transparency

Local Government Debt Reporting

Debt Obligation Reporting under Local Government Code, Section 140.008

Overview

The 84th Legislature passed HB 1378 to increase the transparency of local government debt. Under Local Government Code § 140.008, political subdivisions, including counties, cities, school districts, junior college districts, special purpose districts, and other subdivisions of state government must annually compile their debt obligation data from the preceding fiscal year and either:

  1. report it to the Comptroller of Public Accounts for posting or, alternatively,
  2. post the information on their own websites.

For those who chose the first option above, the Comptroller's office has developed the Annual Local Debt Report (XLS) form and an online submission form to enable entities or their third-party representatives to compile and submit the required information:

  • Download, complete and save the Annual Local Debt Report form. Save these forms according to the following convention: "Annual Local Debt Report_Name of Political Subdivision_2016".
  • Next, access the online submission form and upload your completed Annual Local Debt Report.

Local Debt Submission Form

Debt Lookup

In accordance with 140.008(d), the Comptroller's office provides the submitted information in an appropriate format. The Local Entity Debt Lookup makes self-reported debt information for each political subdivision available by searching a political subdivision's name, entity type, city, and/or zip code.

Local Entity Debt Lookup

Reporting Deadlines

Political subdivisions shall report the required information via Option 1 or 2 above:

  • within 210 days of the end of the political subdivision's fiscal year in 2016;
  • thereafter, within 180 days of the end of the most recently completed fiscal year.

Submission Deadlines by Fiscal Year End

Deadlines for Annual Local Debt Reporting (HB 1378)

Note: This table reflects both deadlines: the 210 days from the last day of an entity's 2016 fiscal year and 180 days from the last day of an entity's subsequent fiscal years.

Last Day of Fiscal Year Submission/Posting Deadline for Fiscal 2016 Submission/Posting Deadline for Fiscal 2017 and Beyond
January 31 August 28, 2016 July 30
February 28 September 25, 2016 August 27
March 31 October 27, 2016 September 27
April 30 November 26, 2016 October 27
May 31 December 27, 2016 November 27
June 30 January 26, 2017 December 27
July 31 February 26, 2017 January 27
August 31 March 29, 2017 February 27
September 30 April 28, 2017 March 29
October 31 May 29, 2017 April 29
November 30 June 28, 2017 May 29
December 31 July 29, 2017 June 29

Required Debt Obligation Reporting

The Comptroller's office is charged with adopting rules for the implementation of Local Government Code 140.008. These rules are in development and will establish the format, submission and web posting and/or web linking of reporting of political subdivisions' required annual debt information, including that of water districts described in Chapter 49 of the Water Code. This website serves as the Comptroller's standing guidance while rules to implement Local Government Code 140.008 are in development. In meantime, the HB 1378 draft rules can be viewed here. These draft rules are not finalized. Please contact us with any comments or questions regarding these draft rules.

Specifically, the rules will:

  1. Provide definitions: Define terms used in the Comptroller's Annual Local Debt Report Form
  2. Provide a form for reporting local debt information:

    The Comptroller's Annual Local Debt Report forms can be obtained from the Comptroller's Local Government Debt Transparency site or by emailing us. The Comptroller may update or otherwise change the form as needed.

  3. Address deadlines and other requirements for political subdivisions to complete and post their annual debt information:

    Annually and within 210 days of the end of each political subdivisions' fiscal year in 2016, and thereafter within 180 days of the end of the most recently completed fiscal year, all political subdivisions, including cities and counties with populations below 15,000 and 35,000, respectively, shall either:

    • submit via upload to the Comptroller's website the completed Annual Local Debt Report Form provided by the Comptroller and continually maintain a link from their website to the section of the Comptroller's website specifically created for local debt reporting per Local Government Code 140.008
    • OR may elect to post required annual debt information on their own websites. While use of the Comptroller's Annual Local Debt Report Form itself is optional, all items on it must be included in political subdivisions' debt reporting. All political subdivisions deciding to publish their required debt information on their own websites must:
      1. ensure their report is posted continuously on their website until it posts the next year's report, and
      2. continuously post their main office contact information on their website, including the physical address, the mailing address, the main telephone number, and an email address.
  4. Offer an alternative for water districts for compliance:

    Water districts described in Chapter 49 of the Water Code may submit via web upload one of the following to the Comptroller's Office within 210 days of the end of the fiscal year completed in 2016 and thereafter, annually and within 180 days of the end of the most recently completed fiscal year: an annual financial report, an audit or an affidavit of financial dormancy.

  5. Establish Comptroller's role in implementing LGC 140.008:

    The Comptroller must receive the Annual Local Debt Report from political subdivisions, including cities and counties with populations below 15,000 and 35,000, respectively, post them on the Comptroller's website, and must ensure that each political subdivision's report is easily located via a search function. The Comptroller receives and posts on its website one of the following for each water district as defined by Chapter 49 of the Water Code: an annual report, an affidavit of financial dormancy, or an audit.

Frequently Asked Questions

If our political subdivision has no outstanding debt, do we still need to report under Local Government Code, Section 140.008?

Yes. A political subdivision must annually compile and report the required financial information under Local Government Code, Section 140.008. There is not an exception to the filing requirement for a political subdivision with no outstanding debt.

Our political subdivision has some debt that is not funded by tax money. Are we required to report this?

A political subdivision must annually compile and report the required financial information, including debt obligations defined as an issued public security under Government Code, Section 1201.002.

A public security "means an instrument, including a bond, certificate, note, or other type of obligation authorized to be issued by an issuer under a statute, a municipal home-rule charter, or the constitution of this state" under Government Code, Section 1201.002(2)

Since the definition of an issued public security is not limited by the source of debt payment, a political subdivision would be required to report its debt obligation information regardless of the source of payment.

Are county appraisal districts considered political subdivisions and therefore required to report under Local Government Code, Section 140.008?

Yes. Since a county appraisal district is defined as a Texas political subdivision under Section 6.01(c) of the Texas Tax Code, it is required to report under Local Government Code, Section 140.008.

Are charter schools required to report under HB 1378?

Charter schools required under §140.008 to compile and report outstanding debt obligations will likely include those organized under:

  • Texas Education Code Chapter 12, Subchapter B ("Home-Rule School District Charter");
  • Texas Education Code Chapter 12, Subchapter C ("Campus or Campus Program Charter"), and
  • Texas Education Code Chapter 12, Subchapter E ("College or University or Junior College Charter School"); as well as
  • Open-enrollment charter schools operated by certain public institutions of higher education or other governmental entities as described by Texas Education Code Chapter 12, Subchapter D ("Open-Enrollment Charter School"), Section 12.101 ("Authorization").

The Comptroller encourages all charter schools to participate in the Local Government Debt database.

If our political subdivision has short term leases and loans or other agreements not requiring authorization, do we need to report these items under Local Government Code, Section 140.008?

Only public securities defined under Government Code §1201.002 (an instrument, including a bond, certificate, note, or other type of obligation authorized to be issued by an issuer under a statute, a municipal home-rule charter, or the constitution of this state) must be reported. If short term leases and loans or other agreements do not meet this definition, they are not required to be reported.

However the intent of HB1378 is debt transparency. Even if they do not meet the definition of public securities above, political subdivisions are encouraged to report bank obligations or direct placements if they have a term over 3 years; were authorized by the voters; or are to be repaid with ad valorem taxation.

If a school district, municipality, or any political subdivision other than a water district makes an annual audit or financial report available on its own website, will this put the entity in compliance with the local debt reporting requirements set forth under Local Government Code §140.008?

No, political subdivisions subject to the reporting requirements of Texas Local Government Code §140.008 (with the exception of water districts subject to §140.008(g)) must compile an Annual Local Debt Report and either make the report available for public inspection and post it continuously on the political subdivision's Internet website in accordance with the requirements of §140.008(f), or provide the pertinent debt information to the Comptroller in the format required by the Comptroller in accordance with the requirements of §140.008 (d) or (e).

However, Texas Local Government Code §140.008(c) does allow an entity that elects to post the Annual Local Debt Report on its own website (in lieu of providing the report to the Comptroller for posting on the Comptroller's website) and that maintains certain financial information described under subsection (b) elsewhere on its website to "provide in the report a direct link to, or a clear statement describing the location of, the separately posted information." The statute explains that an entity is afforded this option in order to avoid "replicating in the annual report" information that is presented in a separate, but clearly identifiable, other location. The Comptroller nonetheless urges political subdivisions and local governments to ensure that all required debt information maintained on the local entity's website can be easily located and accessed by the public, and to use best efforts to promote local debt transparency in accordance with Texas law.

Are Community Centers required to comply with the state's debt reporting requirement?

The Texas Health and Safety Code states that a "community center" may be established and operated by a county, municipality, hospital district, school district, or an organizational combination of two or more of those local agencies. (§534.001)

The Texas Health and Safety Code also provides that a community center is considered:

  • an agency of the state, a governmental unit, and a unit of local government, as defined and specified by Chapters 101 and 102, Civil Practice and Remedies Code;
  • a local government, as defined by Section 791.003, Government Code;
  • a local government for the purposes of Chapter 2259, Government Code; and
  • a political subdivision for the purposes of Chapter 172, Local Government Code.

Also, community centers are established and operated by local agencies under a plan approved by DADS and DSHS (25 TAC §411.301(b)).

Lastly, the Texas Council of Community Centers website states that "Texas Community Centers are units of local government. Locally sponsored by counties, cities, hospital districts and school districts, each Center is governed by a publicly appointed Board of Trustees comprised of local leaders that represent the diversity and best interests of communities, families, and consumers." (Source: http://txcouncil.com/about-community-centers/)

Considering all of this, the Comptroller's Office would state that Community Centers should comply with the debt reporting requirements set forth in Texas Local Government Code §140.008 as that section applies to political subdivisions to include any "subdivision of state government."

Entities should do their own research, however, and/or consult an attorney if they have doubts about the application of §140.008.

If you have any other questions, please contact us or call 844-519-5676.