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HB2421

Regular Session

Relating to the date of dissolution of the Save Historic Muny District.

Low
Low Cost
Effective:2025-09-01
Enforcing Agencies

City of Austin • Save Historic Muny District Board of Directors

HB2421
Relating to the date of dissolution of the Save Historic Muny District.
Low Urgency
Heavily Contested
House Vote99 - 43
YEA
NAY
70% in favor142 voting
Senate Vote28 - 3
YEA
90% in favor31 voting
46
Total Opposition Votes
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
City of AustinSave Historic Muny District Boar...
Primary Author: Rep. Donna Howard
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025.
  • Compliance Deadline: Immediate. You must adjust contract terms and billing cycles prior to May 31, 2025, to mitigate the risk of the statutory gap.
  • Agency Rulemaking: No formal rulemaking required. However, the City of Austin and the District Board must legally navigate the interim period (June 1, 2025 – August 31, 2025) where the District technically lacks statutory authority.

Immediate Action Plan

  • 1. Accelerate Invoicing: Submit all outstanding invoices to the District immediately and demand payment before May 31, 2025.
  • 2. Amend Contracts: Execute simple extensions for any agreements set to expire in May 2025 to bridge the gap to September.
  • 3. Verify Insurance: Contact your broker to ensure your COI covers the District continuously through the Summer 2025 gap, regardless of its technical legal status.
  • 4. Pause Work (If Necessary): If you hold high-value contracts, consider negotiating a work stoppage or "standby" phase for Summer 2025 to minimize exposure until the law takes effect in September.

Operational Changes Required

Contracts

  • Termination Clauses: Audit all Master Service Agreements (MSAs) and vendor contracts with the District. If a clause triggers termination "upon District dissolution," execute an amendment immediately to define the term through May 31, 2027.
  • Interlocal Agreements: Contractors paid via City utility fee revenue sharing must verify that the City of Austin extends the underlying interlocal agreement to match the new 2027 date; otherwise, the funding mechanism for your contract may lapse.

Hiring/Training

  • Accounts Receivable: Instruct finance teams to flag the Save Historic Muny District as a "High Risk" payor for the period of June 1, 2025, through September 1, 2025.
  • Site Management: Staff working on-site must be aware that the District's authority to direct work may be legally challenged during the Summer 2025 gap.

Reporting & Record-Keeping

  • Entity Status: Update internal vendor management systems (VMS). Remove any automatic "inactive" flags set for May 2025.
  • Agreement Monitoring: Continue monitoring for the execution of a land purchase/preservation agreement with the University of Texas. If this is not signed by May 31, 2027, dissolution becomes mandatory.

Fees & Costs

  • Cash Flow Impact: Anticipate payment delays. Invoices submitted in June or July 2025 may be held until the law becomes effective in September 2025 due to lack of disbursement authority.

Strategic Ambiguities & Considerations

The "Zombie District" Gap (June 1 – Aug 31, 2025):

The law saving the District takes effect three months *after* the District is scheduled to dissolve. This creates a legal vacuum.

  • Payment Authority: It is unclear if the District has the legal authority to process payments during this gap.
  • Liability Shield: It is unclear if the District retains governmental immunity under the Texas Tort Claims Act during this interim.
  • Insurance: There is a risk that commercial general liability policies naming the District as an Additional Insured could be contested by carriers claiming the entity ceased to exist on May 31.

Need Help Understanding Implementation?

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 4, 2025
Passed House
Apr 29, 2025
Passed Senate
May 25, 2025
Signed
Jun 22, 2025
TopicsSave Historic Muny DistrictCity GovernmentCity Government--land Use & ZoningSpecial Districts & AuthoritiesSpecial Districts & Authorities--miscellaneous
03

House Authors

Rep. Donna HowardDemocrat · Primary Author
Joint Authors

Senate Sponsor

Sen. Sarah EckhardtDemocrat · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Rep. Donna Howard

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Related by Topic

View more Save Historic Muny District legislation
Quick Reference

Frequently Asked Questions

Common questions about HB2421

Q

What does Texas HB2421 do?

HB2421 extends the statutory life of the Save Historic Muny District from May 31, 2025, to May 31, 2027, providing two additional years for the District to negotiate a land preservation agreement. However, because the bill takes effect on September 1, 2025—three months after the current dissolution date—vendors and contractors face a "legal gap" creating significant payment and liability risks during Summer 2025. Implementation Timeline Effective Date: September 1, 2025.

Q

Who authored HB2421?

HB2421 was authored by Texas Representative Donna Howard during the Regular Session.

Q

When was HB2421 signed into law?

HB2421 was signed into law by Governor Greg Abbott on June 22, 2025.

Q

Which agencies enforce HB2421?

HB2421 is enforced by City of Austin and Save Historic Muny District Board of Directors.

Q

How urgent is compliance with HB2421?

The compliance urgency for HB2421 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

Q

What is the cost impact of HB2421?

The cost impact of HB2421 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does HB2421 address?

HB2421 addresses topics including save historic muny district, city government, city government--land use & zoning, special districts & authorities and special districts & authorities--miscellaneous.

Legislative data provided by LegiScanLast updated: November 25, 2025

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