January 7, 2022, Number 1

Download the full .pdf version here: TML Legislative Update Number 1

comptroller's 380 agreement reporting tool online; deadline extended for reporting existing agreements

The comptroller’s office has made available an online reporting tool for city compliance with a new law, H.B. 2404, which was signed into law following the 2021 legislative session. The bill requires cities to report their Chapter 380 economic development agreements to the comptroller for inclusion in a statewide database. In addition to requiring cities to submit information regarding future economic development agreements, including an electronic copy of the agreement itself, cities are required to report the same information to the comptroller for all existing 380 agreements by no later than January 1, 2022.

Because the online reporting tool was established so close to the original January 1, 2022 deadline, the comptroller’s office extended the deadline to allow for already existing 380 agreements to be reported through May 1, 2022. Any new 380 agreements or amendments entered into after January 1, 2022 must be reported using the online system within 14 days of the signing or renewal of the agreement.

Cities will receive an email from the comptroller with information on how to file. Cities can also reach out directly to the Data Analysis and Transparency Division of the comptroller’s office for additional information at 844-519-5672, ext. 6-9231.

comptroller reporting requirements: file eminent domain and local hotel occupancy reports now

In addition to the new 380 economic development agreement reporting requirements mentioned in the previous article, the reporting windows for annual eminent domain reporting and local hotel occupancy tax reporting are now open. 

Eminent Domain Reporting

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.

Local 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

The comptroller’s website now consolidates all local government reporting information on one webpage, making it easier to comply with reporting requirements passed in recent sessions. The website includes this helpful reminder flyer for cities and links to more detailed information about each specific reporting requirement and how to submit reports. City officials can also access information about special district reporting requirements that generally apply to city-related entities like crime control and prevention districts, municipal development districts, municipal management districts, public improvement districts, and sports and community venue districts.

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.

federal infrastructure bill update

In November 2021, the federal Infrastructure Investment and Jobs Act (IIJA) was signed into law. The IIJA is altogether a $1.2 trillion bill that will invest in the nation’s core infrastructure priorities including roads, bridges, rail, transit, airports, ports, energy transmission, water systems, and broadband.

The League will monitor state and federal agencies and work with the National League of Cities (NLC) to access the latest information relating to the IIJA. We will be providing periodic updates in the Legislative Update on resources for Texas cities on how to access IIJA funding for local infrastructure projects.   

Federal Highway Administration

In December, the U.S. Department of Transportation’s Federal Highway Administration (FHWA) released a guidance memo outlining a framework to prioritize the use of IIJA resources. Among other things, the guidance memo indicates that FHWA will prioritize the “repair, rehabilitation, reconstruction, replacement, and maintenance of existing transportation infrastructure, especially the incorporation of safety, accessibility, multimodal, and resilience features” and “projects that move more people and freight by modernizing and increasing the operational efficiency of existing roads and highways over projects that expand the general purpose capacity of roads and highways.”

Federal Aviation Administration

The Federal Aviation Administration announced that it will award a total of $2.89 billion under the IIJA to 3,075 airports around the nation. The grant money comes from the Airport Infrastructure Grant program, which is one of three new aviation programs created by the IIJA. For fiscal year 2022, Texas airports will receive roughly $242 million in Airport Infrastructure Grant Funding. Interested city officials can access an interactive map, which includes a listing of funding for individual airports.   

Federal Communications Commission

On December 31, the Federal Communications Commission launched the Affordable Connectivity Program (ACP), which was established under the IIJA and designed to help families struggling to pay for broadband internet service. For qualifying households, the ACP can provide a discount of up to $30 per month towards internet service and a one-time discount of up to $100 to purchase a laptop, desktop, or tablet from participating providers.

puc proposes rules for power outage alert system and for middle mile broadband

The Public Utility Commission (PUC) is proposing two different rules of interest to cities.

First, the PUC is proposing a rule relating to an alert system for regional and statewide power outage alerts. The proposed rule include the criteria for the content, activation, and termination of the power outage alerts, as required by S.B. 3. The League previously reported on S.B. 3 here.

Interested persons may file comments electronically through the interchange on the PUC’s website. Comments must be filed by January 11, 2022. PUC staff strongly encourages commenters to include a bulleted executive summary to assist commission staff in reviewing the filed comments in a timely fashion. All comments should refer to Project Number 52287.

The PUC staff will conduct a public hearing on the rulemaking on January 14, 2022, at 10:00 a.m. in the Commissioners’ Hearing Room, 7th floor, William B. Travis Building, if requested in accordance with state law. The request for a public hearing must be received by January 11, 2022.

The second rule that the PUC is proposing establishes Middle Mile Broadband rules as required by H.B. 3853. The rule will allow amenable electric utilities with excess fiber capacity to establish Middle Mile Broadband Service with internet service providers (ISPs) in unserved and underserved areas of Texas.

Interested persons may file comments electronically through the interchange on the PUC’s website. Comments must be filed by January 18, 2022 at 3:00 p.m. Reply comments are due by 3:00 p.m. on January 31, 2022.  PUC staff strongly encourages commenters to include a bulleted executive summary to assist commission staff in reviewing the filed comments in a timely fashion. All comments should refer to Project Number 52845.

The PUC staff will conduct a public hearing on the rulemaking on February 3, 2022, at 9:00 a.m. in the Commissioners’ Hearing Room, 7th floor, William B. Travis Building, if requested in accordance with state law. The request for a public hearing must be received by January 31, 2022.

twdb opens application period for funding and proposes rules for financial assistance for economically distressed areas

The Texas Water Development Board (TWDB) opened the application period for the 2022 funding cycle of the State Water Implementation Fund for Texas (SWIFT) program. Abridged applications are due on Tuesday, February 1, 2022 and 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

TWDB also is proposing rules for applications for financial assistance for economically distressed areas. The rules implement requirements of S.B. 2452 from the 2019 legislative session. The rules would require applications for the economically distressed areas program to include subdivisions regulations with the application. The city or county where the project is located must adopt and enforce Model Subdivision Rules for the regulation of subdivisions prior to application for financial assistance.

Interested persons may submit written comments on the proposed rulemaking: (1) by mail to Office of General Counsel, Texas Water Development Board, P.O. Box 13231, Austin, Texas 78711-3231; (2) by email to rulescomments@twdb.texas.gov; or (3) by fax to (512) 475-2053. Comments will be accepted until 5:00 p.m. on January 31, 2022. Comments should include Chapter 363 in the subject line.

railroad commission adopts critical infrastructure designation rules

The Railroad Commission (RRC) adopted rules for designating critical natural gas infrastructure during energy emergencies. The rules implement S.B. 3’s requirement that the RRC adopt rules to establish a process to designate certain natural gas facilities and entities associated with providing natural gas in Texas as critical customers or critical gas suppliers during energy emergencies. The League previously reported on S.B. 3 here.

epa adopts lead and copper rule

On December 16, 2021, the Environmental Protection Agency (EPA) announced that the Lead and Copper Rule Revisions (LCRR) adopted under the Safe Drinking Water Act would go into effect with a compliance date of October 16, 2024.

The EPA also announced that during their executive order directed review of the LCRR they have identified several areas of the rule that need improvement. The EPA will develop and propose a Lead and Copper Rule Improvements (LCRI) rulemaking before the October 16, 2024 compliance date of the LCRR, to strengthen key elements of the rule.

The EPA released a fact sheet titled “Stronger Protections from Lead in Drinking Water: Next Steps for the Lead and Copper Rule” summarizing the EPA’s actions and intentions. Additional resources can be found here.

covid-19 Update

All pandemic-related updates, including information about the American Rescue Plan’s city-related provisions, will be in the Legislative Update Newsletter from now on.  

American Rescue Plan Act Funds: Final Rule Released

On January 6, 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, which, to date, has distributed more than $245 billion to state, local, and Tribal governments to support their response to and recovery from the COVID-19 pandemic. Recipients of funds were encouraged to begin using funds under the Interim Final Rule (IFR), which was released in May 2021. 

The Final Rule will be effective April 1, 2022. Until that time, the interim final rule remains in effect; funds used consistently with the IFR while it is in effect are in compliance with the SLFRF program. However, cities can choose to take advantage of the Final Rule now, even ahead of the effective date. Treasury will not take action to enforce the interim final rule to the extent that a use of funds is consistent with the terms of the final rule, regardless of when the SLFRF funds were used.

The complete text of the Final Rule can be found here. The Final Rule is more than 400 pages long, so Treasury has made a more user-friendly overview of the main provisions available here.

Harris County Mask Mandate Upheld in Court of Appeals

On January 6, the Texas Court of Appeals, Third District, released an opinion which, among other things, upholds an injunction against Governor Abbott’s Executive Order GA-38 and allows Harris County’s mask requirement to stay in effect for now, pending a full trial of the facts of the case.

The court concluded that, “the Governor does not possess absolute authority under the Texas Disaster Act to preempt orders issued by local governmental entities or officials that contradict his executive orders. Further, the Governor’s authority to suspend certain statutes under Section 418.016 does not include the authority to suspend Section 418.108 or other public-health statutes relied on by the [local officials] in issuing their respective face-covering requirements.” Should this decision ultimately stand, local officials’ role in disaster response will be restored; however, this decision will likely be appealed to the Texas Supreme Court.


TML member cities may use the material 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.