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.

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.