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