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Signed Into Law
Signed June 20, 2025Effective 2025-09-01
HB5696

Regular Session

Relating to the creation of The Reserve Municipal Management District; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes.

Government Affairs & Regulatory Compliance Analysis

HB5696: Government Affairs Overview

HB5696 establishes "The Reserve Municipal Management District" in Mansfield, effective September 1, 2025, granting a new board authority to levy property taxes and special assessments. Commercial property owners and developers within the 173-acre district must immediately account for increased holding costs and new super-priority liens on real estate assets.

Rep. David Cook·House Bill·Regular Session

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

City of Mansfield (Consent required for bond issuance) • Texas Commission on Environmental Quality (TCEQ) • The Reserve Municipal Management District Board of Directors

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HB5696
Relating to the creation of The Reserve Municipal Management District; providing authority to issue bonds; providing authority to impose assessments, ...
Moderate Urgency
Heavily Contested
House Vote87 - 44
YEA
NAY
66% in favor131 voting
Senate Vote28 - 3
YEA
90% in favor31 voting
47
Total Opposition Votes
Cost Impact
High
Effective
2025-09-01
Enforcing Agencies
City of MansfieldTCEQThe Reserve Municipal Management...
Primary Author: Rep. David Cook
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 lease review required. Financial compliance is triggered upon Board resolution for assessments or voter approval for ad valorem taxes (anticipated 2026).
  • Agency Rulemaking: The District Board will define assessment methodologies and tax rates via local resolution. Monitor Board agendas starting Q4 2025; no state-level agency rulemaking is required to activate these powers.

Immediate Action Plan

  • Verify property location against the metes and bounds in Section 2 of the Act to confirm jurisdiction.
  • Audit existing lease agreements to ensure pass-through mechanisms cover special district assessments.
  • Establish a monitoring protocol for the initial Board of Directors (Roby, O'Neal, White, Smolinski, Moore) regarding the first bond election and assessment petition.
  • Update property seller disclosure forms immediately for any assets listed within the District.

Operational Changes Required

Contracts

  • Leases: Amend standard Triple Net (NNN) leases for properties in the District to explicitly define MMD assessments as recoverable "Operating Expenses."
  • Lending: Review loan covenants regarding "permitted liens." MMD assessments create a first-priority lien that supersedes private mortgages; this may trigger technical default in senior financing if not carved out.
  • Construction: Vendor contracts with the District must adhere to Chapter 791 Government Code (public works) standards, not private commercial terms.

Hiring/Training

  • Tax Compliance: Accounts Payable teams must add "The Reserve MMD" to jurisdictional tracking systems. Failure to pay these specific assessments results in foreclosure risk superior to mortgage liens.

Reporting & Record-Keeping

  • Seller Disclosures: Real estate sales within the District must now include statutory notice of the District’s existence, tax authority, and potential assessments under Texas Water Code Sec. 49.452.
  • Lien Tracking: You must record and track Board resolutions levying assessments; these attach to the land immediately upon passage.

Fees & Costs

  • Ad Valorem Tax: New millage rate to be set by the Board (capped by election results).
  • Assessments: Variable costs for infrastructure improvements (roads, parking, drainage), levied per Board resolution.
  • Director Fees: Up to $7,200/year per director (paid from District funds).

Strategic Ambiguities & Considerations

  • Service Overlap: The statute requires District services to "supplement" not "replace" City of Mansfield services, but fails to define the operational boundary. Watch for the Interlocal Agreement (ILA) to ensure you are not taxed twice for the same maintenance (e.g., landscaping, street lighting).
  • Assessment Methodology: The Board has absolute discretion to calculate assessments based on square footage, front footage, or assessed value. This formula is not fixed in the statute and will be determined during Board meetings.

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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 30, 2025
Passed House
May 16, 2025
Passed Senate
May 26, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsSpecial Districts & AuthoritiesSpecial Districts & Authorities--miscellaneousthe Reserve Municipal Management DistrictMansfield, City of
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House Authors

Rep. David CookRepublican · Primary Author

Senate Sponsor

Sen. Brian BirdwellRepublican · Primary Sponsor

Bill Text(with markup)

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Quick Reference

Frequently Asked Questions

Common questions about HB5696

Q

What does Texas HB5696 do?

HB5696 establishes "The Reserve Municipal Management District" in Mansfield, effective September 1, 2025, granting a new board authority to levy property taxes and special assessments. Commercial property owners and developers within the 173-acre district must immediately account for increased holding costs and new super-priority liens on real estate assets.

Q

Who authored HB5696?

HB5696 was authored by Texas Representative David Cook during the Regular Session.

Q

When was HB5696 signed into law?

HB5696 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce HB5696?

HB5696 is enforced by City of Mansfield (Consent required for bond issuance), Texas Commission on Environmental Quality (TCEQ) and The Reserve Municipal Management District Board of Directors.

Q

How significant are the changes in HB5696?

The regulatory priority for HB5696 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of HB5696?

The cost impact of HB5696 is estimated as "high". This may vary based on industry and implementation requirements.

Q

What topics does HB5696 address?

HB5696 addresses topics including special districts & authorities, special districts & authorities--miscellaneous, the reserve municipal management district and mansfield, city of.

Q

What are the key dates for HB5696?

Key dates for HB5696: Effective date is 2025-09-01. Consult with legal counsel regarding applicability.

Q

What are the penalties under HB5696?

HB5696 establishes the following penalties: civil penalty of Total of unpaid assessment plus penalties, interest, collection expenses, and attorney's fees for Failure to pay district assessments or taxes (results in first and prior lien against property). Consult with legal counsel for specific applicability to your situation.

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