By: Bettencourt, Sparks S.B. No. 1024
A BILL TO BE ENTITLED
AN ACT
relating to the issuance of certain anticipation notes and
certificates of obligation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1431.002, Government Code, is amended by
adding Subsections (d) and (e) to read as follows:
(d) Except as provided by Subsection (e), the governing body
of an issuer may not authorize an anticipation note to pay a
contractual obligation to be incurred if:
(1) a bond proposition to authorize the issuance of
bonds for the same purpose was submitted to the voters during the
preceding five years and failed to be approved; or
(2) the amount of the anticipation note is greater
than five percent of the issuer's total outstanding bonded
indebtedness as of the date of issuance, including the amount of the
principal and interest to be paid on the outstanding bonds until
maturity.
(e) The governing body of an issuer may authorize an
anticipation note that the governing body is otherwise prohibited
from authorizing under Subsection (d):
(1) in a case described by Section 271.056(1), (2), or
(3), Local Government Code;
(2) to finance the cleanup, mitigation, or remediation
of a natural disaster;
(3) to comply with a federal court order; and
(4) to comply with a state or federal law, rule, or
regulation if the issuer has been officially notified of
noncompliance with the law, rule, or regulation.
SECTION 2. Section 1431.003(b), Government Code, is amended
to read as follows:
(b) Notwithstanding anything in this chapter to the
contrary and except as provided by Section 1431.002(d), the
governing body may exercise the authority granted to the governing
body of an issuer with regard to issuance of obligations under
Chapter 1371, except that the prohibition in that chapter on the
repayment of an obligation with ad valorem taxes does not apply to
an issuer exercising the authority granted by this section.
SECTION 3. Section 271.047(d), Local Government Code, is
amended to read as follows:
(d) Except as provided by this subsection, the governing
body of an issuer may not authorize a certificate to pay a
contractual obligation to be incurred if a bond proposition to
authorize the issuance of bonds for the same purpose was submitted
to the voters during the preceding five [three] years and failed to
be approved. A governing body may authorize a certificate that the
governing body is otherwise prohibited from authorizing under this
subsection:
(1) in a case described by Section 271.056(1), (2), or
(3) [Sections 271.056(1)-(3)]; and
(2) to comply with a state or federal law, rule, or
regulation if the political subdivision has been officially
notified of noncompliance with the law, rule, or regulation.
SECTION 4. The changes in law made by this Act apply only to
an anticipation note or certificate of obligation authorized to be
issued on or after the effective date of this Act. An anticipation
note or certificate of obligation authorized to be issued before
the effective date of this Act is governed by the law in effect
immediately before the effective date of this Act, and the former
law is continued in effect for that purpose.
SECTION 5. This Act takes effect September 1, 2025.