The bill, H.B. No. 231, introduces new restrictions on the use of ad valorem tax revenue for the payment of public securities by municipalities, counties, and entities acting on their behalf. Specifically, it adds a new subsection to Section 26.07 of the Tax Code, stating that any increase in a taxing unit's maintenance and operations tax revenue from an election cannot be used or transferred to repay public securities. Additionally, the bill amends the heading of Chapter 1253 of the Government Code to reflect a focus on "Public Securities" rather than "General Obligation Bonds" and introduces a new section, 1253.004, which explicitly prohibits the dedication or use of ad valorem tax revenue for public securities payments.

The new provisions clarify that revenue derived from ad valorem taxes, particularly those resulting from elections under Chapter 26 of the Tax Code, cannot be pledged or used for public securities, including payments made to local government corporations. This limitation is intended to ensure that such tax revenues are not diverted from their intended purposes. The bill will apply only to public securities issued after its effective date, which will be immediate if it receives a two-thirds majority vote in both houses of the legislature; otherwise, it will take effect 91 days after the legislative session concludes.

Statutes affected:
Introduced: Tax Code 26.07 (Tax Code 26)