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.
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.
