The bill, S.B. No. 1037, 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 if a bond proposition for the same purpose was rejected by voters in the past five years, if the amount exceeds five percent of the governing body's total outstanding bonded indebtedness, or if a petition against the issuance is signed by at least five percent of registered voters. However, exceptions are made for cases described in Section 271.056 of the Local Government Code and for compliance with state or federal laws if the issuer has been notified of noncompliance.

Additionally, the bill modifies the timeframe for which a bond proposition must have been submitted from three years to five years and clarifies that the prohibition on repayment of obligations with ad valorem taxes does not apply to issuers exercising authority under this section. The changes will only apply to anticipation notes or certificates of obligation authorized on or after the effective date of the Act, which is set for September 1, 2025.

Statutes affected:
Introduced: Government Code 1431.002, Government Code 1431.003, Local Government Code 271.047 (Local Government Code 271, Government Code 1431)