HB 4295 Introduced

Relating to the authority of a political subdivision to issue a public security if the debt-to-asset ratio of the political subdivision exceeds a certain percentage. 

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A BILL TO BE ENTITLED

 

AN ACT

 

relating to the authority of a political subdivision to issue a

 

public security if the debt-to-asset ratio of the political

 

subdivision exceeds a certain percentage.

 

       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 

       SECTION 1.  The heading to Chapter 1253, Government Code, is

 

amended to read as follows:

 

CHAPTER 1253. PUBLIC SECURITIES [GENERAL OBLIGATION BONDS] ISSUED

 

BY POLITICAL SUBDIVISIONS

 

       SECTION 2.  Chapter 1253, Government Code, is amended by

 

adding Section 1253.004 to read as follows:

 

       Sec. 1253.004.  LIMITATION ON AUTHORITY TO ISSUE PUBLIC

 

SECURITIES WITH HIGH DEBT-TO-ASSET RATIO. (a) In this section,

 

“public security” has the meaning assigned by Section 1201.002.

 

       (b)  A political subdivision may not issue a public security

 

if the political subdivision has a debt-to-asset ratio of 20

 

percent or more.

 

       SECTION 3.  The change in law made by this Act applies only

 

to a public security issued by a political subdivision on or after

 

the effective date of this Act.

 

       SECTION 4.  This Act takes effect September 1, 2025. 

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