The bill, S.B. No. 1024, amends the Government Code and Local Government Code regarding the issuance of anticipation notes and certificates of obligation by governing bodies of issuers. It introduces new restrictions on the authorization of anticipation notes, stating that they cannot be issued to pay contractual obligations if a bond proposition for the same purpose was submitted to voters in the past five years and failed, or if the total debt service of all outstanding and proposed anticipation notes exceeds five percent of the issuer's most recent annual budget. However, exceptions are provided for cases involving natural disasters, compliance with court orders or federal/state regulations, and if the total debt service of the proposed note is less than $5 million.

Additionally, the bill modifies the conditions under which certificates of obligation can be authorized, aligning them with the new provisions for anticipation notes. It specifies that a certificate cannot be authorized if a similar bond proposition was rejected in the past five years, but allows for exceptions in specific circumstances, such as compliance with legal requirements. The changes will apply only to anticipation notes or certificates authorized after the bill's effective date of September 1, 2025, ensuring that previously authorized notes and certificates remain governed by the prior law.

Statutes affected:
Introduced: Government Code 1431.002, Government Code 1431.003, Local Government Code 271.047 (Local Government Code 271, Government Code 1431)
Senate Committee Report: Government Code 1431.002, Government Code 1431.003, Local Government Code 271.047 (Local Government Code 271, Government Code 1431)
Engrossed: Government Code 1431.002, Government Code 1431.003, Local Government Code 271.047 (Local Government Code 271, Government Code 1431)
House Committee Report: Government Code 1431.002, Government Code 1431.003, Local Government Code 271.047 (Local Government Code 271, Government Code 1431)