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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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