HB5670

Regular Session

Relating to the creation of the Montgomery County Municipal Utility District No. 259; granting a limited power of eminent domain; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes.

LowStandard timeline

Low Cost

Effective:2025-09-01

Enforcing Agencies

Texas Commission on Environmental Quality (TCEQ) • Montgomery County Commissioners Court • Texas Transportation Commission (regarding state road connectivity) • District Board of Directors (Montgomery County MUD No. 259)

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: September 1, 2025
Compliance Deadline: Immediate upon effective date for land acquisition planning; Confirmation Election must be held prior to September 1, 2029.
Agency Rulemaking: No new agency rules required; however, the District must submit road project plans to the Texas Transportation Commission or Montgomery County prior to construction.

Immediate Action Plan

Map the ETJ: Confirm immediately if the land sits within the ETJ of Conroe, Houston, or another municipality to initiate the consent process.
Secure ROW Voluntarily: Audit all proposed utility and road routes. If any cross property not owned by the developer, initiate purchase negotiations immediately; you have no condemnation backstop.
Activate Insurance: Purchase D&O insurance for the temporary directors effective September 1, 2025.
Schedule Election: Set the date for the confirmation and tax authorization election to ensure the District can begin levying assessments in the next tax cycle.

Operational Changes Required

Contracts

Developer Reimbursement Agreements: Agreements must be drafted to include contingency clauses for "failure to acquire right-of-way." Without eminent domain, a single holdout landowner can stall infrastructure projects; contracts must protect the developer's capital if projects are rerouted or cancelled.
Construction Bids: All infrastructure contracts funded by the District must adhere to Texas Water Code Chapter 49 public bidding requirements.
Municipal Consent: If the District lies within a city's ETJ (likely Houston or Conroe), a Consent Agreement/Strategic Partnership Agreement must be executed before bonds are sold.

Hiring/Training

Director Bonding: The five temporary directors named in the statute must be sworn in and secure Public Official Bonds and D&O liability insurance immediately upon the Act’s effective date.
Election Management: Retain legal counsel specialized in special district election procedures to manage the confirmation election, as procedural errors here will invalidate future tax levies.

Reporting & Record-Keeping

Election Results: Certified returns for the confirmation election (approving the District, taxes, and bonds) must be filed with the TCEQ and retained permanently.
Road Plans: Engineering plans for road projects must be submitted to Montgomery County (and TxDOT if connecting to a state highway) for approval *before* breaking ground.
Tax Rate Filings: Once the tax rate is set, annual filings with the Montgomery County Tax Assessor-Collector are mandatory.

Fees & Costs

Ad Valorem Taxes: The District is authorized to levy an unlimited O&M tax and bond tax, subject to voter approval.
Bond Issuance Costs: Road bonds are strictly capped at 25% of the assessed value of real property within the District.
Impact Fees: The Board may impose impact fees on new development to fund district purposes.

Strategic Ambiguities & Considerations

"Applicable Municipality" Jurisdiction: The statute requires consent from the municipality in whose ETJ the land resides. If the 342-acre tract straddles two jurisdictions, or if ETJ boundaries are contested, you may face dual-regulatory requirements. Verify GIS data immediately.
Road Bond Valuation Lag: The 25% cap on road bonds is based on *assessed* value. In early development stages, assessed value is low, creating a funding gap for road infrastructure that developers must front-end without immediate reimbursement.

Need Help Understanding Implementation?

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Schedule 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.

Legislative Timeline

This bill's path through the Texas Legislature

TopicsMontgomery County Municipal Utility District No. 259 Special Districts & Authorities Special Districts & Authorities--municipal Utility Districts

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

C.S.H.B. 5670

By: Holt

Land & Resource Management

Committee Report (Substituted)

BACKGROUND AND PURPOSE

The bill author has informed the committee of the need for a municipal utility district to be created in Montgomery County for the benefit of certain undeveloped land. C.S.H.B. 5670 seeks to provide for the creation of the Montgomery County Municipal Utility District No. 259.

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

C.S.H.B. 5670 amends the Special District Local Laws Code to create the Montgomery County Municipal Utility District No. 259, subject to applicable municipal consent and voter approval at a confirmation election. The bill, among other provisions, grants the district the power to undertake certain road projects and provides for the district's division. The bill authorizes the district, subject to certain requirements, to issue obligations and impose property, operation and maintenance, and contract taxes. The bill does the following:

·expressly prohibits the district from exercising the power of eminent domain if the bill does not receive a two-thirds vote of all the members elected to each house; and

·establishes that the bill's provisions relating to this vote threshold are not intended to be an expression of a legislative interpretation of the requirements of Section 17(c), Article I, Texas Constitution.

C.S.H.B. 5670 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

September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 5670 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 establishes that the temporary board of directors of the district consists of Jerry Everhard, Darby Oldham Kent, Troy A. Brown, Brett West, and Caleb Davis, which the introduced did not do. Whereas the introduced did not grant the district the power to undertake certain road projects or provide for the district's division, the substitute does provide for that power and the district's division.

House Authors

Rep. Janis HoltRepublican · Primary Author

Senate Sponsor

Sen. Charles CreightonRepublican · Primary Sponsor

Bill Text(with markup)

H.B. No. 5670

AN ACT

relating to the creation of the Montgomery County Municipal Utility

District No. 259; granting a limited power of eminent domain;

providing authority to issue bonds; providing authority to impose

assessments, fees, and taxes.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle F, Title 6, Special District Local Laws

Code, is amended by adding Chapter 8012A to read as follows:

CHAPTER 8012A. MONTGOMERY COUNTY MUNICIPAL UTILITY DISTRICT

NO. 259

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 8012A.0101. DEFINITIONS. In this chapter:

(1) "Board" means the district's board of directors.

(2) "Commission" means the Texas Commission on

Environmental Quality.

(3) "Director" means a board member.

(4) "District" means the Montgomery County Municipal

Utility District No. 259.

Sec. 8012A.0102. NATURE OF DISTRICT. The district is a

municipal utility district created under Section 59, Article XVI,

Texas Constitution.

Sec. 8012A.0103. CONFIRMATION AND DIRECTOR ELECTION

REQUIRED. The temporary directors shall hold an election to

confirm the creation of the district and to elect five permanent

directors as provided by Section 49.102, Water Code.

Sec. 8012A.0104. CONSENT OF MUNICIPALITY REQUIRED. The

temporary directors may not hold an election under Section

8012A.0103 until each municipality in whose corporate limits or

extraterritorial jurisdiction the district is located has

consented by ordinance or resolution to the creation of the

district and to the inclusion of land in the district as required by

applicable law.

Sec. 8012A.0105. FINDINGS OF PUBLIC PURPOSE AND BENEFIT.

(a) The district is created to serve a public purpose and benefit.

(b) The district is created to accomplish the purposes of:

(1) a municipal utility district as provided by

general law and Section 59, Article XVI, Texas Constitution; and

(2) Section 52, Article III, Texas Constitution, that

relate to the construction, acquisition, improvement, operation,

or maintenance of macadamized, graveled, or paved roads, or

improvements, including storm drainage, in aid of those roads.

Sec. 8012A.0106. INITIAL DISTRICT TERRITORY. (a) The

district is initially composed of the territory described by

Section 2 of the Act enacting this chapter.

(b) The boundaries and field notes contained in Section 2 of

the Act enacting this chapter form a closure. A mistake made in the

field notes or in copying the field notes in the legislative process

does not affect the district's:

(1) organization, existence, or validity;

(2) right to issue any type of bond for the purposes

for which the district is created or to pay the principal of and

interest on a bond;

(3) right to impose a tax; or

(4) legality or operation.

SUBCHAPTER B. BOARD OF DIRECTORS

Sec. 8012A.0201. GOVERNING BODY; TERMS. (a) The district

is governed by a board of five elected directors.

(b) Except as provided by Section 8012A.0202, directors

serve staggered four-year terms.

Sec. 8012A.0202. TEMPORARY DIRECTORS. (a) The temporary

board consists of:

(1) Jerry Everhard;

(2) Darby Oldham Kent;

(3) Troy A. Brown;

(4) Brett West; and

(5) Caleb Davis.

(b) Temporary directors serve until the earlier of:

(1) the date permanent directors are elected under

Section 8012A.0103; or

(2) September 1, 2029.

Section 8012A.0103 and the terms of the temporary directors have

expired, successor temporary directors shall be appointed or

reappointed as provided by Subsection (d) to serve terms that

expire on the earlier of:

(1) the date permanent directors are elected under

Section 8012A.0103; or

(2) the fourth anniversary of the date of the

appointment or reappointment.

(d) If Subsection (c) applies, the owner or owners of a

majority of the assessed value of the real property in the district

may submit a petition to the commission requesting that the

commission appoint as successor temporary directors the five

persons named in the petition. The commission shall appoint as

successor temporary directors the five persons named in the

petition.

SUBCHAPTER C. POWERS AND DUTIES

Sec. 8012A.0301. GENERAL POWERS AND DUTIES. The district

has the powers and duties necessary to accomplish the purposes for

which the district is created.

Sec. 8012A.0302. MUNICIPAL UTILITY DISTRICT POWERS AND

DUTIES. The district has the powers and duties provided by the

general law of this state, including Chapters 49 and 54, Water Code,

applicable to municipal utility districts created under Section 59,

Article XVI, Texas Constitution.

Sec. 8012A.0303. AUTHORITY FOR ROAD PROJECTS. Under

Section 52, Article III, Texas Constitution, the district may

design, acquire, construct, finance, issue bonds for, improve,

operate, maintain, and convey to this 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.

Sec. 8012A.0304. ROAD STANDARDS AND REQUIREMENTS. (a) A

road project must 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.

(b) If a road project is not located in the corporate limits

or extraterritorial jurisdiction of a municipality, the road

project must meet all applicable construction standards,

subdivision requirements, and regulations of each county in which

the road project is located.

Texas Transportation Commission must approve the plans and

specifications of the road project.

Sec. 8012A.0305. COMPLIANCE WITH MUNICIPAL CONSENT

ORDINANCE OR RESOLUTION. The district shall comply with all

applicable requirements of any ordinance or resolution that is

adopted under Section 54.016 or 54.0165, Water Code, and that

consents to the creation of the district or to the inclusion of land

in the district.

Sec. 8012A.0306. DIVISION OF DISTRICT. This chapter

applies to any new district created by the division of the district

under Section 49.316, Water Code, and a new district has all the

powers and duties of the district.

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Sec. 8012A.0401. ELECTIONS REGARDING TAXES OR BONDS. (a)

The district may issue, without an election, bonds and other

obligations secured by:

(1) revenue other than ad valorem taxes; or

(2) contract payments described by Section

8012A.0403.

(b) The district must hold an election in the manner

provided by Chapters 49 and 54, Water Code, to obtain voter approval

before the district may impose an ad valorem tax or issue bonds

payable from ad valorem taxes.

taxes to finance a road project unless the issuance is approved by a

vote of a two-thirds majority of the district voters voting at an

election held for that purpose.

Sec. 8012A.0402. OPERATION AND MAINTENANCE TAX. (a) If

authorized at an election held under Section 8012A.0401, the

district may impose an operation and maintenance tax on taxable

property in the district in accordance with Section 49.107, Water

Code.

(b) The board shall determine the tax rate. The rate may not

exceed the rate approved at the election.

Sec. 8012A.0403. CONTRACT TAXES. (a) In accordance with

Section 49.108, Water Code, the district may impose a tax other than

an operation and maintenance tax and use the revenue derived from

the tax to make payments under a contract after the provisions of

the contract have been approved by a majority of the district voters

voting at an election held for that purpose.

(b) A contract approved by the district voters may contain a

provision stating that the contract may be modified or amended by

the board without further voter approval.

SUBCHAPTER E. BONDS AND OTHER OBLIGATIONS

Sec. 8012A.0501. AUTHORITY TO ISSUE BONDS AND OTHER

OBLIGATIONS. The district may issue bonds or other obligations

payable wholly or partly from ad valorem taxes, impact fees,

revenue, contract payments, grants, or other district money, or any

combination of those sources, to pay for any authorized district

purpose.

Sec. 8012A.0502. TAXES FOR BONDS. At the time the district

issues bonds payable wholly or partly from ad valorem taxes, the

board shall provide for the annual imposition of a continuing

direct ad valorem tax, without limit as to rate or amount, while all

or part of the bonds are outstanding as required and in the manner

provided by Sections 54.601 and 54.602, Water Code.

Sec. 8012A.0503. BONDS FOR ROAD PROJECTS. At the time of

issuance, the total principal amount of bonds or other obligations

issued or incurred to finance road projects and payable from ad

valorem taxes may not exceed one-fourth of the assessed value of the

real property in the district.

SECTION 2. The Montgomery County Municipal Utility District

No. 259 initially includes all the territory contained in the

following area:

342.736 ACRES

(342.386-acre tract and 0.350-acre tract)

FIELD NOTES FOR 342.386 ACRES

Being a 342.386 acre tract of land located within the Thomas J.

Williams Survey, Abstract No. 593, the Martin B. Lawrence Survey,

Abstract No. 310, and the Presley Gill Survey, Abstract No. 230,

Montgomery County, Texas, being all of a called 342.655 acre tract,

as recorded in County Clerks File No. (C.C.F.N.) 2024083985 of the

Official Public Records of Montgomery County, Texas

(O.P.R.M.C.T.), and all of a called 0.343 acre tract, as recorded in

C.C.F.N. 2024083985 of the O.P.R.M.C.T., combined referred to

hereafter as the above referenced tract of land, said 342.386 acre

tract being more particularly described by metes and bounds as

follows (bearings are based on the Texas Coordinate System of 1983,

(NAD83) Central Zone, per GPS observations):

BEGINNING at a 3/4-inch iron pipe found (pinched) for corner, being

the Northeast corner of the above referenced tract, same being the

Southeast corner of a called 94.699 acre tract, as recorded in

C.C.F.N. 2022149597 of the O.P.R.M.C.T., same being the Southwest

corner of a called 114.235 acre tract, as recorded in C.C.F.N.

2022149965 of the O.P.R.M.C.T., same being the Northwest corner of

a called 190.3782 acre tract, as recorded in C.C.F.N. 9329517 of the

O.P.R.M.C.T.;

THENCE South 03°30'21" East, along the East line of the above

referenced tract, same being the West line of said called 190.3782

acre tract, and the West line of a called 277.3296 acre tract, as

recorded in C.C.F.N. 2006119068 of the O.P.R.M.C.T., a distance of

3,908.80 feet to a 3/4-inch iron pipe found (pinched) for corner,

being an angle point in the East line of the above referenced tract;

THENCE South 56°46'57" East, along the Easterly line of the above

referenced tract, same being the Westerly line of said called

277.3296 acre tract, a distance of 672.27 feet to a point;

THENCE South 06°03'09" East, over and across the above referenced

tract, a distance of 160.45 feet to a point for corner, being in

Peach Creek;

THENCE North 69°00'30" West, along said Peach Creek, a distance of

81.97 feet to a point for corner;

THENCE North 84°04'48" West, along said Peach Creek, a distance of

186.94 feet to a point for corner;

THENCE North 83°05'29" West, along said Peach Creek, a distance of

103.60 feet to a point for corner;

THENCE North 89°23'55" West, along said Peach Creek, a distance of

99.30 feet to a point for corner;

THENCE South 83°06'59" West, along said Peach Creek, a distance of

85.86 feet to a point for corner;

THENCE South 67°33'36" West, along said Peach Creek, a distance of

96.43 feet to a point for corner;

THENCE North 85°03'20" West, along said Peach Creek, a distance of

139.37 feet to a point for corner;

THENCE North 36°52'04" West, along said Peach Creek, a distance of

71.26 feet to a point for corner;

THENCE South 83°16'48" West, along said Peach Creek, a distance of

50.98 feet to a point for corner;

THENCE South 21°21'04" West, along said Peach Creek, a distance of

73.24 feet to a point for corner;

THENCE South 71°51'57" West, along said Peach Creek, a distance of

93.60 feet to a point for corner;

THENCE North 72°46'17" West, along said Peach Creek, a distance of

71.92 feet to a point for corner;

THENCE South 73°06'31" West, along said Peach Creek, a distance of

136.79 feet to a point for corner;

THENCE North 87°54'03" West, along said Peach Creek, a distance of

198.79 feet to a point for corner;

THENCE North 63°27'29" West, along said Peach Creek, a distance of

182.42 feet to a point for corner;

THENCE North 75°57'05" West, along said Peach Creek, a distance of

75.96 feet to a point for corner;

THENCE South 40°27'42" West, along said Peach Creek, a distance of

80.51 feet to a point for corner;

THENCE North 51°33'56" West, along said Peach Creek, a distance of

167.25 feet to a point for corner;

THENCE South 78°34'17" West, along said Peach Creek, a distance of

114.32 feet to a point for corner;

THENCE South 36°53'39" West, along said Peach Creek, a distance of

44.03 feet to a point for corner;

THENCE South 35°07'20" East, along said Peach Creek, a distance of

70.81 feet to a point for corner;

THENCE South 61°41'14" East, along said Peach Creek, a distance of

74.58 feet to a point for corner;

THENCE South 50°41'44" West, along said Peach Creek, a distance of

257.15 feet to a point for corner;

THENCE South 43°26'06" West, along said Peach Creek, a distance of

146.31 feet to a point for corner;

THENCE North 85°36'57" West, along said Peach Creek, a distance of

65.71 feet to a point for corner;

THENCE North 05°46'04" East, along said Peach Creek, a distance of

71.43 feet to a point for corner;

THENCE North 83°44'36" West, along said Peach Creek, a distance of

155.13 feet to a point for corner;

THENCE North 72°21'48" West, along said Peach Creek, a distance of

197.06 feet to a point for corner;

THENCE South 88°30'59" West, along said Peach Creek, a distance of

63.87 feet to a point for corner;

THENCE North 06°09'14" East, along said Peach Creek, a distance of

45.98 feet to a point for corner;

THENCE North 54°34'31" East, along said Peach Creek, a distance of

150.69 feet to a point for corner;

THENCE North 12°41'45" East, along said Peach Creek, a distance of

60.84 feet to a point for corner;

THENCE North 38°16'33" West, along said Peach Creek, a distance of

125.36 feet to a point for corner;

THENCE North 84°39'10" West, along said Peach Creek, a distance of

94.40 feet to a point for corner;

THENCE North 29°23'50" West, along said Peach Creek, a distance of

105.19 feet to a point for corner;

THENCE North 45°14'51" West, along said Peach Creek, a distance of

369.11 feet to a point for corner;

THENCE South 29°28'04" West, along said Peach Creek, a distance of

111.97 feet to a point for corner;

THENCE North 89°46'10" West, along said Peach Creek, a distance of

318.26 feet to a point for corner;

THENCE South 81°03'28" West, along said Peach Creek, a distance of

291.98 feet to a point for corner;

THENCE North 24°28'50" West, along said Peach Creek, a distance of

86.81 feet to a point for corner;

THENCE North 54°41'25" East, along said Peach Creek, a distance of

85.59 feet to a point for corner;

THENCE North 57°52'48" East, along said Peach Creek, a distance of

90.25 feet to a point for corner;

THENCE North 02°58'50" West, along said Peach Creek, a distance of

81.02 feet to a point for corner;

THENCE South 52°39'33" West, along said Peach Creek, a distance of

109.86 feet to a point for corner;

THENCE South 82°57'52" West, along said Peach Creek, a distance of

232.05 feet to a point for corner;

THENCE South 60°59'56" West, along said Peach Creek, a distance of

163.99 feet to a point for corner;

THENCE North 43°31'56" West, along said Peach Creek, a distance of

117.90 feet to a point for corner;

THENCE North 11°08'12" West, along said Peach Creek, a distance of

119.61 feet to a point for corner;

THENCE North 52°07'38" West, along said Peach Creek, a distance of

128.29 feet to a point for corner;

THENCE North 42°30'46" East, along said Peach Creek, a distance of

94.55 feet to a point for corner;

THENCE North 59°04'41" West, along said Peach Creek, a distance of

244.51 feet to a point for corner;

THENCE North 71°46'08" West, along said Peach Creek, a distance of

359.19 feet to a point for corner;

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Fiscal NoteView Original

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


April 29, 2025

TO:	Honorable Gary Gates, Chair, House Committee on Land & Resource Management

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HB5670 by Holt (Relating to the creation of the Montgomery County Municipal Utility District No. 259; granting a limited power of eminent domain; providing authority to issue bonds; providing authority to impose fees, and taxes.), 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 exercise of eminent domain power, 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:

LBB Staff:

JMc, SZ, BC, CWi

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Frequently Asked Questions

Common questions about HB5670

What does Texas HB5670 do?

HB5670 establishes Montgomery County Municipal Utility District No. 259 effective September 1, 2025, creating a new taxing and regulatory authority over approximately 342 acres. Crucially, the legislation failed to secure the required two-thirds legislative vote, meaning this District is statutorily prohibited from exercising eminent domain.

Who authored HB5670?

HB5670 was authored by Texas Representative Janis Holt during the Regular Session.

When was HB5670 signed into law?

HB5670 was signed into law by Governor Greg Abbott on June 20, 2025.

Which agencies enforce HB5670?

HB5670 is enforced by Texas Commission on Environmental Quality (TCEQ), Montgomery County Commissioners Court, Texas Transportation Commission (regarding state road connectivity) and District Board of Directors (Montgomery County MUD No. 259).

How urgent is compliance with HB5670?

The compliance urgency for HB5670 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of HB5670?

The cost impact of HB5670 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does HB5670 address?

HB5670 addresses topics including montgomery county municipal utility district no. 259, special districts & authorities and special districts & authorities--municipal utility districts.

Legislative data provided by LegiScanLast updated: November 25, 2025

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