ESDs are allowed to levy ad valorem (property) tax. The Texas Constitution states that ESDs may tax up to $0.10 per $100 of property valuation. The ESD’s creation documents establish the district’s initial tax rate.
ESDs may also collect sales tax, provided an election is held and voters approve this power. In Texas, 8.25% is the maximum allowed sales tax rate. The state collects 6.25%, leaving 2% available to eligible local jurisdictions, including ESDs. An ESD may collect anywhere from .125% to 2% of the local sales tax rate depending on availability and subject to voter approval.
ESDs are also allowed to bill for services provided, such as emergency medical services or fire protection, if it so chooses.
By law, ESD boards must meet at least once a month. All meetings are subject to the Texas Open Meetings Act. ESDs must also comply with the Texas Public Information Act concerning open records requests and records retention.
Unless the ESD falls under an exception, ESDs are required by law to file an audit with their County Commissioners Court by June 1 of each year. If the audit is not filed by Sept. 1, the President and Treasurer of the ESD board are automatically removed from their offices.
If an ESD meets certain requirements, it may be allowed to file certified financial statements instead of an audit. This exception exists for smaller ESDs that would have difficulty affording an exhaustive audit process.
While ESDs are established by Article 48-e of the Texas Constitution, Chapter 775 of the Texas Health and Safety Code is the enabling statute for all ESDs. ESDs are required by law to file an Annual Report with the Texas Department of Agriculture by January 1st of each year.