SB897

Regular Session

Relating to the administration of a grant program to support community mental health programs assisting veterans and their families.

ModeratePlan for compliance

Low Cost

Effective:2025-09-01

Enforcing Agencies

Health and Human Services Commission (HHSC)

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: September 1, 2025.
Compliance Deadline: Applies immediately to any grant agreement entered into or renewed on or after September 1, 2025. Grants awarded prior to this date remain subject to the former 100% match requirement.
Agency Rulemaking: HHSC is not required to promulgate new administrative rules but must update Grant Application Guides and Request for Applications (RFA) documentation for the FY26 cycle. Watch for these updates between June and August 2025.

Immediate Action Plan

Verify Eligibility: Confirm your service area (or the largest county in your multi-county service area) has a population exceeding 250,000 based on the most recent census data.
Dual-Track Budgeting: Prepare two budget scenarios for FY26 grant applications: one utilizing the 75% match (Plan A) and one retaining the 100% match (Plan B) in case the legislative appropriation trigger is not met.
Monitor Appropriations: Direct your government relations team to track the specific line item for "Veteran Community Mental Health Programs" in the General Appropriations Act to confirm if the mandatory trigger in Section 3 is activated.
Delay Execution: If negotiating a grant renewal near August 2025, attempt to delay final signature until after September 1, 2025, to capture the lower match rate (funding permitting).

Operational Changes Required

Contracts

Grant Agreements: Legal counsel must review FY26 grant contracts from HHSC. Ensure the "Match Contribution" schedule reflects the 75% ratio (0.75 non-state dollars for every 1.00 state dollar) rather than the previous 1:1 requirement.
Donor MOUs: Review Memoranda of Understanding with third-party funders (foundations, municipalities). You may now require less capital from partners to unlock the maximum state award. You must decide whether to reduce their contribution request or maintain it to leverage a larger aggregate grant.

Hiring/Training

Finance & Grant Management: Grant administrators must adjust pro-forma budgets for FY26 applications. Staff must be trained to calculate the new match ratio to avoid over-committing organizational reserves.

Reporting & Record-Keeping

Match Verification: Documentation proving the source of matching funds remains required. However, the *aggregate amount* required for compliance audits will decrease by 25% for eligible urban providers.

Fees & Costs

Capital Relief: This law lowers the cost of capital. For a hypothetical $1M state grant, the required organizational contribution drops from $1M to $750,000, freeing up $250,000 in unrestricted funds for other operational uses.

Strategic Ambiguities & Considerations

The Appropriation Trigger (Section 3):

The reduction to a 75% match is not guaranteed. The law states HHSC is only *required* to implement the lower match if the Legislature appropriates *more* money to this program than in the previous biennium.

The Risk: If the Legislature flat-lines the budget, HHSC has the discretion ("may, but is not required") to implement the lower match.
The Watch: Do not assume the 75% rate is active until the General Appropriations Act is finalized and HHSC releases the specific RFA for FY26 confirming the rate.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsCounty Government County Government--general Mental Health & Substance Abuse Military & Veterans Health & Human Services Commission

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

Senate Research Center	S.B. 897
89R6232 MPF-D	By: Blanco
	Veteran Affairs
	3/17/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Certain grant programs that fund community mental health services for veterans and their families, including the Texas Veterans + Family Alliance Grant Program (TV+FA), require a funding match from non-state sources to receive state funds. Under current law, the required match varies by county population: 25 percent for counties with fewer than 100,000 residents, 50 percent for counties with populations between 100,000 and 249,999, and 100 percent for counties with 250,000 or more residents. These match requirements place a significant financial burden on qualifying organizations and local entities that support veterans, jeopardizing the sustainability of critical mental health services. S.B. 897 ensures continued access to care for veterans and their families by reducing the grant match requirement from 100 percent to 50 percent for mental health programs serving veterans and their families in counties with over 250,000 residents.

As proposed, S.B. 897 amends current law relating to the administration of a grant program to support community mental health programs assisting veterans and their families.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Sections 547.0304 and 547.0305, Government Code, as effective April 1, 2025, as follows:

Sec. 547.0304. MATCHING GRANT CONDITIONS: SINGLE COUNTIES. Requires the Health and Human Services Commission (HHSC), for services and treatment provided in a single county, to condition each grant provided under Subchapter G (Matching Grant Program For Community Mental Health Programs Assisting Veterans and Their Families), Chapter 547 (Mental Health and Substance Use Services), on a potential grant recipient providing funds from non-state sources in a total amount at least equal to:

(1) makes a nonsubstantive change to this subdivision; or

(2) 50 percent of the grant amount if the community mental health program to be supported by the grant provides services and treatment in a county with a population of 100,000 or more, rather than a population of 100 or more but less than 250,000.

Deletes text of existing Subdivision (3) requiring HHSC, for services and treatment provided in a single county, to condition each grant provided under this subchapter on a potential grant recipient providing funds from non-state sources in a total amount at least equal to 100 percent of the grant amount if the community mental health program to be supported by the grant provides services and treatment in a county with a population of 250,000 or more. Makes a nonsubstantive change.

Sec. 547.0305. MATCHING GRANT CONDITIONS: MULTIPLE COUNTIES. Requires HHSC, for a community mental health program that provides services and treatment in more than one county, to condition each grant provided under this subchapter on a potential grant recipient providing funds from non-state sources in a total amount at least equal to:

(1) makes a nonsubstantive change to this subdivision; or

(2) 50 percent of the grant amount if the county with the largest population in which the community mental health program to be supported by the grant provides services and treatment has a population of 100,000 or more, rather than a population of 100,00 or more but less than 250,000.

Deletes text of existing Subdivision (3) requiring HHSC, for a community mental health program that provides services and treatment in more than one county, to condition each grant provided under this subchapter on a potential grant recipient providing funds from non-state sources in a total amount at least equal to 100 percent of the grant amount if the county with the largest population in which the community mental health program to be supported by the grant provides services and treatment has a population of 250,000 or more. Makes a nonsubstantive change.

SECTION 2. Makes application of this Act prospective.

SECTION 3. Provides that HHSC is required to implement the changes in law made by this Act to Sections 547.0304 and 547.0305, Government Code, only if the legislature appropriates money specifically for that purpose in an amount greater than the amount appropriated to HHSC for that purpose for the state fiscal biennium ending August 31, 2025. Authorizes, but does not require, HHSC, if the legislature does not appropriate money specifically for that purpose and in such amount, to implement those changes in law using other money available to HHSC for that purpose.

SECTION 4. Effective date: September 1, 2025.

Senate Authors

Sen. Cesar BlancoDemocrat · Primary Author

Coauthors (1)

Sarah Eckhardt (D)

House Sponsor

Rep. Ray LopezDemocrat · Primary Sponsor

Bill Text(with markup)

S.B. No. 897

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to the administration of a grant program to support
	community mental health programs assisting veterans and their
	families.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Sections 547.0304 and 547.0305, Government Code,
	as effective April 1, 2025, are amended to read as follows:
	Sec. 547.0304. MATCHING GRANT CONDITIONS: SINGLE COUNTIES.
	For services and treatment provided in a single county, the
	commission shall condition each grant provided under this
	subchapter on a potential grant recipient providing funds from
	non-state sources in a total amount at least equal to:
	(1) 25 percent of the grant amount if the community
	mental health program to be supported by the grant provides
	services and treatment in a county with a population of less than
	100,000;
	(2) 50 percent of the grant amount if the community
	mental health program to be supported by the grant provides
	services and treatment in a county with a population of 100,000 or
	more but less than 250,000; or
	(3) 75 [~~100~~] percent of the grant amount if the
	community mental health program to be supported by the grant
	provides services and treatment in a county with a population of
	250,000 or more.
	Sec. 547.0305. MATCHING GRANT CONDITIONS: MULTIPLE
	COUNTIES. For a community mental health program that provides
	services and treatment in more than one county, the commission
	shall condition each grant provided under this subchapter on a
	potential grant recipient providing funds from non-state sources in
	a total amount at least equal to:
	(1) 25 percent of the grant amount if the county with
	the largest population in which the community mental health program
	to be supported by the grant provides services and treatment has a
	population of less than 100,000;
	(2) 50 percent of the grant amount if the county with
	the largest population in which the community mental health program
	to be supported by the grant provides services and treatment has a
	population of 100,000 or more but less than 250,000; or
	(3) 75 [~~100~~] percent of the grant amount if the county
	with the largest population in which the community mental health
	program to be supported by the grant provides services and
	treatment has a population of 250,000 or more.
	SECTION 2. The changes in law made by this Act apply only to
	a grant awarded on or after the effective date of this Act. A grant
	awarded before the effective date of this Act is governed by the law
	in effect on the date the award was made, and the former law is
	continued in effect for that purpose.
	SECTION 3. The Health and Human Services Commission is
	required to implement the changes in law made by this Act to
	Sections 547.0304 and 547.0305, Government Code, only if the
	legislature appropriates money specifically for that purpose in an
	amount greater than the amount appropriated to the commission for
	that purpose for the state fiscal biennium ending August 31, 2025.
	If the legislature does not appropriate money specifically for that
	purpose and in such amount, the commission may, but is not required
	to, implement those changes in law using other money available to
	the commission for that purpose.
	SECTION 4. This Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 17, 2025

TO:	Honorable Kelly Hancock, Chair, Senate Committee on Veteran Affairs

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB897 by Blanco (Relating to the administration of a grant program to support community mental health programs assisting veterans and their families.), As Introduced

No significant fiscal implication to the State is anticipated.

The Health and Human Services Commission (HHSC) is required to implement a provision of the bill only if the Legislature appropriates money specifically for that purpose and in an amount greater than the amount appropriated to HHSC. If the Legislature does not appropriate money specifically for that purpose and in such amount, HHSC may, but is not required to, implement a provision of the bill using other appropriations available for that purpose.

It is assumed that any costs associated with the bill could be absorbed using existing resources.

Local Government Impact

The bill's provisions related to reducing matching requirements for counties of various population sizes may benefit impacted counties but in an amount that cannot be determined at this time.

Source Agencies:

403 Veterans Commission, 529 Health and Human Services Commission

LBB Staff:

JMc, KDw, ER, SB

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Frequently Asked Questions

Common questions about SB897

What does Texas SB897 do?

SB897 reduces the mandatory non-state matching funds requirement for veteran mental health grants from 100% to 75% for entities operating in counties with populations exceeding 250,000. This capital relief is legally contingent upon the Legislature increasing the program's total appropriation for the next biennium; without increased funding, the Health and Human Services Commission (HHSC) retains discretion to maintain the higher 100% match rate. Implementation Timeline Effective Date: September 1, 2025.

Who authored SB897?

SB897 was authored by Texas Senator Cesar Blanco during the Regular Session.

When was SB897 signed into law?

SB897 was signed into law by Governor Greg Abbott on May 15, 2025.

Which agencies enforce SB897?

SB897 is enforced by Health and Human Services Commission (HHSC).

How urgent is compliance with SB897?

The compliance urgency for SB897 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of SB897?

The cost impact of SB897 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does SB897 address?

SB897 addresses topics including county government, county government--general, mental health & substance abuse, military & veterans and health & human services commission.

Legislative data provided by LegiScanLast updated: November 25, 2025

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