Section 140.008, Texas Local Government Code (HB 1378) Fiscal Transparency and Accountability of Political Subdivisions * * * * * Section 140.008, Texas Local Government Code (HB 1378)

Imposition of Reporting Requirements HB 1378 imposed certain annual financial reporting requirements on political subdivisions Political subdivisions must annually compile and report certain financial information

Who must report? “political subdivisions” counties municipalities school districts junior college districts other special districts other subdivisions of state government

Manner of Compliance Political subdivisions must post requisite information on website make such report available for inspection by the public Alternative methods of compliance may be followed Provide information to Comptroller Special rule for Water Districts

Reporting Deadline Deadline for compliance established by Comptroller of Public Accounts For fiscal years after FY 2016: report must be issued no later than 180 days after reporting entity’s fiscal year end

Information Reported As of the last day of the preceding fiscal year: amount of all authorized debt obligations; principal of all outstanding debt obligations; principal of each outstanding debt obligation; combined principal and interest required to pay all outstanding debt obligations on time and in full; combined principal and interest required to pay each outstanding debt obligation on time and in full;

Information Reported (continued) As of the last day of the preceding fiscal year: amounts required by bullets on Slide 6, limited to authorized and outstanding debt obligations secured by ad valorem taxation: expressed as a total amount; and expressed as a per capita amount, if the political subdivision is a municipality, county, or school district

Information Reported (continued) As of the last day of the preceding fiscal year: the following for each debt obligation: the issued and unissued amount; the spent and unspent amount; the maturity date; and the stated purpose for which the debt obligation was authorized

Information Reported (continued) The current credit rating given by any nationally recognized credit rating organization to debt obligations of the political subdivision

Information Reported (continued) Any other information that the political subdivision considers relevant or necessary to explain the values required by bullets on Slides 6 and 7, including. . .

Information Reported (continued) the amount of authorized and outstanding debt obligations secured by ad valorem taxation (Slide 7), stated as a per capita amount, if the political subdivision is not required to provide the amount under Slide 7 an explanation of the payment sources for the different types of debt a projected per capita amount of authorized and outstanding debt obligations secured by ad valorem taxation, as of the last day of the maximum term of the most recent debt obligation issued by the political subdivision

Compliance - Primary Method Annual report: must be available for inspection by any person must be posted continuously on the political subdivision's website until the political subdivision posts its next annual report

Compliance - Primary Method No requirement that information be posted in any particular location on website If required information is already posted on website, political subdivision may include in the annual report a direct link or a clear statement describing the location of the information

Compliance - Alternative Methods Comptroller report: Information submitted through portal on the Comptroller’s website No submissions through hard copy or email No additional information for entities filing the Comptroller’s report pursuant to Section 140.008(d) If political subdivision maintains a website, must also provide a link to the location on the Comptroller’s website where the annual report may be viewed.

Compliance - Alternative Methods Small municipalities (population < 15,000) Counties (population < 35,000) Per Comptroller’s guidelines, small municipalities and counties use same reporting form and uploading solution as other political subdivisions

Compliance – Main Office Must ensure that contact information for the “main office” of the political subdivision is continuously posted on the political subdivision’s website Main office is not defined

Compliance – Main Office Must post the following information relative to the “main office”: physical address mailing address main telephone number e-mail address Lack of definition should provide flexibility to proclaim the location of “main office” in cases where location is unclear

Compliance – Special Rule Water Districts Water district: “district” as defined by Section 49.001, Texas Water Code Water districts comply by submitting an audit, affidavit of financial dormancy or annual financial report, as applicable, to the Comptroller; and complying with Chapter 49, Texas Water Code’s requirements relative to such documents. including requirement to file audit, affidavit of financial dormancy or annual financial report with the Texas Commission on Environmental Quality within 135 days after the close of the water district's fiscal year.

Noncompliance Statute does not provide penalty for failure to comply

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