Bill Caption

Relating to the creation of the Burns Branch Municipal Utility District No. 1 of Denton 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

HB 4720 would create a municipal utility district (MUD) focusing on road construction, drainage, wastewater, and other fundamental needs and may issue bonds and may hold an election to vote on issuing bonds from ad valorem taxes and operation and maintenance taxes. The first five members of the board of directors would be appointed and temporary. The district may not exercise the power of eminent domain. 

Vote Recommendation Notes

HB 4720 would provide the legislative requirement necessary to establish fundamental services in the area described in the bill as Burns Branch Municipal Utility District No. 1. The taxing and bonding authority given to this new district would only have a local application. While this bill would create a new special purpose district, due to the limited 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.