Municipal Utility Districts in DFW

The Details

A Municipal Utility District (MUD) is a political subdivision of the State of Texas authorized by the Texas Commission of Environmental Quality (TCEQ) to provide water, sewage, drainage and other utility-related services within the MUD boundaries.

MUD Sizes

MUDs can vary in size, but they generally serve large communities of a few hundred households. Overall, Texas has more than 1,200 special districts, many of which are located outside of city limits where there are no municipal services.

How Is A MUD Formed?

A majority of property owners in the proposed district petitions the Texas Commission of Environmental Quality to create a MUD. The TCEQ evaluates the petition, holds a public hearing, and grants or denies the petition. After approval, the TCEQ appoints five temporary members to the MUD's Board of Directors, until an election is called to elect permanent Board members, to confirm the MUD's creation, and to authorize bonds and taxing authority for bond repayment.

What Are MUD Taxes?

Municipal Utility Districts are funded through bonds. Homeowners then pay off those bonds through MUD tax. As the debt decreases, MUD taxes may also decrease over time.

Are MUD Tax Rates Higher?

MUD tax rates, like all property tax rates, vary according to property values and debt requirements. MUD rates generally decline over time as the MUD is built out and operating and debt service costs are shared by more homeowners.