Officials in the northern Mexican city of San Luis Rio Colorado are extending the offer in an effort to reduce a high stray population and to avoid the flea-born typhus that has been reported nearby.
The one-time 200-peso ($16.30) credit on tax or water bills is aimed at dog owners who feel they can no longer take care of their pets and might otherwise leave them on the street.
But pro-animal groups say bringing the dog to a city shelter is likely to lead to their euthanasia and are calling for a ban on the practice.
City spokesman Gabriel Moreno said Monday that the dogs handed over to the city are first offered for adoption, and only put to sleep if nobody wants them.