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 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 to cover contractual obligations necessary for the construction, renovation, or improvement of public works, particularly in response to 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 requirement for voter approval if a petition signed by at least two percent of registered voters is submitted against the issuance of certificates. The bill also repeals a previous section of the Local Government Code and clarifies that the new regulations will apply only to certificates issued after the effective date of the Act, which is set for September 1, 2025.

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)