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Signed Into Law
Signed June 20, 2025Effective 2025-09-01
HB5688

Regular Session

Relating to the creation of the San Benito 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

HB5688: Government Affairs Overview

HB5688 establishes the San Benito Municipal Utility District No. 1 in Cameron County, granting it authority to issue bonds and levy taxes for infrastructure development effective September 1, 2025. Crucially, the bill failed to receive the two-thirds vote required for immediate effect, triggering a statutory prohibition on the use of eminent domain, forcing developers to acquire all necessary easements strictly through private negotiation.

Rep. Janie Lopez·House Bill·Regular Session

Low
Low Cost
Effective:2025-09-01
Enforcing Agencies

Cameron County Commissioners Court • City of San Benito (or applicable municipality) • Texas Commission on Environmental Quality (TCEQ) • Texas Transportation Commission

Business Impact

Who HB5688 Affects

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

Regulatory Priority: low

Standard regulatory changes (effective 2025-09-01). Review during normal business planning.

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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

  • 1Service Agreements: Any long-term contract for water supply or waste treatment funded by tax revenue requires voter approval before execution (Sec. 8028A.0403).
  • 2Director Onboarding: The five Temporary Directors named in the bill must file constitutional oaths and obtain Directors and Officers (D&O) liability insurance immediately upon the effective date.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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HB5688
Relating to the creation of the San Benito Municipal Utility District No. 1; granting a limited power of eminent domain; providing authority to issue ...
Low 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
Low
Effective
2025-09-01
Enforcing Agencies
Cameron County Commissioners CourtCity of San BenitoTCEQTexas Transportation Commission
Primary Author: Rep. Janie Lopez
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: Q4 2025 (Temporary Directors must organize and petition for municipal consent immediately upon the effective date to prepare for a 2026 confirmation election).
  • Agency Rulemaking: No new agency rulemaking is required; however, the District must adhere to existing TCEQ rules for bond issuances and TxDOT standards for road projects if state maintenance is sought.

Immediate Action Plan

  • 1. Secure Off-Site Easements: Immediately finalize negotiations for all utility corridors and drainage outfalls; the District has no power to condemn land if negotiations fail.
  • 2. Draft the Consent Ordinance: Engage with the City of San Benito to draft a Consent Ordinance that explicitly defines road maintenance responsibilities.
  • 3. Convene Temporary Directors: Schedule the organizational meeting for September 2025 to swear in directors and appoint officers.
  • 4. Schedule Confirmation Election: Target the May 2026 uniform election date to confirm the District and approve bond/tax propositions.

Operational Changes Required

Contracts

  • Reimbursement Agreements: Developers must execute reimbursement agreements with the District to define repayment terms for upfront infrastructure costs. These contracts must now account for the 25% assessed value cap on road bonds.
  • Easement Acquisition: Due to the loss of eminent domain, all land acquisition contracts for off-site utilities or drainage must include strict contingencies. You cannot rely on the District to condemn holdout parcels.
  • Service Agreements: Any long-term contract for water supply or waste treatment funded by tax revenue requires voter approval before execution (Sec. 8028A.0403).

Hiring/Training

  • Director Onboarding: The five Temporary Directors named in the bill must file constitutional oaths and obtain Directors and Officers (D&O) liability insurance immediately upon the effective date.
  • Consultant Procurement: The Board must retain Bond Counsel, a General Counsel, and a District Engineer. These hires must comply with the Professional Services Procurement Act.

Reporting & Record-Keeping

  • Municipal Consent: You must secure and file a Consent Ordinance from the City of San Benito (or applicable municipality). Without this document, the District cannot legally operate.
  • Truth-in-Taxation: Once voters approve the tax, the Board must perform and file annual tax rate calculations.
  • Election Results: Results of the Confirmation and Bond Election must be filed with the TCEQ and the Texas Attorney General.

Fees & Costs

  • Bond Issuance Costs: Budget for legal and financial advisory fees associated with bond applications.
  • Election Costs: The District (initially the developer) must fund the administration of the confirmation election.
  • Ad Valorem Taxes: Future property owners will face two new tax levies: an Operation & Maintenance (O&M) tax and a Debt Service tax.

Strategic Ambiguities & Considerations

  • Road Maintenance Liability: The law allows the District to convey roads to the state, county, or city, but does not *mandate* acceptance by those entities. If the City of San Benito refuses to accept the roads for maintenance, the District retains liability. Risk: This will permanently inflate the O&M tax rate to cover road repairs. This must be resolved in the initial Consent Ordinance.
  • "No Eminent Domain" Scope: The prohibition on eminent domain is absolute due to the voting failure. This creates a significant "holdout" risk for off-site outfalls or connecting mains. Developers must secure these rights-of-way immediately; the District cannot bail you out later.

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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 23, 2025
Passed House
May 10, 2025
Passed Senate
May 25, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsSan Benito Municipal Utility District No. 1Special Districts & AuthoritiesSpecial Districts & Authorities--municipal Utility DistrictsSpecial Districts & Authorities--water & Utility
03

House Authors

Rep. Janie LopezRepublican · Primary Author

Senate Sponsor

Sen. Adam HinojosaRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

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More from Rep. Janie Lopez

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Related by Topic

View more San Benito Municipal Utility District No. 1 legislation
Quick Reference

Frequently Asked Questions

Common questions about HB5688

Q

What does Texas HB5688 do?

HB5688 establishes the San Benito Municipal Utility District No. 1 in Cameron County, granting it authority to issue bonds and levy taxes for infrastructure development effective September 1, 2025. Crucially, the bill failed to receive the two-thirds vote required for immediate effect, triggering a statutory prohibition on the use of eminent domain, forcing developers to acquire all necessary easements strictly through private negotiation.

Q

Who authored HB5688?

HB5688 was authored by Texas Representative Janie Lopez during the Regular Session.

Q

When was HB5688 signed into law?

HB5688 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce HB5688?

HB5688 is enforced by Cameron County Commissioners Court, City of San Benito (or applicable municipality), Texas Commission on Environmental Quality (TCEQ) and Texas Transportation Commission.

Q

How significant are the changes in HB5688?

The regulatory priority for HB5688 is rated as "low". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HB5688?

The cost impact of HB5688 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does HB5688 address?

HB5688 addresses topics including san benito municipal utility district no. 1, special districts & authorities, special districts & authorities--municipal utility districts and special districts & authorities--water & utility.

Q

What are the key dates for HB5688?

Key dates for HB5688: 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