The bill establishes the Montgomery County Municipal Utility District No. 263, granting it limited powers of eminent domain, the ability to issue bonds, and the authority to impose assessments, fees, and taxes. It introduces new legal language to the Special District Local Laws Code by adding Chapter 8016A, which outlines the governance structure of the district, including a board of five elected directors serving staggered four-year terms. The bill mandates that temporary directors must hold an election to confirm the district's creation and elect permanent directors, contingent upon obtaining consent from relevant municipalities.

Additionally, the bill specifies the district's powers and duties, including the design, construction, and maintenance of road projects, while requiring compliance with municipal regulations and voter approval for certain financial actions, such as imposing ad valorem taxes or issuing bonds. Notably, it includes a new section, Section 8016A.0307, which prohibits the district from exercising the power of eminent domain unless a two-thirds vote is achieved in both houses. The initial territory of the district is defined as an 87.24-acre tract in Montgomery County, Texas, and the bill is set to take effect on January 1, 2026, if passed, ensuring adherence to all constitutional and legislative requirements throughout its process.

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