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Relating to general obligation bonds issued by political
No significant fiscal implication to the State is anticipated.
HB 440 would make a number of changes to the general obligation bond process.
The bill would stipulate that a school district may use the unspent proceeds of bonds only for the specific purposes for which the bond was authorized or to retire the bonds, unless the specific purposes of the bond(s) are accomplished or abandoned and the board of trustees in an open meeting approves in separate votes the use of proceeds for a purpose other than to retire the bonds and the purpose must be specified at the time the meeting is taken. Certain meeting notice and public participation opportunities would be required.
The bill would prohibit a political subdivision from issuing general obligation bonds to purchase, improve, or construct improvements to real property or to purchase personal property if the weighted average maturity of the bonds to finance the improvements or personal property exceeds 120 percent of the reasonably expected weighted average economic life of the improvements or personal property.
A political subdivision other than a school district would be prohibited from using unspent proceeds of a general obligation bond other than for the specific purposes the bond was issued or to retire the bond unless a majority of voters of the political subdivision approve of an alternative use of the unspent proceeds. Such an election must be held in the same manner as an election to issue bonds in the political subdivision.
Texas Action supports HB 440 for promoting the principles of limited government and property rights. This bill would help ensure that bonds and their related uses are transparent to the public and accountable to voters. We would support an amendment requiring school districts wishing to use unspent proceeds for an alternative purpose to also subject the proposed alternative purpose to voters for approval.