5 Points. Comptroller. Certificates of Obligation. Local Funding Mechanism. No Voters.

What is a certificate of obligation? ” local governments can use to fund public works without voter approval” (the lead sentence)

Where are certificates of obligation codified? Texas’ Certificate of Obligation Act of 1971

Goals of certificates of obligation?

• a quick tool for cities to fund projects with important flexibility
• for instances after a disaster or a court ruling

What entities can use certificates of obligation? 

• Cities
• counties
• health or hospital districts

What can local governments fund with COs?

• construction
• demolition
• restoration
• purchase materials, supplies, equipment, machinery, buildings
• purchase land and rights of way
• pay for related professional services

How does the funding mechanism work? 

• terms of up to 40 years
• usually are supported by property taxes or other local revenues

Have certificates of obligation been reigned in? Yes, in 2015 the Legislature added limitations

Fiscal Notes | Texas Comptroller | CERTIFICATES OF OBLIGATIONA Flexible Funding Tool for Local Projects