JD Key Consulting Logo
Signed Into Law
Signed June 20, 2025Effective 2025-06-20
HB5658

Regular Session

Relating to the creation of the Craver Ranch Municipal Management District No. 1; providing authority to issue bonds; providing authority to impose assessments and fees; granting a limited power of eminent domain.

Government Affairs & Regulatory Compliance Analysis

HB5658: Government Affairs Overview

Effective June 20, 2025, the Texas Legislature has established the Craver Ranch Municipal Management District No. 1 over approximately 2,800 acres in Denton, creating a new quasi-governmental entity with the power to levy assessments and exercise eminent domain. While the District is statutorily prohibited from levying ad valorem (property) taxes, it may impose mandatory assessments that function as super-priority liens against real property, directly impacting developers, lenders, and commercial tenants within the District boundaries.

Rep. Jared Patterson·House Bill·Regular Session

Moderate
Medium Cost
Effective:2025-06-20
Enforcing Agencies

City of Denton (Development Agreement and Bond Consent oversight) • Craver Ranch Municipal Management District No. 1 Board of Directors • Texas Commission on Environmental Quality (TCEQ)

Business Impact

Who HB5658 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-06-20). Consider how these changes may affect your operations.

🌾

Agriculture

Affected business types:

  • Farmers
  • Ranchers
  • Agricultural processors
  • Farm equipment dealers
View all agriculture legislation

Key Operational Considerations

  • 1Title Review Teams: Staff must be trained to flag "Craver Ranch MMD No. 1" in title commitments immediately.

Estimated Cost Impact

mediumModerate costs expected for implementation.

Enforcing Agencies

Need Government Relations Support?

JD Key Consulting provides government affairs and regulatory strategy services. We help businesses navigate Texas agencies, understand legislative impacts, and advocate for their interests.

Need Help Navigating This Legislation?

JD Key Consulting provides strategic guidance on Texas regulatory compliance and legislative impact for your business.

HB5658
Relating to the creation of the Craver Ranch Municipal Management District No. 1; providing authority to issue bonds; providing authority to impose as...
Moderate Urgency
Heavily Contested
House Vote103 - 45
YEA
NAY
70% in favor148 voting
Senate Vote28 - 3
YEA
90% in favor31 voting
48
Total Opposition Votes
Cost Impact
Medium
Effective
2025-06-20
Enforcing Agencies
City of DentonCraver Ranch Municipal Managemen...TCEQ
Primary Author: Rep. Jared Patterson
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: June 20, 2025 (Immediate).
  • Compliance Deadline: Pre-Transaction. Title searches and lease negotiations must account for District jurisdiction immediately. Operational powers (issuing bonds/levying assessments) are paused pending the execution of a Development Agreement.
  • Agency Rulemaking: The District Board and City of Denton must execute a Development Agreement to activate District powers. If this is not signed by September 1, 2030, the District must dissolve.

Immediate Action Plan

  • 1. Geospatial Audit: Immediately overlay the 2,800-acre Craver Ranch legal description against your current asset portfolio to identify affected parcels.
  • 2. Lease Audit: Review all active LOIs and leases for properties in this zone; insert language ensuring "Assessments" are defined as recoverable operating expenses.
  • 3. Monitor City Council: Track the City of Denton City Council agenda for the "Craver Ranch Development Agreement." This document will set the actual zoning and development rules.
  • 4. Lender Notification: If you hold debt on land in this District, notify your lender of the new district creation to preempt technical default notices regarding superior liens.

Operational Changes Required

Contracts

  • Commercial Leases (NNN): Standard "Tax" clauses are insufficient. You must amend Triple Net leases to explicitly include "special district assessments" as a pass-through expense, as the District is legally barred from levying "taxes."
  • Loan Agreements: Lenders must update covenants. District assessments create a first and prior lien superior to mortgage liens (subordinate only to ad valorem taxes). Lenders should require assessment reserves.
  • Purchase & Sale Agreements: Sellers must provide statutory notice to buyers regarding the District’s existence and assessment authority under the Texas Water Code. Failure to disclose grants the buyer the right to terminate.

Hiring/Training

  • Title Review Teams: Staff must be trained to flag "Craver Ranch MMD No. 1" in title commitments immediately.
  • Project Managers: Must be briefed that infrastructure improvements (roads, drainage) now require a petition signed by owners representing a majority of the assessed value to trigger District financing.

Reporting & Record-Keeping

  • Lien Monitoring: Accounting departments must track District Board resolutions, as assessments become liens immediately upon adoption.
  • Petition Tracking: Developers must maintain precise records of assessed value ownership to calculate the threshold required to petition the Board for bond issuances.

Fees & Costs

  • Assessments: Variable. The Board will determine rates based on project costs. These are not capped by the legislation.
  • Ad Valorem Taxes: 0%. The District is prohibited from levying property taxes.
  • Impact Fees: The District may impose fees for connections to water/sanitary sewer systems if it assumes those functions.

Strategic Ambiguities & Considerations

  • The "Development Agreement" Scope: Section 4020.0108 requires a Development Agreement with the City of Denton before the District can act. The law does not define the limits of this agreement. The City may use this negotiation to impose stricter building codes, environmental standards, or exactions than standard city ordinances require.
  • Assessment Methodology: The statute allows assessments for "any purpose authorized" but does not dictate the formula (e.g., front-footage vs. square footage vs. valuation). The Board has broad discretion here, creating uncertainty in cost projections until the first assessment order is drafted.

Need Compliance Guidance on This Legislation?

JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

Schedule a Consultation

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
Mar 28, 2025
Passed House
May 7, 2025
Passed Senate
May 28, 2025
Signed
Jun 20, 2025
Effective
Jun 20, 2025
TopicsCraver Ranch Municipal Management District No. 1Denton, City ofSpecial Districts & AuthoritiesSpecial Districts & Authorities--miscellaneous
03

House Authors

Rep. Jared PattersonRepublican · Primary Author

Senate Sponsor

Sen. Brent HagenbuchRepublican · Primary Sponsor

Bill Text(with markup)

Showing first 50k characters.

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

Explore more bills from this author and on related topics

More from Rep. Jared Patterson

View all bills by Rep. Jared Patterson

Related by Topic

View more Craver Ranch Municipal Management District No. 1 legislation
Quick Reference

Frequently Asked Questions

Common questions about HB5658

Q

What does Texas HB5658 do?

Effective June 20, 2025, the Texas Legislature has established the Craver Ranch Municipal Management District No. 1 over approximately 2,800 acres in Denton, creating a new quasi-governmental entity with the power to levy assessments and exercise eminent domain. While the District is statutorily prohibited from levying ad valorem (property) taxes, it may impose mandatory assessments that function as super-priority liens against real property, directly impacting developers, lenders, and commercial tenants within the District boundaries.

Q

Who authored HB5658?

HB5658 was authored by Texas Representative Jared Patterson during the Regular Session.

Q

When was HB5658 signed into law?

HB5658 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce HB5658?

HB5658 is enforced by City of Denton (Development Agreement and Bond Consent oversight), Craver Ranch Municipal Management District No. 1 Board of Directors and Texas Commission on Environmental Quality (TCEQ).

Q

How significant are the changes in HB5658?

The regulatory priority for HB5658 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HB5658?

The cost impact of HB5658 is estimated as "medium". This may vary based on industry and implementation requirements.

Q

What topics does HB5658 address?

HB5658 addresses topics including craver ranch municipal management district no. 1, denton, city of, special districts & authorities and special districts & authorities--miscellaneous.

Q

What are the key dates for HB5658?

Key dates for HB5658: Effective date is 2025-06-20. Consult with legal counsel regarding applicability.

Q

What are the penalties under HB5658?

HB5658 establishes the following penalties: civil penalty of Foreclosure of Property for Failure to pay District assessments results in a first and prior lien superior to most other liens (except ad valorem taxes), enforceable via foreclosure.. Consult with legal counsel for specific applicability to your situation.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026