This legislation attempts to create a process by which new municipalities may be created out of existing municipalities by attempting to address issue such as the transition of services and facilities, the preservation of facilities and assets, purchasing options for the existing municipality's water and sewer system, and attempting to address outstanding bond obligations from the existing municipality, among other issues. 

The legislation first attempts to utilize existing statutes governing the creation of new municipalities out of the unincorporated area by piggybacking off of existing statutory language. Under current law, residents of the county who become residents of a newly created municipality also remain residents of the county and are still obligated to pay county ad valorem taxes. This legislation cannot and does not allow for residents of a newly created municipality to also remain residents of the existing municipality from which they were removed, meaning such residents would not be obligated to pay the existing municipality ad valorem taxes, as they would no longer be residents of the existing municipality. 

The legislation contains a newly formed definition of "assets" which includes "all real property, personal property, moneys, instruments, and reserves of any nature" but would not include any "real property currently designated and operated as an international airport." Furthermore, the legislation allows the new municipality to purchase parks and fire departments from the existing city, should they choose to do so. Parks could be purchased at a price of $100 per acre and fire stations could be purchased at $5000 per fire station.

Similarly, the legislation would allow the new city to purchase physical assets from an existing city, including land at $100 an acre and buildings at $1000 a building, inclusive of all fixtures. Also, a new city would be authorized to purchase the water system within its territory from the existing municipality for $100,000. Neither of these provisions would apply to new municipalities created from the unincorporated area. 

The legislation speaks to division of certain physical assets on a pro rata basis between the new municipality and the existing municipality but does not define what a division by pro rata basis means when it comes to division of assets. 

However, the legislation does define division of pro rata basis in the subsection attempting to address bond obligations by stating that the pro rata share would be equal to the value of the new municipality's ad valorem digest divided by the prior municipality's ad valorem digest from the tax year of the bond obligation date. The legislation also attempts to address outstanding bond obligations of the existing municipality by creating definitions and requiring the new municipality to remain obligated to some degree for the outstanding bonds.