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A BILL TO BE ENTITLED
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AN ACT
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relating to a prohibition on the issuance of certain capital |
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appreciation bonds by local governments. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 1201, Government Code, is |
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amended by adding Section 1201.0245 to read as follows: |
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Sec. 1201.0245. CAPITAL APPRECIATION BONDS BY LOCAL |
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GOVERNMENTS PROHIBITED. (a) In this section, "capital |
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appreciation bond" means a bond that accrues and compounds interest |
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from its date of delivery, the interest on which by its terms is |
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payable only upon maturity or prior redemption. |
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(b) A county, municipality, special district, school |
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district, junior college district, or other political subdivision |
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may not issue capital appreciation bonds that are secured by ad |
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valorem taxes. |
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(c) Subsection (b) does not apply to the issuance of |
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refunding bonds under Chapter 1207. |
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(d) Subsection (b) does not apply to the issuance of capital |
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appreciation bonds for the purpose of financing transportation |
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projects. |
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SECTION 2. The change in law made by this Act does not |
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affect the validity of capital appreciation bonds issued before the |
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effective date of this Act. |
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SECTION 3. This Act takes effect September 1, 2015. |