Bill > HB4986

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 telecommunications systems, cybersecurity systems, and parks, while removing several previous categories like public safety facilities and administrative buildings. It also introduces more restrictive conditions for issuing COs, such as requiring that they be issued only when necessary to comply with laws, mitigate public health emergencies, or respond to court decisions. The bill reduces the maximum amount of additional certificates that can be issued for change orders from 25% to 15% of the original contractual obligation and requires that the contract for the public work be entered into within 90 days of authorization. Additionally, the bill lowers the threshold for voter petition protest from five percent to two percent of registered voters and extends the waiting period after a failed bond election from three to five years before new certificates can be issued. The maximum maturity for certificates is reduced from 40 to 30 years, and the bill specifically limits the use of COs for demolishing dangerous structures, removing the previous provision for restoring historic structures. These changes aim to provide more oversight and restrictions on local government debt issuance.

Labor and Employment

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB4986