Bill Caption

Relating to the creation of the River Farm Municipal Utility District No. 1 of Bell County; granting a limited power of eminent domain; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes.

Fiscal Notes

No significant fiscal implication to the State is anticipated.

Bill Analysis

SB 1987 would create the River Farm Municipal Utility District No. 1 in Bell County to assist conservation and development of the natural resources of this state. The district may design, acquire, construct, finance, issue bonds for, improve, operate, maintain, and convey to this state, a county, or a municipality for operation and maintenance macadamized, graveled, or paved roads, or improvements, including storm drainage, in aid of those roads. The district may exercise eminent domain within district boundaries to acquire a site for a road project only if this bill receives two-thirds of the votes in the legislature from both houses. The district would have the power to issue bonds without an election funded by nontax revenue or contract payments. The district would be required to hold an election to implement an ad valorem tax or contract tax.

Vote Recommendation Notes

While this bill would create a new special-purpose district, due to the local nature of this bill we are neutral on this legislation. 

MUDs allow for utility services to be provided to new residential developments without making the broader tax base subsidize the cost of installing utilities for the benefit of only the people living in the new development. In this way, the costs of MUDs are akin to user fees in which only those who use the system and benefit from the services pay the costs. Texas Action remains neutral on SB 1987.