| 1 | 1 | | By: Schofield H.B. No. 2423 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | A BILL TO BE ENTITLED |
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| 5 | 5 | | AN ACT |
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| 6 | 6 | | relating to federal bankruptcy for home rule municipalities. |
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| 7 | 7 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 8 | 8 | | SECTION 1. Sec. 140.001., Local Government Code is amended |
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| 9 | 9 | | by adding subsection (d) to read as follows: |
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| 10 | 10 | | Sec. 140.001. RELIEF UNDER FEDERAL BANKRUPTCY LAWS FOR |
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| 11 | 11 | | MUNICIPALITY, TAXING DISTRICT, OR OTHER POLITICAL SUBDIVISION. (a) |
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| 12 | 12 | | A municipality, taxing district, or other political subdivision |
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| 13 | 13 | | that is subject to this section may proceed under all federal |
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| 14 | 14 | | bankruptcy laws intended to relieve municipal indebtedness. |
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| 15 | 15 | | (b) A municipality is subject to this section if it has the |
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| 16 | 16 | | power to incur indebtedness through the action of its governing |
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| 17 | 17 | | body. A taxing district or other political subdivision is subject |
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| 18 | 18 | | to this section if it has the power to incur indebtedness either |
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| 19 | 19 | | through the action of its governing body or through that of the |
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| 20 | 20 | | county or municipality in which it is located. |
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| 21 | 21 | | (c) The officials and governing body of the municipality, |
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| 22 | 22 | | taxing district, or other political subdivision may adopt all |
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| 23 | 23 | | proceedings and take any action necessary or convenient to fully |
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| 24 | 24 | | avail the entity of the federal bankruptcy laws. |
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| 25 | 25 | | (d) A home rule municipality that adopts proceedings to |
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| 26 | 26 | | avail the municipality of federal bankruptcy laws or otherwise |
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| 27 | 27 | | seeks bankruptcy protection forfeits its home rule charter. |
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| 28 | 28 | | SECTION 2. This Act takes effect September 1, 2017. |
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