Texas 2023 - 88th Regular

Texas House Bill HB1489 Compare Versions

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1	1	By: Tepper H.B. No. 1489
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the issuance of certificates of obligation by local
7	7	governments.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. This Act shall be known as the Certificate of
10	10	Obligation Reform Act of 2023.
11	11	SECTION 2. Sections 271.043, 271.045, and 271.0461, Local
12	12	Government Code, are amended to read as follows:
13	13	Sec. 271.043. DEFINITIONS. In this subchapter:
14	14	(10) "Public work" means:
15	15	(i) streets, roads, highways, bridges,
16	16	sidewalks, parks, landfills, parking structures, or airports;
17	17	(ii) telecommunications, wireless
18	18	communications, information technology systems, applications,
19	19	hardware, or software;
20	20	(iii) cybersecurity; or
21	21	(iv) as part of any utility system, water supply
22	22	project, water plant, wastewater plant, water and wastewater
23	23	distribution or conveyance facility, wharf, dock, or flood control
24	24	and drainage project.
25	25	Sec. 271.045. PURPOSES FOR WHICH CERTIFICATES MAY BE
26	26	AUTHORIZED. (a) The governing body of an issuer may authorize only
27	27	the necessary certificates to pay a contractual obligation to be
28	28	incurred for the construction, renovation, repair, or improvement
29	29	of a public work:
30	30	(1) to comply with a state or federal law, rule, or
31	31	regulation if the political subdivision has been officially
32	32	notified of noncompliance with the law, rule, or regulation;
33	33	(2) if the governing body believes the construction,
34	34	renovation, repair, or improvement of a public work is necessary to
35	35	mitigate the impact of:
36	36	(i) a public health emergency that poses an
37	37	imminent danger to a resident's physical health or safety in the
38	38	governing body's jurisdiction; or
39	39	(ii) a natural disaster in the governing body's
40	40	jurisdiction and:
41	41	(A) the governor declares or renews a
42	42	declaration of a state of disaster under Section 418.014,
43	43	Government Code, in that fiscal year, and the governor's
44	44	designation of the area threatened includes all or part of the
45	45	geographic territory of the local government; or
46	46	(B) the presiding officer of the governing
47	47	body of a political subdivision declares or renews a declaration of
48	48	a local state of disaster under Section 418.108, Government Code,
49	49	in that fiscal year, and the presiding officer's designation of the
50	50	area threatened includes all or part of the geographic territory of
51	51	the local government; or
52	52	(3) if a court renders a decision that requires the
53	53	local government to construct, renovate, repair, or improve a
54	54	public work.
55	55	[(1) construction of any public work;
56	56	(2) purchase of materials, supplies, equipment, machinery,
57	57	buildings, land, and rights-of-way for authorized needs and
58	58	purposes; or
59	59	(3) payment of contractual obligations for professional
60	60	services, including services provided by tax appraisers,
61	61	engineers, architects, attorneys, map makers, auditors, financial
62	62	advisors, and fiscal agents.]
63	63	(b) If necessary because of change orders, the governing
64	64	body of an issuer may authorize certificates [may be authorized] in
65	65	an amount not to exceed 15 [25] percent of a contractual obligation
66	66	incurred for the construction of public works, but certificates may
67	67	be delivered only in the amount necessary to discharge contractual
68	68	obligations.
69	69	(c) The governing body of a municipality may issue
70	70	certificates of obligation to pay all or part of a municipality's
71	71	obligations incurred by contract for interests in and rights to
72	72	water or sewer treatment capacity in connection with a water supply
73	73	and transmission project or sewer treatment or collection project
74	74	to be constructed in whole or in part on behalf of the municipality
75	75	by another governmental entity or political subdivision pursuant to
76	76	a written agreement expressly authorized under Section 552.014 of
77	77	this code or Section 791.026, Government Code.
78	78	(d) In exercising its authority to issue certificates of
79	79	obligation for the purposes specified in Subsection (c), the
80	80	municipality must limit the principal amount of certificates to be
81	81	issued for the purpose of funding its contractual obligations to an
82	82	amount equal to (i) the aggregate of the contractual payments or the
83	83	total costs allocated or attributed, under generally accepted
84	84	accounting principles, to the capital costs of the project, as
85	85	opposed to any maintenance or operating costs to be paid under the
86	86	written agreement or (ii) the total cost of the project multiplied
87	87	by the percentage of the nameplate capacity of the project acquired
88	88	or conveyed by the written agreement to the municipality, whichever
89	89	limitation is applicable to the contractual interests or rights
90	90	being conveyed or identified in the written agreement.
91	91	(e) Work that is directly attributable under generally
92	92	accepted accounting principles to the costs of the project and that
93	93	is performed by employees of the issuer may be allocated or
94	94	attributed to the capital costs of the project.
95	95	(f) If the governing body of an issuer authorizes
96	96	certificates to pay a contractual obligation under this section,
97	97	the governing body must enter into a contract or written agreement
98	98	for the construction, renovation, repair, or improvement of a
99	99	public work not later than 90 days after the governing body
100	100	authorizes the certificates.
101	101	(g) If the governing body of an issuer authorizes
102	102	certificates to pay a contractual obligation under this Subsection
103	103	(a)(2)(i), the governing body shall adopt a resolution stating the
104	104	conditions and circumstances of the public health emergency.
105	105	(h) The provisions of this subchapter relating to
106	106	advertisement for competitive bids apply to contractual
107	107	obligations to be incurred for a purpose for which certificates are
108	108	to be issued under this section.
109	109	Sec. 271.0461. ADDITIONAL PURPOSE FOR CERTIFICATES:
110	110	DEMOLITION OF DANGEROUS STRUCTURES [OR RESTORATION OF HISTORIC
111	111	STRUCTURES]. Certificates may be issued by any municipality for the
112	112	payment of contractual obligations to be incurred in demolishing
113	113	dangerous structures [or restoring historic structures] and may be
114	114	sold for cash, subject to the restrictions and other conditions of
115	115	Section 271.050.
116	116	SECTION 3. Sections 271.047(c) and (d), Local Government
117	117	Code, are amended to read as follows:
118	118	(c) A certificate may not mature over a period greater than
119	119	30 [40] years from the date of the certificate and may not bear
120	120	interest at a rate greater than that allowed by Chapter 1204,
121	121	Government Code.
122	122	(d) Except as provided by this subsection, the governing
123	123	body of an issuer may not authorize a certificate to pay a
124	124	contractual obligation to be incurred if a bond proposition to
125	125	authorize the issuance of bonds for the same purpose was submitted
126	126	to the voters during the preceding five [three] years and failed to
127	127	be approved. A governing body may authorize a certificate that the
128	128	governing body is otherwise prohibited from authorizing under this
129	129	subsection:
130	130	(1) in a case described by Sections 271.056(1)-(3);
131	131	and
132	132	(2) to comply with a state or federal law, rule, or
133	133	regulation if the political subdivision has been officially
134	134	notified of noncompliance with the law, rule, or regulation.
135	135	SECTION 4. Section 271.049(c), Local Government Code, is
136	136	amended to read as follows:
137	137	(c) If before the date tentatively set for the authorization
138	138	of the issuance of the certificates or if before the authorization,
139	139	the municipal secretary or clerk if the issuer is a municipality, or
140	140	the county clerk if the issuer is a county, receives a petition
141	141	signed by at least two [five] percent of the qualified voters of the
142	142	issuer protesting the issuance of the certificates, the issuer may
143	143	not authorize the issuance of the certificates unless the issuance
144	144	is approved at an election ordered, held, and conducted in the
145	145	manner provided for bond elections under Chapter 1251, Government
146	146	Code.
147	147	SECTION 5. Section 271.046, Local Government Code, is
148	148	repealed.
149	149	SECTION 6. Chapter 271, Local Government Code, as amended
150	150	by this Act, applies to a certificate issued on or after the
151	151	effective date of this Act.
152	152	SECTION 7. This Act takes effect immediately if it receives
153	153	a vote of two-thirds of all the members elected to each house, as
154	154	provided by Section 39, Article III, Texas Constitution. If this
155	155	Act does not receive the vote necessary for immediate effect, this
156	156	Act takes effect September 1, 2023.