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Signed Into Law
Signed June 20, 2025Effective 2025-06-20
HB5661

Regular Session

Relating to the creation of the Fort Bend County Municipal Utility District No. 286; granting a limited power of eminent domain; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes.

Government Affairs & Regulatory Compliance Analysis

HB5661: Government Affairs Overview

HB5661 immediately establishes Fort Bend County Municipal Utility District No. 286, creating a new political subdivision with the power to levy unlimited ad valorem taxes, issue bonds, and exercise eminent domain. Landowners and developers within the defined 177-acre tract must secure a Development Agreement with the City of Rosenberg; without this specific contract, the District is statutorily blocked from holding a confirmation election or issuing bonds.

Rep. Gary Gates·House Bill·Regular Session

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

City of Rosenberg (Municipal Consent & Development Agreement) • Texas Commission on Environmental Quality (TCEQ) • Texas Transportation Commission (Road project approval if state-maintained)

Business Impact

Who HB5661 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.

💧

Water

Affected business types:

  • Water utilities
  • Wastewater treatment facilities
  • Municipal water districts
  • Agricultural water users
View all water legislation

Key Operational Considerations

  • 1Construction Contracts: Contracts for road projects must specify adherence to City of Rosenberg or Fort Bend County construction standards to ensure future conveyance.

Estimated Cost Impact

highSignificant operational investment may be required.

Enforcing Agencies

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HB5661
Relating to the creation of the Fort Bend County Municipal Utility District No. 286; granting a limited power of eminent domain; providing authority t...
Moderate Urgency
Heavily Contested
House Vote101 - 47
YEA
NAY
68% in favor148 voting
Senate Vote27 - 4
YEA
87% in favor31 voting
51
Total Opposition Votes
Cost Impact
High
Effective
2025-06-20
Enforcing Agencies
City of RosenbergTCEQTexas Transportation Commission
Primary Author: Rep. Gary Gates
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 (Law is currently active due to 2/3 vote passage).
  • Compliance Deadline: Immediate. Temporary Directors must convene for an organizational meeting. The Development Agreement must be executed prior to the confirmation election.
  • Agency Rulemaking: No new state agency rules required. However, the District Board must immediately adopt internal orders to govern elections and taxation.

Immediate Action Plan

  • Convene the Board: Hold the organizational meeting of the Temporary Directors immediately to elect officers.
  • Engage the City: Initiate formal negotiations with the City of Rosenberg regarding the Development Agreement and annexation timeline.
  • Launch Transparency Portal: Activate the District website to satisfy Tax Code transparency requirements.
  • Secure Insurance: Purchase D&O liability insurance and execute Director bonds.

Operational Changes Required

Contracts

  • Mandatory Development Agreement: You must negotiate and execute a tri-party agreement between the District, the City of Rosenberg, and majority landowners. This contract is a condition precedent for all future financing.
  • Reimbursement Agreements: Developers advancing infrastructure funds must execute agreements with the District that strictly adhere to TCEQ rules to ensure future repayment eligibility from bond proceeds.
  • Construction Contracts: Contracts for road projects must specify adherence to City of Rosenberg or Fort Bend County construction standards to ensure future conveyance.

Hiring/Training

  • Board Organization: The five named Temporary Directors (Arce, Moarefi, Aussenberg, Chun, Olsen) must execute $10,000 performance bonds and obtain Directors & Officers (D&O) liability insurance immediately.
  • Consultant Retention: The Board must appoint legal counsel, a financial advisor, and a district engineer to prepare the Bond Application Report for the TCEQ.

Reporting & Record-Keeping

  • Website Compliance: You must immediately launch a publicly accessible website containing tax rates, financial data, and board information to comply with Tax Code Sec. 26.18.
  • Jurisdictional Filings: The District must file a copy of HB5661 and a boundary map with the TCEQ and the Fort Bend County Clerk.

Fees & Costs

  • Unlimited Tax Liability: The District is authorized to impose unlimited ad valorem taxes to secure bond payments, subject to voter approval.
  • Maintenance Budgeting: Until roads are formally accepted by the City or County, the District must budget for ongoing road maintenance.

Strategic Ambiguities & Considerations

  • Municipal Veto Power: The statute requires a "mutually approved" Development Agreement but does not compel the City of Rosenberg to sign. The City holds effective veto power; if they refuse terms, the District is legally frozen and cannot issue bonds.
  • Road Acceptance Risk: While the District is authorized to convey roads to the state, county, or municipality, acceptance is not automatic. If the receiving entity declines the infrastructure, the District retains long-term maintenance liability, which will impact the operating tax rate.

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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
Apr 1, 2025
Passed House
May 7, 2025
Passed Senate
May 28, 2025
Signed
Jun 20, 2025
Effective
Jun 20, 2025
TopicsFort Bend County Municipal Utility District No. 286Special Districts & AuthoritiesSpecial Districts & Authorities--municipal Utility DistrictsSpecial Districts & Authorities--water & Utility
03

House Authors

Rep. Gary GatesRepublican · Primary Author

Senate Sponsor

Sen. Joan HuffmanRepublican · 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

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More from Rep. Gary Gates

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Related by Topic

View more Fort Bend County Municipal Utility District No. 286 legislation
Quick Reference

Frequently Asked Questions

Common questions about HB5661

Q

What does Texas HB5661 do?

HB5661 immediately establishes Fort Bend County Municipal Utility District No. 286, creating a new political subdivision with the power to levy unlimited ad valorem taxes, issue bonds, and exercise eminent domain. Landowners and developers within the defined 177-acre tract must secure a Development Agreement with the City of Rosenberg; without this specific contract, the District is statutorily blocked from holding a confirmation election or issuing bonds.

Q

Who authored HB5661?

HB5661 was authored by Texas Representative Gary Gates during the Regular Session.

Q

When was HB5661 signed into law?

HB5661 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce HB5661?

HB5661 is enforced by City of Rosenberg (Municipal Consent & Development Agreement), Texas Commission on Environmental Quality (TCEQ) and Texas Transportation Commission (Road project approval if state-maintained).

Q

How significant are the changes in HB5661?

The regulatory priority for HB5661 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HB5661?

The cost impact of HB5661 is estimated as "high". This may vary based on industry and implementation requirements.

Q

What topics does HB5661 address?

HB5661 addresses topics including fort bend county municipal utility district no. 286, special districts & authorities, special districts & authorities--municipal utility districts and special districts & authorities--water & utility.

Q

What are the key dates for HB5661?

Key dates for HB5661: Effective date is 2025-06-20. Consult with legal counsel regarding applicability.

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