The Legislative Budget Board in cooperation with the Texas Water Development Board (TWDB) and the Texas Commission on Environmental Quality (TCEQ) has determined the following:

The bill creates the Montrose Museum Community Improvement District (District) in Harris County with the powers and duties of a Municipal Management District (MMD) governed by Local Government Code Chapter 375.

1) Population - The proposed district appears to be entirely within the City of Houston in Harris County.  Due to the complexity of the proposed boundaries, staff are not able determine the exact location of the district in the short review period.  Hence, staff is not able to make an estimate of current or future population for the proposed district.  The population projections recently approved for use in the 2006 Regional Water Plans show an increase in the City of Houston population from 1,953,631 in the year 2000 to 2,520,926 in the year 2020.

2) Location & Size - The District includes an area within Harris County.

3) Powers - The District has the rights, powers, privileges, authority, and functions of a general law MMD The District also has the power given to a corporation under the Development Corporation Act (Section 4B, Article 5190.6, VTCS) and the power to create a nonprofit corporation under Transportation Code Chapter 431.

4) District Finances - Similar to general law MMDs, including the authority to levy benefit assessments, ad valorem taxes, and issue bonds. In addition, the District would have the ability to impose a sales tax. A petition signed by the owners of a majority of the assessed value or surface area in the District, is required prior to financing projects. Approval of bonds by the Attorney General’s Office is required.

5) Board of Directors - The initial board consists of 13 appointed directors named in the bill. Directors will serve staggered terms of four years with five directors’ terms expiring June 1 of an odd-numbered year and eight directors’ terms expiring June 1 of the following odd-numbered year.

6) Eminent Domain - Like general law MMDs, the District may not exercise the power of eminent domain.

7) Ability to Tax - The District may impose assessments, impact fees, ad valorem debt service and operation and maintenance taxes according to Local Government Code Chapter 375. With voter approval, the District may impose a sales-and-use tax. The District may not impose an impact fee or assessment on a residential property, multi-unit residential property, or condominium; or on the property, equipment, or facilities of an electric utility.

8) Overlapping Services - The bill states that the District is created to supplement and not supplant the County or water district services provided within the District's boundaries.

9) Adequacy of Boundary Description - The description provided follows generally along streets and roads, a state highway and a railway, and indicates some approximate distances; however, there appears to be a discrepancy in some distances used in describing the northeast portion of the District. The discrepancy may affect the use of the boundary description for taxing purposes. The bill does not provide a detailed metes and bounds description

10) Comments on Powers /Duties Different from Similar Types of Districts - Subject to limitations on amount and voter authorization, the District may impose sales taxes. Also, the District may authorize the creation of a nonprofit corporation to assist and act on behalf of the District in implementing a project or providing a service.

11) TCEQ Supervision - Similar to general law MMDs that are exempt from TCEQ auditing and bond review authority unless the bonds are issued specifically for water, wastewater, or drainage facilities.

12) State Water Plan Objectives - Over 33% of the water utilized by the City of Houston's water system was groundwater and the total intake was 345,855 acre-feet.  This level of water use produced an approximate Gallons-Per-Capita-Daily of 159.

Board staff finds that creation of the proposed District is not in conflict with the State Water Plan objectives of promoting the efficient use of local groundwater resources and the implementation of practices and programs to effectively manage local groundwater resources.