CITY CONTRACTS; INDEBTEDNESS TO CITY

Houston Code of Ordinances ch. 15, art. VIII

in effect

Houston Code of Ordinances § 15-121 Policy.

Sec. 15-121. - Policy. (a) Except as provided in section 15-125 of this Code or subsection (b) of this section, no contract shall be let, nor any other business transaction entered into, by the city with any contracting entity that is indebted to the city or whose owner is indebted to the city, if the contract or transaction comes within the provisions of section 15-1(c) of this Code. No city contract shall be amended or extended if the contracting entity or any owner thereof has become indebted to the city since the inception of the contract unless such indebtedness is fully paid prior to any council action to amend or extend such contract. (b) Exception. Subsection (a) of this section shall not apply to any contract if prohibited by the provisions of Chapter 252, Texas Local Government Code (as the same may be amended from time to time), or by any other applicable state or federal law, rule or regulation restricting the power of the city to promulgate the policy set forth herein; provided however, that when a contract or other business matter that requires council action is placed before city council, regardless of the applicability of subsection (a), the city council shall be notified in writing whether a proposed contracting entity or owner thereof, if applicable, is indebted to the city. (Ord. No. 2015-929, § 2, 9-30-2015)

Houston Code of Ordinances § 15-122 Definitions.

Sec. 15-122. - Definitions. The following terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: Contracting entity means a person, whether acting as an individual or operating as a sole proprietorship, corporation, non-profit corporation, partnership, joint venture, limited liability company, or other entity, regardless of the form of its organization, that seeks to enter into a contract that requires approval by the city council, but shall exclude governmental entities. Controller means the city controller. Debt means any delinquent sum of money in an amount greater than $100.00 levied, imposed or assessed against any contracting entity, or owner thereof, by the city for ad valorem taxes on real or personal property located within the boundaries of the city. Debtor means a contracting entity, or owner thereof if the contracting entity is other than a person doing business as an individual or sole proprietorship, that owes a debt to the city, as shown by city or other governmental records. Delinquent means past due, unpaid and no longer subject to challenge, protest or appeal, as those processes are described in the Texas Tax Code. Indebted means owing a debt to the city, without regard to ability or inability to pay the same, where the amount is delinquent, provided that a debtor who remains current on all obligations of an installment agreement executed by the debtor regarding a debt shall not be deemed indebted for purposes of this article. Initiating director means the director of the department responsible for a matter that is intended to, or does, result in the making of a contract or entry into another business transaction between a contracting entity and the city. Owner means, with respect to a contracting entity, an individual contractor in his or her own name or as a sole proprietorship, and as to a contracting entity other than an individual or person operating as a sole proprietorship, any person who owns ten percent or more thereof, or, in the case of a non-profit corporation, any officer of the non-profit corporation. (Ord. No. 2015-929, § 2, 9-30-2015)

Houston Code of Ordinances § 15-123 Determination of indebtedness; procedure.

Sec. 15-123. - Determination of indebtedness; procedure. (a) All bids, proposals, or other information submitted to the city in connection with any proposed contract, transaction, project or matter shall include a commitment that the contracting entity shall comply with this article. Contracts awarded without the submission of a bid or proposal, including but not limited to contracts for engineering and architectural services, shall be subject to this section and shall not be finally approved by the city council until a determination as to any indebtedness of the contracting entity or any owner thereof to the city has been made as provided in this section. The controller shall prescribe the information that shall be required from contracting entities. (b) Any failure to submit information required by subsection (a) shall constitute grounds for rejection or non-consideration of such bid, proposal or other submission. It shall be the duty of the initiating director to ascertain that the requisite ownership information has been submitted and signed. (c) Upon the initiating director's determination of the contracting entity to be recommended for the award of a contract, information regarding ownership of the contracting entity submitted by such entity shall be promptly forwarded by the initiating director to the controller. (d) Before a contract is submitted to city council for approval, the controller shall immediately investigate whether the recommended contracting entity or any owner thereof is indebted to the city and, if so, determine insofar as possible with the information provided, whether such indebtedness is then under active protest, challenge or appeal by such debtor. The controller shall maintain a log of all received information forms and, at least weekly, forward a copy of such log to the city's delinquent tax collection firm or other third party of the controller's choosing, to assist the controller in identifying debts owed the city and determine the amount of any debt due the city. (e) Promptly after receipt of the report of the delinquent tax collection firm, or other third party, the controller shall certify in writing to each initiating director whether, based on the best information available, a recommended contracting entity is indebted to the city and, if so, the amount of such debt. The initiating director shall immediately forward a copy of the controller's certificate or report to each affected contracting entity, together with the telephone number of the delinquent tax collection firm, a contact in the controller's office, or the alternate third party source of information, by which a debtor may confirm the information in such record or file an appeal under section 15-124 of this Code. The controller's certificate will be deemed to have been received by the contracting entity within three business days after its deposit in the U.S. mail by the initiating director. (f) Should the controller fail to produce the certificate required by subsection (e) within ten business days from receipt of an ownership information form, the affected contracting entity and all owners thereof will be deemed not to be indebted to the city for purposes of this article only. (g) The controller's certificate or report shall be valid only until the first of March next following its date of issue. A subsequent award to the same contracting entity during the time that the controller's certificate or report remains valid may be based on the controller's certificate or report. A subsequent award to the same contracting entity after the first of March of each calendar year is subject to all of the requirements of this section. (h) If the debt shown in the controller's certificate or report is paid, the receipt or other written proof of payment shall be delivered to the controller who shall immediately issue a new certificate or report to the initiating director confirming such payment. (i) When an award or other transaction is ready to be submitted to city council for action, the initiating director shall forward to the city secretary the controller's certificate or report, or the resolution of any appeal and related information as provided in sections 15-123 and 15-124 of this Code. (j) The certificates or reports of the controller provided for in this section shall be made available to council members who request them. (Ord. No. 2015-929, § 2, 9-30-2015)

Houston Code of Ordinances § 15-124 Appeal.

Sec. 15-124. - Appeal. Any debtor shall have the right to appeal the controller's certificate or report under section 15-123(e) of this Code by filing a written statement with the delinquent tax collection firm. (Ord. No. 2015-929, § 2, 9-30-2015)

Houston Code of Ordinances § 15-125 Exceptions.

Sec. 15-125. - Exceptions. (a) The policy and procedures set forth in this article do not apply in the following instances: (1) Public emergency or calamity. (2) Purchase of goods or services available only from a single source, including the lease of any personal property or equipment by the city. (3) Circumstances in which the amount of the indebtedness is insignificant in relation to the economic or other benefit or harm that may result from the application of the policy. (4) Pending bankruptcy of an indebted owner or contracting entity. (5) Concluded bankruptcy of an indebted owner or contracting entity in which the debt was legally discharged. (6) Memberships purchased by the city. (7) Condemnation awards. (8) Property acquisitions, including the lease of any real property to or by the city, excluding any lease of city-owned property below fair market rental. (9) Purchase of property, casualty or other insurance by the city. (10) Banking or other depository contracts. (b) This policy may also be waived as to other matters where city council deems it to be in the city's interest. (Ord. No. 2015-929, § 2, 9-30-2015)

Source: City of Houston, Code of Ordinances and City Charter (Municode Library, library.municode.com)URL: https://library.municode.com/tx/houston/codes/code_of_ordinances?nodeId=COOR_CH15CO_ARTVIIICICOINCIFetched: 10/26/2026