HB5699

HB5699 lets Harris County Municipal Utility District No. 405 contract with an owner of undeveloped property to remove that property from the district on terms the board considers advantageous. The district may issue an exclusion order only after those conditions are satisfied and must record it in Harris County’s property records. The act does not automatically remove any named parcel.

Exclusion does not erase the property’s share of district debt. Until that share is paid in full, the owner remains obligated, statutory liens continue, and the district must collect debt-service taxes at the same rate charged to property still inside the district. Those receipts remain pledged to debt and must be applied exclusively to the excluded property’s share. The exclusion contract must state the amount or how it is calculated. An owner of any part of the excluded property may pay the remaining share in full; full payment releases the property from district debt-service taxes.

Subject to the contract and statutory debt provisions, excluded land is no longer part of the district or entitled to its services. Bondholder rights cannot be impaired. The district may issue still-unissued bonds, notes or other obligations approved by district voters before exclusion without a new authorization election. This preserves prior voter authorization; it is not a general exemption for debt never approved by voters.

The district keeps its preexisting powers and duties. The act validates earlier governmental acts and proceedings, but excludes matters already held invalid by final judgment and matters in litigation on the effective date that ultimately are held invalid by final judgment. It does not simply erase those court protections.

The act became law without the governor’s signature June 20, 2025, effective September 1, 2025. Passage votes were 91–40, with two present but not voting, in the House and 28–3 in the Senate. Sources: enrolled law and official history.