Regular Session
Northeast Texas Municipal Water District (NETMWD) Board of Directors • Governing bodies of the Member Cities of NETMWD (City Councils)
Key implementation requirements and action items for compliance with this legislation
Existing executed contracts remain valid. However, all pending negotiations must be paused. Future Water Supply Agreements and Master Service Agreements must include a Condition Precedent clause, stating the agreement is not effective until the District provides certified resolutions from five member cities.
Government Relations and Legal teams must pivot strategy. You can no longer rely solely on relationships with the NETMWD Board. Your team must be prepared to lobby and present before the City Councils of the member cities (e.g., Marshall, Jefferson, Avinger).
Closing binders for water transactions must now contain:
While there are no new statutory fees, businesses must budget for a 90 to 120-day delay in project timelines to accommodate the notice period and the scheduling of five separate city council votes. Legal and lobbying costs will increase commensurate with this expanded political scope.
The statute forbids the District to "acquire a permit" without city approval but does not specify if this approval is required *before filing* the application with TCEQ or *before final issuance*.
Our government affairs experts can walk you through this bill's specific impact on your operations.
Schedule ConsultationInformation 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.
This bill's path through the Texas Legislature
BILL ANALYSIS |
| C.S.H.B. 5659 |
| By: Dean |
| Natural Resources |
| Committee Report (Substituted) |
| BACKGROUND AND PURPOSE The bill author has informed the committee that the Northeast Texas Municipal Water District was created by the Texas Legislature in 1953 and that the district is comprised of seven cities and is managed by a board of seven directors, with a director appointed by the city council of each of those cities. The bill author has also informed the committee that constituents in House District 7 and residents of the water district are concerned with reports that the district directors are considering selling water or water rights in executive session without public testimony and against resolutions passed by member cities against the proposed sale. C.S.H.B. 5659 seeks to address this issue by providing for a public hearing by the district regarding certain water-related contracts and municipal approval of such a contract to ensure that a matter as important as the sale of water or water rights is supported by local constituencies.
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| 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.
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| 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.
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| ANALYSIS C.S.H.B. 5659 amends Chapter 78, Acts of the 53rd Legislature, Regular Session, 1953, to require the Northeast Texas Municipal Water District's board of directors, before the district may enter into water supply or certain water-related contracts or acquire a water appropriation permit, to hold a public hearing on the proposed contract or permit acquisition. The bill requires the board to provide any interested person an opportunity to appear before the board at the hearing and speak on the proposed contract or permit acquisition and requires the board to provide notice of the hearing in the manner provided by specified Water Code provisions generally applicable to all water districts for a board meeting. The bill conditions the district's entering into such a contract or acquiring such a permit on the contract or permit acquisition being approved by a majority vote of the governing body of each city that is entitled to appoint one or more directors.
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| EFFECTIVE DATE On passage, or, if the bill does not receive the necessary vote, September 1, 2025.
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| COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 5659 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. The substitute changes the bill's effective date to provide for its possible immediate effect, contingent on receiving the requisite constitutional vote, whereas the introduced provided only for the bill to take effect September 1, 2025, with no possibility for immediate effect. |
| H.B. No. 5659 | ||
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| relating to the procedural requirements applicable to interbasin | ||
| transfers of water involving the Northeast Texas Municipal Water | ||
| District. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Chapter 78, Acts of the 53rd Legislature, | ||
| Regular Session, 1953, is amended by adding Sections 17A and 17B to | ||
| read as follows: | ||
| Sec. 17A. (a) Before the District may enter into a contract | ||
| for an interbasin transfer of water or acquire a permit or other | ||
| authorization from the Texas Commission on Environmental Quality | ||
| for a proposed interbasin transfer, the Board of Directors shall | ||
| hold a public hearing on the proposed interbasin transfer. | ||
| (b) The Board of Directors shall provide any interested | ||
| person an opportunity to appear before the Board at the hearing and | ||
| speak on the proposed interbasin transfer. | ||
| (c) The Board of Directors shall provide notice of the | ||
| hearing in the manner provided by Section 49.063, Water Code, for a | ||
| meeting of the Board. | ||
| Sec. 17B. The District may enter into a contract or acquire | ||
| a permit or other authorization described by Section 17A of this Act | ||
| only if the contract or authorization is approved by a majority vote | ||
| of the governing bodies of at least five of the cities entitled to | ||
| appoint one or more directors under Section 3 or 6 of this Act. | ||
| SECTION 2. This Act takes effect immediately if it receives | ||
| a vote of two-thirds of all the members elected to each house, as | ||
| provided by Section 39, Article III, Texas Constitution. If this | ||
| Act does not receive the vote necessary for immediate effect, this | ||
| Act takes effect September 1, 2025. | ||
| TO: | Honorable Cody Harris, Chair, House Committee on Natural Resources |
| FROM: | Jerry McGinty, Director, Legislative Budget Board |
| IN RE: | HB5659 by Dean (Relating to the procedural requirements applicable to certain water-related transactions involving the Northeast Texas Municipal Water District.), As Introduced |
| Source Agencies: |
| LBB Staff: | JMc, TUf, BC, CWi |
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Common questions about HB5659
Effective immediately, House Bill 5659 strips the Northeast Texas Municipal Water District (NETMWD) Board of its unilateral authority to approve interbasin water transfers. Power has shifted to the member cities; you must now secure affirmative votes from at least five member city councils and hold a mandatory public hearing before any contract is valid. Implementation Timeline Effective Date: June 22, 2025 (The law is currently active).
HB5659 was authored by Texas Representative Jay Dean during the Regular Session.
HB5659 was signed into law by Governor Greg Abbott on June 22, 2025.
HB5659 is enforced by Northeast Texas Municipal Water District (NETMWD) Board of Directors and Governing bodies of the Member Cities of NETMWD (City Councils).
The compliance urgency for HB5659 is rated as "critical". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
The cost impact of HB5659 is estimated as "low". This may vary based on industry and implementation requirements.
HB5659 addresses topics including special districts & authorities, special districts & authorities--municipal utility districts, special districts & authorities--water & utility, northeast texas municipal water district and public notice.
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