The Certificate of Obligation Reform Act amends the Local Government Code to refine the process and conditions under 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 parks, telecommunications systems, and cybersecurity systems, while removing previous exclusions related to professional sports facilities and hotels. The bill also stipulates that certificates can only be authorized for specific contractual obligations related to public works that are necessary for compliance with laws, responding to emergencies, or fulfilling court orders. Additionally, it introduces new requirements for governing bodies to enter contracts within 90 days of authorization and mandates the adoption of resolutions for public health emergencies.

Further amendments include a reduction in the maximum maturity period for certificates from 40 to 30 years, and a change in the percentage of contractual obligations that can be authorized for issuance from 25% to 15%. The bill also lowers the threshold for voter petitions against 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, ensuring that existing certificates remain governed by the previous law.

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)