By: Lucio  S.B. No. 461          (In the Senate - Filed January 11, 2017; February 6, 2017,   read first time and referred to Committee on Intergovernmental   Relations; April 5, 2017, reported adversely, with favorable   Committee Substitute by the following vote:  Yeas 7, Nays 0;   April 5, 2017, sent to printer.)Click here to see the committee vote     COMMITTEE SUBSTITUTE FOR S.B. No. 461 By:  Lucio     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.     * * * * *