SB3056

Regular Session

Relating to the creation of the Alluvium Ranch 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.

LowStandard timeline

High Cost

Effective:2025-09-01

Enforcing Agencies

Alluvium Ranch Municipal Management District No. 1 Board of Directors • City of Sherman (Consent required for bond issuance) • 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 (unless the Act received a two-thirds vote in both houses, in which case it is effective immediately).
Compliance Deadline: Immediate upon effective date for all real estate transactions; Seller’s Disclosures must be updated to avoid contract termination rights by purchasers.
Agency Rulemaking: The District Board of Directors will adopt specific tax rates and assessment methodologies post-creation. The City of Sherman must pass an ordinance consenting to the creation before bonds are issued.

Immediate Action Plan

1. Geographic Verification: Immediately cross-reference your land holdings in Grayson County (specifically James Fox, Aaron Burleson, and James Blagg Surveys) against the metes and bounds in Section 2 of the Bill.
2. Update Title Plants: Title companies must flag this geographic area to ensure assessments are identified during title searches.
3. Revise Disclosures: Add the required Water Code District Notice to all sales packets for affected properties immediately.
4. Monitor Board Formation: Identify the initial Directors (named in Sec. 4014.0203) and establish communication regarding their initial bond and tax election schedule.
5. Verify Vote Count: Confirm the final legislative vote count to determine if the District possesses eminent domain powers.

Operational Changes Required

Contracts

Purchase & Sale Agreements (PSAs): You must insert statutory notices pursuant to Texas Water Code § 49.452 for any property sold within the District. Failure to include this notice allows the buyer to terminate the contract at closing or sue for damages post-closing.
Commercial Leases: Amend "Operating Expenses" or "CAM" definitions in new leases to explicitly include "District assessments and taxes" as pass-through costs to tenants.
Loan Documents: Lenders must update underwriting criteria; District assessments create a first-priority lien superior to private mortgage liens.

Hiring/Training

Sales & Closing Teams: Train staff to identify properties within the "Alluvium Ranch" metes and bounds to ensure proper disclosures are generated.
Accounts Payable: Update vendor systems to recognize "Alluvium Ranch MMD No. 1" as a valid taxing authority to prevent accidental delinquency penalties.

Reporting & Record-Keeping

Petitions: If you are a developer seeking District financing for infrastructure, you must draft and retain certified copies of petitions signed by owners of a majority of the assessed value.
Lien Releases: Implement a strict protocol to obtain and record formal lien releases from the District immediately upon satisfying any assessment obligations.

Fees & Costs

Ad Valorem Taxes: The District will levy an Operation and Maintenance tax (rate determined by the Board and voter approval).
Assessments: The Board may impose assessments for specific projects. These amounts are uncapped by the statute and depend on the "benefit" received by the property.
Penalties: Non-payment results in penalties, interest, attorney's fees, and potential foreclosure.

Strategic Ambiguities & Considerations

Eminent Domain Authority: The District’s power to exercise eminent domain is conditional. It is granted *only* if the bill received a two-thirds vote in each legislative house. You must verify the final legislative journal to confirm if this power exists.
"Benefit" Calculation: The statute allows assessments based on benefit but does not define the calculation formula (e.g., frontage vs. acreage vs. valuation). This is a frequent area of litigation; monitor the Board's initial assessment methodology closely.
City of Sherman Veto: The District cannot issue bonds without the City of Sherman's consent. The City may impose additional development agreements or constraints as a condition of this consent, which are not visible in the text of SB3056.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed

Filed

TopicsAlluvium Ranch Municipal Management District No. 1 Special Districts & Authorities Special Districts & Authorities--miscellaneous Grayson County Sherman, City of

Official Analysis

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BILL ANALYSIS

Senate Research Center	S.B. 3056
89R25135 JTZ-F	By: Hagenbuch
	Local Government
	4/29/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

It has been suggested that an area within the corporate limits of the City of Sherman would benefit from the creation of an improvement district, due to high demand for homes in growing Grayson County. S.B. 3056 seeks to provide for the creation of such a district.

S.B. 3056 amends the Special District Local Laws Code to create the Alluvium Ranch Municipal Management District No. 1 to provide certain improvements, projects, and services for public use and benefit. The bill provides for, among other provisions, the following:

� providing authority to issue bonds;�
� providing authority to impose assessments and fees; and��
� granting limited power of eminent domain.

As proposed, S.B. 3056 amends current law relating to the creation of the Alluvium Ranch 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 4014, as follows:

CHAPTER 4014.� ALLUVIUM RANCH MUNICIPAL MANAGEMENT DISTRICT NO. 1

Sets forth standard language for the creation of the Alluvium Ranch Municipal Management District No. 1 (district) in the City of Sherman (city). Sets forth standards, procedures, requirements, and criteria for:

Creation, purpose, and approval of the district Sections (Sections 4014.0101-4014.0108);

Size, composition, appointment, compensation, and terms of the board of directors of the district (board), including the naming of the initial directors (Sections 4014.0201-4014.0203);

Powers and duties of the district (Sections 4014.0301-4014.0312);

General financial provisions to impose a tax and issue bonds and obligations for the district (Sections 4014.0401-4014.0505); and

Dissolution of the district by the board (Sections 4014.0901).

Authorizes the district to exercise the power of eminent domain in the manner provided by Section 59.222 (Eminent Domain), Water Code.

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

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

SECTION 4.� (a)� Provides that Section 4014.0312, Special District Local Laws Code, as added by Section 1 of this Act, takes effect only if this Act receives 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 4014, Special District Local Laws Code, as added by Section 1 of this Act, is amended by adding Section 4014.0312 to read as follows:

Sec. 4014.0312.� 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. Brent HagenbuchRepublican · Primary Author

House Sponsor

Rep. Shelley LutherRepublican · Primary Sponsor

Bill Text(with markup)

S.B. No. 3056

relating to the creation of the Alluvium Ranch 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 4014 to read as follows:

CHAPTER 4014. ALLUVIUM RANCH MUNICIPAL MANAGEMENT DISTRICT NO. 1

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 4014.0101. DEFINITIONS. In this chapter:

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

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

(3) "County" means Grayson County.

(4) "Director" means a board member.

(5) "District" means the Alluvium Ranch Municipal

Management District No. 1.

Sec. 4014.0102. NATURE OF DISTRICT. The Alluvium Ranch

Municipal Management District No. 1 is a special district created

under Section 59, Article XVI, Texas Constitution.

Sec. 4014.0103. 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,

the county, or 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 or county 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 any city or county services

provided in the district.

Sec. 4014.0104. 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. 4014.0105. 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. 4014.0106. 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. 4014.0107. APPLICABILITY OF MUNICIPAL MANAGEMENT

DISTRICTS LAW. Except as otherwise provided by this chapter,

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

Sec. 4014.0108. 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. 4014.0201. 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. 4014.0202. 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. 4014.0203. INITIAL DIRECTORS. (a) The initial board

consists of the following directors:

Pos. No.

Name of Director

Tim McNutt

Buck Nguyen

Felix Wong

Darrell Rogers

Damian Perez

(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. 4014.0301. GENERAL POWERS AND DUTIES. The district

has the powers and duties necessary to accomplish the purposes for

which the district is created.

Sec. 4014.0302. 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. 4014.0303. 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. 4014.0304. LAW ENFORCEMENT SERVICES. To protect the

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

including the city or the county, to provide law enforcement

services in the district for a fee.

Sec. 4014.0305. 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. 4014.0306. 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. 4014.0307. 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. 4014.0308. 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. 4014.0309. ADDING OR EXCLUDING LAND. Except as

provided by Section 4014.0310, 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. 4014.0310. DIVISION OF DISTRICT. (a) The district may

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

no outstanding bonded debt.

(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) A political subdivision's consent to the creation of the

district and to the inclusion of land in the district granted under

Section 4014.0505 acts as the political subdivision's 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.

(h) 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.

Sec. 4014.0311. CERTAIN RESIDENTIAL PROPERTY NOT EXEMPT.

Section 375.161, Local Government Code, does not apply to the

district.

Sec. 4014.0312. 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. 4014.0401. 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. 4014.0402. 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. 4014.0501. 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. 4014.0502. OPERATION AND MAINTENANCE TAX. (a) If

authorized by a majority of the district voters voting at an

election under Section 4014.0501, 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

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Fiscal NoteView Original

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


May 2, 2025

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

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB3056 by Hagenbuch (Relating to the creation of the Alluvium Ranch 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 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 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, CWi

Related Legislation

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Frequently Asked Questions

Common questions about SB3056

What does Texas SB3056 do?

SB3056 establishes the Alluvium Ranch Municipal Management District No. 1 in Grayson County, creating a new political subdivision with the power to levy ad valorem taxes, impose assessments, and issue bonds. Landowners and developers within the District boundaries face immediate financial implications, including new tax liabilities and liens that take priority over commercial mortgages.

Who authored SB3056?

SB3056 was authored by Texas Senator Brent Hagenbuch during the Regular Session.

When was SB3056 signed into law?

SB3056 was signed into law by Governor Greg Abbott on June 20, 2025.

Which agencies enforce SB3056?

SB3056 is enforced by Alluvium Ranch Municipal Management District No. 1 Board of Directors, City of Sherman (Consent required for bond issuance) and Texas Commission on Environmental Quality (TCEQ).

How urgent is compliance with SB3056?

The compliance urgency for SB3056 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of SB3056?

The cost impact of SB3056 is estimated as "high". This may vary based on industry and implementation requirements.

What topics does SB3056 address?

SB3056 addresses topics including alluvium ranch municipal management district no. 1, special districts & authorities, special districts & authorities--miscellaneous, grayson county and sherman, city of.

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Relating to the creation of the Alluvium Ranch 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. Brent Hagenbuch

Related by Topic

Frequently Asked Questions

What does Texas SB3056 do?

Who authored SB3056?

When was SB3056 signed into law?

Which agencies enforce SB3056?

How urgent is compliance with SB3056?

What is the cost impact of SB3056?

What topics does SB3056 address?

Need Strategic Guidance on This Bill?