All Roll Calls
Yes: 219 • No: 75
TexasHB 568689th Legislature Regular SessionHouseWALLET
Relating to the creation of the Montgomery County Management District No. 3; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes.
Sponsored By: Creighton, Will Metcalf
Became Law
MONTGOMERY COUNTY MANAGEMENT DISTRICT NO. 3MONTGOMERY COUNTYSpecial Districts & Authorities--MiscellaneousENVIRONMENTAL QUALITY, TEXAS COMMISSION ON
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Bill Overview
Analyzed Economic Effects
11 provisions identified: 3 benefits, 3 costs, 5 mixed.
Voter-approved district bonds carry uncapped taxes
The district can charge a property tax for operations, projects, and services only after majority voter approval. The board sets that rate, but cannot exceed the voter-approved maximum. Bonds repaid partly or fully through property taxes also require voter approval. Once those bonds are issued, the district must levy an annual tax without a rate or amount limit while bonds remain outstanding. Before the first such bond issue, each municipality whose city limits or surrounding jurisdiction includes district land must approve its creation and land inclusion.
District cannot force property sales
The district cannot use eminent domain to take private property. This protects owners from forced property acquisition by this district. The restriction does not address other governments' powers.
Property assessments create personal debt and liens
The board can assess property in all or part of the district for authorized purposes. Before assessments fund services or improvements, owners representing a majority of assessable real property value must petition, using the county's latest certified appraisal roll. Assessments, penalties, interest, collection expenses, and attorney fees become personal debts and property liens, even for owners unnamed in proceedings. Liens start with the board resolution, last until paid, outrank liens except county, school district, and municipal property-tax liens, and use property-tax enforcement procedures. Assessment-roll corrections require notice and a hearing and cannot increase a parcel's assessment; the law sets no assessment amount.
District services add to existing local services
The district can build, operate, and finance authorized local projects using available money and public or private contracts. It can pay qualified providers, including Montgomery County, Conroe, or Willis, for law enforcement. It can also build or operate public parking, including facilities leased to private operators. Montgomery County, Conroe, and Willis remain responsible for the service levels they provided when the law took effect. District services add to that baseline; the law sets no specific project budget, policing fee, or parking price.
District businesses gain new support options
The district can create economic development programs offering public loans, grants, staff, or services to support business activity. The law sets no funding amount, loan terms, grant size, or business eligibility rules. District land is also eligible for tax increment reinvestment zones and tax abatement reinvestment zones. These powers do not themselves create a zone, award assistance, or grant a tax reduction.
Targeted district improvements carry area-specific taxes
The district can designate an area or property for projects and services that mainly benefit that location, not the whole district. Voters there must approve the plan, and the board must formally establish the area or property designation. The district can then use taxes, liens, and bonds tied to that area to fund those benefits. Area-specific property taxes and property-tax-backed bonds require approval by a majority voting there. The law sets no tax rate or bond amount.
District sales tax needs voter approval
After majority voter approval, the district can charge sales and use tax in one-eighth-of-one-percent steps, or 0.125 percentage points. The board sets and changes rates within the voter-approved maximum and combined local tax limit, accounting for overlapping city and county taxes. Revenue can fund any district purpose or secure debt; rate cuts and abolition cannot impair repayment of obligations secured by it. The board can otherwise end the tax without an election, but restarting after abolition or a zero rate requires voter approval. An existing tax extends to added land without another election, ends on removed land, and continues on remaining land.
District splits require new voter safeguards
The district can split into two or more districts only before it has ever issued bonds and while charging no property tax. The board can initiate a split or act on a petition from owners representing a majority of district real property's assessed value. New districts initially must stay within the Act's original territory; the division order assigns assets, debts, and temporary directors. Each new district must hold a confirmation election. It must also obtain voter approval for taxes requiring elections and bonds repaid partly or fully through property taxes.
New Montgomery County district takes shape
The law creates Montgomery County Management District No. 3 on 144.058 acres in the Calvin Lynch Survey. District land gains access to authorized projects and services, along with exposure to district taxes and assessments under separate approval rules. Five directors serve staggered four-year terms; the Texas Commission on Environmental Quality appoints them from board recommendations. The district can add or remove land by following the Water Code's boundary-change procedures. Creating the district alone does not impose a specific charge or guarantee a service.
Owners can require district closure
The board must dissolve the district after a written petition from owners representing at least two-thirds of assessable property value. Owners representing at least two-thirds of eligible district land area can also require dissolution. The board can separately choose dissolution by majority vote. Closure is blocked by unpaid contractual payment obligations or bonds not repaid or legally provided for. District public works must also be transferred by contract to another responsible party before closure.
District borrowing expands with repayment obligations
The district can borrow and issue bonds, notes, or other obligations for authorized purposes. Repayment can use voter-approved property taxes, assessments, impact fees, revenues, contract payments, grants, or other district money. The outstanding-principal limit in Water Code Section 49.4645 does not apply. Bonds backed by non-property-tax revenue or contract payments can be issued without a bond election. Contract-payment bonds must meet Water Code Section 49.108 requirements; the law sets no borrowing amount.
Sponsors & Cosponsors
Sponsors
Creighton
Affiliation unavailable
Will Metcalf
House
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
Senate vote • 5/25/2025
Record vote
Yes: 0 • No: 0
Senate vote • 5/25/2025
Record vote
Yes: 0 • No: 0
House vote • 5/15/2025
Record vote
Yes: 106 • No: 36
House vote • 5/14/2025
Record vote
Yes: 98 • No: 38
House vote • Unknown
Committee vote: Intergovernmental Affairs
Yes: 10 • No: 1
Senate vote • Unknown
Committee vote: Local Government
Yes: 5 • No: 0 • Other: 1
Actions Timeline
Effective immediately
6/20/2025HouseFiled without the Governor's signature
6/20/2025HouseSent to the Governor
5/28/2025HouseSigned in the Senate
5/27/2025SenateSigned in the House
5/27/2025HouseReported enrolled
5/26/2025HouseSenate passage reported
5/25/2025HouseRecord vote
5/25/2025SenatePassed
5/25/2025SenateRead 3rd time
5/25/2025SenateRecord vote
5/25/2025SenateThree day rule suspended
5/25/2025SenateVote recorded in Journal
5/25/2025SenateRead 2nd time & passed to 3rd reading
5/25/2025SenateLaid before the Senate
5/25/2025SenatePlaced on local & uncontested calendar
5/25/2025SenateCommittee report printed and distributed
5/20/2025SenateRecommended for local & uncontested calendar
5/20/2025SenateReported favorably w/o amendments
5/20/2025SenateVote taken in committee
5/19/2025SenateConsidered in public hearing
5/19/2025SenateRecommendations filed with the Speaker
5/19/2025HouseReferred to Local Government
5/16/2025SenateRead first time
5/16/2025SenateReceived from the House
5/15/2025Senate
Bill Text
Engrossed
Enrolled
House Committee Report
Introduced
Senate Committee Report
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