AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
S.B. 1013 requires certain counties, cities, and school districts to conduct periodic zero-based budgeting every twelve years.
This bill requires school districts with 50,000 or more students, and cities or counties with a population of 225,000, to conduct a full review of their respective budget every twelve years. This practice, also referred to as "zero-based budgeting," will help ensure budgetary transparency at the local level. This bill is similar to one filed that requires state agencies to produce a zero-based budget as they undergo the Sunset process.
Starting with the 2017 budget cycle, in conjunction with an annual itemized budget, an entity budget must be prepared that outlays all activities the entity conducts or performs and a justification of each activity. Once prepared, the zero-based budget must be open for public inspection prior to adoption. A zero-based budget will provide, in simple to understand language, a clearer picture of where tax monies are spent.
As proposed, S.B. 1013 amends current law relating to periodic zero-based budgeting for certain political subdivisions.
RULEMAKING AUTHORITY
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Subchapter A, Chapter 44, Education Code, by adding Section 44.0025, as follows:
Sec. 44.0025. PERIODIC ZERO-BASED BUDGET REQUIRED; CONTENTS. (a) Provides that this section applies only to a school district with a student enrollment of 50,000 or more.
(b) Requires the superintendent to, in addition to the annual itemized budget required under Section 44.002 (Preparation of Budget), prepare a zero-based budget every 12th year that contains:
(1) a description of the discrete activities the school district conducts or performs with a justification for each activity by reference to a statute, rule, or other legal authority, and an evaluation of the effectiveness and efficiency of the district's policies, management, fiscal affairs, and operations in relation to each activity;
(2) for each activity identified under Subdivision (1), a quantitative estimate of any adverse effects that reasonably may be expected to result if the activity were discontinued, together with a description of the methods by which the adverse effects were estimated
(3) for each activity identified under Subdivision (1), an itemized account of expenditures required to maintain the activity at any minimum level of service required by statute, rule, or other legal authority, together with a concise statement of the quantity and quality of service required at that minimum level;
(4) for each activity identified under Subdivision (1), an itemized account of expenditures required to maintain the activity at the current level of service or performance, together with a concise statement of the quantity and quality of service or performance provided at that level;
(5) a ranking of activities identified under Subdivision (1) that illustrates the relative importance of each activity to the overall goals and purposes of the school district at current service levels; and
(6) recommendations to the board of trustees of the school district regarding whether the district should continue funding each activity identified under Subdivision (1) and, if so, at what level.
(c) Authorizes the superintendent, in preparing the zero-based budget, to require any school district officer or employee to provide information necessary for the superintendent to properly prepare the budget.
(d) Requires the superintendent to file a copy of the zero-based budget with the Texas Education Agency (agency) on or before the date the proposed budget is filed, and the copy of the zero-based budget to be available for public inspection in the school district's central administrative office. Requires the district to, if the district maintains an Internet website, take action to ensure that the zero-based budget is posted on the website.
(e) Requires the board of trustees of the school district to, at a public meeting held to adopt a budget under this subchapter, consider information presented in the zero-based budget in addition to the proposed budget.
SECTION 2. Amends Chapter 102, Local Government Code, by adding Section 102.0055, as follows:
Sec. 102.0055. PERIODIC ZERO-BASED BUDGET REQUIRED; CONTENTS. (a) Provides that this section applies only to a municipality with a population of 225,000 or more.
(b) Requires the budget officer to, in addition to the annual itemized budget required under Section 102.003 (Itemized Budget; Contents), prepare a zero-based budget every 12th year that contains:
(1) a description of the discrete activities the municipality conducts or performs with a justification for each activity by reference to a statute, charter provision, ordinance, or other legal authority, and an evaluation of the effectiveness and efficiency of the municipality's policies, management, fiscal affairs, and operations in relation to each activity;
(2) for each activity identified under Subdivision (1), a quantitative estimate of any adverse effects that reasonably may be expected to result if the activity were discontinued, together with a description of the methods by which the adverse effects were estimated;
(3) for each activity identified under Subdivision (1), an itemized account of expenditures required to maintain the activity at any minimum level of service required by statute, charter provision, ordinance, or other legal authority, together with a concise statement of the quantity and quality of service required at that minimum level;
(4) for each activity identified under Subdivision (1), an itemized account of expenditures required to maintain the activity at the current level of service or performance, together with a concise statement of the quantity and quality of service or performance provided at that level;
(5) a ranking of activities identified under Subdivision (1) that illustrates the relative importance of each activity to the overall goals and purposes of the municipality at current service levels; and
(6) recommendations to the governing body of the municipality regarding whether the municipality should continue funding each activity identified under Subdivision (1) and, if so, at what level.
(c) Authorizes the budget officer in preparing the zero-based budget, to require any municipal officer or board to provide information necessary for the budget officer to properly prepare the budget.
(d) Requires the budget officer to file a copy of the zero-based budget with the municipal clerk on or before the date the proposed budget is filed, and the copy of the zero-based budget to be available for public inspection. Requires the municipal clerk to, if the municipality maintains an Internet website, take action to ensure that the zero-based budget is posted on the website.
(e) Requires the governing body of the municipality to, at a public hearing held to adopt a budget under this subchapter, consider information presented in the zero-based budget in addition to the proposed budget.
SECTION 3. Amends Subchapter B, Chapter 111, Local Government Code, by adding Section 111.0375, as follows:
Sec. 111.0375. PERIODIC ZERO-BASED BUDGET REQUIRED; CONTENTS. (a) Requires the county auditor to, in addition to the annual itemized budget required under Section 111.034 (Itemized Budget; Contents), prepare a zero-based budget every 12th year that contains:
(1) a description of the discrete activities the county conducts or performs with a justification for each activity by reference to a statute, order, or other legal authority, and an evaluation of the effectiveness and efficiency of the county's policies, management, fiscal affairs, and operations in relation to each activity;
(2) for each activity identified under Subdivision (1), a quantitative estimate of any adverse effects that reasonably may be expected to result if the activity were discontinued, together with a description of the methods by which the adverse effects were estimated;
(3) for each activity identified under Subdivision (1), an itemized account of expenditures required to maintain the activity at any minimum level of service required by statute, order, or other legal authority, together with a concise statement of the quantity and quality of service required at that minimum level;
(4) for each activity identified under Subdivision (1), an itemized account of expenditures required to maintain the activity at the current level of service or performance, together with a concise statement of the quantity and quality of service or performance provided at that level;
(5) a ranking of activities identified under Subdivision (1) that illustrates the relative importance of each activity to the overall goals and purposes of the county at current service levels; and
(6) recommendations to the commissioners court of the county regarding whether the county should continue funding each activity identified under Subdivision (1) and, if so, at what level.
(b) Authorizes the county auditor to, in preparing the zero-based budget, require any district, county, or precinct officer of the county to provide information necessary for the auditor to properly prepare the budget.
(c) Requires the county auditor to file a copy of the zero-based budget with the county clerk on or before the date the proposed budget is filed, and the copy of the zero-based budget to be available for public inspection. Requires the county clerk to, if the county maintains an Internet website, take action to ensure that the zero-based budget is posted on the website.
(d) Requires the commissioners court to, at a public hearing held to adopt a budget under this subchapter, consider information presented in the zero-based budget in addition to the proposed budget.
SECTION 4. Amends Subchapter C, Chapter 111, Local Government Code, by adding Section 111.0665, as follows:
Sec. 111.0665. PERIODIC ZERO-BASED BUDGET REQUIRED; CONTENTS. (a) Provides that this section applies only to a county with a population of 225,000 or more.
(b) Requires the budget officer to, in addition to the annual itemized budget required under Section 111.063 (Itemized Budget; Contents), prepare a zero-based budget every 12th year that contains:
(1) a description of the discrete activities the county conducts or performs with a justification for each activity by reference to a statute, order, or other legal authority, and evaluation of the effectiveness and efficiency of the county's policies, management, fiscal affairs, and operations in relation to each activity;
(2) for each activity identified under Subdivision (1), a quantitative estimate of any adverse effects that reasonably may be expected to result if the activity were discontinued, together with a description of the methods by which the adverse effects were estimated;
(3) for each activity identified under Subdivision (1), an itemized account of expenditures required to maintain the activity at any minimum level of service required by statute, order, or other legal authority, together with a concise statement of the quantity and quality of service required at that minimum level;
(4) for each activity identified under Subdivision (1), an itemized account of expenditures required to maintain the activity at the current level of service or performance, together with a concise statement of the quantity and quality of service or performance provided at that level;
(5) a ranking of activities identified under Subdivision (1) that illustrates the relative importance of each activity to the overall goals and purposes of the county at current service levels; and
(6) recommendations to the commissioners court of the county regarding whether the county should continue funding each activity identified under Subdivision (1) and, if so, at what level.
(c) Authorizes the budget officer to, in preparing the zero-based budget, require the county auditor or any other district, county, or precinct officer of the county to provide information necessary for the budget officer to properly prepare the budget.
(d) Requires the budget officer to file a copy of the zero-based budget with the county clerk and county auditor on or before the date the proposed budget is filed, and the copy of the zero-based budget to be available for public inspection.
(e) Requires the commissioners court to, at a public hearing held to adopt a budget under this subchapter, consider information presented in the zero-based budget in addition to the proposed budget.
SECTION 5. Requires the board of trustees of a school district, a commissioners court, or a governing body of a municipality to adopt an initial zero-based budget as described by Section 44.0025, Education Code, or Section 102.0055, 111.0375, or 111.0665, Local Government Code, as added by this Act, as applicable, for the fiscal year beginning on or after September 1, 2017.
SECTION 6. Effective date: September 1, 2015.