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A BILL TO BE ENTITLED
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AN ACT
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relating to federal bankruptcy for home rule municipalities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sec. 140.001., Local Government Code is amended |
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by adding subsection (d) to read as follows: |
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Sec. 140.001. RELIEF UNDER FEDERAL BANKRUPTCY LAWS FOR |
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MUNICIPALITY, TAXING DISTRICT, OR OTHER POLITICAL SUBDIVISION. (a) |
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A municipality, taxing district, or other political subdivision |
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that is subject to this section may proceed under all federal |
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bankruptcy laws intended to relieve municipal indebtedness. |
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(b) A municipality is subject to this section if it has the |
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power to incur indebtedness through the action of its governing |
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body. A taxing district or other political subdivision is subject |
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to this section if it has the power to incur indebtedness either |
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through the action of its governing body or through that of the |
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county or municipality in which it is located. |
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(c) The officials and governing body of the municipality, |
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taxing district, or other political subdivision may adopt all |
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proceedings and take any action necessary or convenient to fully |
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avail the entity of the federal bankruptcy laws. |
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(d) A home rule municipality that adopts proceedings to |
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avail the municipality of federal bankruptcy laws or otherwise |
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seeks bankruptcy protection forfeits its home rule charter. |
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SECTION 2. This Act takes effect September 1, 2017. |