84(R) - 2015
House Investments & Financial Services
House Investments & Financial Services
Relating to the fiscal transparency and accountability of certain entities responsible for public money.
A fiscal note dated April 3, 2015 anticipates no significant fiscal implication to the State.
It also indicates that there could be costs to political subdivisions for implementing the bill depending on several factors including employing personnel to complete the report requirements and costs associated with creation and maintenance of a website for applicable subdivisions. Some of these costs could be offset by the savings associated with the repealed provisions of the bill.
House Bill 1378 would amend Chapter 140 of the Government Code to require that political subdivisions (including counties, municipalities, school districts, junior college districts, other special districts or other subdivisions of state government) prepare an annual financial report and debt information.
The financial report would have to give information on each fund subject to the authority of the governing body of the political subdivision, including itemized revenues for the fund and itemized expenditures from the fund, and the balance for each fund on the last day of the fiscal year. Information on debt as of the last day of the preceding fiscal year would have to include detailed and total amount and principal of all authorized debt obligations; the combined principal and interest required to pay all and each outstanding debt obligation on time and in full; the amounts limited to authorized and outstanding debt obligations secured by ad valorem taxation expressed as a total amount and per capita for municipalities, counties, or school districts; for each debt obligation, issued and unissued amount, spent and unspent amount, maturity date and stated purpose.
House Bill 1378 would require that a political subdivision maintain a Web site and make the information required above available on the Web site. A political subdivision other than a county or municipality with a population of more than 2,000 or a school district or a junior college district would be able to post the required information on a Web site in which the political subdivision controls the content of posting, such as a social media outlet, as long as the information is easily found by searching the name of the political subdivision on the Internet.
House Bill 1378 would also require that an open-enrollment charter school prepare and publish on an Web site it would have to maintain an annual financial statement.
House Bill 1378 would repeal Section 140.006 of the Local Government Code related to the publication of an annual financial statement by a school, road, or other district.
House Bill 1378 would also amend Section 271.047 of the Local Government Code related to the authorization of certificates by ordinance or order, to allow the governing body of an issuer not to authorize a certificate to pay a contractual obligation to be incurred if a bond proposition for the same purpose was rejected by voters during the preceding three years, with the exception of situations described in Section 271.056 (1)-(3) or to comply with a state or federal law, rule, or regulation.
Vote Recommendation Notes
The bill as substituted by the Senate Finance Committee would only keep the information required regarding debt of political subdivisions. Nevertheless, this information would still be a step in the right direction for more transparency. We continue to support it. The second chamber sponsor is Senator Bettencourt.
First chamber analysis below:
According to the Texas Bond Review Board's latest data, local government debt service outstanding rose to $333.1 billion in fiscal year 2014, or the equivalent of nearly $12,500 owed per Texan.
House Bill 1378 would bring some transparency to Texans at the local level by requiring information from political subdivisions on their revenues, expenditures and authorized debt, and making it available on the Internet. It would also somewhat allow for limiting their ability to issue certificates of obligation, a contributing factor to the rise of local debt.
House Bill 1378 goes in the right direction by recognizing that a limited government is an accountable government. We support House Bill 1378.