Texas Capitol Building/Photo by Noah Dawson

As the legislative session in Austin wraps up, SB 2035, a bill inspired by the Amarillo Civic Center lawsuit is headed to Governor Abbott.

The bill, which was introduced by Paul Bettencourt (R-Houston), would modify existing law related to the ability of taxing entities to issue debt following a failed bond election. Under current law, if a bond put forward by a taxing entity such as a city is rejected by voters, the entity may not use certificates of obligation for the same purpose for three years. Bettencourt’s bill makes two big changes to that law.

First, it expands the time of the moratorium from three years to five. Second, it expands the scope of the law to also limit use of anticipation notes for the same purpose.

The bill was inspired by an attempt by the City of Amarillo to use tax anticipation notes to fund improvements to the Amarillo Civic Center Complex last year, despite a failed bond election for a similar project in 2020, when voters overwhelmingly rejected Proposition A.

That move by the city prompted a lawsuit by businessman Alex Fairly. Judge William Sowder voided the city’s ordinance, primarily on grounds that the city violated portions of the Texas Open Meetings Act. While the city is currently appealing the decision, SB 2035 seeks to stop other taxing entities from making similar attempts.

According to an unofficial record vote, there were 102 Yeas and 42 Nays. Nearly all of the chamber’s Republican lawmakers, including both of Amarillo’s representatives, voted for the bill. The only exceptions were House Speaker Dade Phelan (R-Beaumont) and Andrew Andrew Murr (R-Junction), who did not cast votes, as well as Charlie Geren (R-Fort Worth) who voted Present. While most Democrats voted Nay, 20 crossed party lines to support the bill. The Democrats who voted for the bill are: