Morgan Bill Lets Big Counties Borrow To Pay Pension Debts

The text as introduced · 760 words

89R15749 JCG-F

By: Morgan
H.B. No. 4461

A BILL TO BE ENTITLED

AN ACT

relating to the issuance of obligations by certain counties to pay

the unfunded liabilities of the county to a public retirement

system.

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

SECTION 1. Subtitle I, Title 9, Government Code, is amended

by adding Chapter 1480 to read as follows:

CHAPTER 1480. OBLIGATIONS FOR UNFUNDED LIABILITIES OF CERTAIN

COUNTIES TO PUBLIC RETIREMENT SYSTEMS

Sec. 1480.001. DEFINITIONS. In this chapter:

(1) "Obligation" includes a bond, certificate, note,

or book entry obligation.

(2) "Public retirement system" has the meaning

assigned by Section 802.001.

(3) "Unfunded liability" means an unfunded, accrued

liability of a county to a public retirement system as determined by

actuarial analysis.

Sec. 1480.002. APPLICABILITY. This chapter applies only to

a county with a population of 800,000 or more that is located

adjacent to a county with a population of four million or more.

Sec. 1480.003. OBLIGATIONS AUTHORIZED. (a) A county may

issue obligations to fund all or any part of an unfunded liability.

(b) Before authorizing issuance and delivery of an

obligation under this section, the commissioners court of the

county must enter into a written agreement with the governing body

of the public retirement system that:

(1) has fiduciary responsibility for assets of the

trust fund that is to receive the net proceeds of the obligations to

be issued; and

(2) has the duty to oversee the investment and

expenditure of the assets of the fund.

(c) The written agreement must state the amount of the

unfunded liability and the date or dates on which the public

retirement system will accept the net proceeds of the obligations

to be issued in payment of all or a portion of the unfunded

liability.

Sec. 1480.004. VOTER APPROVAL REQUIRED. A county may issue

an obligation under this chapter to fund all or any part of the

unfunded liability of a public retirement system associated with

the county to which this chapter applies only if the issuance is

approved by a majority of the qualified voters of the county voting

at an election held for that purpose.

Sec. 1480.005. PROCEEDS OF OBLIGATIONS ISSUED. The county

shall deposit the net proceeds of obligations issued under this

chapter to the credit of the public retirement system. The amount

deposited under this section becomes part of the public retirement

system's assets.

Sec. 1480.006. PAYMENT OF OBLIGATIONS. (a) An obligation

issued under this chapter may be made payable by the county from:

(1) the fund from which compensation is paid to its

officers and employees;

(2) its general fund; or

(3) except as provided by Subsection (b), taxes,

revenues, both taxes and revenues, or any other source or

combination of sources of money that the county may use under state

law to secure or pay any kind of bond or obligation.

(b) An obligation issued under this chapter may not be made

payable by the county from ad valorem taxes.

(c) Notwithstanding any provision of the Tax Code, a county

may pledge anticipated revenue from the imposition of sales and use

taxes to secure the payment of an obligation authorized by this

chapter for a period not longer than 30 years.

Sec. 1480.007. OBLIGATION AS REFINANCING. An obligation

issued under this chapter is a complete or partial refinancing of a

commitment of the county to fund its unfunded liability.

Sec. 1480.008. SALE OF OBLIGATIONS; MATURITY. Obligations

issued under this chapter may be sold at private or public sale and

must mature not later than the 30th anniversary of the date of

issuance.

Sec. 1480.009. CREDIT AGREEMENTS. (a) In this section,

"credit agreement" and "obligation" have the meanings assigned by

Section 1371.001, Government Code.

(b) The governing body of a county that issues obligations

under this chapter may exercise any of the rights or powers of the

governing body of an issuer under Chapter 1371, Government Code,

and may enter into a credit agreement under that chapter. An

obligation issued under this chapter is an obligation under Chapter

1371, Government Code, but is not required to be rated as required

by that chapter.

Sec. 1480.010. CHAPTER CONTROLLING. To the extent of any

conflict between this chapter and another law, this chapter

prevails.

SECTION 2. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.