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History

MUD History

Municipal Utility Districts, or MUDs, are political subdivisions of the state, most often formed by the legislature to operate, maintain and repair the water, wastewater and drainage infrastructure of a geographically defined area of land. Frequently in Texas, MUDs are used to finance utility development of residential and commercial areas outside of city limits in unincorporated areas. There are over 1500 MUDs in Texas.

Origin

1904 – Section 52, Article III of the Texas Constitution was adopted authorizing the legislature to create special districts to issue bonds “for the improvement of rivers, creeks, streams, to prevent overflows, provide for navigation and irrigation.”

1917 – Section 59, Article XVI of the Texas Constitution – A conservation amendment was adopted which allowed conservation and reclamation, or water districts, to operate with unlimited bonded indebtedness; it declared that conservation and development of the state’s natural resources was a public right and duty; it created a unique situation whereby water districts had unlimited tax and debt limits, however, all other units of general government had established tax and debt limits.

1925-1971 – The legislature authorized the creation of a group of regulatory agencies and the creation of a variety of types of water districts. A triad, consisting of the Texas Water Rights Commission (TWRC), Texas Water Quality Board (TWQB), and The Texas Water Development Board (TWDB), slowly evolved into The Texas Water Commission. The general laws now provide for 13 different types of water districts.

1971 – The legislature passed the Municipal Utility District Act that added Chapter 54 to the Texas water Code. The Act was modernized and streamlined piece of legislation governing a specific type of district – municipal utility district – which, under supervision of the Texas Water Commission, is designed to be used in conjunction with urban lands.

1993 – A group of regulatory agencies, consisting of the Texas Water Commission, The Texas Air Control Board and The Texas Health Department, were combined and reorganized to form The Texas Natural Resources Conservation Commission, or TNRCC, with supervisory jurisdiction over all types of utility districts, including municipal utility districts.

1995 – Chapter 49 was added to the Texas Water Code to provide a common set of laws and procedures governing all types of special water districts. Most, but not all, of Chapter 54 of the Texas Water Code was repealed, but selected portions of Chapter 54 relating specifically to municipal utility districts are still in effect. The result is that both Chapters 49 and 54 of the Texas water Code govern municipal utility districts.

Present – The Texas Water Code has been amended almost every year the legislature has been in session. The TNRCC changed its name to Texas Commission of Environmental Quality, or TCEQ.


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