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A BILL TO BE ENTITLED
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AN ACT
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relating to financial accounting and reporting for this state and |
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political subdivisions of this state. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The legislature finds that: |
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(1) state and local governments provide essential |
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services funded by statutorily authorized taxes and fees and not by |
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cost recovery-based rate or price models; |
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(2) state and local government operations derive |
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authority from and are regulated by the Texas and federal |
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constitutions and statutes; and |
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(3) financial accounting and reporting should |
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accurately reflect government activities and not mislead or |
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misinform the public. |
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SECTION 2. Subtitle F, Title 10, Government Code, is |
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amended by adding Chapter 2264 to read as follows: |
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CHAPTER 2264. FINANCIAL ACCOUNTING AND REPORTING |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 2264.001. APPLICABILITY. This chapter applies to this |
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state and to each political subdivision of this state. |
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Sec. 2264.002. APPLICABILITY TO COMPONENT UNITS. To the |
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extent an entity is reported on the financial statement of the state |
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or a political subdivision as a component unit, the statutory |
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accounting principles and reporting standards in this chapter apply |
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to that entity. |
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[Sections 2264.003-2264.050 reserved for expansion] |
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SUBCHAPTER B. FINANCIAL ACCOUNTING AND REPORTING STANDARDS |
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Sec. 2264.051. REQUIREMENTS FOR SYSTEM OF ACCOUNTING AND |
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REPORTING. The system of accounting for and reporting the |
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financial activities of this state and its political subdivisions: |
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(1) must be consistent with state financial laws; |
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(2) may not misrepresent the nature, scope, or |
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duration of the financial activities of the state or political |
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subdivision; and |
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(3) must follow the statutory standards in this |
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chapter when other accounting bases conflict with state law. |
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Sec. 2264.052. STATUTORY MODIFIED ACCRUAL BASIS. (a) A |
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statutory modified accrual basis is a comprehensive basis of |
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accounting that recognizes revenue when it is measurable and |
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available to finance current expenditures and recognizes |
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expenditures when they are normally expected to be liquidated with |
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current financial resources regardless of when they mature. |
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(b) This state and its political subdivisions may account |
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for and report selected types of financial activities on a |
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statutory modified accrual basis for government-wide and |
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fund-level internal and external financial statement reporting. |
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Sec. 2264.053. COMPLIANCE WITH ACCOUNTING PRINCIPLES. |
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Compliance with the statutory accounting principles of this chapter |
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by the state or a political subdivision satisfies another statute |
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that requires accounting and reporting according to generally |
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accepted accounting principles. |
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Sec. 2264.054. ACCOUNTING FOR OTHER POSTEMPLOYMENT |
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BENEFITS. (a) In this section: |
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(1) "Other postemployment benefits" means employee |
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benefit programs for which coverage or eligibility extends to |
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retired employees. The term does not include pension benefits. |
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(2) "Pay-as-you-go" means benefit plan financing |
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generally made at or about the same time and in or about the same |
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amount as benefit payments and expenses become due. |
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(b) To the extent that generally accepted accounting |
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principles require accounting or reporting of other postemployment |
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benefits at the government-wide or fund level on any basis other |
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than pay-as-you-go and in accordance with the statutory accounting |
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principles in this chapter, those accounting or reporting |
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requirements do not apply to this state or its political |
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subdivisions. |
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SECTION 3. Section 112.002(c), Local Government Code, is |
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amended to read as follows: |
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(c) Except as provided by Chapter 2264, Government Code, a |
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[A] regulation adopted under this section may not be inconsistent |
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with generally accepted accounting principles [as established by
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the Governmental Accounting Standards Board]. |
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SECTION 4. The changes in law made by this Act apply to |
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financial accounting and reporting by a governmental entity subject |
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to Chapter 2264, Government Code, as added by this Act, beginning |
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with the governmental entity's first fiscal year that begins on or |
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after the effective date of this Act. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |