January 28, 2022, Number 4

Download the full .pdf version here: TML Legislative Update Number 4

mandatory eminent domain reporting closes february 1

Legislation passed in 2015 requires cities to annually fill out a web-based form with the comptroller relating to each city’s statutory eminent domain authority. Instructions for reporting can be found here. The three-month reporting period began on November 1, 2021 and closes on February 1, 2022. However, reports may be updated at any time throughout the year. The failure to fill out the form could result in a maximum $2,000 penalty against a city.  

The entry should be, for almost every city, an update of previously filed information, including whether the city exercised its eminent domain authority in the preceding calendar year by filing a condemnation petition under Section 21.012, Property Code. This was clarified to some degree for certain cities by legislation that passed in 2021. S.B. 157 provides that—for cities under 25,000 population—an annual report must be filed only if the city’s eminent domain authority information has changed from the previous year. If the city’s information has not changed from the previous report, the city must use the comptroller’s reporting tool to confirm the accuracy of the previous information by electronically updating the filed report with the comptroller. Of course, any city that never filled out the form as required should do so now.

City officials with questions about the requirements can contact the comptroller’s transparency team by email at transparency@cpa.texas.gov or (844) 519-5676.

deadline approaching for swift applications

The Texas Water Development Board (TWDB) application period of the 2022 funding cycle of the State Water Implementation Fund for Texas (SWIFT) program is set to close on February 1, 2022. Abridged applications may be submitted via the TWDB’s online application system or by paper copy. Projects must be recommended in the 2022 State Water Plan to be eligible for SWIFT program financial assistance.  

The SWIFT program helps communities develop and optimize water supplies at cost-effective rates. The program provides low-interest financing, extended repayment terms, deferral of repayments, and incremental repurchase terms for projects with state ownership aspects. It also includes additional interest rate subsidies for rural and agricultural projects.

For more information on the SWIFT program and how to apply, please visit the TWDB website.

american rescue plan act: using slfrf allocation to replace lost revenue

As highlighted in a previous issue of the Legislative Update, the U.S. Department of the Treasury issued the final rule for the State and Local Fiscal Recovery Funds (SLFRF) program, enacted as a part of the American Rescue Plan Act, on January 6, 2022. Of particular interest to many cities is the final rule’s streamlining of the ability of cities to use SLFRF dollars to replace lost public sector revenue due to the pandemic.

The final rule provides that recipients of SLFRF dollars, including cities, may use the revenue to pay for “government services” in an amount equal to the revenue lost by the city due to the pandemic. How does a city calculate the amount of revenue lost? The final rule adopted by Treasury provides two options.

The first option available to a city, which was not present in the interim rule, authorizes a city to elect a “standard allowance” of $10 million to spend on government services through the period of performance. (Note: the “period of performance” under the rules spans from March 3, 2021 through December 31, 2024.) Under this option, Treasury assumes that $10 million was lost in city revenue due to the pandemic. Treasury adopted this simplified option to streamline the determination of revenue loss for SLFRF recipients, with an eye specifically towards assisting smaller local governments with the calculation. The second option allows a city to calculate its actual revenue lost due to the pandemic using a specific formula spelled out in the final rule.

Because a city may spend up to the amount determined for revenue loss on government services, a city that selects the $10 million allowance to determine revenue lost may spend up to a maximum of $10 million on government services, though a city may not spend more than its award amount. This means that cities receiving less than $10 million in funding have the discretion to use the entirety of their award amount to pay for governmental services. As described in Treasury’s overview of the final rule, the term “governmental services” is broadly defined in the final rule to generally include any service traditionally provided by government. A non-exhaustive list of governmental services include:

  • Construction of schools and hospitals
  • Road building, maintenance, and other infrastructure
  • Health services
  • General government administration, staff, and administrative facilities
  • Environmental remediation; and 
  • Provision of public safety services, including the purchase of fire trucks and police vehicles

It should be pointed out that SLFRF awards spent on governmental services due to lost revenue are subject to streamlined reporting and compliance requirements. Additionally, recipient cities retain the ability under the final rule to spend SLFRF allotments on other eligible use categories, including supporting the COVID-19 public health and economic response, providing premium pay to certain eligible workers, and spending on water, sewer, and broadband infrastructure. There are also restrictions on use of the funds in the final rule, including for instance, prohibiting SLFRF revenue from being used to offset a reduction in tax revenue due to a tax cut. More details on eligible uses and restrictions can be found in the final rule and Treasury’s overview of the rule, both linked above.   

This week, the National League of Cities posted an article pointing out several beneficial provisions included in Treasury’s final rule on the SLFRF, including the $10 million lost revenue allowance.  

fema's technical assistance program

The Federal Emergency Management Agency (FEMA) has created the Building Resilient Infrastructure and Communities (BRIC) Direct Technical Assistance program to help smaller communities and those with less staff capacity with free advice and support.

The BRIC program supports cities as they undertake hazard mitigation projects, reducing the risks they face from disasters and natural hazards. The BRIC Direct Technical Assistance program seeks to help eligible communities in the navigation of BRIC and other resilience grant funding.  A letter of interest for the program is due on January 28, 2022. The free technical assistance will last for up to 36 months. Interested cities may email a letter of interest to include certain information but no more than two pages to FEMA-BRICDirectTechnicalAssistance@fema.dhs.gov.

don't forget: mandatory hotel occupancy tax reporting

The 50-day window for reporting local hotel occupancy tax information opened January 1, 2022. The reporting deadline is February 20, 2022.  

Tax Code Section 351.009 requires cities to file an annual report with the comptroller that includes the city’s hotel occupancy tax rate, the amount of revenue generated by the tax, and the amount and percentage of the revenue spent for each of the following purposes:

•    Convention or information centers

•    Convention delegates registration

•    Advertising to attract tourists

•    Arts promotion and improvement

•    Historical restoration and preservation projects

•    Signage directing the public to sights and attractions

Cities have two reporting options: (1) use the comptroller’s online reporting form to submit all required information; or (2) clearly post and maintain all required information on the city’s website and provide the comptroller’s office with a link to the information. For cities selecting the second option, the comptroller provides an optional format template to post on the city’s website.  

For more information, see the comptroller’s hotel occupancy tax reporting webpage or contact the comptroller’s transparency team by email at transparency@cpa.texas.gov or (844) 519-5676.


TML member cities may use the materials herein for any purpose. No other person or entity may reproduce, duplicate, or distribute any part of this document without the written authorization of the Texas Municipal League.