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HB 5555

Relating to municipal utility districts; limiting the rate of a tax.

89th Legislature (2025) Introduced by Erin Zwiener

HB 5555 caps municipal utility district tax rates in Texas to limit property owner tax burdens while potentially constraining infrastructure funding in growing areas.

Left pending in committee
#countygovernment--landuse&zoning(i0098) #environmentalquality #texascommissionon(v0334) #elections--general(i0310) #publicnotice(s0264) #specialdistricts&authorities--groundwaterconservedist.(i0013) #specialdistricts&authorities--municipalutilitydistricts(i0009) #taxation--property-taxrate(i0794)
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WeVote Research Nonpartisan
Bill Summary · HB 5555

Legislative bill overview

HB 5555 proposes to limit the tax rate that municipal utility districts (MUDs) in Texas can impose on property owners. MUDs are special districts that typically provide water, wastewater, and drainage services to suburban and rural areas. The bill would place a statutory cap on how much these districts can tax residents for their operations.

Why is this important

MUDs currently have significant autonomy in setting tax rates, which can result in varying property tax burdens across different districts. Property owners in high-tax MUDs may see substantial increases in their overall tax obligations. A rate limitation could provide tax predictability and relief for residents, though it may also constrain funding for infrastructure maintenance and expansion in growing areas.

Potential points of contention

  • Fiscal impact on services: Lower tax caps could reduce funding for essential water and sewer infrastructure, potentially delaying repairs or limiting capacity for new development
  • Regional equity: Different MUDs serve different populations with varying infrastructure needs; a uniform rate cap may not account for these differences
  • Development implications: Constrained MUD budgets could increase costs for new subdivisions or slow growth in areas dependent on MUD services, affecting housing availability and affordability

Compiled from official sources — confirm details with the bill’s official record.

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