Relating to the powers, duties, and authority to issue bonds of the Fort Bend County Water Control and Improvement District No. 12 related to roads.
LowStandard timeline
Medium Cost
Effective:2025-09-01
Enforcing Agencies
Fort Bend County Water Control and Improvement District No. 12 • Texas Transportation Commission • Fort Bend County Commissioners Court • Applicable Municipalities (within jurisdiction)
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: September 1, 2025
Compliance Deadline: September 1, 2025 (Any road project seeking reimbursement after this date must meet the specified statutory standards).
Agency Rulemaking: The District is not required to promulgate formal state-level rules, but we anticipate the District Board will amend its internal *Development Rules and Regulations* to establish application procedures for road bonds between now and Q3 2025.
Immediate Action Plan
Audit Land Holdings: Identify which parcels fall within WCID No. 12 and determine the controlling jurisdiction (City vs. County) for each.
Update Financial Models: Adjust project pro-formas to account for road reimbursements, but apply a risk factor for the 25% cap.
Amend Agreements: Contact District counsel immediately to begin drafting amendments to existing Development and Reimbursement Agreements to incorporate road powers.
Secure Approvals: Ensure all current road designs have explicit sign-off from the ultimate receiving entity (City/County) to preserve future reimbursement eligibility.
Operational Changes Required
Contracts
Reimbursement Agreements: Existing agreements with the District must be amended to explicitly include "road projects" as reimbursable costs.
Construction Contracts: Master Service Agreements (MSAs) with paving and civil contractors must reference the specific standards of the oversight jurisdiction (e.g., "Must meet City of Sugar Land standards") rather than generic industry standards to ensure bond eligibility.
Conveyance Instruments: Legal counsel must draft deeds and bills of sale anticipating transfer to the County or Municipality, not the District, as the District is authorized to convey roads upon completion.
Hiring/Training
Project Managers: Must be trained to identify the "controlling jurisdiction" (City vs. County vs. TxDOT) for every segment of road prior to design.
Civil Engineers: Design teams must verify that drainage improvements "in aid of" roads meet the specific criteria required for road bond inclusion, which differs from standard water district drainage bond criteria.
Reporting & Record-Keeping
Pre-Construction Certification: You must obtain and file written approval of plans from the relevant municipality or county *before* breaking ground. Retroactive approval is not sufficient for bond counsel.
Valuation Tracking: Developers must maintain real-time tracking of the District’s total assessed property value to ensure the 25% bond cap has not been reached prior to requesting issuance.
Fees & Costs
Bond Issuance Costs: Standard issuance fees will apply.
Cost of Capital Risk: Because road bonds are capped at 25% of assessed value (unlike unlimited water/sewer bonds), there is a higher risk of reimbursement delays if property values stagnate.
Strategic Ambiguities & Considerations
"In Aid of Those Roads": The statute allows financing for improvements "in aid of" roads. It is unclear if this extends to aesthetic hardscaping, lighting, or extensive sidewalks. Until the District clarifies this via internal policy, assume a narrow interpretation to avoid rejected costs.
Valuation Timing: The 25% cap applies "at the time of issuance." A market downturn between the bond election and the sale date could eliminate borrowing capacity.
ETJ Conflicts: While the law prioritizes Municipal standards in the ETJ, County Commissioners often assert authority over maintenance acceptance. Secure Interlocal Agreements (ILAs) early to prevent a standoff at the time of conveyance.
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The bill author has informed the committee that a certain area in Fort Bend County lacks some of the necessary roads to support the area's development. H.B. 5662 seeks to address this issue by granting the Fort Bend County Water Control and Improvement District No. 12 the authority to undertake certain road projects and issue related bonds.
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. 5662 amends the Special District Local Laws Code to establish provisions relating to the Fort Bend County Water Control and Improvement District No. 12, including findings of public purpose and benefit. The bill authorizes the district, under specified provisions of the Texas Constitution, to design, acquire, construct, finance, issue bonds for, improve, operate, maintain, and convey to the state, a county, or a municipality for operation and maintenance macadamized, graveled, or paved roads, or improvements, including storm drainage, in aid of those roads. The bill requires a road project to meet all applicable construction standards, zoning and subdivision requirements, and regulations of each municipality in whose corporate limits or extraterritorial jurisdiction the road project is located. The bill requires a road project that is not located in the corporate limits or extraterritorial jurisdiction of a municipality to meet all applicable construction standards, subdivision requirements, and regulations of each county in which the road project is located. The bill requires the Texas Transportation Commission to approve the plans and specifications of the road project if the state will maintain and operate the road. The bill caps, at the time of issuance, the total principal amount of bonds or other obligations issued or incurred to finance road projects and payable from property taxes at one-fourth of the assessed value of the real property in the district.
H.B. 5662 establishes that all applicable requirements relating to the following have been fulfilled and accomplished with respect to the bill:
·the legal notice of intention to introduce;
·governor action;
·Texas Commission on Environmental Quality recommendations; and
·the state constitution and laws and legislative rules and procedures.
EFFECTIVE DATE
On passage, or, if the bill does not receive the necessary vote, September 1, 2025.
Honorable Cody Harris, Chair, House Committee on Natural Resources
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB5662 by Gates (Relating to the powers, duties, and authority to issue bonds of the Fort Bend County Water Control and Improvement District No. 12 related to roads.), 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 district's issuance of bonds or imposition of assessments, fees, and taxes being unknown. No fiscal implication to other units of local government is anticipated.
Source Agencies: b > td >
582 Commission on Environmental Quality
LBB Staff: b > td >
JMc, TUf, BC, CWi
Related Legislation
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HB5662 authorizes Fort Bend County Water Control and Improvement District No. 12 to finance, construct, and issue bonds for road projects, expanding its scope beyond water and drainage. While this creates a new reimbursement avenue for developers, it imposes a strict debt ceiling capped at 25% of the District’s assessed property value and mandates rigid adherence to municipal or county construction standards as a condition of funding.
Q
Who authored HB5662?
HB5662 was authored by Texas Representative Gary Gates during the Regular Session.
Q
When was HB5662 signed into law?
HB5662 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce HB5662?
HB5662 is enforced by Fort Bend County Water Control and Improvement District No. 12, Texas Transportation Commission, Fort Bend County Commissioners Court and Applicable Municipalities (within jurisdiction).
Q
How urgent is compliance with HB5662?
The compliance urgency for HB5662 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB5662?
The cost impact of HB5662 is estimated as "medium". This may vary based on industry and implementation requirements.
Q
What topics does HB5662 address?
HB5662 addresses topics including fort bend county water control and improvement district no. 12, special districts & authorities, special districts & authorities--water & utility and special districts & authorities--water control improve dist..
Legislative data provided by LegiScanLast updated: November 25, 2025
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