| 1 | 1 | | 84R1175 JTS-F |
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| 2 | 2 | | By: Hinojosa S.B. No. 103 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to a prohibition on the issuance of certain capital |
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| 8 | 8 | | appreciation bonds by local governments. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Subchapter B, Chapter 1201, Government Code, is |
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| 11 | 11 | | amended by adding Section 1201.0245 to read as follows: |
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| 12 | 12 | | Sec. 1201.0245. CAPITAL APPRECIATION BONDS BY LOCAL |
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| 13 | 13 | | GOVERNMENTS PROHIBITED. (a) In this section, "capital |
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| 14 | 14 | | appreciation bond" means a bond that accrues and compounds interest |
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| 15 | 15 | | from its date of delivery, the interest on which by its terms is |
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| 16 | 16 | | payable only upon maturity or prior redemption. |
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| 17 | 17 | | (b) A county, municipality, special district, school |
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| 18 | 18 | | district, junior college district, or other political subdivision |
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| 19 | 19 | | may not issue capital appreciation bonds that are secured by ad |
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| 20 | 20 | | valorem taxes. |
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| 21 | 21 | | (c) Subsection (b) does not apply to the issuance of |
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| 22 | 22 | | refunding bonds under Chapter 1207. |
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| 23 | 23 | | (d) Subsection (b) does not apply to the issuance of capital |
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| 24 | 24 | | appreciation bonds for the purpose of financing transportation |
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| 25 | 25 | | projects. |
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| 26 | 26 | | SECTION 2. The change in law made by this Act does not |
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| 27 | 27 | | affect the validity of capital appreciation bonds issued before the |
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| 28 | 28 | | effective date of this Act. |
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| 29 | 29 | | SECTION 3. This Act takes effect September 1, 2015. |
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