The bill, H.B. No. 3688, 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 previously submitted and failed within the last five years, if the total 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 existing provisions regarding certificates of obligation, aligning them with the new restrictions on anticipation notes. It specifies that a certificate cannot be authorized if a similar bond proposition was rejected in the last five years, but allows for exceptions under the same conditions as those for anticipation notes. The changes will apply only to notes or certificates authorized after the bill's effective date of September 1, 2025, ensuring that any prior authorizations remain governed by the previous law.

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