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Signed Into Law
Signed June 20, 2025Effective 2025-09-01
SB3050

Regular Session

Relating to the creation of the Fannin County Improvement District No. 1; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes.

Government Affairs & Regulatory Compliance Analysis

SB3050: Government Affairs Overview

SB3050 establishes the Fannin County Improvement District No. 1, converting approximately 337 acres of land into a political subdivision with the authority to levy unlimited ad valorem taxes and impose assessments with superior lien status. This law immediately alters the financial liability and development requirements for landowners, lenders, and developers holding interests in the Johnson Family Trust tracts; failure to control the district’s formation will result in externally imposed taxation and regulation.

Sen. Bryan Hughes·Senate Bill·Regular Session

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

Fannin County Improvement District No. 1 Board of Directors • Texas Commission on Environmental Quality (TCEQ)

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SB3050
Moderate
Relating to the creation of the Fannin County Improvement District No. 1; providing authority to issue bonds; providing authority to impose assessment...
Moderate Compliance Urgency
Requires near-term attention
Cost Impact
High
Effective
2025-09-01
Enforcing Agencies
Fannin County Improvement Distri...TCEQ
Primary Author: Sen. Bryan Hughes
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 (unless immediate effect granted via supermajority vote).
  • Compliance Deadline: September 1, 2025. Landowners must be prepared to file petitions with the TCEQ immediately upon the effective date to ensure favorable Board appointment.
  • Agency Rulemaking: The TCEQ must process petitions to appoint the initial five temporary directors. Subsequently, the District Board will function as a regulatory agency, adopting rules for assessments and elections. The period between September 2025 and the first Board meeting is a "regulatory gray zone" where development financing is effectively paused.

Immediate Action Plan

  • 1. Verify Geography: Confirm immediately if your assets fall within the Daniel Davis, John Nail, William Perrin, or William Lewis Surveys referenced in the Act.
  • 2. Draft TCEQ Petition: Prepare the petition for the appointment of temporary directors now, so it is ready to file on September 1, 2025.
  • 3. Secure Lender Consent: Contact mortgage holders to obtain written consent for the creation of the District and future imposition of superior liens.
  • 4. Update Pro-Formas: Revise development financial models to account for the new District tax burden and the administrative costs of District management.

Operational Changes Required

Contracts

  • Commercial Loan Agreements: You must review all existing deeds of trust and loan covenants for property within the District. SB3050 allows for assessments that create a first and prior lien superior to private mortgages. Petitioning for such assessments without lender consent will likely trigger a "Default by Encumbrance" clause.
  • Triple Net (NNN) Leases: Future lease agreements within the District must explicitly define the pass-through of District-specific ad valorem taxes and infrastructure assessments.
  • Sales Contracts: All real estate sales contracts must now include the statutory Notice to Purchasers (Texas Water Code § 49.452), disclosing the District’s taxing power. Failure to include this allows the buyer to terminate the contract at closing.

Hiring/Training

  • Specialized Counsel: Retain legal counsel specializing in Texas Special Districts immediately. General real estate counsel is often insufficient for the specific "dirt bond" issuance process.
  • District Engineer: You must engage a civil engineer to prepare the "Petition for Improvements" required by the Board before any infrastructure projects can be authorized.

Reporting & Record-Keeping

  • Petition for Directors: Majority landowners must file a formal petition with the TCEQ to seat the initial Board.
  • Petition for Improvements: The Board is legally barred from financing projects until a specific petition requesting the improvements is filed by the landowners.
  • Voter Registration: You must track and manage the residency of qualified voters within the District to ensure quorums for the mandatory tax and bond elections.

Fees & Costs

  • Unlimited Tax Liability: The District is authorized to levy an ad valorem tax with no cap on the rate for bond repayment, subject to voter approval.
  • Personal Liability: Unlike standard property taxes, unpaid assessments under this District are the personal liability of the property owner, exposing corporate assets beyond the specific real estate to collection actions.

Strategic Ambiguities & Considerations

  • Assessment Methodology: The statute authorizes assessments but leaves the calculation method (e.g., front-foot vs. square-footage vs. assessed value) to the discretion of the Board. If you do not control the Board, you risk an assessment methodology that disproportionately burdens your specific asset class.
  • Navigation Powers: The Act grants "Navigation District Powers" (canals, docks, bulkheads) without defining the environmental regulatory scope. The Board may adopt rules regarding waterway usage that overlap with or exceed standard state regulations.

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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
Passed Senate
May 14, 2025
Passed House
May 28, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsFannin County Improvement District No. 1Special Districts & AuthoritiesSpecial Districts & Authorities--miscellaneous
03

Senate Authors

Sen. Bryan HughesRepublican · Primary Author

House Sponsor

Rep. Shelley LutherRepublican · Primary Sponsor

Bill Text(with markup)

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Quick Reference

Frequently Asked Questions

Common questions about SB3050

Q

What does Texas SB3050 do?

SB3050 establishes the Fannin County Improvement District No. 1, converting approximately 337 acres of land into a political subdivision with the authority to levy unlimited ad valorem taxes and impose assessments with superior lien status. This law immediately alters the financial liability and development requirements for landowners, lenders, and developers holding interests in the Johnson Family Trust tracts; failure to control the district’s formation will result in externally imposed taxation and regulation.

Q

Who authored SB3050?

SB3050 was authored by Texas Senator Bryan Hughes during the Regular Session.

Q

When was SB3050 signed into law?

SB3050 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce SB3050?

SB3050 is enforced by Fannin County Improvement District No. 1 Board of Directors and Texas Commission on Environmental Quality (TCEQ).

Q

How significant are the changes in SB3050?

The regulatory priority for SB3050 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB3050?

The cost impact of SB3050 is estimated as "high". This may vary based on industry and implementation requirements.

Q

What topics does SB3050 address?

SB3050 addresses topics including fannin county improvement district no. 1, special districts & authorities and special districts & authorities--miscellaneous.

Q

What are the key dates for SB3050?

Key dates for SB3050: Effective date is 2025-09-01. Rulemaking: Appoint five temporary voting directors based on petition by owners of a majority of assessed property value. (Upon receipt of petition); Adopt resolution establishing signature requirements and procedures for disbursement of district money. (Prior to fund transfer). Consult with legal counsel regarding applicability.

Q

What are the penalties under SB3050?

SB3050 establishes the following penalties: civil penalty of Lien foreclosure / Personal liability for Failure to pay district assessments. Unpaid assessments constitute a first and prior lien superior to private liens and are the personal liability of the property owner.. Consult with legal counsel for specific applicability to your situation.

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Legislative data provided by LegiScanLast updated: January 11, 2026