Relating to territory in an emergency services district that is annexed by a municipality.
ModeratePlan for compliance
Medium Cost
Effective:2025-09-01
Enforcing Agencies
Emergency Services District (ESD) Boards • Municipal Governing Bodies • County Appraisal Districts
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: September 1, 2025
Compliance Deadline: Immediate for any annexation proceedings finalizing on or after September 1, 2025. Municipalities initiating annexation in early 2025 must plan for this new statutory hurdle.
Agency Rulemaking: No state-level rulemaking is mandated. However, local ESD Boards and City Councils must adopt internal resolutions and data standards immediately to define "Level of Service" metrics before the first dispute arises.
Immediate Action Plan
Municipalities: Update Annexation Service Plan templates to include specific "Level of Service" comparisons as defined by SB2965.
ESDs: Establish a baseline "Level of Service" report now. You cannot block a disannexation in 2025 if you do not have documented proof of your current performance capabilities.
Private Providers: Audit all service contracts for clauses tied to municipal annexation and renegotiate terms to protect revenue during prolonged jurisdiction disputes.
Developers: Before consenting to voluntary annexation, demand written confirmation of which entity (City or ESD) will be the primary emergency responder and tax authority.
Operational Changes Required
Contracts
Private EMS & Fire Providers: Review "Territory Reduction" and "Change of Law" clauses. Existing contracts likely assume automatic service area reduction (and revenue loss) upon city annexation. You must amend agreements to reflect that territory—and revenue—may be retained pending arbitration.
Developers: Development Agreements (Chapter 212) must now account for the possibility that the City cannot legally deliver fire/EMS services immediately upon annexation. Indemnity clauses regarding "failure to serve" need revision.
Hiring/Training
City Planning & Legal Staff: Must be trained on the strict notification protocol. Failure to send notice via Certified Mail to the ESD Secretary creates a procedural defect that can void the territory transfer.
ESD Administrators: Must be trained on the "30-Day Trap." Staff must monitor incoming mail for municipal notices daily. Failure to issue a counter-resolution within 30 days results in automatic approval of the disannexation.
Reporting & Record-Keeping
Level of Service Data: Both Cities and ESDs must maintain real-time data on three statutory metrics: (1) Resource Location, (2) Resource Deployment, and (3) Response Times. This data is the only admissible evidence in a dispute.
Appraisal District Notification: ESDs must implement a workflow to immediately notify the County Appraisal District upon the finalization of a disannexation to prevent incorrect tax levies.
Fees & Costs
Arbitration Expenses: If a City disputes an ESD's refusal to release territory, the law mandates binding arbitration. Legal budgets must account for Section 775.0221 arbitration proceedings, which will likely involve expensive expert testimony regarding response time modeling.
Insurance Premiums: Property owners must verify the "Authority Having Jurisdiction" (AHJ). If the ESD retains the territory, the ESD's ISO rating applies. If the City takes over, the City's rating applies. A change in provider can materially alter commercial insurance costs.
Strategic Ambiguities & Considerations
"Response Time" Definition: The statute lists "response time" as a metric but fails to define the standard (e.g., NFPA 1710, average response vs. 90th percentile). Expect Cities to use "average" times and ESDs to use "guaranteed" times to force arbitration.
"Capable at Time of Removal": The law requires the municipality to be capable of service "at the time of removal." It is unclear if this requires physical infrastructure (a built fire station) or merely funded capacity (a contract or budget allocation). Developers should assume the stricter interpretation—physical assets—until case law settles this.
Need Help Understanding Implementation?
Our government affairs experts can walk you through this bill's specific impact on your operations.
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.
Under current law, when a municipality intends to disannex territory from an emergency services district (ESD), it must send written notice by certified mail to the secretary of the ESD board of directors notifying the ESD of the annexation and intent to be the sole provider of emergency services. Upon receipt of the notice, the ESD board must immediately change its records to show that the territory has been disannexed from the ESD and cease to provide services to the residents in the newly annexed area. However, concerns have been raised about instances in which a municipality annexes territory but does not maintain or exceed the level of emergency services provided before annexation, resulting in a reduction of services to residents.
S.B. 2965 clarifies current law on how a municipality can annex portions of an ESD to ensure that residents in annexed jurisdictions continue to receive the same level of emergency services under the municipality as they did under the ESD. Specifically, the bill prohibits an order of disannexation from being adopted if the services planned for the area will not meet or exceed the level of service provided by the ESD at the time of disannexation. The bill does not prohibit municipal annexation, but facilitates accountability of the current statute and ensures continuity of important public safety services.
As proposed, S.B. 2965 amends current law relating to territory in an emergency services district that is annexed by a municipality.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 775.022, Health and Safety Code, by amending Subsection (a) and adding Subsection (a-1), as follows:
(a) Requires a municipality, if the municipality completes all other procedures necessary to annex territory in a district, including the preparation of a service plan if required by Section 43.056 (Provision of Services to Annexed Area), Local Government Code, the municipality intends to remove the territory from the district, and the municipality is capable at the time of the removal of being, rather than if the municipality intends to be, the sole provider of emergency services to the territory by the use of municipal personnel or by some method other than by use of the district, to send written notice of those facts, and the completed service plan, if applicable, to the board of emergency services commissioners (board) not later than the 30th day after completing the necessary procedures. Provides that the territory remains part of the emergency services district (district) and does not become part of the municipality until the secretary of the board receives the notice and the board by resolution disannexes the territory from the district. Provides that, if the board determines that the municipal services planned to be provided in the territory will not meet or exceed the level of service provided by the district in the territory, the board is required to adopt that determination in a resolution and is prohibited from by resolution disannexing the territory from the district. Requires the board, if the board determines that municipal services planned to be provided in the territory will meet or exceed the level of service provided by the district in the territory at the time of disannexation, rather than requires the board, on receipt of the notice, by resolution to disannex the territory from the district, notify the appraisal district to change, rather than to immediately change, its records to show that the territory has been disannexed from the district, and cease to provide further services to the residents of that territory. Defines "level of service." Makes nonsubstantive changes.
(a-1) Provides that a board is considered to have approved a disannexation of territory under Subsection (a) if the board fails to provide to the municipality a resolution disapproving or approving the disannexation before the 30th day after the date the board receives the notice under Subsection (a) from the municipality.
Effective September 1, 2025, SB2965 ends the automatic removal of territory from Emergency Services Districts (ESDs) following municipal annexation, shifting significant leverage to ESD Boards. Municipalities must now prove their emergency services meet or exceed current ESD performance metrics to assume jurisdiction, creating a potential "dual-jurisdiction" risk where property owners face municipal zoning but remain under ESD taxation and emergency response. Implementation Timeline Effective Date: September 1, 2025 Compliance Deadline: Immediate for any annexation proceedings finalizing on or after September 1, 2025.
Q
Who authored SB2965?
SB2965 was authored by Texas Senator Charles Creighton during the Regular Session.
Q
When was SB2965 signed into law?
SB2965 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce SB2965?
SB2965 is enforced by Emergency Services District (ESD) Boards, Municipal Governing Bodies and County Appraisal Districts.
Q
How urgent is compliance with SB2965?
The compliance urgency for SB2965 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of SB2965?
The cost impact of SB2965 is estimated as "medium". This may vary based on industry and implementation requirements.
Q
What topics does SB2965 address?
SB2965 addresses topics including city government, city government--annexation, health, health--emergency services & personnel and special districts & authorities.
Legislative data provided by LegiScanLast updated: November 25, 2025
Need Strategic Guidance on This Bill?
Need help with Government Relations, Lobbying, or compliance? JD Key Consulting has the expertise you're looking for.
