1. Texas Secretary of State Elections Division
11/23/2018
Bond Elections
Tim Juro, Staff Attorney
Elections Division – Texas Secretary of State
Election Law Seminar – December 2015
11/23/2018
Texas Secretary of State Elections Division
Texas Secretary of State Elections Division

2. Texas Secretary of State Elections Division
Agenda
Sources of Law
Types of Bonds
Ordering a Bond Election
Notice of a Bond Election
Ballots
Entity Specific Provisions
Approval by the Attorney General
11/23/2018
Texas Secretary of State Elections Division

3. Texas Secretary of State Elections Division
Sources of Law
Texas Constitution
Election Code
Government Code
Local Government Code
Water Code
Health & Safety Code
Transportation Code
Etc.
11/23/2018
Texas Secretary of State Elections Division

4. Texas Secretary of State Elections Division
Bond Authority
An entity must be explicitly authorized to issue debt
ISDs, Cities, Counties, etc. have authority from different places
The law granting authority often indicates the purpose for which debt can be issued
11/23/2018
Texas Secretary of State Elections Division

5. Texas Secretary of State Elections Division
Bond Purposes
Bonds are for obligations that are multi-year
Obligations that are repaid in the same year generally do not follow the same process
Too many short-term obligations can effect the entity’s credit rating
Long Term vs. Short Term needs
11/23/2018
Texas Secretary of State Elections Division

6. Texas Secretary of State Elections Division
Bonds and Elections
General Obligation Bonds: Generally REQUIRE an election.
Revenue Bonds: May or may not require an election, depending on the source law.
Refunding Bonds: Seldom require an election.
Certificates of Obligation: May be issued without voter approval. However, notice must be posted and an election may be called if a petition signed by qualified voters is received.
11/23/2018
Texas Secretary of State Elections Division

7. Texas Secretary of State Elections Division
Bonds and Elections
General Obligation Bonds
Backed by ad valorem taxes
Authorized by election
Used for permanent public improvements
As provided by either statute or charter (for cities)
Typically long-life assets
11/23/2018
Texas Secretary of State Elections Division

8. Texas Secretary of State Elections Division
Bonds and Elections
Revenue Bonds
No election required
Unless required by city charter– Ed. Code has no likewise provision
Not secured by property taxes
Revenue stream is promised to finance a revenue-producing asset
11/23/2018
Texas Secretary of State Elections Division

9. Texas Secretary of State Elections Division
Bonds and Elections
Certificates of Obligation
For cities, counties & hospital/heath districts
No election required
But can be, if a petition is received
Wider range of use
Things like professional services, demolition, restoration, etc.
Can be supported by taxes, revenues, or both
11/23/2018
Texas Secretary of State Elections Division

10. Ordering a Bond Election
Texas Election Code applies, election MUST be called on a uniform election date = May or November. (§41.001)
Does not have to be on the date of your general election
NOTE: Please check your special district law for any exceptions.
11/23/2018
Texas Secretary of State Elections Division

11. Ordering a Bond Election
Deadline for Ordering = Texas Election Code:
78 Days Before Election
Change made by SB 1703
11/23/2018
Texas Secretary of State Elections Division

12. Texas Secretary of State Elections Division
Bond Election Order
Election Notice (§ 3.006)
date of the election
offices/measures to be voted on at election
location of each early voting places
date that early voting will begin, if later than standard date
dates and hours for early voting in an election in which the early voting clerk is not county clerk or city secretary;
dates and hours for voting on Saturday or Sunday, if county clerk of city secretary is not early voting clerk
early voting clerk’s official mailing address, if the early voting clerk is not county clerk or city secretary.
11/23/2018
Texas Secretary of State Elections Division

13. Texas Secretary of State Elections Division
Bond Election Order
If the election is for general obligation bond (secured by taxes) must follow the requirements indicated in §3.009 for the election order:
§ 3.006
+ § 3.009
ORDER
11/23/2018
Texas Secretary of State Elections Division

14. Texas Secretary of State Elections Division
Bond Election Order
PART ONE : General Election Order (§ 3.006)
date of the election
offices/measures to be voted on at election
location of each early voting places
date that early voting will begin, if later than standard date
dates and hours for early voting in an election in which the early voting clerk is not county clerk or city secretary;
dates and hours for voting on Saturday or Sunday, if county clerk of city secretary is not early voting clerk
early voting clerk’s official mailing address, if the early voting clerk is not county clerk or city secretary.
11/23/2018
Texas Secretary of State Elections Division

15. Texas Secretary of State Elections Division
Bond Election Order
PART TWO: Bond Election Order Requirements
Proposition language that will appear on the ballot.
Purpose for which the debt obligations are to be authorized.
Principal amount of the debt obligations to be authorized.
Statement that taxes sufficient to pay principal and interest may be imposed.
Statement of the estimated tax rate.
The maximum maturity date of the debt obligations.
Current amount of the outstanding principal of the entity’s debt obligations.
Current amount of the outstanding interest on debt obligations.
The ad valorem debt service tax rate for the political subdivision.
11/23/2018
Texas Secretary of State Elections Division

16. Posting Election Order
If the election is for general obligation bond (secured by taxes) must be posted:
WHERE
WHEN
Prominent location at each polling place.
On election day and during early voting.
In 3 public places in boundaries of the political subdivision holding the election.
Not later than the 21st day before the election.
On political subdivision’s website with notice of election and contents of proposition, if political subdivision maintains a website.
During the 21 days before the election.
11/23/2018
Texas Secretary of State Elections Division

17. Posting Election Order - Cities
Per Gov’t Code municipalities must also post substantial copy of election order at:
Three public places in municipality
City hall for municipality.
11/23/2018
Texas Secretary of State Elections Division

18. Texas Secretary of State Elections Division
Notice of Election
Notice of Election (§ 4.004):
the nature and date of the election;
the location of each polling place;
the hours that the polls will be open;
any other information required by other law.
11/23/2018
Texas Secretary of State Elections Division

19. Posting Notice - Cities
Notice of Bond Election for Municipalities: Gov’t Code + Election Code NOTICE Note: Refunding bonds excluded from this requirements.
11/23/2018
Texas Secretary of State Elections Division

20. Posting Notice - Cities
How
Deadline
Publishing in Newspaper
Not earlier than 30th day or later than the 10th day before the election.
On the same day in each of two successive weeks. The first publication must be not less than 14 days before the date of the election.
Posting notice at a public place in each election precinct. OR
Mailing copy of the notice to each registered voter.
Not later than the 21st day before election day.
Not later than the 10th day before election day.
11/23/2018
Texas Secretary of State Elections Division

21. Posting Notice – Other Political Subs
How
Deadline
Publishing in Newspaper.
Not earlier than 30th day or later than the 10th day before the election.
Posting notice at a public place in each election precinct. OR
Mailing copy of the notice to each registered voter.
Not later than the 21st day before election day.
11/23/2018
Texas Secretary of State Elections Division

22. Texas Secretary of State Elections Division
Ballots - Cities
Contents of ballot proposition must have requirements of Election Code and Government Code:
Total principal amount of the bonds.
State purposes for which the bonds are to be authorized.
Rate of interest.
Imposition of taxes sufficient to pay the annual interest.
Maturity date of the bonds.
11/23/2018
Texas Secretary of State Elections Division

23. Texas Secretary of State Elections Division
Ballots - Others
Must only follow Election Code (§ (e)):
The total principal amount of the bonds to be authorized, if approved.
A general description of the purposes for which the bonds are to be authorized.
11/23/2018
Texas Secretary of State Elections Division

24. Entity Specific Elections
Please remember to consult with code provisions for districts!
11/23/2018
Texas Secretary of State Elections Division

25. Entity Specific Elections
Drainage Districts
Per § (c) and (d) of Water Code:
(c) The notice shall be signed by the secretary and shall:
(1) state the purpose of the election;
(2) state the proposition to be voted on;
(3) define the election precincts;
(4) prescribe the polling places in the district; and
(5) list the names of the election officers.
11/23/2018
Texas Secretary of State Elections Division

26. Entity Specific Elections, cont.
Drainage Districts
(d) The notice shall be published once a week for three consecutive weeks in a newspaper of general circulation in the county in which the district is located, but if a newspaper is not published in the county, the notice shall be published in the nearest county. The first publication shall be at least 20 days before the day of the election.
11/23/2018
Texas Secretary of State Elections Division

27. Entity Specific Elections, cont.
Development of Employment, Industrial
and Health Resources
Per § : In addition to Chapter 3 of Election Code, order must include “location of each polling place and election judges and clerks appointed for each polling place.”
11/23/2018
Texas Secretary of State Elections Division

28. Texas Secretary of State Elections Division
Approval by OAG
After bond is approved, the bond and authorization proceedings must be submitted to the OAG for review and approval
Remember, not all bonds require an election
OAG reviews the bond for compliance
Bond cannot issue with OAG approval!
11/23/2018
Texas Secretary of State Elections Division

29. Texas Secretary of State Elections Division
Approval by OAG
If the bond is approved by the OAG, the bond is registered with the Texas Comptroller
After registration, the bond can be issued
At that point, the bond is uncontestable (except for a claim of unconstitutionality)
Issued bonds are then given to purchaser for purchase price ($$$)
11/23/2018
Texas Secretary of State Elections Division

30. Texas Secretary of State Elections Division
Approval by OAG
“[A]fter approval by the attorney general and registration by the comptroller and on issuance…the bonds are valid, enforceable, and incontestable in any court.”
Tex. Gov. Code Ann. § (Vernon 2012).
11/23/2018
Texas Secretary of State Elections Division

31. Texas Secretary of State
Thanks for listening!
Questions?
11/23/2018
Texas Secretary of State