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AN ACT
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relating to the notice required before the issuance of certain debt |
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obligations by political subdivisions. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 3.009, Election Code, is amended to read |
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as follows: |
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Sec. 3.009. CONTENTS OF DEBT OBLIGATION ELECTION ORDER. |
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(a) In this section, "debt obligation" means an issued public |
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security, as defined by Section 1201.002, Government Code, that is |
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secured by and payable from ad valorem taxes. The term does not |
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include public securities that are designated as self-supporting by |
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the political subdivision issuing the securities. |
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(b) The document ordering an election to authorize a |
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political subdivision to issue debt obligations must distinctly |
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state: |
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(1) the proposition language that will appear on the |
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ballot; |
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(2) the purpose for which the debt obligations are to |
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be authorized; |
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(3) the principal amount of the debt obligations to be |
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authorized; |
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(4) that taxes sufficient to pay the [annual] |
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principal of and interest on the debt obligations may be imposed; |
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(5) a statement of the estimated tax rate if the debt |
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obligations are authorized or of the maximum interest rate of the |
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debt obligations or any series of the debt obligations, based on the |
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market conditions at the time of the election order; |
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(6) the maximum maturity date of the debt obligations |
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to be authorized or that the debt obligations may be issued to |
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mature over a specified number of years not to exceed the maximum |
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number of years authorized by law [40]; |
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(7) the aggregate amount of the outstanding principal |
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of the political subdivision's debt obligations as of the date |
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[beginning of the political subdivision's fiscal year in which] the |
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election is ordered; |
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(8) the aggregate amount of the outstanding interest |
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on debt obligations of the political subdivision as of the date |
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[beginning of the political subdivision's fiscal year in which] the |
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election is ordered, which may be based on the political |
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subdivision's expectations relative to variable rate debt |
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obligations; and |
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(9) the ad valorem debt service tax rate for the |
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political subdivision at the time the election is ordered, |
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expressed as an amount per $100 valuation of taxable property. |
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SECTION 2. Section 52.072, Election Code, is amended by |
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amending Subsection (e) and adding Subsection (f) to read as |
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follows: |
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(e) In addition to any other requirement imposed by law for |
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a proposition, including a provision prescribing the proposition |
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language, a proposition submitted to the voters for approval of |
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[the issuance of bonds or] the imposition, increase, or reduction |
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of a tax shall specifically state, as applicable: |
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(1) [with respect to a proposition seeking voter
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approval of the issuance of bonds:
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[(A)
the total principal amount of the bonds to
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be authorized, if approved; and
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[(B)
a general description of the purposes for
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which the bonds are to be authorized, if approved;
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[(2)] with respect to a proposition that only seeks |
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voter approval of the imposition or increase of a tax, the amount of |
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or maximum tax rate of the tax or tax increase for which approval is |
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sought; or |
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(2) [(3)] with respect to a proposition that only |
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seeks voter approval of the reduction of a tax, the amount of tax |
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rate reduction or the tax rate for which approval is sought. |
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(f) A political subdivision that submits to the voters a |
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proposition for the approval of the issuance of debt obligations |
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shall prescribe the wording of the proposition that is to appear on |
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the ballot in accordance with the requirements of Subchapter B, |
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Chapter 1251, Government Code. In this subsection, "debt |
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obligation" and "political subdivision" have the meanings assigned |
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by Section 1251.051, Government Code. |
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SECTION 3. Chapter 1251, Government Code, is amended by |
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designating Sections 1251.001, 1251.003, 1251.004, 1251.005, and |
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1251.006 as Subchapter A and adding a subchapter heading to read as |
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follows: |
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SUBCHAPTER A. PROVISIONS RELATING GENERALLY TO COUNTY AND |
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MUNICIPAL BOND ELECTIONS |
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SECTION 4. Chapter 1251, Government Code, is amended by |
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adding Subchapter B to read as follows: |
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SUBCHAPTER B. BALLOT FOR DEBT OBLIGATIONS ISSUED BY POLITICAL |
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SUBDIVISION |
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Sec. 1251.051. DEFINITIONS. In this subchapter: |
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(1) "Debt obligation" means a public security, as |
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defined by Section 1201.002, secured by and payable from ad valorem |
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taxes. The term does not include public securities that are |
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designated as self-supporting by the political subdivision issuing |
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the securities. |
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(2) "Debt obligation election order" means the order, |
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ordinance, or resolution ordering an election to authorize the |
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issuance of debt obligations. |
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(3) "Political subdivision" means a municipality, |
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county, school district, or special taxing district. |
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Sec. 1251.052. FORM. (a) The ballot for a measure seeking |
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voter approval of the issuance of debt obligations by a political |
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subdivision shall specifically state: |
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(1) a general description of the purposes for which |
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the debt obligations are to be authorized; |
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(2) the total principal amount of the debt obligations |
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to be authorized; and |
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(3) that taxes sufficient to pay the principal of and |
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interest on the debt obligations will be imposed. |
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(b) A political subdivision with at least 250 registered |
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voters on the date the governing body of the political subdivision |
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adopts the debt obligation election order must prepare a voter |
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information document for each proposition to be voted on at the |
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election. The political subdivision shall post the voter |
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information document in the same manner as a debt obligation |
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election order is required to be posted under Section 4.003(f), |
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Election Code, and may include the voter information document in |
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the debt obligation election order. The voter information document |
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must distinctly state: |
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(1) the language that will appear on the ballot; |
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(2) the following information formatted as a table: |
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(A) the principal of the debt obligations to be |
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authorized; |
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(B) the estimated interest for |
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the debt |
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obligations to be authorized; |
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(C) the estimated combined principal and |
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interest required to pay on time and in full the debt obligations to |
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be authorized; and |
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(D) as of the date the political subdivision |
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adopts the debt obligation election order: |
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(i) the principal of all outstanding debt |
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obligations of the political subdivision; |
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(ii) the estimated remaining interest on |
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all outstanding debt obligations of the political subdivision, |
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which may be based on the political subdivision's expectations |
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relative to the interest due on any variable rate debt obligations; |
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and |
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(iii) the estimated combined principal and |
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interest required to pay on time and in full all outstanding debt |
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obligations of the political subdivision, which may be based on the |
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political subdivision's expectations relative to the interest due |
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on any variable rate debt obligations; |
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(3) the estimated maximum annual increase in the |
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amount of taxes that would be imposed on a residence homestead in |
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the political subdivision with an appraised value of $100,000 to |
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repay the debt obligations to be authorized, if approved, based |
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upon assumptions made by the governing body of the political |
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subdivision; and |
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(4) any other information that the political |
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subdivision considers relevant or necessary to explain the |
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information required by this subsection. |
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(c) The governing body of the political subdivision shall |
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identify in the voter information document the major assumptions |
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made in connection with the statement required by Subsection |
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(b)(3), including: |
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(1) the amortization of the political subdivision's |
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debt obligations, including outstanding debt obligations and the |
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proposed debt obligations; |
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(2) changes in estimated future appraised values |
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within the political subdivision; and |
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(3) the assumed interest rate on the proposed debt |
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obligations. |
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(d) A political subdivision that maintains an Internet |
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website shall provide the information described by Subsection (b) |
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on its website in an easily accessible manner beginning not later |
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than the 21st day before election day and ending on the day after |
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the date of the debt obligation election. |
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(e) This section provides the ballot proposition language |
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for an election to authorize the issuance of debt obligations by a |
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political subdivision. To the extent of a conflict between this |
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section and another law, this section controls. |
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SECTION 5. Section 271.049, Local Government Code, is |
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amended by amending Subsections (a) and (b) and adding Subsection |
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(e) to read as follows: |
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(a) Regardless of the sources of payment of certificates, |
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certificates may not be issued unless the issuer publishes notice |
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of its intention to issue the certificates. The notice must be |
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published: |
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(1) once a week for two consecutive weeks in a |
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newspaper, as defined by Subchapter C, Chapter 2051, Government |
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Code, that is of general circulation in the area of the issuer, with |
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the date of the first publication to be before the 45th [30th] day |
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before the date tentatively set for the passage of the order or |
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ordinance authorizing the issuance of the certificates; and |
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(2) if the issuer maintains an Internet website, |
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continuously on the issuer's website for at least 45 days before the |
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date tentatively set for the passage of the order or ordinance |
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authorizing the issuance of the certificates. |
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(b) The notice must state: |
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(1) the time and place tentatively set for the passage |
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of the order or ordinance authorizing the issuance of the |
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certificates; |
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(2) the [maximum amount and] purpose of the |
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certificates to be authorized; [and] |
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(3) the manner in which the certificates will be paid |
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for, whether by taxes, revenues, or a combination of the two; |
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(4) the following: |
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(A) the then-current principal of all |
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outstanding debt obligations of the issuer; |
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(B) the then-current combined principal and |
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interest required to pay all outstanding debt obligations of the |
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issuer on time and in full, which may be based on the issuer's |
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expectations relative to the interest due on any variable rate debt |
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obligations; |
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(C) the maximum principal amount of the |
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certificates to be authorized; and |
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(D) the estimated combined principal and |
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interest required to pay the certificates to be authorized on time |
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and in full; |
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(5) the estimated interest rate for the certificates |
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to be authorized or that the maximum interest rate for the |
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certificates may not exceed the maximum legal interest rate; and |
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(6) the maximum maturity date of the certificates to |
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be authorized. |
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(e) In this section, "debt obligation" means a public |
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security, as defined by Section 1201.002, Government Code, secured |
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by and payable from ad valorem taxes. The term does not include |
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public securities that are designated as self-supporting by the |
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political subdivision issuing the securities. |
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SECTION 6. Section 1251.002, Government Code, is repealed. |
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SECTION 7. (a) The changes in law made by this Act to |
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Chapter 1251, Government Code, apply only to a ballot for an |
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election ordered on or after the effective date of this Act. An |
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election ordered before the effective date of this Act is governed |
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by the law in effect when the election was ordered, and the former |
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law is continued in effect for that purpose. |
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(b) The changes in law made by this Act to Section 271.049, |
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Local Government Code, apply only to a certificate of obligation |
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for which the first notice of intention to issue the certificate is |
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made on or after the effective date of this Act. A certificate of |
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obligation for which the first notice of intention to issue the |
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certificate is made before the effective date of this Act is |
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governed by the law in effect when the notice of intention is made, |
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and the former law is continued in effect for that purpose. |
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SECTION 8. This Act takes effect September 1, 2019. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 477 was passed by the House on April |
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10, 2019, by the following vote: Yeas 146, Nays 0, 1 present, not |
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voting; and that the House concurred in Senate amendments to H.B. |
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No. 477 on May 22, 2019, by the following vote: Yeas 138, Nays 4, 2 |
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present, not voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 477 was passed by the Senate, with |
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amendments, on May 15, 2019, by the following vote: Yeas 29, Nays |
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2. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: __________________ |
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Date |
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__________________ |
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Governor |