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Bill

HB 563

Relating to the establishment of the small municipality revenue recovery grant program to provide financial assistance for economic development to small municipalities facing severe economic hardships.

89th Legislature (2025) Introduced by Barbara Gervin-Hawkins

Texas bill establishing grant program to provide economic development financial assistance to small municipalities experiencing severe economic hardship.

Referred to Intergovernmental Affairs
#comptrollerofpublicaccounts(v2608) #citygovernment--general(i0060) #countygovernment--finance(i0097) #economic&industrialdevelopment--general(i0214)
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Bill Summary · HB 563

Legislative bill overview

HB 563 proposes creating a small municipality revenue recovery grant program in Texas designed to provide financial assistance to small cities and towns experiencing severe economic hardship. The program would support economic development initiatives in these municipalities to help them recover lost revenue and stabilize their fiscal situations.

Why is this important

Small municipalities often lack the tax base and resources of larger cities, making them vulnerable to economic downturns, industry loss, or population decline. A dedicated grant program could help prevent service cuts, infrastructure deterioration, and further economic decline in rural and economically distressed communities across Texas.

Potential points of contention

  • Program costs and funding source: The bill does not specify how the program would be funded, whether through state general revenue, dedicated taxes, or other mechanisms, raising questions about fiscal impact on state budgets
  • Eligibility criteria and fairness: Determining what constitutes "severe economic hardship" and how grants would be distributed among competing municipalities could be contentious, with concerns about whether selection is equitable or politically influenced
  • Effectiveness and accountability: Questions about whether grants represent the most effective use of state resources compared to other economic development strategies, and what measurable outcomes or repayment requirements would apply

Compiled from official sources — confirm details with the bill’s official record.

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