HB5658

Regular Session

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

ModeratePlan for compliance

Medium Cost

Effective:2025-06-20

Enforcing Agencies

City of Denton (Development Agreement and Bond Consent oversight) • Craver Ranch Municipal Management District No. 1 Board of Directors • Texas Commission on Environmental Quality (TCEQ)

HB5658

Relating to the creation of the Craver Ranch Municipal Management District No. 1; providing authority to issue bonds; providing authority to impose as...

Moderate Urgency

Heavily Contested

House Vote103 - 45

YEA

NAY

70% in favor148 voting

Senate Vote28 - 3

YEA

90% in favor31 voting

Total Opposition Votes

Cost Impact

Medium

Effective

2025-06-20

Enforcing Agencies

City of DentonCraver Ranch Municipal Managemen...TCEQ

Primary Author: Rep. Jared Patterson

89th Texas Legislature

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Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: June 20, 2025 (Immediate).
Compliance Deadline: Pre-Transaction. Title searches and lease negotiations must account for District jurisdiction immediately. Operational powers (issuing bonds/levying assessments) are paused pending the execution of a Development Agreement.
Agency Rulemaking: The District Board and City of Denton must execute a Development Agreement to activate District powers. If this is not signed by September 1, 2030, the District must dissolve.

Immediate Action Plan

1. Geospatial Audit: Immediately overlay the 2,800-acre Craver Ranch legal description against your current asset portfolio to identify affected parcels.
2. Lease Audit: Review all active LOIs and leases for properties in this zone; insert language ensuring "Assessments" are defined as recoverable operating expenses.
3. Monitor City Council: Track the City of Denton City Council agenda for the "Craver Ranch Development Agreement." This document will set the actual zoning and development rules.
4. Lender Notification: If you hold debt on land in this District, notify your lender of the new district creation to preempt technical default notices regarding superior liens.

Operational Changes Required

Contracts

Commercial Leases (NNN): Standard "Tax" clauses are insufficient. You must amend Triple Net leases to explicitly include "special district assessments" as a pass-through expense, as the District is legally barred from levying "taxes."
Loan Agreements: Lenders must update covenants. District assessments create a first and prior lien superior to mortgage liens (subordinate only to ad valorem taxes). Lenders should require assessment reserves.
Purchase & Sale Agreements: Sellers must provide statutory notice to buyers regarding the District’s existence and assessment authority under the Texas Water Code. Failure to disclose grants the buyer the right to terminate.

Hiring/Training

Title Review Teams: Staff must be trained to flag "Craver Ranch MMD No. 1" in title commitments immediately.
Project Managers: Must be briefed that infrastructure improvements (roads, drainage) now require a petition signed by owners representing a majority of the assessed value to trigger District financing.

Reporting & Record-Keeping

Lien Monitoring: Accounting departments must track District Board resolutions, as assessments become liens immediately upon adoption.
Petition Tracking: Developers must maintain precise records of assessed value ownership to calculate the threshold required to petition the Board for bond issuances.

Fees & Costs

Assessments: Variable. The Board will determine rates based on project costs. These are not capped by the legislation.
Ad Valorem Taxes: 0%. The District is prohibited from levying property taxes.
Impact Fees: The District may impose fees for connections to water/sanitary sewer systems if it assumes those functions.

Strategic Ambiguities & Considerations

The "Development Agreement" Scope: Section 4020.0108 requires a Development Agreement with the City of Denton before the District can act. The law does not define the limits of this agreement. The City may use this negotiation to impose stricter building codes, environmental standards, or exactions than standard city ordinances require.
Assessment Methodology: The statute allows assessments for "any purpose authorized" but does not dictate the formula (e.g., front-footage vs. square footage vs. valuation). The Board has broad discretion here, creating uncertainty in cost projections until the first assessment order is drafted.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsCraver Ranch Municipal Management District No. 1 Denton, City of Special Districts & Authorities Special Districts & Authorities--miscellaneous

Official Analysis

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House Authors

Rep. Jared PattersonRepublican · Primary Author

Senate Sponsor

Sen. Brent HagenbuchRepublican · Primary Sponsor

Bill Text(with markup)

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More from Rep. Jared Patterson

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Frequently Asked Questions

Common questions about HB5658

What does Texas HB5658 do?

Effective June 20, 2025, the Texas Legislature has established the Craver Ranch Municipal Management District No. 1 over approximately 2,800 acres in Denton, creating a new quasi-governmental entity with the power to levy assessments and exercise eminent domain. While the District is statutorily prohibited from levying ad valorem (property) taxes, it may impose mandatory assessments that function as super-priority liens against real property, directly impacting developers, lenders, and commercial tenants within the District boundaries.

Who authored HB5658?

HB5658 was authored by Texas Representative Jared Patterson during the Regular Session.

When was HB5658 signed into law?

HB5658 was signed into law by Governor Greg Abbott on June 20, 2025.

Which agencies enforce HB5658?

HB5658 is enforced by City of Denton (Development Agreement and Bond Consent oversight), Craver Ranch Municipal Management District No. 1 Board of Directors and Texas Commission on Environmental Quality (TCEQ).

How urgent is compliance with HB5658?

The compliance urgency for HB5658 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of HB5658?

The cost impact of HB5658 is estimated as "medium". This may vary based on industry and implementation requirements.

What topics does HB5658 address?

HB5658 addresses topics including craver ranch municipal management district no. 1, denton, city of, special districts & authorities and special districts & authorities--miscellaneous.

Legislative data provided by LegiScanLast updated: November 25, 2025

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