Special Purpose District Financial and Tax Reporting

In 2017, the 85th Legislature passed a transparency bill requiring certain special purpose districts to annually provide records and other information concerning district finances and tax rates to the Comptroller of Public Accounts (See Senate Bill 625 (SB 625). ) SB 625 also requires the Comptroller of Public Accounts to create the Special Purpose District Public Information Database, where information submitted by the districts will be assembled, updated, and made available to the public free of charge. (See Texas Local Government Code §203.062; Texas Government Code §403.0241.)

Starting on September 1, 2019, special purpose districts that annually submit their Special Purpose District Financial and Tax Report to the Comptroller no longer have to submit the Local Government Debt Report.

Information submitted by special purpose districts must be transmitted in the form and manner prescribed by the Comptroller. The Comptroller's office has developed an electronic reporting form to enable entities or their third-party representatives to submit the required information in the approved format.

Online Reporting

All reporting is completed through the Comptroller's eSystems, a secure online portal for a variety of online transactions. If the reported information changes following the first report, entities can edit future reports any time prior to the start of the next reporting period.

Reporting entities have the choice of manually entering their debt information through the online portal or providing a direct link to the entity’s debt material posted on its website.

Special purpose districts that are classified as a water district under Texas Water Code §49.001 have the option to physically maintain the required documentation at the district’s main office for inspection by any person. Contact information will be requested for public access.

Refer to Assistance for SPD Financial and Tax Reporting for details.

Reporting Requirements

All special purpose districts (SPDs), defined by §403.0241(b) as political subdivisions of the state with geographic boundaries that define their territorial jurisdiction, meeting certain criteria are required to report their information. Exempt are those political subdivisions defined as municipalities, counties, junior college districts, independent school districts, or political subdivisions with statewide jurisdiction.

SPDs meeting at least one of the following applicability criteria from each category below (1 and 2) are required to annually report their information to the Comptroller for inclusion in the Special Purpose District Public Information Database:

1. The SPD was authorized by the state by a general or special law during the most recent tax year to:
   1. impose an ad valorem tax and/or sales and use tax;
   2. impose an assessment; and/or
   3. charge a fee.
2. During the SPD’s most recent fiscal year it:
   1. had bonds outstanding;
   2. had gross receipts in excess of $250,000; and/or
   3. had cash and temporary investments in excess of $250,000.

To establish a more robust database, the Comptroller encourages all SPDs to provide their general information for inclusion in the public database, whether they meet the criteria above or not.

If an entity is unsure whether it is mandated to comply with these reporting requirements, the Comptroller recommends consulting with a legal or financial professional to make this determination. Agency staff are unable to advise in this regard.

Required Information

• Texas Taxpayer ID number (i.e., the SPD's 11-digit Texas Taxpayer ID)
  Note: If you do not have a Texas Taxpayer ID, please contact our office at 844-519-5676 to receive one.
• The SPD's contact information:
  • Name of the entity
  • The first and last name of each board member
  • The name and job title of any employee of the SPD serving as general manager, executive director, or in another position with comparable duties or functions
  • Physical address of the main office
  • Mailing address, if different
  • County or counties within the SPD's territorial jurisdiction
  • Main telephone number
  • Primary contact email address
  • Internet website address or, if the district does not maintain an Internet website, the address of any Internet website or websites the district uses to comply with Section 2051.202, Government Code and Section 26.18, Tax Code
• Third-party contact information, if applicable
  • Firm name
  • Employee name
  • Job title
  • Mailing address
  • Telephone number
  • Email address
• The contact information for the SPD's tax assessor-collector, if applicable
  • Name of representative for the tax assessor-collector
  • Mailing address
  • Telephone number
  • Tax-assessor-collector's entity name
• The contact information for the SPD's utility operator, if applicable
  • Name of representative for the utility operator
  • Company name
  • Mailing address
  • Telephone number
• The sales and use tax rate that the district imposes for the most recent fiscal year, if applicable
• The total amount of bonds authorized by the voters of the SPD that are payable wholly or partly from ad valorem taxes, excluding refunding bonds if refunding bonds were separately authorized and excluding contract revenue bonds
• The aggregate initial principal amount of all bonds issued by the SPD that are payable wholly or partly from ad valorem taxes, excluding refunding bonds and contract revenue bonds
• Whether the SPD is classified as a water district under Texas Water Code §49.001
• In addition to the information set forth above, water districts must report:
  • The ad valorem tax rate imposed for the most recent tax year, if any
  • Financial information required to be reported to the Comptroller under Local Government Code §140.008 (b) or (g), including any revenue obligations
• Non-water districts must also report:
  • The table of ad valorem tax rates for the most recent tax year as described by Tax Code §26.16, in the form required by that section (if the SPD imposes an ad valorem tax)
  • Financial information required to be reported to the Comptroller under Local Government Code §140.008(b), including any revenue obligations

Reporting Deadlines

Special purpose districts are provided a 90-day window to gather and report the required information. The reporting period begins annually on January 1st and reports are due by April 1st.

FAQ's

If, during the last fiscal year, an SPD did not have bonds outstanding, gross receipts or cash and temporary investments in excess of $250,000, but otherwise meets the applicability criteria set forth above, does it still need to provide any information?

The Comptroller of Public Accounts encourages special purpose districts to provide, at a minimum, contact information where district representatives wish to receive notices and other communications from the agency regarding these and any future reporting requirements.

One of the reporting criteria for this requirement is whether an entity had cash and temporary investments in excess of $250,000 during the most recent fiscal year. How is “temporary investments” defined?

The term “temporary investments” is analogous to “cash equivalents.” This is defined in the State of Texas' Comprehensive Annual Financial Report as short-term, highly liquid investments that are both readily convertible to known amounts of cash and near maturity. They present an insignificant risk of decreasing in value due to interest rate changes.

Investments with an original maturity of three months or less, and used for cash management rather than investing activities, are considered cash equivalents.

Examples could be:

• treasury bills
• commercial paper
• certificates of deposit
• money market funds
• cash management pools

Use this definition to determine if the entity you represent meets the reporting criteria.

I represent multiple districts; can I just fill out 1 reporting form for the database?

No. You will need to fill out a separate reporting form for each SPD you represent.

Is there a penalty for noncompliance?

If an entity does not timely report required information and does not cure its failure after notice from the Comptroller, it may be subject to a maximum penalty of $2,000 and listed as a noncompliant entity. The Comptroller has no means to determine if an entity should report information or if reported information has changed.

The special purpose district I am reporting for has a base property tax rate that covers the entire jurisdiction and an additional defined area property tax rate for some area of the SPD. What do I need to report?

Only the district's base property tax rate for the most recent tax year should be reported.

---

For other questions regarding this reporting requirement, please email us at [email protected] or call 844-519-5676.