87R830 SMT-D
 
  By: Bettencourt, Birdwell S.B. No. 604
 
 
 
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. The district may not issue bonds after the date a
  petition for dissolution under Section 375.262 is filed with the
  board.
         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)  After a petition is filed under Section 375.262 with the
  board of a district that has outstanding bonded indebtedness:
               (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 all bonded
  indebtedness as soon as practicable in accordance with the order or
  resolution authorizing the issuance of the bonds.
         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.