What is a Municipal Utility District (MUD)?
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 services within the MUD boundaries.
These political subdivisions are usually formed in areas where municipal services are not always available, such as outside city limits in Extraterritorial Jurisdictions (ETJ). They are recognized as taxing entities by the State of Texas to raise funds within its boundaries to pay for the costs of providing the municipal services. MUDs can be a tool used in financing, constructing, and operating quality water, wastewater, and drainage facilities because they allow the developer and future property owners to absorb the costs and pay for them over time. MUDs also help manage growth in the ETJ by allowing development to occur in a planned manner and providing a means to finance the needed infrastructure.