The Certificate of Obligation Reform Act amends the Local Government Code to refine the process by which local governments can issue certificates of obligation. Key changes include a redefinition of "public work" to encompass a broader range of projects, such as telecommunications and cybersecurity systems, while removing references to certain facilities like hotels and sports venues. The bill stipulates that certificates can only be authorized to pay for obligations related to the construction, renovation, or improvement of public works necessary for compliance with laws, public health emergencies, or natural disasters. Additionally, it mandates that contracts for these projects must be entered into within 90 days of authorization.

Further amendments include a reduction in the maximum maturity period for certificates from 40 to 30 years, and a change in the percentage limit for issuing certificates based on change orders from 25% to 15%. The bill also introduces a requirement for a resolution to be adopted in the event of a public health emergency and modifies the petition threshold for voter approval of certificate issuance from five percent to two percent of registered voters. The act will take effect on September 1, 2025, and will only apply to certificates issued after this date.

Statutes affected:
Introduced: Local Government Code 271.045, Local Government Code 271.0461, Local Government Code 271.047, Local Government Code 271.049, Local Government Code 271.057, Local Government Code 271.059, Local Government Code 271.046 (Local Government Code 271)