Relating to the creation of the Sayers Ranch Municipal Utility District; 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) • Texas Transportation Commission (if state maintains roads) • Bastrop County Commissioners Court • Applicable Municipalities (ETJ/Corporate Limits)
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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: Immediate upon the District’s confirmation election (projected Q1/Q2 2026) for tax rate adoption; "Notice to Purchaser" disclosures must be updated immediately upon the setting of the first tax rate.
Agency Rulemaking: No new agency rulemaking is required; however, the District must navigate existing Texas Commission on Environmental Quality (TCEQ) rules (30 TAC Chapter 293) regarding bond feasibility and district creation.
Immediate Action Plan
Verify Boundaries: Legal counsel must cross-reference the metes and bounds in Section 2 with current surveys to ensure no jurisdictional overlap.
Secure Municipal Consent: Obtain a resolution of consent from any municipality with ETJ jurisdiction before ordering the confirmation election.
Negotiate Land Purchases: Immediately commence voluntary negotiations for necessary easements, as the eminent domain "safety net" does not exist.
Prepare Election Orders: Draft orders for the confirmation election to be held on the first uniform election date following September 1, 2025.
Operational Changes Required
Contracts
Land Acquisition: Standard condemnation clauses in acquisition contracts are void for this District. All right-of-way and easement acquisitions must be structured as voluntary, negotiated purchases or dedications.
Reimbursement Agreements: Developers must execute Reimbursement Agreements with the District to secure repayment for infrastructure outlays. These contracts must be contingent upon future bond sales and TCEQ approval.
Interlocal Agreements: If the District requires external water/wastewater treatment, wholesale service agreements with regional providers or municipalities must be finalized prior to the confirmation election.
Hiring/Training
Board Governance: The five temporary directors named in the statute must be sworn in and post bonds immediately after the effective date.
Professional Services: The Board must retain Bond Counsel, a Financial Advisor, and a District Engineer to prepare the confirmation election order and initial bond application.
Reporting & Record-Keeping
Real Estate Disclosures: Sellers of property within the District boundaries must update sales contracts to include the statutory "Notice to Purchaser" (Texas Water Code § 49.452) detailing tax rates and bond authority. Failure to provide this creates a voidable contract.
TCEQ Filings: The District must file confirmation election results and annual audit reports with the TCEQ.
Fees & Costs
Ad Valorem Taxes: The Board is authorized to levy operation and maintenance (O&M) taxes and unlimited tax bonds, subject to voter approval.
Impact Fees: The Board may impose impact fees and assessments to cover regulatory and administrative costs.
Strategic Ambiguities & Considerations
Road Standards Jurisdiction: Section 8022A.0304 requires compliance with municipal standards if in an ETJ, or county standards if outside. If the District straddles jurisdictions, or if the County and Municipality have conflicting engineering standards, the stricter standard generally prevails. Developers must secure a "Letter of No Objection" from both entities to prevent dedication refusal.
Bond Feasibility: While the statute grants bonding authority, it does not guarantee TCEQ approval. The District must prove financial feasibility under TCEQ rules. The gap between statutory creation and agency authorization creates a "funding lag" that developers must capitalize upfront.
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The bill author has informed the committee of the need for a municipal utility district to be created in Bastrop County for the benefit of certain undeveloped land. H.B. 5695 seeks to provide for the creation of the Sayers Ranch Municipal Utility District.
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. 5695 amends the Special District Local Laws Code to create the Sayers Ranch Municipal Utility District, 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 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 this provision is not intended to be an expression of a legislative interpretation of the requirements of Section 17(c), Article I, Texas Constitution.
H.B. 5695 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:
HB5695 by Gerdes (Relating to the creation of the Sayers Ranch Municipal Utility District; 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 issuance of bonds or imposition of assessments, fees, and taxes being unknown. No fiscal implication to other units of local government is anticipated.
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Related Legislation
Explore more bills from this author and on related topics
HB5695 creates the Sayers Ranch Municipal Utility District (MUD) in Bastrop County, establishing a new political subdivision authorized to finance infrastructure through bonds and ad valorem taxes. Critically, the bill failed to receive the two-thirds vote required for immediate effect; consequently, the District is explicitly prohibited from exercising the power of eminent domain. Implementation Timeline Effective Date: September 1, 2025.
Q
Who authored HB5695?
HB5695 was authored by Texas Representative Stan Gerdes during the Regular Session.
Q
When was HB5695 signed into law?
HB5695 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce HB5695?
HB5695 is enforced by Texas Commission on Environmental Quality (TCEQ), Texas Transportation Commission (if state maintains roads), Bastrop County Commissioners Court and Applicable Municipalities (ETJ/Corporate Limits).
Q
How urgent is compliance with HB5695?
The compliance urgency for HB5695 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB5695?
The cost impact of HB5695 is estimated as "low". This may vary based on industry and implementation requirements.
Q
What topics does HB5695 address?
HB5695 addresses topics including special districts & authorities, special districts & authorities--municipal utility districts, special districts & authorities--water & utility, sayers ranch municipal utility district and environmental quality, texas commission on.
Legislative data provided by LegiScanLast updated: November 25, 2025
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