CONSTITUTIONAL AMENDMENT PROPOSITIONS WILL AFFECT CITIES

Two proposed amendments to the Texas Constitution on the November 8 ballot directly affect Texas cities. 

The first, Proposition 2, would authorize the Texas Water Development Board to issue an additional $6 billion in general obligation water development bonds on a revolving basis.   Cities will be among other local governments eligible to tap the increased bonding amount through loans, grants, and various matching programs.   The $6 billion will be in addition to amounts currently authorized for issuance by the Board, and the increased amount would be subject to the framework governing Texas Water Development Fund II found in Section 49-d-9, Article III, of the Texas Constitution.   The amendment would also exempt a project funded by the new proceeds from certain constitutional limits on state participation.

The second, Proposition 5, would allow a city to enter into a multiyear interlocal cooperation contract with another city or with a county without having to meet interest and sinking fund requirements.  Under current law, most long-term contracts create a “debt” under the Texas Constitution, which isn’t legal without a pledge of a property tax paid into a sinking fund.  This amendment, if successful, will do away with the requirement of a pledged property tax, making such interlocal cooperation contracts—whether for services, infrastructure projects, or other purposes—easier to create and administer. 

Both propositions must pass by a majority of the voters of Texas voting on the November 8, 2011, ballot.  

TML member cities may use the material herein for any purpose. No other person or entity may reproduce, duplicate, or distribute any part of this document without the written authorization of the Texas Municipal League.

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