Texas Secretary of State Elections Division 12/4/2018 Bond Elections Tim Juro, Staff Attorney Elections Division – Texas Secretary of State Election Law Seminar – December 2016 12/4/2018 Texas Secretary of State Elections Division Texas Secretary of State Elections Division

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 12/4/2018 Texas Secretary of State Elections Division

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. 12/4/2018 Texas Secretary of State Elections Division

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 12/4/2018 Texas Secretary of State Elections Division

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 (voting, etc.) Too many short-term obligations can effect the entity’s credit rating Long Term vs. Short Term needs 12/4/2018 Texas Secretary of State Elections Division

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. 12/4/2018 Texas Secretary of State Elections Division

Ordering a Bond Election Texas Election Code applies, election MUST be called on a uniform election date = May or November. (§41.001) NOTE: Please check your special district law for any exceptions. 12/4/2018 Texas Secretary of State Elections Division

Ordering a Bond Election Deadline for Ordering = Texas Election Code: 78 Days Before Election Change made by SB 1703 12/4/2018 Texas Secretary of State Elections Division

Texas Secretary of State Elections Division What should you know? Information you should have prior to ordering the bond election: What will the ballot say? What will the bond do? What do we currently owe? What will the rate be? This information should be considered before you order your bond election! 12/4/2018 Texas Secretary of State Elections Division

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. 12/4/2018 Texas Secretary of State Elections Division

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 12/4/2018 Texas Secretary of State Elections Division

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. 12/4/2018 Texas Secretary of State Elections Division

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. 12/4/2018 Texas Secretary of State Elections Division

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. 12/4/2018 Texas Secretary of State Elections Division

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. 12/4/2018 Texas Secretary of State Elections Division

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. 12/4/2018 Texas Secretary of State Elections Division

Posting Notice - Cities Notice of Bond Election for Municipalities: Gov’t Code + Election Code NOTICE Note: Refunding bonds excluded from this requirements. 12/4/2018 Texas Secretary of State Elections Division

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. 12/4/2018 Texas Secretary of State Elections Division

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. 12/4/2018 Texas Secretary of State Elections Division

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. 12/4/2018 Texas Secretary of State Elections Division

Texas Secretary of State Elections Division Ballots - Others Must only follow Election Code (§ 52.072(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. 12/4/2018 Texas Secretary of State Elections Division

Entity Specific Elections Please remember to consult with code provisions for districts! 12/4/2018 Texas Secretary of State Elections Division

Entity Specific Elections Drainage Districts Per § 56.211 (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.   12/4/2018 Texas Secretary of State Elections Division

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. 12/4/2018 Texas Secretary of State Elections Division

Entity Specific Elections, cont. Development of Employment, Industrial and Health Resources Per § 1433.046: 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.” 12/4/2018 Texas Secretary of State Elections Division

Texas Secretary of State Elections Division Bonds and Cakes Both require foresight Have your ingredient list before you start Both require precision Don’t confuse tsp for tbsp Both require patience Needs to bake to completion Both can’t be unbaked Unless you have specific authority 12/4/2018 Texas Secretary of State Elections Division

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! 12/4/2018 Texas Secretary of State Elections Division

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 ($$$) 12/4/2018 Texas Secretary of State Elections Division

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. § 1202.006 (Vernon 2012). 12/4/2018 Texas Secretary of State Elections Division