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House bill 738 hinges on Perry

Profile image for By John D. Harden / Staff Writer
By John D. Harden / Staff Writer

Bill would let county officials review MUDs before they’re created

State officials expect a bill that gives county commissioners the authority to review municipal utility districts before they are created to be on the governor’s desk and ready for his signature by today.

State Rep. Myra Crownover’s, R-Denton, House Bill 738 passed the Senate committee on Friday, moving on to the Senate for a final vote.

The House passed the bill May 8.

State officials monitoring the bill said they expect the bill to be on Gov. Rick Perry’s desk today, but they said the schedule could change.

If made into law, the bill will give county officials the ability to make recommendations regarding the creation of utility districts.

Municipal utility districts, or MUDs, are government entities that are operated like a school district. They have their own boundaries, tax rates and power to issue debt. However, there are some services that the districts can’t provide, like law enforcement and road maintenance in some cases.

Some of the services the districts lack are covered at the expense of the county, County Commissioner Hugh Coleman said.

Coleman went to Austin last week to testify on behalf of the bill to help it move past the Senate committee.

Coleman and other officials said they feel they deserve a chance to review the developments they will be forced to support.

The state has at least three ways developers can create a district. A district can be either created by the county, state legislation or by the Texas Commission on Environmental Quality.

A developer or property owner can avoid a county review if the request for a district is taken to the TCEQ for approval.

The number of utility districts created in Denton County has grown rapidly since 2000.

In Denton County, developers primarily use utility districts’ tax bonds to pay for the water infrastructure needed to support residential communities.

The property taxes collected in a district are then used to reimburse the developer for the debt.

The original purpose of utility districts was to help small communities develop water and sewer systems, according to TCEQ records.

According to data obtained from the TCEQ, there are at least 56 utility districts in the county, 17 of which were approved by the TCEQ.

Crownover said, if passed, her bill will allow the county to have a voice in each case.

“I believe that the best way to approach any issue is to ensure that all stakeholders have a place at the table,” she said.

Crownover said the bill will give county officials a chance to weigh in on a proposed district, but not the power to approve or deny it.

In the past, any legislation introduced to control utility districts failed, said Sara C. Bronin, author of a 2007 law review paper titled “Wrestling With MUDs to Pin Down the Truth About Special Districts.”

Bronin said bills set to control utility districts are unpopular among lawmakers and property owners.

When the bill was first introduced, Coleman said it would take a lot of work to get it through both the House and Senate.

The bill’s progress can be tracked by visiting and then searching for HB 738.

JOHN D. HARDEN can be reached at 940-566-6882 and via Twitter at @JDHarden.