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House Bill 114 |
House Author: Flynn et al. |
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Effective: 9-1-15 |
Senate Sponsor: Hinojosa et al. |
House Bill 114 amends the Government Code to restrict the issuance of capital appreciation bonds (CABs) by political subdivisions under the Public Security Procedures Act. The bill prohibits a political subdivision from issuing CABs that are secured by property taxes unless certain conditions are met, including conditions relating to the length of maturity of the bonds, receipt of a cost estimate, personal or financial relationships, and transparency. The bill exempts refunding bonds and CABs issued for transportation project financing from such restrictions. The bill also prohibits the use of CAB proceeds to purchase certain maintenance or transportation-related items, restricts the use of unspent CAB proceeds, caps the total amount of issued CABs at 25 percent of a political subdivision's total outstanding bonded indebtedness, and prohibits a political subdivision from extending the maturity date of an issued CAB except under certain circumstances.