TITLE: 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.

SUMMARY: 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.

FULL TEXT:
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.