Relating to the creation of the River Ranch Municipal Utility District No. 1; granting a limited power of eminent domain; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes.
ModeratePlan for compliance
Medium Cost
Effective:2025-09-01
Enforcing Agencies
Texas Commission on Environmental Quality (TCEQ) • Texas Transportation Commission (for state road integration) • Williamson County Commissioners Court (Road standards) • Applicable Municipalities (Consent and ETJ standards)
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Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: September 1, 2025.
Compliance Deadline: Landowners must file a petition for the appointment of temporary directors with the TCEQ immediately on or after September 1, 2025.
Agency Rulemaking: No new agency rules are required, but the District is subject to existing TCEQ creation standards. The "regulatory gray zone" exists between the effective date and the confirmation election (estimated Q2 2026), during which the Board exists but cannot yet levy taxes or issue bonds.
Immediate Action Plan
1.Secure Land Rights: Immediately audit all proposed utility routes. If a route crosses third-party land, secure a signed easement option now. Do not rely on future negotiation.
2.Prepare TCEQ Petition: Have legal counsel draft the petition for temporary directors so it is ready to file at 8:00 AM on September 1, 2025.
3.Initiate Municipal Talks: Begin negotiations with the relevant city planning department regarding the Consent Resolution and development standards.
4.Update Sales Contracts: Draft the "Notice to Purchasers" regarding the new taxing district to be included in all real estate sales contracts effective Sept 1, 2025.
Operational Changes Required
Contracts
Reimbursement Agreements: Developers must draft agreements with the District to fund initial infrastructure costs. These contracts must explicitly account for the 25% assessed value cap on road bonds versus the unlimited cap on utility bonds.
Right-of-Way (ROW) Options: Because eminent domain is prohibited, you must secure option contracts or easements for all off-site utility corridors *before* finalizing engineering plans.
Municipal Consent: You must negotiate and execute a "Strategic Partnership Agreement" or consent resolution with the applicable municipality (likely Liberty Hill or Georgetown) before the confirmation election.
Hiring/Training
Board Appointments: You must identify five qualified temporary directors to be named in the TCEQ petition.
Specialized Counsel: Retain Bond Counsel and a Financial Advisor immediately to structure the initial debt issuance and ensure the "Notice to Purchasers" complies with the Texas Water Code.
Reporting & Record-Keeping
TCEQ Petition: A formal petition requesting the appointment of temporary directors must be filed with the TCEQ. This requires a metes and bounds survey that matches the enacted legislation.
Notice to Purchasers: Upon the District's creation, sellers of real property within the boundaries must provide the statutory notice regarding potential tax liability to all buyers.
Election Orders: The Board must maintain strict records of the Confirmation, Director, and Bond elections to withstand Attorney General review during bond approval.
Fees & Costs
Ad Valorem Taxes: The Board is authorized to set a tax rate for Operation & Maintenance (O&M) and Bond repayment.
Bond Issuance Limits:
Roads: Bond issuance is strictly limited to 25% of the assessed value of real property at the time of issuance.
Utilities: Unlimited, subject to voter authorization and TCEQ feasibility rules.
Strategic Ambiguities & Considerations
Municipal Standards vs. State Authority: While the State created the District, the local municipality retains control over construction standards via the consent process. If the municipality demands standards exceeding TCEQ or TxDOT requirements, project costs will increase. The law does not resolve conflicts between District authority and Municipal ETJ authority; these must be resolved via contract.
Utility Interconnectivity: Without eminent domain, the District is vulnerable to "ransom" pricing from adjacent landowners for utility easements. If a neighbor refuses an easement, the District may be forced to build on-site treatment facilities rather than connecting to regional lines, significantly altering the cost model.
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The bill author has informed the committee of the need for a municipal utility district to be created in Williamson County for the benefit of certain undeveloped land. H.B. 5674 seeks to provide for the creation of the River Ranch Municipal Utility District No. 1.
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. 5674 amends the Special District Local Laws Code to create the River Ranch Municipal Utility District No. 1, 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 are not intended to be an expression of a legislative interpretation of the requirements of Section 17(c), Article I, Texas Constitution.
H.B. 5674 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 Gary Gates, Chair, House Committee on Land & Resource Management
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB5674 by Wilson (Relating to the creation of the River Ranch Municipal Utility District No. 1; granting a limited power of eminent domain; providing authority to issue bonds; providing authority to impose assessments, 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: b > td >
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HB 5674 creates the River Ranch Municipal Utility District No. 1 in Williamson County, establishing a new taxing and regulatory authority over approximately 2,000 acres effective September 1, 2025. Critically, the Legislature denied this District the power of eminent domain; developers and the Board must acquire all rights-of-way through voluntary negotiation, or infrastructure projects will stall.
Q
Who authored HB5674?
HB5674 was authored by Texas Representative Terry Wilson during the Regular Session.
Q
When was HB5674 signed into law?
HB5674 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce HB5674?
HB5674 is enforced by Texas Commission on Environmental Quality (TCEQ), Texas Transportation Commission (for state road integration), Williamson County Commissioners Court (Road standards) and Applicable Municipalities (Consent and ETJ standards).
Q
How urgent is compliance with HB5674?
The compliance urgency for HB5674 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB5674?
The cost impact of HB5674 is estimated as "medium". This may vary based on industry and implementation requirements.
Q
What topics does HB5674 address?
HB5674 addresses topics including river ranch municipal utility district no. 1, special districts & authorities, special districts & authorities--municipal utility districts, special districts & authorities--water & utility and environmental quality, texas commission on.
Legislative data provided by LegiScanLast updated: November 25, 2025
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