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A BILL TO BE ENTITLED
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AN ACT
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relating to the issuance of certain capital appreciation bonds by |
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political subdivisions. |
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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. ISSUANCE OF CAPITAL APPRECIATION BONDS BY |
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LOCAL GOVERNMENTS. (a) In this section, "capital appreciation |
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bond" means a bond that accrues and compounds interest from its date |
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of delivery, the interest on which by its terms is payable only upon |
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maturity or prior redemption. |
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(b) The total amount of capital appreciation bonds issued by |
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a county, municipality, special district, school district, junior |
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college district, or other political subdivision that are secured |
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by ad valorem taxes may not exceed 25 percent of the political |
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subdivision's total outstanding bonded indebtedness at the time of |
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the issuance, including the amount of principal and interest to be |
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paid on the outstanding bonds until maturity. |
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(c) Subsection (b) does not apply to the issuance of: |
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(1) refunding bonds under Chapter 1207; or |
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(2) capital appreciation bonds for financing |
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transportation 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. |