Bill Text: TX SB461 | 2017-2018 | 85th Legislature | Comm Sub


Bill Title: Relating to the notice required before the issuance of certain debt obligations by political subdivisions.

Spectrum: Slight Partisan Bill (Republican 2-1)

Status: (Engrossed - Dead) 2017-05-12 - Committee report sent to Calendars [SB461 Detail]

Download: Texas-2017-SB461-Comm_Sub.html
 
 
  By: Lucio, et al. S.B. No. 461
 
  (Murphy)
 
   
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the notice required before the issuance of certain debt
  obligations by political subdivisions.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 3.009, Election Code, is amended to read
  as follows:
         Sec. 3.009.  CONTENTS OF DEBT OBLIGATION ELECTION ORDER.
  (a)  In this section, "debt obligation" means an issued public
  security, as defined by Section 1201.002, Government Code, that is
  secured by and payable from ad valorem taxes. The term does not
  include public securities that are designated as self-supporting by
  the political subdivision issuing the securities.
         (b)  The document ordering an election to authorize a
  political subdivision to issue debt obligations must distinctly
  state:
               (1)  the proposition language that will appear on the
  ballot;
               (2)  the purpose for which the debt obligations are to
  be authorized;
               (3)  the principal amount of the debt obligations to be
  authorized;
               (4)  that taxes sufficient to pay the [annual]
  principal of and interest on the debt obligations may be imposed;
               (5)  a statement of the estimated tax rate if the debt
  obligations are authorized or of the maximum interest rate of the
  debt obligations or any series of the debt obligations, based on the
  market conditions at the time of the election order;
               (6)  the maximum maturity date of the debt obligations
  to be authorized or that the debt obligations may be issued to
  mature over a specified number of years not to exceed the maximum
  number of years authorized by law [40];
               (7)  the aggregate amount of the outstanding principal
  of the political subdivision's debt obligations as of the date
  [beginning of the political subdivision's fiscal year in which] the
  election is ordered;
               (8)  the aggregate amount of the outstanding interest
  on debt obligations of the political subdivision as of the date
  [beginning of the political subdivision's fiscal year in which] the
  election is ordered, which may be based on the expectations of the
  political subdivision as it relates to variable rate debt
  obligations; and
               (9)  the ad valorem debt service tax rate for the
  political subdivision at the time the election is ordered,
  expressed as an amount per $100 valuation of taxable property.
         SECTION 2.  Section 52.072, Election Code, is amended by
  amending Subsection (e) and adding Subsection (f) to read as
  follows:
         (e)  In addition to any other requirement imposed by law for
  a proposition, including a provision prescribing the proposition
  language, a proposition submitted to the voters for approval of
  [the issuance of bonds or] the imposition, increase, or reduction
  of a tax shall specifically state, as applicable:
               (1)  [with respect to a proposition seeking voter
  approval of the issuance of bonds:
                     [(A)     the total principal amount of the bonds to
  be authorized, if approved; and
                     [(B)     a general description of the purposes for
  which the bonds are to be authorized, if approved;
               [(2)]  with respect to a proposition that only seeks
  voter approval of the imposition or increase of a tax, the amount of
  or maximum tax rate of the tax or tax increase for which approval is
  sought; or
               (2) [(3)]  with respect to a proposition that only
  seeks voter approval of the reduction of a tax, the amount of tax
  rate reduction or the tax rate for which approval is sought.
         (f)  A political subdivision that submits to the voters a
  proposition for the approval of the issuance of debt obligations
  shall prescribe the wording of the proposition that is to appear on
  the ballot in accordance with the requirements of Subchapter B,
  Chapter 1251, Government Code. In this subsection, "debt
  obligation" and "political subdivision" have the meanings assigned
  by Section 1251.051, Government Code.
         SECTION 3.  Chapter 1251, Government Code, is amended by
  designating Sections 1251.001, 1251.003, 1251.004, 1251.005, and
  1251.006 as Subchapter A and adding a subchapter heading to read as
  follows:
  SUBCHAPTER A. PROVISIONS RELATING GENERALLY TO BOND ELECTIONS
         SECTION 4.  Chapter 1251, Government Code, is amended by
  adding Subchapter B to read as follows:
  SUBCHAPTER B. BALLOT FOR DEBT OBLIGATIONS ISSUED BY POLITICAL
  SUBDIVISION
         Sec. 1251.051.  DEFINITIONS. In this subchapter:
               (1)  "Debt obligation" means a public security as
  defined by Section 1201.002 secured by and payable from ad valorem
  taxes.  The term does not include public securities that are
  designated as self-supporting by the political subdivision issuing
  the securities.
               (2)  "Debt obligation election order" means the order,
  ordinance, or resolution ordering an election to authorize the
  issuance of debt obligations.
               (3)  "Political subdivision" means a municipality,
  county, school district, or special taxing district.
         Sec. 1251.052.  FORM. (a)  The ballot for a measure seeking
  voter approval of the issuance of debt obligations by a political
  subdivision shall specifically state:
               (1)  a general description of the purposes for which
  the debt obligations are to be authorized;
               (2)  the total principal amount of the debt obligations
  to be authorized; and
               (3)  that taxes sufficient to pay the principal of and
  interest on the debt obligations will be imposed.
         (b)  In addition to the requirements of Subsection (a), the
  ballot for a measure seeking voter approval of the issuance of debt
  obligations by a political subdivision with at least 250 registered
  voters on the date the governing body of the political subdivision
  adopts the debt obligation election order shall specifically state
  the estimated maximum annual increase in the amount of taxes that
  would be imposed on a residence homestead in the political
  subdivision with an appraised value of $100,000 to repay the debt
  obligations to be authorized, if approved, based upon assumptions
  made by the governing body of the political subdivision.
         (c)  The governing body of the political subdivision shall
  identify in the debt obligation election order the major
  assumptions made in connection with the statement required by
  Subsection (b), including:
               (1)  the amortization of the political subdivision's
  debt obligations, including outstanding debt obligations and the
  proposed debt obligations;
               (2)  changes in estimated future appraised values
  within the political subdivision; and
               (3)  the assumed interest rate on the proposed debt
  obligations.
         (d)  A political subdivision with at least 250 registered
  voters on the date the governing body of the political subdivision
  adopts the debt obligation election order must prepare a voter
  information document for each proposition to be voted on at the
  election.  The political subdivision shall post the voter
  information document in the same manner as a debt obligation
  election order is required to be posted under Section 4.003(f),
  Election Code, and may include the voter information document in
  the debt obligation election order.  The voter information document
  must distinctly state:
               (1)  the language that will appear on the ballot;
               (2)  the following information formatted as a table:
                     (A)  the principal of the debt obligations to be
  authorized;
                     (B)  the estimated interest for the debt
  obligations to be authorized;
                     (C)  the estimated combined principal and
  interest required to pay on time and in full the debt obligations to
  be authorized; and
                     (D)  as of the date the political subdivision
  adopts the debt obligation election order:
                           (i)  the principal of all outstanding debt
  obligations of the political subdivision;
                           (ii)  the estimated remaining interest on
  all outstanding debt obligations of the political subdivision,
  which may be based on the expectations of the political subdivision
  as it relates to the interest due on any variable rate debt
  obligations; and
                           (iii)  the estimated combined principal and
  interest required to pay on time and in full all outstanding debt
  obligations of the political subdivision, which may be based on the
  expectations of the political subdivision as it relates to the
  interest due on any variable rate debt obligations; and
               (3)  any other information that the political
  subdivision considers relevant or necessary to explain the
  information required by this subsection.
         (e)  A political subdivision that maintains an Internet
  website shall provide the information described by Subsection (d)
  on its website in an easily accessible manner beginning not later
  than the 21st day before election day and ending on the day after
  the date of the debt obligation election.
         (f)  This section provides the ballot proposition language
  for an election to authorize the issuance of debt obligations by a
  political subdivision.  To the extent of a conflict between this
  section and another law, this section controls.
         SECTION 5.  Section 271.049, Local Government Code, is
  amended by amending Subsections (a) and (b) and adding Subsection
  (e) to read as follows:
         (a)  Regardless of the sources of payment of certificates,
  certificates may not be issued unless the issuer publishes notice
  of its intention to issue the certificates.  The notice must be
  published:
               (1)  once a week for two consecutive weeks in a
  newspaper, as defined by Subchapter C, Chapter 2051, Government
  Code, that is of general circulation in the area of the issuer, with
  the date of the first publication to be before the 45th [30th] day
  before the date tentatively set for the passage of the order or
  ordinance authorizing the issuance of the certificates; and
               (2)  if the issuer maintains an Internet website,
  continuously on the issuer's website for at least 45 days before the
  date tentatively set for the passage of the order or ordinance
  authorizing the issuance of the certificates.
         (b)  The notice must state:
               (1)  the time and place tentatively set for the passage
  of the order or ordinance authorizing the issuance of the
  certificates;
               (2)  the [maximum amount and] purpose of the
  certificates to be authorized; [and]
               (3)  the manner in which the certificates will be paid
  for, whether by taxes, revenues, or a combination of the two;
               (4)  the following:
                     (A)  the then-current principal of all
  outstanding debt obligations of the issuer;
                     (B)  the then-current combined principal and
  interest required to pay all outstanding debt obligations of the
  issuer on time and in full, which may be based on the expectations
  of the issuer as it relates to the interest due on any variable rate
  debt obligations;
                     (C)  the maximum principal amount of the
  certificates to be authorized; and
                     (D)  the estimated combined principal and
  interest required to pay the certificates to be authorized on time
  and in full;
               (5)  the estimated interest rate for the certificates
  to be authorized or that the maximum interest rate for the
  certificates may not exceed the maximum legal interest rate; and
               (6)  the maximum maturity date of the certificates to
  be authorized.
         (e)  In this section, "debt obligation" means a public
  security, as defined by Section 1201.002, Government Code, secured
  by and payable from ad valorem taxes.  The term does not include
  public securities that are designated as self-supporting by the
  political subdivision issuing the securities.
         SECTION 6.  Section 1251.002, Government Code, is repealed.
         SECTION 7.  (a)  The changes in law made by this Act to
  Chapter 1251, Government Code, apply only to a ballot for an
  election ordered on or after the effective date of this Act. An
  election ordered before the effective date of this Act is governed
  by the law in effect when the election was ordered, and the former
  law is continued in effect for that purpose.
         (b)  The changes in law made by this Act to Section 271.049,
  Local Government Code, apply only to a certificate of obligation
  for which the first notice of intention to issue the certificate is
  made on or after the effective date of this Act.  A certificate of
  obligation for which the first notice of intention to issue the
  certificate is made before the effective date of this Act is
  governed by the law in effect when the notice of intention is made,
  and the former law is continued in effect for that purpose.
         SECTION 8.  This Act takes effect September 1, 2017.
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