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House Bill 2365 |
House Author: Truitt et al. |
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Effective: 6-15-07 |
Senate Sponsor: Duncan |
House Bill 2365 amends the Government Code to allow state and local governments to follow state statutory modified accrual standards of accounting as prescribed in the bill, if other accounting bases conflict with state law. The bill contains provisions for the state or its political subdivisions to account for post-employment benefits other than pensions (OPEBs) on this statutory basis if generally accepted accounting principles (GAAP) of the state or a political subdivision require accounting on any basis other than pay-as-you-go. The bill further allows these governmental entities that choose the alternate accounting methods established by this legislation to account for OPEBs in a manner that differs from requirements set forth in federal Governmental Accounting Standards Board (GASB) statement 45, which requires governmental entities to account for OPEBs, in particular retiree health benefits, in a manner similar to methods used for pension benefits.
The provisions of the bill require a state system to fully disclose to its members, retirees, and other beneficiaries that the system is not obligated to provide benefits beyond existing statutory, constitutional, or other legal requirements, including the requirements that limit the duration of certain obligations, limitations due to other funding obligations, or whether the funding obligations extend throughout the life of the member.
The bill requires the comptroller to provide guidance to the state and its political subdivisions in implementing the requirements and goals of this legislation.
The bill amends the Local Government Code by repealing provisions requiring the use of a particular accounting system by certain counties. It requires that the changes in financial accounting and reporting take effect for the Teacher Retirement System of Texas beginning with fiscal year 2007 and for the Employees Retirement System of Texas, The Texas A&M University System, and The University of Texas System beginning with fiscal year 2008. The Teacher Retirement System is required to comply with the requirements related to member disclosure by December 1, 2007, and the Employees Retirement System of Texas, The Texas A&M University System, and The University of Texas System must comply by December 1, 2008.