House Bill No. 19 aims to enhance the regulation of debt issuance and repayment by local governments in Texas, with a particular focus on ad valorem tax rates and the use of tax revenue for debt obligations. The bill amends Section 44.004(c) of the Education Code to improve transparency in budget discussions by requiring detailed public notices that compare proposed budgets with previous years, total appraised and taxable values, and outstanding bonded indebtedness. It also mandates that elections for issuing general obligation bonds or increasing ad valorem tax rates occur on the November uniform election date, ensuring these elections cannot be classified as emergency elections. Additionally, the bill limits local government debt by stating that annual debt service from property taxes cannot exceed 20% of the average property tax collections over the past three years.

Furthermore, the bill updates various sections of the Local Government Code and the Tax Code regarding the issuance of certificates of obligation and related financial practices. Key changes include allowing certificates for professional services necessary for public works, reducing the maximum maturity period for certificates from 40 to 30 years, and lowering the percentage of registered voters required to protest the issuance of certificates from five to two percent. The bill also introduces new requirements for governing bodies during public health emergencies and mandates that public works contracts be awarded to the lowest responsible bidder. It prohibits the use of maintenance and operations tax revenue for debt repayment and specifies that the changes will apply only to taxes imposed and certificates issued after the effective date of the Act, set for September 1, 2025, with certain provisions taking effect on January 1, 2026.

Statutes affected:
Introduced: Education Code 44.004, Government Code 1431.001, Government Code 1431.002, Government Code 271.045, Local Government Code 271.043, Local Government Code 271.045, Local Government Code 271.0461, Local Government Code 271.047, Local Government Code 271.049, Local Government Code 271.0525, Local Government Code 271.057, Local Government Code 271.059, Tax Code 26.012, Tax Code 26.04, Tax Code 26.05, Tax Code 26.07 (Government Code 271, Education Code 44, Tax Code 26, Local Government Code 271, Government Code 1431)