Relating to the dissolution of the Rose City Municipal Utility District.
LowStandard timeline
Low Cost
Effective:2025-06-20
Enforcing Agencies
Texas Commission on Environmental Quality (TCEQ)
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: June 20, 2025 (The Act takes effect; the 60-day wind-down clock begins).
Compliance Deadline: August 19, 2025 (The District dissolves; all claims must be settled or perfected by this date).
Agency Rulemaking: No rulemaking required. The Texas Commission on Environmental Quality (TCEQ) acts solely as the repository for dissolution filings.
Immediate Action Plan
1.Audit Receivables: Immediately query accounting systems for "Rose City Municipal Utility District" and total the exposure.
2.Accelerate Invoicing: Submit final invoices for all work completed to date; do not wait for standard billing cycles.
3.Demand Assurance: Legal counsel must send a formal request to the District Board asking for written confirmation of how outstanding debts will be satisfied prior to August 19.
4.Halt Future Work: Suspend any long-term procurement or construction schedules that extend beyond the August deadline.
Operational Changes Required
Contracts
Termination by Operation of Law: All Master Service Agreements (MSAs), construction contracts, and professional service agreements with the District will effectively terminate on August 19, 2025.
Action: Legal teams must review "Successors and Assigns" clauses immediately. Do not assume automatic assignment to a municipality or county, as none is named in the bill.
Hiring/Training
Stop-Work Orders: Operations managers must assess active work orders within the District.
Action: Prepare to demobilize crews and equipment prior to August 19. Work performed after this date faces a near-zero probability of payment unless a new entity explicitly assumes the obligation in writing.
Reporting & Record-Keeping
Proof of Debt: Creditors must generate a perfected paper trail for all outstanding debts.
Action: Ensure all change orders are signed, pay applications are certified, and invoices are formally submitted to the District Board before they vacate office.
Filings: While the District Directors file the dissolution papers with TCEQ, vendors should file formal demand letters to establish a priority claim on any residual assets.
Fees & Costs
Collection Risk: There are no new regulatory fees; however, businesses face a high risk of bad debt write-offs.
Action: Shift all "Rose City MUD" accounts to "Immediate Collection" status.
Strategic Ambiguities & Considerations
The "Unknown" Successor: The legislation and the Legislative Budget Board’s Fiscal Note are silent on the transfer of assets and obligations, explicitly stating the outcome is "unknown."
Risk: Unlike typical consolidations where a City assumes MUD debt, this is a dissolution without a named heir. If the District holds more debt than liquid assets, there is no statutory backstop for creditors.
Watch Item: Monitor TCEQ filings between June 20 and August 19 to see if a local municipality voluntarily accepts the District's infrastructure and associated liabilities.
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The legislature provided for the creation of the Rose City Municipal Utility District several years ago, but the bill author has informed the committee that, due to changes in state law and city planning, no confirmation election was held to fully create the district, and the need for the district no longer exists. H.B. 3810 seeks to address this issue by repealing the law that provided for the creation of the Rose City Municipal Utility District.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
H.B. 3810 requires the directors of the Rose City Municipal Utility District (MUD) to wind up the MUD's affairs, including by filing any required dissolution documents with the Texas Commission on Environmental Quality (TCEQ). The bill dissolves the MUD and extinguishes the terms of the MUD's directors on the 60th day after the bill's effective date.
H.B. 3810 repeals Chapter 7958 of the Special District Local Laws Code effective on the 61st day after the bill's effective date.
H.B. 3810 establishes that all applicable requirements relating to the following have been fulfilled and accomplished with respect to the bill:
·the legal notice of intention;
·governor action;
·TCEQ recommendations; and
·the state constitution and laws and legislative rules and procedures.
EFFECTIVE DATE
Except as otherwise provided, on passage, or, if the bill does not receive the necessary vote, September 1, 2025.
Honorable Gary Gates, Chair, House Committee on Land & Resource Management
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB3810 by Alders (Relating to the dissolution of the Rose City Municipal Utility District.), As Introduced
No significant fiscal implication to the State is anticipated.
It is assumed that any costs associated with the bill could be absorbed using existing resources.
Local Government Impact
The fiscal implications of the bill to the district cannot be determined due to the circumstances relating to the dissolution of the district and the transfer of assets, obligations, and provisions of services being unknown.
Source Agencies:
LBB Staff:
JMc, SZ, BC, CWi
Related Legislation
Explore more bills from this author and on related topics
HB3810 mandates the total legal dissolution of the Rose City Municipal Utility District (MUD), terminating its corporate existence on August 19, 2025. Vendors, contractors, and bondholders must accelerate all accounts receivable and finalize project close-outs immediately, as the District’s authority to pay debts or maintain contracts vanishes on the dissolution date with no statutorily defined successor. Implementation Timeline Effective Date: June 20, 2025 (The Act takes effect; the 60-day wind-down clock begins).
Q
Who authored HB3810?
HB3810 was authored by Texas Representative Daniel Alders during the Regular Session.
Q
When was HB3810 signed into law?
HB3810 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce HB3810?
HB3810 is enforced by Texas Commission on Environmental Quality (TCEQ).
Q
How urgent is compliance with HB3810?
The compliance urgency for HB3810 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB3810?
The cost impact of HB3810 is estimated as "low". This may vary based on industry and implementation requirements.
Q
What topics does HB3810 address?
HB3810 addresses topics including rose city municipal utility district, special districts & authorities, special districts & authorities--municipal utility districts and special districts & authorities--water & utility.
Legislative data provided by LegiScanLast updated: November 25, 2025
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