Existing Debt Allotment Program

Created by the Texas Legislature in 1999, the Existing Debt Allotment (EDA) program provides tax rate equalization for local debt service taxes. Specifically, the program provides a guaranteed yield on interest and sinking fund (I&S) taxes levied by school districts to pay the principal of and interest on eligible bonds. It guarantees a specific amount of state and local funds per student for each cent of tax effort up to $0.29 per $100 of assessed valuation. House Bill 21 (85th Texas Legislature, First Called Session) amended the Texas Education Code, §46.032 by increasing the EDA guaranteed yield from $35 to the lesser of a) $40 per student in average daily attendance (ADA) per penny of I&S taxes levied by school districts to pay the principal of and interest on eligible bonds, or b) an amount that would result in a $60 million increase in state aid from the previous yield of $35. The yield for the 2021–2022 school year is estimated to be approximately $40.00 for payment purposes and will be revised again based on final refined ADA at near-final settle-up in September 2022.

Law and Rules

• Texas Education Code: Chapter 46, Subchapter B, Assistance with Payment of Existing Debt
• Commissioner's Rules: 19 Texas Administrative Code §61.1035, Assistance with Payment of Existing Debt

Reports and Tools 

• EDA Eligible Debt Service Report
• EDA Payments Ledger
• EDA State Aid Calculation by District - Included in the SOF report
• 2022 Unequalized Tax Collections Applicable to EDA and IFA Local Share - June 2022   

Payment Instructions

• Comptroller's Instructions for Wiring Funds
• Comptroller's Instructions for ACH Receiver Services

Eligibility

Eligibility Criteria

Only general obligation bonds are eligible for the EDA program. Lease-purchase agreements authorized by the Local Government Code, §271.004, are not eligible. Similarly, debt service for which a district currently receives assistance through the Instructional Facilities Allotment (IFA) program under the Texas Education Code (TEC), Chapter 46, Subchapter A, is not eligible. The first payment of debt service under the TEC, §46.033, determines the eligibility of bonds for the EDA program. Refunding bonds as defined by the TEC, §46.007, are also eligible for EDA assistance.

Eligibility Date

The eligibility date for the EDA program was amended by the passage of House Bill 3646, 81st Texas Legislature. Section 76 of the bill changed the TEC, §46.033, to provide a permanent roll-forward provision to establish bond eligibility for the EDA program. The amendments to the section deleted the eligibility dates in the statute and replaced those dates with references to the last year of the preceding biennium. Bonds for which a payment is made during the final school year of the preceding state fiscal biennium are eligible for the EDA program. This payment must be reflected in the debt service schedule of the final official statement for the bonds in order to establish eligibility for the EDA program.

Eligibility and I&S Tax Collections

The amount of state aid on eligible bonds during a biennium is limited by the interest and sinking fund tax collections from the second year of the previous biennium. If a district’s tax rate did not include tax effort for newly eligible bonds, it is possible the district may not receive EDA funding for those bonds until the next school year, depending on local circumstances.