The bill, H.B. No. 231, introduces new restrictions on the use of ad valorem tax revenue for the payment of public securities. It amends Section 26.07 of the Tax Code by adding a new subsection (h), which states that any increase in a taxing unit's maintenance and operations tax revenue from an election cannot be used or transferred to any entity, including local government corporations, for the repayment of public securities. Additionally, the bill modifies the heading of Chapter 1253 of the Government Code to reflect a broader scope, changing "General Obligation Bonds" to "Public Securities" and clarifying that local entities, including municipalities and counties, cannot dedicate or use ad valorem tax revenue for public securities payments.

Furthermore, the bill adds Section 1253.004 to the Government Code, which defines "public security" and explicitly prohibits municipalities, counties, or their representatives from using revenue derived from ad valorem taxes for public securities payments. This section 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 on the 91st day after the legislative session if such a vote is not achieved.

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