Texas House of Representatives/Photo by Noah Dawson
A bill inspired by businessman Alex Fairly’s lawsuit against the City of Amarillo is one step closer to becoming law.
The bill, SB 2035, originally introduced by Texas State Senator Paul Bettencourt (R-Houston), would place a 5-year moratorium on using either certificates of obligation or anticipation notes for projects rejected by voters in a bond election. Currently, taxing entities are only prohibited from using certificates of obligation within 3 years of a failed bond election. No similar prohibition currently exists for anticipation notes.
The bill was filed in response to the City of Amarillo attempting to issue tax anticipation notes to fund renovations to the Amarillo Civic Center Complex last year. The project was similar to a bond-funded proposal rejected by voters in the November 2020 election. The plan was halted by Judge William Sowder after local businessman Alex Fairly sued the city in response to the project. The city has since appealed the ruling, arguing that they need to do so to clarify state law. However, it appears the legislature is moving towards tightening the laws in question.
During a hearing on the bill, Adam Haynes, representing the Conference of Urban Counties, argued against expanding the moratorium from three to five years. While he argued against the expanded moratorium, he still said it was a “good bill” and a needed reaction to the actions taken by the City of Amarillo.
James Quintero, who testified on behalf of the Texas Public Policy Foundation, argued that the moratorium should be expanded, even suggesting that the legislature consider a further increase to seven years.
According to the witness list, TJ Patterson representing the City of Fort Worth and Julie Wheeler representing the Travis County Commissioners Court had registered to testify against the bill but did not appear. Samuel Sheetz, representing Americans for Prosperity, as well as Jorge Martinez and Karla Sierra, representing The LIBRE Initiative, registered to testify in support of the bill but did not appear.
Following the hearing last week, the bill passed out of the House Committee on Pensions, Investments & Financial Services on Monday, with the following vote recorded:
Ayes:
Giovanni Capriglione (R-Southlake)
Stan Lambert (R-Abilene)
Salman Bhojani (D-Euless)
Frederick Frazier (R-McKenney)
Teresa Leo Wilson (R-Galveston)
Gary VanDeaver (R-New Boston)
Nays:
John Bryant (D-Dallas)
Mihaela Plesa (D-Dallas)
Absent:
Hubert Vo (D-Houston)
The bill now heads to the floor of the Texas House of Representatives for final approval by that chamber. Since the bill has already passed in the Texas Senate, it will then head to Governor Greg Abbott’s desk if approved by the House.
Update 5/22/23: The bill has been scheduled for consideration by the house on Tuesday, May 23rd.