By: Bettencourt, et al. S.B. No. 604
(Capriglione)
A BILL TO BE ENTITLED
AN ACT
relating to bonds issued by and the dissolution of municipal
management districts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter M, Chapter 375, Local Government
Code, is amended by adding Section 375.2621 to read as follows:
Sec. 375.2621. PROHIBITION ON ISSUANCE OF BONDS AFTER
PETITION. If a petition for dissolution under Section 375.262 is
filed with the board, the board must consider the petition not later
than the 60th day after the date the petition is filed. The
district may not issue bonds secured by assessments after the date
the board confirms that the petition is valid and complete under
Section 375.262.
SECTION 2. Section 375.264, Local Government Code, is
amended to read as follows:
Sec. 375.264. LIMITATIONS [LIMITATION] ON DISSOLUTION BY
BOARD OF DISTRICT WITH DEBT. (a) A district may not be dissolved by
its board under Section 375.261 or after a petition is filed under
Section 375.262 if the district has [any] outstanding bonded
indebtedness until that bonded indebtedness has been repaid or
defeased in accordance with the order or resolution authorizing the
issuance of the bonds.
(b) If a petition for dissolution is filed under Section
375.262 with the board of a district and the district has
outstanding bonded indebtedness secured by assessments:
(1) the district shall remain in existence solely for
the purpose of discharging its bonded indebtedness; and
(2) the board shall use all district money that is
available for the purpose to repay or defease the bonded
indebtedness as soon as practicable in accordance with the order or
resolution authorizing the issuance of the bonds.
(c) Subsection (b) does not apply to a district that has
outstanding bonded indebtedness secured by a source other than
assessments on the date the petition is filed with the board.
SECTION 3. The changes in law made by this Act apply only to
a municipal management district that is the subject of a petition
described by Section 375.262, Local Government Code, filed with the
board on or after the effective date of this Act. A district that is
the subject of such a petition filed with the board before the
effective date of this Act is governed by the law in effect on the
date the petition was filed, and the former law is continued in
effect for that purpose.
SECTION 4. The changes in law made by this Act may not be
construed to impair an obligation under a contract entered into
before the effective date of this Act. A political subdivision may
fulfill the subdivision's obligations under a contract entered into
before that date but may not extend such a contract beyond the
contract's original term.
SECTION 5. This Act takes effect September 1, 2021.