As engrossed by the House, HB 440 proposes two important public debt reforms, including:
- Upholding the will of voters by requiring that unspent bond proceeds only be used for a separate purpose if approved by the voters of a political subdivision other than a school district or if approved by the school district’s board of trustees.
- Better aligning the maturity of a bond with the life of an asset.
If approved, these reforms would counter two poor practices that do not serve Texas taxpayers well, i.e., using unspent bond proceeds for projects not explicitly endorsed by voters and using long-term debt instruments to finance short-term expenses. In tandem, these twin practices are aggravating an already difficult local government debt problem.