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 telecommunications and cybersecurity systems, while removing references to certain facilities like hotels and sports venues. The bill also stipulates that certificates can only be authorized to cover contractual obligations necessary for the construction, renovation, or repair of public works, particularly in response to legal requirements or emergencies. Additionally, it introduces new provisions requiring governing bodies to enter contracts within 90 days of authorization and mandates the adoption of resolutions detailing public health emergencies when applicable.

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 covered by certificates from 25% to 15%. The bill also establishes stricter conditions under which certificates can be issued if a bond proposition has failed in the past five years. A significant deletion in the bill is the removal of the section allowing certificates for the restoration of historic structures. The act is set to take effect on September 1, 2025, and will only apply to certificates issued after this date.

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)