A Municipal Utility District (“MUDs”) is a local governmental entity organized for the purposes of providing safe drinking water and sanitary sewer service to the areas within its boundaries. Additionally, MUDs can
exercise other typical governmental powers, including drainage relief within its boundaries, the levy and collection of ad valorem taxes, issuing bonds with voter authorization, charge for authorized services, adopt and enforce rules and regulations to accomplish the purposes for which the MUD was created, develop and maintain certain public improvements such as parks and jogging trails, provide solid waste management services, and provide police protection services. While the powers of MUDs may seem very broad, MUDs are one of the most highly regulated and controlled governmental entities in the State of Texas. The powers of MUDs are limited to those expressly provided for in the Texas Water Code and the Texas Constitution and there is significant oversight provided by the Texas Commission on Environmental Quality (the "TCEQ").
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