Photo Credit: The Woodlands TownshipNews
City of Houston passes Third Amendment to Regional Participation Agreement with The Woodlands Township
With the approval of the Third Amendment to the Regional Participation Agreement, the City of Houston and The Woodlands Township have reached an agreement that provides meaningful financial benefits for Houston today while providing greater long-term financial and governance certainty for The Woodlands.
“I would like to thank Mayor Whitmire and Houston City Council for their willingness to work with us to reach an agreement that recognizes the needs and priorities of both Houston and The Woodlands,” said Township Chairman Brad Bailey.
“I also want to thank my fellow Township Board members and Township staff for their hard work and commitment throughout this process. Our job as Township Board members has always been simple: protect The Woodlands and build a stronger future for the next generation.”
“This agreement does both. We protected our community from future annexation by Houston, secured greater certainty for our future and kept millions more of our sales tax dollars right here at home. This is a huge win for The Woodlands and a day worth celebrating.”
Under the terms of the original agreement, the Township was required to deposit 1/16th of 1% of sales tax revenue collected in the portion of The Woodlands that lies within Houston’s extraterritorial jurisdiction into a Regional Participation Fund, which currently has a balance of approximately $22.6 million. Those funds were restricted to qualifying regional capital improvement projects and required a dollar-for-dollar match from the City of Houston. This amendment removes those restrictions and eliminates the matching requirement. Houston can now put those dollars to work on its highest priority needs without having to provide another $22.6 million to access the full value of the fund.
The amendment also provides Houston with an additional $27.4 million in unrestricted funds spread out over the next three years. Of this amount, $7.9 million was obligated under the original agreement. The remaining $19.5 million will be funded from existing Township cash reserves.
Together, that represents $50 million in financial benefit to Houston.
For The Woodlands, this agreement provides something equally important: long-term certainty.
Beginning in 2030, the sales tax revenues previously required to be allocated to the Regional Participation Fund will remain with the Township and can be used to address the needs and priorities of our community. Based on conservative projections, this change will result in an average increase in sales tax revenue of $4.5 million per year over the next 30 years.
The agreement also provides greater certainty regarding our future governance by eliminating the possibility of annexation by Houston while The Woodlands remains within Houston’s extraterritorial jurisdiction. While current law protects The Woodlands from annexation without voter approval, State law may change in the future and leave The Woodlands exposed.
The Woodlands Township Board of Directors, during a special meeting held on Wednesday, August 26, 2026, unanimously approved the Third Amendment to the Regional Participation Agreement with the City of Houston. The City of Houston passed it on September 2, 2026.
“I am pleased that we reached an agreement that is a win-win for both of our great communities. Let’s keep working,” said Houston Mayor John Whitmire.
Nearly 20 years ago, Houston and The Woodlands entered into the Regional Participation Agreement to address the circumstances facing our communities at that time. Today, an amendment was executed to restructure the original agreement to meet Houston’s current needs and the Township’s longer-range goals. The Woodlands Township looks forward to continuing to be a good partner and a good neighbor to Houston for many years to come.
Source: The Woodlands Township
