HB5680

Regular Session

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

ModeratePlan for compliance

Medium Cost

Effective:2025-09-01

Enforcing Agencies

Bayou Belle Municipal Management District No. 1 Board of Directors • Liberty County Tax Assessor-Collector • Texas Commission on Environmental Quality (TCEQ)

HB5680

Relating to the creation of the Bayou Belle Municipal Management District No. 1; granting a limited power of eminent domain; providing authority to is...

Moderate Urgency

Heavily Contested

House Vote84 - 47

YEA

NAY

64% in favor131 voting

Senate Vote28 - 3

YEA

90% in favor31 voting

Total Opposition Votes

Cost Impact

Medium

Effective

2025-09-01

Enforcing Agencies

Bayou Belle Municipal Management...Liberty County Tax Assessor-Coll...TCEQ

Primary Author: Rep. Janis Holt

89th Texas Legislature

jdkey.com

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: September 1, 2025
Compliance Deadline: Immediate upon effective date for updating "Notice to Purchasers" in real estate sales contracts. Financial liability (taxes/assessments) begins upon Board resolution or voter approval.
Agency Rulemaking: The initial Board of Directors will convene in Q4 2025/Q1 2026 to adopt bylaws and set assessment methodologies. There is a regulatory gray zone until the Board defines the specific formula for calculating assessments (e.g., per foot vs. per acre).

Immediate Action Plan

Audit Property Locations: Immediately verify if your assets fall within the Julianna Malley League, Abstract No. 71, to confirm jurisdiction.
Update Lease Templates: Revise standard NNN lease agreements to capture MMD assessments as recoverable costs before the September 1 effective date.
Monitor Board Formation: Identify the initial Board meeting date (Q4 2025) and designate a representative to attend. You must advocate for an assessment methodology that favors your property type before rules are adopted.
Review Loan Covenants: Check existing loan agreements for clauses regarding "superior liens" or "special assessments," as the creation of this District may trigger notification requirements to your lender.

Operational Changes Required

Contracts

Commercial Leases (NNN): Landlords must amend lease definitions of "Operating Expenses" or "Taxes" to explicitly include "special district assessments" and "MMD taxes." Without this specific language, landlords risk being unable to pass these new costs to tenants.
Real Estate Sales: Sellers must update sales contracts to include the statutory "Notice to Purchasers" (Texas Water Code § 49.452). Failure to disclose the District’s existence renders the contract voidable by the purchaser at closing.
Construction Agreements: Contracts with the District are deemed "governmental functions." Contractors must comply with Texas Government Code Chapter 2253 (Payment and Performance Bonds) and prevailing wage requirements.

Hiring/Training

Title & Closing Staff: Train staff to identify the "Julianna Malley League, Abstract No. 71" in Liberty County as a special taxing jurisdiction to ensure taxes are prorated correctly at closing.
Project Managers: Construction teams must be trained on public work compliance, as private development rules do not apply to District-funded infrastructure.

Reporting & Record-Keeping

Lien Tracking: Lenders must track District assessments as they constitute a first and prior lien superior to all other liens (except municipal/county/school taxes).
Petition Verification: Retain copies of any petitions signed by corporate agents. A petition signed by owners of a majority of assessed value triggers the Board's authority to levy assessments without an election.

Fees & Costs

Assessments: The Board may impose mandatory assessments at any time via resolution. These are personal liabilities of the property owner.
Ad Valorem Taxes: The District may levy property taxes for operations and maintenance, subject to voter approval.
Standby Fees: The District may impose fees on undeveloped property available for service but not yet utilizing connections.

Strategic Ambiguities & Considerations

Assessment Methodology: The statute allows the Board to determine how assessments are calculated (e.g., benefit basis, front-footage, or square footage). This is currently undefined. Risk: A "front-footage" calculation disproportionately impacts businesses with extensive road frontage but lower building value (e.g., logistics centers, warehouses).
Infrastructure Delays (No Eminent Domain): Because the District lacks eminent domain, it must negotiate for all rights-of-way. If a single landowner holds out, critical infrastructure projects (roads/drainage) may be stalled indefinitely, impacting development timelines.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsBayou Belle Municipal Management District No.1 Liberty County Special Districts & Authorities Special Districts & Authorities--miscellaneous Environmental Quality, Texas Commission On

Official Analysis

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House Authors

Rep. Janis HoltRepublican · Primary Author

Senate Sponsor

Sen. Robert NicholsRepublican · Primary Sponsor

Bill Text(with markup)

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More from Rep. Janis Holt

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Frequently Asked Questions

Common questions about HB5680

What does Texas HB5680 do?

HB5680 establishes the Bayou Belle Municipal Management District No. 1 in Liberty County, creating a new jurisdiction with the authority to levy ad valorem taxes and impose superior liens through assessments to fund infrastructure. Crucially, the legislation failed to pass with a supermajority, meaning the District is created WITHOUT eminent domain power.

Who authored HB5680?

HB5680 was authored by Texas Representative Janis Holt during the Regular Session.

When was HB5680 signed into law?

HB5680 was signed into law by Governor Greg Abbott on June 20, 2025.

Which agencies enforce HB5680?

HB5680 is enforced by Bayou Belle Municipal Management District No. 1 Board of Directors, Liberty County Tax Assessor-Collector and Texas Commission on Environmental Quality (TCEQ).

How urgent is compliance with HB5680?

The compliance urgency for HB5680 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of HB5680?

The cost impact of HB5680 is estimated as "medium". This may vary based on industry and implementation requirements.

What topics does HB5680 address?

HB5680 addresses topics including bayou belle municipal management district no.1, liberty county, special districts & authorities, special districts & authorities--miscellaneous and environmental quality, texas commission on.

Legislative data provided by LegiScanLast updated: November 25, 2025

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