1. (a) A governmental act or proceeding of a municipality is conclusively presumed, as of the date it occurred, to be valid and to have occurred in accordance with all applicable statutes and ordinances if:

   1. (1) the third anniversary of the effective date of the act or proceeding has expired; and
   2. (2) a lawsuit to annul or invalidate the act or proceeding has not been filed on or before that third anniversary.

2. (b) This section does not apply to:

   1. (1) an act or proceeding that was void at the time it occurred;
   2. (2) an act or proceeding that, under a statute of this state or the United States, was a misdemeanor or felony at the time the act or proceeding occurred;
   3. (3) an incorporation or attempted incorporation of a municipality, or an annexation or attempted annexation of territory by a municipality, within the incorporated boundaries or extraterritorial jurisdiction of another municipality that occurred without the consent of the other municipality in violation of Chapter 42 or 43;
   4. (4) an ordinance that, at the time it was passed, was preempted by a statute of this state or the United States, including Section 1.06 or 109.57, Alcoholic Beverage Code; or

   5. (5) a matter that on the effective date of this section:

      1. (A) is involved in litigation if the litigation ultimately results in the matter being held invalid by a final judgment of a court; or
      2. (B) has been held invalid by a final judgment of a court.

Added by Acts 1999, 76th Leg., ch. 1338, Sec. 1, eff. June 19, 1999.