HB5677

HB5677 creates Pura Vida Municipal Management District No. 1 for a described 211.348-acre area in Travis County near U.S. 183 and FM 1327. It can finance and provide public improvements and services, including water, wastewater, drainage, roads, recreation and parking, and support economic development through loans, grants, personnel and services. It can contract for additional law enforcement and create a nonprofit corporation to help carry out its work. These services are to supplement—not replace—the City of Mustang Ridge’s existing services. The law also makes the area eligible for tax-increment or tax-abatement zones; eligibility does not itself create either zone.

The district has five elected directors with staggered four-year terms. Owners of a majority of assessed real-property value can petition the Texas Commission on Environmental Quality to appoint temporary directors, with successor appointments if necessary. They must arrange the permanent-director election. Director compensation is capped at $150 per board meeting and $7,200 per year, plus reimbursement of necessary, reasonable expenses.

Property taxes and property-tax-backed bonds require voter approval. The operating-tax rate cannot exceed the approved rate, while the continuing tax for outstanding tax-backed bonds has no rate or amount limit specified in this act. Specified revenue- or contract-payment-backed bonds can be issued without a separate bond election. Required municipal consent applies to the first property-tax-backed bond issuance. Assessment-financed services or improvements require a petition from owners of a majority of assessed property value subject to assessment. Assessments can create a lien and personal liability for property owners. The act removes the general statutory ceiling on outstanding recreational-facility debt; that is not a waiver of every financing requirement.

The district can adopt a sales and use tax with voter approval. Under the act’s main method, its rate is two percent or the lower rate that keeps combined local sales taxes at or below two percent. Alternatively, it can use the development-district method in Local Government Code Chapter 383, which allows voter-approved rates of one-quarter, three-eighths or one-half percent, also subject to the combined-local-tax ceiling. The alternative method allows the board to reduce or abolish the tax and discontinues it if no revenue is collected before the first anniversary. Neither route automatically imposes a tax on enactment.

The district may add or exclude land under the cited general laws. It may divide only when it has no outstanding bonded debt and is not imposing property taxes; newly divided districts cannot initially extend beyond the act’s territory and must obtain applicable voter financing approvals. Dissolution may be initiated by the board or required by a qualifying two-thirds property-owner petition, but debts, contractual payments and responsibility for public facilities must first be addressed.

The bill became law without the governor’s signature June 20, 2025, effective September 1, 2025. The district has no eminent-domain power: the House’s 89–48 concurrence vote was below the required two-thirds threshold, so the prohibition—not the conditional grant—took effect. The initial House vote was 82–49; the Senate vote was 27–4. Sources: enrolled act and certified votes and official history and effective-date remarks.