JD Key Consulting Logo
Signed Into Law
Signed June 20, 2025Effective 2025-09-01
HB5680

Regular Session

Relating to the creation of the Bayou Belle Municipal Management 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

HB5680: Government Affairs Overview

HB5680 establishes the Bayou Belle Municipal Management District No. 1 in Liberty County, creating a new jurisdiction with the authority to levy ad valorem taxes and impose superior liens through assessments to fund infrastructure. Crucially, the legislation failed to pass with a supermajority, meaning the District is created WITHOUT eminent domain power.

Rep. Janis Holt·House Bill·Regular Session

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

Bayou Belle Municipal Management District No. 1 Board of Directors • Liberty County Tax Assessor-Collector • Texas Commission on Environmental Quality (TCEQ)

Business Impact

Who HB5680 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.

💧

Water

Affected business types:

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

Key Operational Considerations

  • 1Title & Closing Staff: Train staff to identify the "Julianna Malley League, Abstract No. 71" in Liberty County as a special taxing jurisdiction to ensure taxes are prorated correctly at closing.

Estimated Cost Impact

mediumModerate costs expected for implementation.

Enforcing Agencies

Need Government Relations Support?

JD Key Consulting provides government affairs and regulatory strategy services. We help businesses navigate Texas agencies, understand legislative impacts, and advocate for their interests.

Need Help Navigating This Legislation?

JD Key Consulting provides strategic guidance on Texas regulatory compliance and legislative impact for your business.

HB5680
Relating to the creation of the Bayou Belle Municipal Management District No. 1; granting a limited power of eminent domain; providing authority to is...
Moderate Urgency
Heavily Contested
House Vote84 - 47
YEA
NAY
64% in favor131 voting
Senate Vote28 - 3
YEA
90% in favor31 voting
50
Total Opposition Votes
Cost Impact
Medium
Effective
2025-09-01
Enforcing Agencies
Bayou Belle Municipal Management...Liberty County Tax Assessor-Coll...TCEQ
Primary Author: Rep. Janis Holt
89th Texas Legislature
jdkey.com
01

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 updating "Notice to Purchasers" in real estate sales contracts. Financial liability (taxes/assessments) begins upon Board resolution or voter approval.
  • Agency Rulemaking: The initial Board of Directors will convene in Q4 2025/Q1 2026 to adopt bylaws and set assessment methodologies. There is a regulatory gray zone until the Board defines the specific formula for calculating assessments (e.g., per foot vs. per acre).

Immediate Action Plan

  • Audit Property Locations: Immediately verify if your assets fall within the Julianna Malley League, Abstract No. 71, to confirm jurisdiction.
  • Update Lease Templates: Revise standard NNN lease agreements to capture MMD assessments as recoverable costs before the September 1 effective date.
  • Monitor Board Formation: Identify the initial Board meeting date (Q4 2025) and designate a representative to attend. You must advocate for an assessment methodology that favors your property type before rules are adopted.
  • Review Loan Covenants: Check existing loan agreements for clauses regarding "superior liens" or "special assessments," as the creation of this District may trigger notification requirements to your lender.

Operational Changes Required

Contracts

  • Commercial Leases (NNN): Landlords must amend lease definitions of "Operating Expenses" or "Taxes" to explicitly include "special district assessments" and "MMD taxes." Without this specific language, landlords risk being unable to pass these new costs to tenants.
  • Real Estate Sales: Sellers must update sales contracts to include the statutory "Notice to Purchasers" (Texas Water Code § 49.452). Failure to disclose the District’s existence renders the contract voidable by the purchaser at closing.
  • Construction Agreements: Contracts with the District are deemed "governmental functions." Contractors must comply with Texas Government Code Chapter 2253 (Payment and Performance Bonds) and prevailing wage requirements.

Hiring/Training

  • Title & Closing Staff: Train staff to identify the "Julianna Malley League, Abstract No. 71" in Liberty County as a special taxing jurisdiction to ensure taxes are prorated correctly at closing.
  • Project Managers: Construction teams must be trained on public work compliance, as private development rules do not apply to District-funded infrastructure.

Reporting & Record-Keeping

  • Lien Tracking: Lenders must track District assessments as they constitute a first and prior lien superior to all other liens (except municipal/county/school taxes).
  • Petition Verification: Retain copies of any petitions signed by corporate agents. A petition signed by owners of a majority of assessed value triggers the Board's authority to levy assessments without an election.

Fees & Costs

  • Assessments: The Board may impose mandatory assessments at any time via resolution. These are personal liabilities of the property owner.
  • Ad Valorem Taxes: The District may levy property taxes for operations and maintenance, subject to voter approval.
  • Standby Fees: The District may impose fees on undeveloped property available for service but not yet utilizing connections.

Strategic Ambiguities & Considerations

  • Assessment Methodology: The statute allows the Board to determine how assessments are calculated (e.g., benefit basis, front-footage, or square footage). This is currently undefined. Risk: A "front-footage" calculation disproportionately impacts businesses with extensive road frontage but lower building value (e.g., logistics centers, warehouses).
  • Infrastructure Delays (No Eminent Domain): Because the District lacks eminent domain, it must negotiate for all rights-of-way. If a single landowner holds out, critical infrastructure projects (roads/drainage) may be stalled indefinitely, impacting development timelines.

Need Compliance Guidance on This Legislation?

JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

Schedule a 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.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Apr 15, 2025
Passed House
May 16, 2025
Passed Senate
May 26, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsBayou Belle Municipal Management District No.1Liberty CountySpecial Districts & AuthoritiesSpecial Districts & Authorities--miscellaneousEnvironmental Quality, Texas Commission On
03

House Authors

Rep. Janis HoltRepublican · Primary Author

Senate Sponsor

Sen. Robert NicholsRepublican · 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

Explore more bills from this author and on related topics

More from Rep. Janis Holt

View all bills by Rep. Janis Holt

Related by Topic

View more Bayou Belle Municipal Management District No.1 legislation
Quick Reference

Frequently Asked Questions

Common questions about HB5680

Q

What does Texas HB5680 do?

HB5680 establishes the Bayou Belle Municipal Management District No. 1 in Liberty County, creating a new jurisdiction with the authority to levy ad valorem taxes and impose superior liens through assessments to fund infrastructure. Crucially, the legislation failed to pass with a supermajority, meaning the District is created WITHOUT eminent domain power.

Q

Who authored HB5680?

HB5680 was authored by Texas Representative Janis Holt during the Regular Session.

Q

When was HB5680 signed into law?

HB5680 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce HB5680?

HB5680 is enforced by Bayou Belle Municipal Management District No. 1 Board of Directors, Liberty County Tax Assessor-Collector and Texas Commission on Environmental Quality (TCEQ).

Q

How significant are the changes in HB5680?

The regulatory priority for HB5680 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HB5680?

The cost impact of HB5680 is estimated as "medium". This may vary based on industry and implementation requirements.

Q

What topics does HB5680 address?

HB5680 addresses topics including bayou belle municipal management district no.1, liberty county, special districts & authorities, special districts & authorities--miscellaneous and environmental quality, texas commission on.

Q

What are the key dates for HB5680?

Key dates for HB5680: 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