Bill > SB470

This bill, known as the Certificate of Obligation Reform Act, makes several significant changes to how local governments in Texas can issue certificates of obligation (COs), which are a type of debt instrument. The bill expands the definition of "public work" to include new categories like telecommunications systems, cybersecurity systems, and parks, while removing several previously listed public facilities. It also introduces more stringent requirements for issuing COs, such as limiting their use to necessary purposes like complying with state or federal laws, mitigating public health emergencies, or responding to court decisions. The bill reduces the maximum change order amount for COs from 25% to 15% and shortens the maximum maturity period from 40 to 30 years. Additionally, it lowers the voter petition threshold for challenging CO issuance from five to two percent of registered voters and extends the waiting period after a failed bond election from three to five years before COs can be issued for the same purpose. The changes aim to provide more oversight and restrict the use of certificates of obligation, making the process more transparent and controlled. The bill will take effect on September 1, 2025, and will apply only to certificates of obligation issued on or after that date.

Government Affairs

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=SB470