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 and counties in Texas. It amends Section 26.07 of the Tax Code by adding a new subsection (h), which explicitly states 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, including through local government corporations. Additionally, the bill modifies the heading of Chapter 1253 of the Government Code to reflect a focus on "Public Securities" rather than "General Obligation Bonds" and includes a new Section 1253.004 that further clarifies the limitations on using ad valorem tax revenue for public securities.

The new Section 1253.004 specifies that municipalities, counties, or entities acting on their behalf cannot dedicate or use revenue derived from ad valorem taxes for public securities payments, including any revenue transferred to local government corporations for this purpose. This provision applies only to public securities issued after the effective date of the Act. The bill is set to take effect immediately upon receiving a two-thirds vote from both houses of the legislature or, if not, on the 91st day after the legislative session concludes.

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