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Signed Into Law
Signed June 20, 2025Effective 2025-09-01
HB5674

Regular Session

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.

Government Affairs & Regulatory Compliance Analysis

HB5674: Government Affairs Overview

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.

Rep. Terry Wilson·House Bill·Regular Session

Moderate
Medium Cost
Effective:2025-09-01
Enforcing Agencies

Applicable Municipalities (Consent and ETJ standards) • Texas Commission on Environmental Quality (TCEQ) • Texas Transportation Commission (for state road integration) • Williamson County Commissioners Court (Road standards)

Business Impact

Who HB5674 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-09-01). Consider how these changes may affect your operations.

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Water

Affected business types:

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

Key Operational Considerations

  • 1Right-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.
  • 2Board Appointments: You must identify five qualified temporary directors to be named in the TCEQ petition.

Estimated Cost Impact

mediumModerate costs expected for implementation.

Enforcing Agencies

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HB5674
Relating to the creation of the River Ranch Municipal Utility District No. 1; granting a limited power of eminent domain; providing authority to issue...
Moderate Urgency
Heavily Contested
House Vote81 - 47
YEA
NAY
63% in favor128 voting
Senate Vote27 - 4
YEA
87% in favor31 voting
51
Total Opposition Votes
Cost Impact
Medium
Effective
2025-09-01
Enforcing Agencies
Applicable MunicipalitiesTCEQTexas Transportation CommissionWilliamson County Commissioners ...
Primary Author: Rep. Terry Wilson
89th Texas Legislature
jdkey.com
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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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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.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Apr 14, 2025
Passed House
May 10, 2025
Passed Senate
May 28, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsRiver Ranch Municipal Utility District No. 1Special Districts & AuthoritiesSpecial Districts & Authorities--municipal Utility DistrictsSpecial Districts & Authorities--water & UtilityEnvironmental Quality, Texas Commission On
03

House Authors

Rep. Terry WilsonRepublican · Primary Author

Senate Sponsor

Sen. Peter FloresRepublican · Primary Sponsor

Bill Text(with markup)

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View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

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More from Rep. Terry Wilson

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Related by Topic

View more River Ranch Municipal Utility District No. 1 legislation
Quick Reference

Frequently Asked Questions

Common questions about HB5674

Q

What does Texas HB5674 do?

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 Applicable Municipalities (Consent and ETJ standards), Texas Commission on Environmental Quality (TCEQ), Texas Transportation Commission (for state road integration) and Williamson County Commissioners Court (Road standards).

Q

How significant are the changes in HB5674?

The regulatory priority for HB5674 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

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.

Q

What are the key dates for HB5674?

Key dates for HB5674: Effective date is 2025-09-01. 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