The bill, H.B. No. 49, 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 repaying public securities. Additionally, the bill modifies the heading of Chapter 1253 of the Government Code to reflect a focus on public securities issued by local entities rather than general obligation bonds.

Furthermore, the bill adds Section 1253.004 to the Government Code, which establishes that municipalities, counties, or entities acting on their behalf cannot dedicate or use revenue derived from ad valorem taxes for the payment of public securities. This includes any revenue transferred to local government corporations for such payments. The provisions of this new section will apply only to public securities issued on or 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 that vote is not achieved.

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