SB3048

Regular Session

Relating to the creation of the Bluebonnet Hills Municipal Management District No. 1; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes; granting a limited power of eminent domain.

ModeratePlan for compliance

High Cost

Effective:2025-09-01

Enforcing Agencies

Bluebonnet Hills Municipal Management District No. 1 Board of Directors • City of Midlothian (Consent rights) • Texas Commission on Environmental Quality (TCEQ)

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: September 1, 2025 (Pending final legislative vote count for immediate effect).
Compliance Deadline: Q4 2025. Landowners must monitor the initial meeting of the Board of Directors to contest assessment methodologies before they are adopted.
Agency Rulemaking: The District Board of Directors will function as a regulatory agency. They will adopt bylaws and set tax rates post-creation. There is no waiting period for the Board to contract for services once convened.

Immediate Action Plan

1. Map Verification: Immediately overlay the metes and bounds from Section 2 of the Bill against your asset holdings to confirm inclusion in the District.
2. Lease Audit: Review all existing leases in the affected area to determine if the landlord or tenant absorbs the cost of new special district assessments.
3. Monitor Vote Count: Confirm if the bill received a two-thirds vote in both chambers to determine if the District possesses eminent domain power.
4. Engage Initial Directors: Establish contact with the five initial directors named in Section 4016.0203 to advocate for favorable assessment methodologies before the first Board meeting.

Operational Changes Required

Contracts

Commercial Leases (NNN): Landlords must amend standard lease templates for properties within the District. "Operating Expenses" must explicitly include special district assessments and new ad valorem taxes to ensure pass-through to tenants.
Loan Covenants: Borrowers must notify lenders of the new taxing jurisdiction. Lenders will likely require a recalculation of the Debt Service Coverage Ratio (DSCR) to account for the new tax burden.
Vendor Agreements: Service providers (security, construction) contracting with the District must comply with Texas Government Code Chapter 791 (Interlocal Cooperation Act) and public bidding requirements.

Hiring/Training

Accounts Payable: Staff must be trained to flag invoices from "Bluebonnet Hills MMD No. 1." These are not optional HOA fees; they are government levies with foreclosure authority.
Sales Teams: Real estate brokers must be trained on the specific boundaries of the District to ensure accurate representations to potential buyers regarding future tax liabilities.

Reporting & Record-Keeping

Seller Disclosures: Sellers of commercial or residential property within the District are legally required to update disclosure forms under the Texas Water Code. Failure to disclose the District's existence allows the buyer to terminate the contract at closing.
Lien Management: Legal teams must track infrastructure assessments. Upon payment, you must secure and record a specific lien release from the District, as these liens do not automatically extinguish like standard property taxes.

Fees & Costs

New Ad Valorem Tax: A new property tax rate will be set by the Board.
Infrastructure Assessments: Variable costs based on "benefit" to the property (e.g., road frontage or square footage).
Foreclosure Penalties: Failure to pay results in a penalty including the total assessment value, interest, collection expenses, and attorney's fees.

Strategic Ambiguities & Considerations

Eminent Domain Authority: The District’s power to condemn land is conditional. If the bill passes with less than a two-thirds supermajority, Section 4016.0311 prohibits the exercise of eminent domain. You must verify the final legislative journal vote count to confirm if your property rights are at risk.
Assessment Methodology: The statute allows assessments for "any purpose authorized" but does not define the calculation formula. The Board has discretion to assess based on front-footage, acreage, or valuation. This formula will be determined in local Board meetings, not in the statute.
Municipal Consent: The District requires consent from the City of Midlothian to issue bonds. The terms of this "Development Agreement" are currently unwritten and will dictate the practical debt ceiling of the District.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed

Filed

TopicsBluebonnet Hills Municipal Management District No. 1 Midlothian, City of Special Districts & Authorities Special Districts & Authorities--miscellaneous

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

Senate Research Center	S.B. 3048
89R15168 JTZ-F	By: Birdwell
	Local Government
	5/2/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Interested parties have expressed their support for the creation of the Bluebonnet Hills Municipal Management District No. 1 located in Midlothian, Texas, north of Highways 287 and 67, and east of Padera Lake.

This legislation provides the framework to support a 448.4-acre master-planned community that balances residential growth, commercial opportunity, and significant open space. This district is an essential tool to implement a high-quality community that aligns with Midlothian's long-term vision. As such, the Midlothian City Council has passed a resolution in support of this project.

Bluebonnet Hills MMD No.1 will provide services such as public safety, economic development, parking facilities, and infrastructure improvements. The MMD will have the authority to design, construct, and finance various infrastructure projects. Additionally, the MMD will have the ability to be divided into multiple districts, subject to gaining consent from the city. Furthermore, the MMD will not have the power to exercise eminent domain. Any land assessments within the district will require petitions from landowners. Voter approval will be required for ad valorem taxes, and the district can issue bonds with the consent of the municipality.

As proposed, S.B. 3048 amends current law relating to the creation of the Bluebonnet Hills Municipal Management District No. 1, provides authority to issue bonds, provides authority to impose assessments, fees, and taxes, and grants a limited power of eminent domain.

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 Subtitle C, Title 4, Special District Local Laws Code, by adding Chapter 4016, as follows:

CHAPTER 4016. BLUEBONNET HILLS MUNICIPAL MANAGEMENT DISTRICT NO. 1

Sets forth standard language for the creation of the Bluebonnet Hills Municipal Management District (district) in the City of Midlothian (city). Sets forth standards, procedures, requirements, and criteria for:

Creation, purpose, and approval of the district (Sections 4016.0101-4016.0108);

Size, composition, appointment, compensation, and terms of the board of directors of the district, including the naming of the initial board of directors (Sections 4016.0201-4016.0203);

Powers and duties of the district (Sections 4016.0301-4016.0311);

General financial provisions, including authorizing certain assessments, and authority to impose a tax and issue bonds and obligations of the district (Sections 4016.0401-4016.0506); and

Dissolution of the district by the city (Section 4016.0901).

Authorizes the district to exercise the power of eminent domain in the manner provided by Section 49.222 (Eminent Domain), Water Code.

SECTION 2. Sets forth the initial boundaries of the district.

SECTION 3. Provides that all requirements of the constitution and laws of this state and the rules and procedures of the legislature with respect to the notice, introduction, and passage of this Act have been fulfilled and accomplished.

SECTION 4. (a) Provides that Section 4016.0311, Special District Local Laws Code, as added by Section 1 of this Act, takes effect only if this Act receives a two-thirds vote of all the members elected to each house.

(b) Provides that, if this Act does not receive a two-thirds vote of all the members elected to each house, Subchapter C, Chapter 4016, Special District Local Laws Code, as added by Section 1 of this Act, is amended by adding Section 4016.0311, as follows:

Sec. 4016.0311. NO EMINENT DOMAIN POWER. Prohibits the district from exercising the power of eminent domain.

SECTION 5. Effective date: upon passage or September 1, 2025.

Senate Authors

Sen. Brian BirdwellRepublican · Primary Author

House Sponsor

Rep. Angelia OrrRepublican · Primary Sponsor

Bill Text(with markup)

S.B. No. 3048

relating to the creation of the Bluebonnet Hills Municipal

Management District No. 1; providing authority to issue bonds;

providing authority to impose assessments, fees, and taxes;

granting a limited power of eminent domain.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle C, Title 4, Special District Local Laws

Code, is amended by adding Chapter 4016 to read as follows:

CHAPTER 4016. BLUEBONNET HILLS MUNICIPAL MANAGEMENT DISTRICT NO. 1

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 4016.0101. DEFINITIONS. In this chapter:

(1) "Board" means the district's board of directors.

(2) "City" means the City of Midlothian.

(3) "Director" means a board member.

(4) "District" means the Bluebonnet Hills Municipal

Management District No. 1.

Sec. 4016.0102. NATURE OF DISTRICT. The Bluebonnet Hills

Municipal Management District No. 1 is a special district created

under Section 59, Article XVI, Texas Constitution.

Sec. 4016.0103. PURPOSE; DECLARATION OF INTENT. (a) The

creation of the district is essential to accomplish the purposes of

Sections 52 and 52-a, Article III, and Section 59, Article XVI,

Texas Constitution, and other public purposes stated in this

chapter.

(b) By creating the district and in authorizing the city and

other political subdivisions to contract with the district, the

legislature has established a program to accomplish the public

purposes set out in Section 52-a, Article III, Texas Constitution.

develop, encourage, and maintain employment, commerce,

transportation, housing, tourism, recreation, the arts,

entertainment, economic development, safety, and the public

welfare in the district.

(d) This chapter and the creation of the district may not be

interpreted to relieve the city from providing the level of

services provided as of the effective date of the Act enacting this

chapter to the area in the district. The district is created to

supplement and not to supplant city services provided in the

district.

Sec. 4016.0104. FINDINGS OF BENEFIT AND PUBLIC PURPOSE.

(a) All land and other property included in the district will

benefit from the improvements and services to be provided by the

district under powers conferred by Sections 52 and 52-a, Article

III, and Section 59, Article XVI, Texas Constitution, and other

powers granted under this chapter.

(b) The district is created to serve a public use and

benefit.

and is essential to further the public purposes of:

(1) developing and diversifying the economy of the

state;

(2) eliminating unemployment and underemployment; and

(3) developing or expanding transportation and

commerce.

(d) The district will:

(1) promote the health, safety, and general welfare of

residents, employers, potential employees, employees, visitors,

and consumers in the district, and of the public;

(2) provide needed funding for the district to

preserve, maintain, and enhance the economic health and vitality of

the district territory as a community and business center;

(3) promote the health, safety, welfare, and enjoyment

of the public by providing pedestrian ways and by landscaping and

developing certain areas in the district, which are necessary for

the restoration, preservation, and enhancement of scenic beauty;

and

(4) provide for water, wastewater, drainage, road, and

recreational facilities for the district.

(e) Pedestrian ways along or across a street, whether at

grade or above or below the surface, and street lighting, street

landscaping, parking, and street art objects are parts of and

necessary components of a street and are considered to be a street

or road improvement.

(f) The district will not act as the agent or

instrumentality of any private interest even though the district

will benefit many private interests as well as the public.

Sec. 4016.0105. INITIAL DISTRICT TERRITORY. (a) The

district is initially composed of the territory described by

Section 2 of the Act enacting this chapter.

(b) The boundaries and field notes contained in Section 2 of

the Act enacting this chapter form a closure. A mistake in the

field notes or in copying the field notes in the legislative process

does not affect the district's:

(1) organization, existence, or validity;

(2) right to issue any type of bonds for the purposes

for which the district is created or to pay the principal of and

interest on the bonds;

(3) right to impose or collect an assessment or tax; or

(4) legality or operation.

Sec. 4016.0106. ELIGIBILITY FOR INCLUSION IN SPECIAL ZONES.

All or any part of the area of the district is eligible to be

included in:

(1) a tax increment reinvestment zone created under

Chapter 311, Tax Code; or

(2) a tax abatement reinvestment zone created under

Chapter 312, Tax Code.

Sec. 4016.0107. APPLICABILITY OF MUNICIPAL MANAGEMENT

DISTRICTS LAW. Except as otherwise provided by this chapter,

Chapter 375, Local Government Code, applies to the district.

Sec. 4016.0108. CONSTRUCTION OF CHAPTER. This chapter

shall be liberally construed in conformity with the findings and

purposes stated in this chapter.

SUBCHAPTER B. BOARD OF DIRECTORS

Sec. 4016.0201. GOVERNING BODY; TERMS. (a) The district is

governed by a board of five elected directors who serve staggered

terms of four years.

(b) Directors are elected in the manner provided by

Subchapter D, Chapter 49, Water Code.

Sec. 4016.0202. COMPENSATION; EXPENSES. (a) The district

may compensate each director in an amount not to exceed $150 for

each board meeting. The total amount of compensation for each

director in one year may not exceed $7,200.

(b) A director is entitled to reimbursement for necessary

and reasonable expenses incurred in carrying out the duties and

responsibilities of the board.

not apply to the board.

Sec. 4016.0203. INITIAL DIRECTORS. (a) The initial board

consists of the following directors:

Pos. No.

Name of Director

Jake Weaver

Cassie Wagner

Dylan Suhy

Melanie Wright

Haley Sheffield

(b) Of the initial directors, the terms of directors

appointed for positions one through three expire June 1, 2027, and

the terms of directors appointed for positions four and five expire

June 1, 2029.

SUBCHAPTER C. POWERS AND DUTIES

Sec. 4016.0301. GENERAL POWERS AND DUTIES. The district

has the powers and duties necessary to accomplish the purposes for

which the district is created.

Sec. 4016.0302. IMPROVEMENT PROJECTS AND SERVICES. (a) The

district, using any money available to the district for the

purpose, may provide, design, construct, acquire, improve,

relocate, operate, maintain, or finance an improvement project or

service authorized under this chapter or under Chapter 375, Local

Government Code.

(b) The district may contract with a governmental or private

entity to carry out an action under Subsection (a).

governmental function or service for the purposes of Chapter 791,

Government Code.

Sec. 4016.0303. NONPROFIT CORPORATION. (a) The board by

resolution may authorize the creation of a nonprofit corporation to

assist and act for the district in implementing a project or

providing a service authorized by this chapter.

(b) The nonprofit corporation:

(1) has each power of and is considered to be a local

government corporation created under Subchapter D, Chapter 431,

Transportation Code; and

(2) may implement any project and provide any service

authorized by this chapter.

nonprofit corporation. The board of directors of the nonprofit

corporation shall serve in the same manner as the board of directors

of a local government corporation created under Subchapter D,

Chapter 431, Transportation Code, except that a board member is not

required to reside in the district.

Sec. 4016.0304. LAW ENFORCEMENT SERVICES. To protect the

public interest, the district may contract with a qualified party,

including the city, to provide law enforcement services in the

district for a fee.

Sec. 4016.0305. MEMBERSHIP IN CHARITABLE ORGANIZATIONS.

The district may join and pay dues to a charitable or nonprofit

organization that performs a service or provides an activity

consistent with the furtherance of a district purpose.

Sec. 4016.0306. ECONOMIC DEVELOPMENT PROGRAMS. (a) The

district may engage in activities that accomplish the economic

development purposes of the district.

(b) The district may establish and provide for the

administration of one or more programs to promote state or local

economic development and to stimulate business and commercial

activity in the district, including programs to:

(1) make loans and grants of public money; and

(2) provide district personnel and services.

and exercise the economic development powers provided to

municipalities by:

(1) Chapter 380, Local Government Code; and

(2) Subchapter A, Chapter 1509, Government Code.

Sec. 4016.0307. PARKING FACILITIES. (a) The district may

acquire, lease as lessor or lessee, construct, develop, own,

operate, and maintain parking facilities or a system of parking

facilities, including lots, garages, parking terminals, or other

structures or accommodations for parking motor vehicles off the

streets and related appurtenances.

(b) The district's parking facilities serve the public

purposes of the district and are owned, used, and held for a public

purpose even if leased or operated by a private entity for a term of

years.

necessary components of a street and are considered to be a street

or road improvement.

(d) The development and operation of the district's parking

facilities may be considered an economic development program.

Sec. 4016.0308. DISBURSEMENTS AND TRANSFERS OF MONEY. The

board by resolution shall establish the number of directors'

signatures and the procedure required for a disbursement or

transfer of district money.

Sec. 4016.0309. ADDING OR EXCLUDING LAND. Except as

provided by Section 4016.0310, the district may add or exclude land

in the manner provided by Subchapter J, Chapter 49, Water Code, or

by Subchapter H, Chapter 54, Water Code.

Sec. 4016.0310. DIVISION OF DISTRICT. (a) The district may

be divided into two or more new districts only if the district:

(1) has no outstanding bonded debt; and

(2) is not imposing ad valorem taxes.

(b) This chapter applies to any new district created by the

division of the district, and a new district has all the powers and

duties of the district.

may not, at the time the new district is created, contain any land

outside the area described by Section 2 of the Act enacting this

chapter.

(d) The board, on its own motion or on receipt of a petition

signed by the owner or owners of a majority of the assessed value of

the real property in the district, may adopt an order dividing the

district.

(e) An order dividing the district must:

(1) name each new district;

(2) include the metes and bounds description of the

territory of each new district;

(3) appoint initial directors for each new district;

and

(4) provide for the division of assets and liabilities

between or among the new districts.

(f) On or before the 30th day after the date of adoption of

an order dividing the district, the district shall file the order

with the Texas Commission on Environmental Quality and record the

order in the real property records of each county in which the

district is located.

(g) Any new district created by the division of the district

must hold an election as required by this chapter to obtain voter

approval before the district may impose a maintenance tax or issue

bonds payable wholly or partly from ad valorem taxes.

(h) Municipal consent to the creation of the district and to

the inclusion of land in the district granted under Section

4016.0506 acts as municipal consent to the creation of any new

district created by the division of the district and to the

inclusion of land in the new district.

Sec. 4016.0311. EMINENT DOMAIN. The district may exercise

the power of eminent domain in the manner provided by Section

49.222, Water Code.

SUBCHAPTER D. ASSESSMENTS

Sec. 4016.0401. PETITION REQUIRED FOR FINANCING SERVICES

AND IMPROVEMENTS WITH ASSESSMENTS. (a) The board may not finance a

service or improvement project with assessments under this chapter

unless a written petition requesting that service or improvement

has been filed with the board.

(b) A petition filed under Subsection (a) must be signed by

the owners of a majority of the assessed value of real property in

the district subject to assessment according to the most recent

certified tax appraisal roll for the county.

Sec. 4016.0402. ASSESSMENTS; LIENS FOR ASSESSMENTS. (a)

The board by resolution may impose and collect an assessment for any

purpose authorized by this chapter in all or any part of the

district.

(b) An assessment, a reassessment, or an assessment

resulting from an addition to or correction of the assessment roll

by the district, penalties and interest on an assessment or

reassessment, an expense of collection, and reasonable attorney's

fees incurred by the district:

(1) are a first and prior lien against the property

assessed;

(2) are superior to any other lien or claim other than

a lien or claim for county, school district, or municipal ad valorem

taxes; and

(3) are the personal liability of and a charge against

the owners of the property even if the owners are not named in the

assessment proceedings.

resolution imposing the assessment until the date the assessment is

paid. The board may enforce the lien in the same manner that the

board may enforce an ad valorem tax lien against real property.

(d) The board may make a correction to or deletion from the

assessment roll that does not increase the amount of assessment of

any parcel of land without providing notice and holding a hearing in

the manner required for additional assessments.

SUBCHAPTER E. TAXES AND BONDS

Sec. 4016.0501. TAX ELECTION REQUIRED. (a) The district

must hold an election in the manner provided by Chapter 49, Water

Code, or, if applicable, Chapter 375, Local Government Code, to

obtain voter approval before the district may impose an ad valorem

tax.

(b) Section 375.243, Local Government Code, does not apply

to the district.

Sec. 4016.0502. OPERATION AND MAINTENANCE TAX. (a) If

authorized by a majority of the district voters voting at an

election under Section 4016.0501, the district may impose an

operation and maintenance tax on taxable property in the district

in the manner provided by Section 49.107, Water Code, for any

district purpose, including to:

(1) maintain and operate the district;

(2) construct or acquire improvements; or

(3) provide a service.

(b) The board shall determine the operation and maintenance

tax rate. The rate may not exceed the rate approved at the

election.

Sec. 4016.0503. AUTHORITY TO BORROW MONEY AND TO ISSUE

BONDS AND OTHER OBLIGATIONS. (a) The district may borrow money on

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Fiscal NoteView Original

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


May 4, 2025

TO:	Honorable Paul Bettencourt, Chair, Senate Committee on Local Government

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB3048 by Birdwell (Relating to the creation of the Bluebonnet Hills Municipal Management District No. 1; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes; granting a limited power of eminent domain.), As Introduced

No fiscal implication to the State is anticipated.

Local Government Impact

The fiscal implications of the bill to the district cannot be determined due to the circumstances relating to the district's exercise of eminent domain power, issuance of bonds, or imposition of assessments, fees, and taxes being unknown. No fiscal implication to other units of local government is anticipated.

Source Agencies:

LBB Staff:

JMc, SZ, BC

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Frequently Asked Questions

Common questions about SB3048

What does Texas SB3048 do?

SB3048 establishes the Bluebonnet Hills Municipal Management District No. 1 in Midlothian, creating a new taxing authority with the power to levy unlimited ad valorem taxes (subject to voter approval), impose infrastructure assessments, and foreclose on property for non-payment. Commercial landowners and developers within the defined 448-acre tracts must immediately account for increased carrying costs and potential liens superior to mortgage instruments.

Who authored SB3048?

SB3048 was authored by Texas Senator Brian Birdwell during the Regular Session.

When was SB3048 signed into law?

SB3048 was signed into law by Governor Greg Abbott on June 20, 2025.

Which agencies enforce SB3048?

SB3048 is enforced by Bluebonnet Hills Municipal Management District No. 1 Board of Directors, City of Midlothian (Consent rights) and Texas Commission on Environmental Quality (TCEQ).

How urgent is compliance with SB3048?

The compliance urgency for SB3048 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of SB3048?

The cost impact of SB3048 is estimated as "high". This may vary based on industry and implementation requirements.

What topics does SB3048 address?

SB3048 addresses topics including bluebonnet hills municipal management district no. 1, midlothian, city of, special districts & authorities and special districts & authorities--miscellaneous.

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Relating to the creation of the Bluebonnet Hills Municipal Management District No. 1; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes; granting a limited power of eminent domain.

Compliance Analysis

Implementation Timeline

Immediate Action Plan

Operational Changes Required

Contracts

Hiring/Training

Reporting & Record-Keeping

Fees & Costs

Strategic Ambiguities & Considerations

Need Help Understanding Implementation?

Legislative Timeline

Official Analysis

Senate Authors

House Sponsor

Bill Text(with markup)

Fiscal NoteView Original

Related Legislation

More from Sen. Brian Birdwell

Related by Topic

Frequently Asked Questions

What does Texas SB3048 do?

Who authored SB3048?

When was SB3048 signed into law?

Which agencies enforce SB3048?

How urgent is compliance with SB3048?

What is the cost impact of SB3048?

What topics does SB3048 address?

Need Strategic Guidance on This Bill?