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  80R9368 MXM-F
 
  By: Truitt H.B. No. 2365
 
 
 
   
 
 
A BILL TO BE ENTITLED
AN ACT
relating to financial accounting and reporting for this state and
political subdivisions of this state.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  The legislature finds that:
             (1)  state and local governments provide essential
services funded by statutorily authorized taxes and fees and not by
cost recovery-based rate or price models;
             (2)  state and local government operations derive
authority from and are regulated by the Texas and federal
constitutions and statutes; and
             (3)  financial accounting and reporting should
accurately reflect government activities and not mislead or
misinform the public.
       SECTION 2.  Subtitle F, Title 10, Government Code, is
amended by adding Chapter 2264 to read as follows:
CHAPTER 2264. FINANCIAL ACCOUNTING AND REPORTING
SUBCHAPTER A. GENERAL PROVISIONS
       Sec. 2264.001.  APPLICABILITY.  This chapter applies to this
state and to each political subdivision of this state.
       Sec. 2264.002.  APPLICABILITY TO COMPONENT UNITS. To the
extent an entity is reported on the financial statement of the state
or a political subdivision as a component unit, the statutory
accounting principles and reporting standards in this chapter apply
to that entity.
[Sections 2264.003-2264.050 reserved for expansion]
SUBCHAPTER B. FINANCIAL ACCOUNTING AND REPORTING STANDARDS
       Sec. 2264.051.  REQUIREMENTS FOR SYSTEM OF ACCOUNTING AND
REPORTING. The system of accounting for and reporting the
financial activities of this state and its political subdivisions:
             (1)  must be consistent with state financial laws;
             (2)  may not misrepresent the nature, scope, or
duration of the financial activities of the state or political
subdivision; and
             (3)  must follow the statutory standards in this
chapter when other accounting bases conflict with state law.
       Sec. 2264.052.  STATUTORY MODIFIED ACCRUAL BASIS.  (a) A
statutory modified accrual basis is a comprehensive basis of
accounting that recognizes revenue when it is measurable and
available to finance current expenditures and recognizes
expenditures when they are normally expected to be liquidated with
current financial resources regardless of when they mature.
       (b)  This state and its political subdivisions may account
for and report selected types of financial activities on a
statutory modified accrual basis for government-wide and
fund-level internal and external financial statement reporting.
       Sec. 2264.053.  COMPLIANCE WITH ACCOUNTING PRINCIPLES.
Compliance with the statutory accounting principles of this chapter
by the state or a political subdivision satisfies another statute
that requires accounting and reporting according to generally
accepted accounting principles.
       Sec. 2264.054.  ACCOUNTING FOR OTHER POSTEMPLOYMENT
BENEFITS. (a) In this section:
             (1)  "Other postemployment benefits" means employee
benefit programs for which coverage or eligibility extends to
retired employees. The term does not include pension benefits.
             (2)  "Pay-as-you-go" means benefit plan financing
generally made at or about the same time and in or about the same
amount as benefit payments and expenses become due.
       (b)  To the extent that generally accepted accounting
principles require accounting or reporting of other postemployment
benefits at the government-wide or fund level on any basis other
than pay-as-you-go and in accordance with the statutory accounting
principles in this chapter, those accounting or reporting
requirements do not apply to this state or its political
subdivisions.
       SECTION 3.  Section 112.002(c), Local Government Code, is
amended to read as follows:
       (c)  Except as provided by Chapter 2264, Government Code, a
[A] regulation adopted under this section may not be inconsistent
with generally accepted accounting principles [as established by
the Governmental Accounting Standards Board].
       SECTION 4.  The changes in law made by this Act apply to
financial accounting and reporting by a governmental entity subject
to Chapter 2264, Government Code, as added by this Act, beginning
with the governmental entity's first fiscal year that begins on or
after the effective date of this Act.
       SECTION 5.  This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution.  If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2007.