This section says certain obligations or credit agreements are valid and enforceable only if approved by the attorney general and registered by the comptroller, with some exceptions. It also lets an issuer agree to waive sovereign immunity in limited situations.
Sec. 1371.059. VALIDITY AND INCONTESTABILITY. (a) If proceedings to authorize an obligation or credit agreement are approved by the attorney general and registered by the comptroller, each obligation or credit agreement, as applicable, or a contract providing revenue or security included in or executed and delivered according to the authorizing proceedings is incontestable in a court or other forum and is valid, binding, and enforceable according to its terms. (b) Notwithstanding Subsection (a) and Section 1371.003, and except as provided by this subsection, an obligation authorized by this chapter is not valid, binding, or enforceable unless the obligation is approved by the attorney general and registered by the comptroller in accordance with Chapter 1202. The attorney general's approval and registration by the comptroller is not required for an obligation: (1) to which Chapter 1202 does not apply or that is exempt from approval and registration as provided by Section 1202.007(a)(1), (2), (3), (4), (6), or (7); or (2) that matures within one year after the issuer receives payment for the obligation, regardless of whether the obligation is evidenced by an instrument with a nominal term of longer than one year. (c) An issuer in the proceedings to authorize obligations or a credit agreement, or in a credit agreement, may agree to waive sovereign immunity from suit or liability for the purpose of adjudicating a claim to enforce the credit agreement or obligation or for damages for breach of the credit agreement or obligation. This subsection does not apply to an issuer that is: (1) a state agency, including a state institution of higher education; or (2) a county with a population of 1.5 million or more. Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1, 1999. Redesignated from Government Code Sec. 1371.057(c) and amended by Acts 1999, 76th Leg., ch. 1064, Sec. 19, eff. Sept. 1, 1999. Amended by: Acts 2007, 80th Leg., R.S., Ch. 1310 (S.B. 968), Sec. 6, eff. June 15, 2007. Acts 2011, 82nd Leg., R.S., Ch. 1163 (H.B. 2702), Sec. 24, eff. September 1, 2011.