Texas Codes

Tex. Loc. Gov't Code § 501.008 (2026)

Limitation On Financial Obligation

✓ current as of May 2026

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Sec. 501.008. LIMITATION ON FINANCIAL OBLIGATION. (a) Except as provided by Subsection (b), a corporation may not incur a financial obligation that cannot be paid from:

(1) bond proceeds;

(2) revenue realized from the lease or sale of a project;

(3) revenue realized from a loan made by the corporation to wholly or partly finance or refinance a project; or

(4) money granted under a contract with a municipality under Section 380.002.

(b) A Type A or Type B corporation may obtain a loan from the Texas small and rural community success fund program under Subchapter E, Chapter 489, Government Code, for eligible projects as authorized by this subtitle. To secure the loan, the Type A or Type B corporation may pledge revenue from the sales and use tax imposed by the corporation's authorizing municipality under Chapter 504 or 505, as applicable, for the benefit of the corporation.

Added by Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 3.01, eff. April 1, 2009.

Amended by:

Acts 2021, 87th Leg., R.S., Ch. 947 (S.B. 1465), Sec. 2, eff. June 18, 2021.

Notes of Decisions

Cited in 1 case, 2019–2019 · leading case: Rosenberg Dev. Corp. v. Imperial Performing Arts, Inc., 571 S.W.3d 738 (Tex. 2019).

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Rosenberg Dev. Corp. v. Imperial Performing Arts, Inc., 571 S.W.3d 738 (Tex. 2019). “See Tex. Loc. Gov't Code §§ 501.008 (limiting the incurrable financial obligations), 505.”

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