Starting on September 1, 2019, special purpose districts, as described by Government Code §403.0241(b), that annually submit the Special Purpose District Financial and Tax Report to the Comptroller no longer have to submit this report. (See House Bill 3001 and Local Government Code §140.008.)
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, certain special purpose districts, and other subdivisions of state government must annually compile their debt obligation data from the preceding fiscal year and either:
For those who chose the first option above, the Comptroller's office has developed the Annual Local Debt Report (XLSX) form and an online submission form to enable entities or their third-party representatives to compile and submit the required information:
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.
Political subdivisions shall report the required information via Option 1 or 2 above within 180 days of the end of the most recently completed fiscal year.
Note: This table reflects the deadline of 180 days from the last day of an entity's fiscal year.
|Last Day of Fiscal Year||Submission/Posting Deadline for Fiscal 2017 and Beyond|
|January 31||July 30|
|February 28||August 27|
|March 31||September 27|
|April 30||October 27|
|May 31||November 27|
|June 30||December 27|
|July 31||January 27|
|August 31||February 27|
|September 30||March 29|
|October 31||April 29|
|November 30||May 29|
|December 31||June 29|
The Comptroller's office was charged with adopting rules for the implementation of Local Government Code §140.008. These rules were drafted, filed, underwent a 30-day comment period and ultimately became effective on January 3, 2018. The rules 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.
The effective rules can be viewed on the Texas Administrative Code webpage.
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.
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.
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.
Charter schools required under §140.008 to compile and report outstanding debt obligations will likely include those organized under:
The Comptroller encourages all charter schools to participate in the Local Government Debt database.
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.
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.
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:
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.
Yes, a water district satisfies the debt reporting requirements of Texas Local Government Code §140.008 if it:
No. Texas Local Government Code §140.008(d) states a political subdivision may provide to the Comptroller the information described by subsection (b) and any other related information required by the Comptroller in the form and in the manner prescribed by the Comptroller. The Annual Local Debt Report is the Comptroller-approved form and properly incorporates all required information.
If, alternatively, a political subdivision elects to post the required information on its own website rather than submit it to the Comptroller, the political subdivision must do so in the manner prescribed by Local Government Code §140.008 (b), (c), and (f), but otherwise is not required to replicate the Comptroller's preformatted Local Annual Debt Report.
It depends on which report is being posted on the entity’s website. A water district does not satisfy the requirements of Local Government Code (LGC) 140.008 if it prepares the financial documents required under Chapter 49 of the water code and posts them on the district’s website in lieu of submitting them to the Comptroller. Those audit and financial reports required under Chapter 49 must be submitted to the Comptroller (who must then post them on the CPA website) in order for the water district to be in compliance with 140.008.
Alternatively, a water district could elect to prepare the report of debt obligation information described in LGC 140.008(b), and then post that report on its internet website (instead of submitting it to the Comptroller), and doing so would satisfy the requirements of LGC 140.008; however, because compliance with LGC 140.008 does not relieve the district of its obligations under the Water Code, the district would still be required to perform the Chapter 49 audit, deliver that audit to TCEQ, etc. This option would most likely be a more time-consuming, cumbersome alternative.
To put it another way, a water district may prepare two different reports (one that satisfies Texas Water Code Chapter 49 Subchapter G, and one that satisfies LGC 140.008(b)) and post the Local Government Code report to its website instead of delivering to the CPA; or a water district can simply prepare the Chapter 49 report and submit that report directly to the CPA in addition to the other entities who must receive it in accordance with Chapter 49.
EDCs are separate legal entities; however, debt issued by EDCs are considered conduit or component debt of the corresponding local government such as a city or county. While Local Government Code (LGC) 140.008 does not establish a requirement that cities or other jurisdictions report debt issued by their EDCs, we have incorporated the option to report this information on the Annual Local Debt Report form for entities that choose to report their conduit or component debt. We encourage municipalities with component or conduit debt to report this information.
Furthermore, because EDCs are not considered to be political subdivisions under Section 501.055(b) of the Local Government Code they are not required by statue to participate in reporting their debt obligation reporting. This does not prevent an EDC from volunteering their debt obligations and if an EDC obliges to report through the Comptroller’s debt reporting system, there is a framework in place to do such.
Yes. Local Government Code (LGC) 392.006 states that a Housing Authority is “for all purposes… a unit of government”, establishing Housing Authorities as a type of “other subdivision of state government” which is referred to in LGC 140.008(2). Thus, Housing Authorities created by a municipality or county under the authority of LGC 392 are subject to the reporting requirements of LGC 140.008.
If you have further questions or concerns on whether or not this pertains to you, we encourage you to work with your legal counsel to make a determination. If you do not employ your own counsel, please refer to LCG 392.040, which permits Housing Authorities to request legal services from the municipal or county attorney.
If you have any other questions, please contact us or call 844-519-5676.