Texas 2025 - 89th Regular

Texas House Bill HB4986 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R1489 AMF-F
2	2	By: Holt H.B. No. 4986
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the issuance of certificates of obligation by local
10	10	governments.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. This Act shall be known as the Certificate of
13	13	Obligation Reform Act.
14	14	SECTION 2. Section 271.043(7-a), Local Government Code, is
15	15	amended to read as follows:
16	16	(7-a) "Public work" [for an issuer that is a
17	17	municipality or county:
18	18	[(A)] means:
19	19	(A) [any of the following public improvements as
20	20	authorized by law:
21	21	[(i)] a street, road, highway, bridge,
22	22	sidewalk, [or] parking structure,[;
23	23	[(ii) a] landfill,[;
24	24	[(iii) an] airport, or park;
25	25	(B) [(iv)] a part of a utility system, water
26	26	supply project, water treatment plant, wastewater treatment plant,
27	27	[or] water or wastewater conveyance facility,[;
28	28	[(v) a] wharf, [or] dock, or[;
29	29	[(vi) a] flood control and drainage
30	30	project;
31	31	[(vii) a public safety facility, including
32	32	a police station, fire station, emergency shelter, jail, or
33	33	juvenile detention facility;
34	34	[(viii) a judicial facility;
35	35	[(ix) an administrative office building
36	36	housing the governmental functions of the municipality or county;
37	37	[(x) an animal shelter;
38	38	[(xi) a library; or
39	39	[(xii) a park or recreation facility that
40	40	is generally accessible to the public and is part of the municipal
41	41	or county park system;
42	42	[(B) means the rehabilitation, expansion,
43	43	reconstruction, or maintenance of an existing stadium, arena, civic
44	44	center, convention center, or coliseum that is owned and operated
45	45	by the municipality or county or by an entity created to act on
46	46	behalf of the municipality or county; and]
47	47	(C) a telecommunications, wireless
48	48	communications, or information technology system and any computer
49	49	application hardware or software; or
50	50	(D) a cybersecurity system [does not include:
51	51	[(i) a facility for which more than 50
52	52	percent of the average annual usage is or is intended to be for
53	53	professional or semi-professional sports;
54	54	[(ii) a new stadium, arena, civic center,
55	55	convention center, or coliseum that is or is intended to be leased
56	56	by a single for-profit tenant for more than 180 days in a single
57	57	calendar year; or
58	58	[(iii) a hotel].
59	59	SECTION 3. Section 271.045, Local Government Code, is
60	60	amended by amending Subsections (a) and (b) and adding Subsections
61	61	(f) and (g) to read as follows:
62	62	(a) The governing body of an issuer may authorize
63	63	certificates only as necessary to pay a contractual obligation to
64	64	be incurred for the construction, creation, renovation, repair, or
65	65	improvement of a public work that is necessary:
66	66	(1) to comply with a state or federal law or rule, but
67	67	only if the issuer has been officially notified of noncompliance
68	68	with the law or rule [construction of any public work];
69	69	(2) to mitigate the impact of the following, as
70	70	determined by the governing body:
71	71	(A) a public health emergency in the jurisdiction
72	72	of the issuer that poses an imminent danger to the physical health
73	73	or safety of the residents of the issuer; or
74	74	(B) a natural disaster in the jurisdiction of the
75	75	issuer subject to a state of disaster declared or renewed by:
76	76	(i) the governor under Section 418.014,
77	77	Government Code, in the fiscal year that the certificates are
78	78	authorized; or
79	79	(ii) the presiding officer of the governing
80	80	body of the issuer under Section 418.108, Government Code, in the
81	81	fiscal year that the certificates are authorized [purchase of
82	82	materials, supplies, equipment, machinery, buildings, land, and
83	83	rights-of-way for authorized needs and purposes]; or
84	84	(3) to respond to a court decision that requires the
85	85	issuer to construct, create, renovate, repair, or improve a public
86	86	work [payment of contractual obligations for professional
87	87	services, including services provided by tax appraisers,
88	88	engineers, architects, attorneys, map makers, auditors, financial
89	89	advisors, and fiscal agents].
90	90	(b) If necessary because of a change order for a contractual
91	91	obligation incurred for the construction, creation, renovation,
92	92	repair, or improvement of a public work [orders], the governing
93	93	body of an issuer may authorize the issuance of certificates [may be
94	94	authorized] in an amount not to exceed 15 [25] percent of the [a]
95	95	contractual obligation [incurred for the construction of public
96	96	works], but certificates may be delivered only in the amount
97	97	necessary to discharge the contractual obligation [obligations].
98	98	(f) The governing body of an issuer that authorizes the
99	99	issuance of a certificate shall enter into a contract for the
100	100	construction, creation, renovation, repair, or improvement of the
101	101	public work for which the issuance is authorized not later than the
102	102	90th day after the date the governing body authorizes the issuance.
103	103	(g) The governing body of an issuer that authorizes a
104	104	certificate to pay a contractual obligation under Subsection
105	105	(a)(2)(A) shall adopt a resolution describing the conditions and
106	106	circumstances of the public health emergency.
107	107	SECTION 4. Section 271.0461, Local Government Code, is
108	108	amended to read as follows:
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
112	112	the payment of contractual obligations to be incurred in
113	113	demolishing dangerous structures [or restoring historic
114	114	structures] and may be sold for cash, subject to the restrictions
115	115	and other conditions of Section 271.050.
116	116	SECTION 5. 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 6. 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 registered [qualified]
142	142	voters of the issuer protesting the issuance of the certificates,
143	143	the issuer may not authorize the issuance of the certificates
144	144	unless the issuance is approved at an election ordered, held, and
145	145	conducted in the manner provided for bond elections under Chapter
146	146	1251, Government Code.
147	147	SECTION 7. Section 271.057(a), Local Government Code, is
148	148	amended to read as follows:
149	149	(a) Except as provided by Subsection (b), a contract let
150	150	under this subchapter for the construction, creation, renovation,
151	151	repair, or improvement of a public work [works] or the purchase of
152	152	materials, equipment, supplies, or machinery and for which
153	153	competitive bidding is required by this subchapter must be let to
154	154	the lowest responsible bidder and, as the governing body
155	155	determines, may be let on a lump-sum basis or unit price basis.
156	156	SECTION 8. Section 271.059, Local Government Code, is
157	157	amended to read as follows:
158	158	Sec. 271.059. CONTRACTOR'S BONDS. If a contract is for the
159	159	construction, creation, renovation, repair, or improvement of a
160	160	public work [works] and is required by this subchapter to be
161	161	submitted to competitive bidding, the successful bidder must
162	162	execute a good and sufficient payment bond and performance bond.
163	163	The bonds must each be:
164	164	(1) in the full amount of the contract price; and
165	165	(2) executed, in accordance with Chapter 2253,
166	166	Government Code, with a surety company authorized to do business in
167	167	this state.
168	168	SECTION 9. Section 271.046, Local Government Code, is
169	169	repealed.
170	170	SECTION 10. The changes in law made by this Act apply only
171	171	to a certificate of obligation issued on or after the effective date
172	172	of this Act. A certificate of obligation issued before the
173	173	effective date of this Act is governed by the law in effect on the
174	174	date the certificate was issued, and the former law is continued in
175	175	effect for that purpose.
176	176	SECTION 11. This Act takes effect September 1, 2025.