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

Subject to a confirmation election, the Act would create the Airline Improvement District in Harris County with the powers and duties governed by Local Government Code Chapter 375, applicable to municipal management districts.

1) Population- The City of Houston population projection for use in the 2006 State Water Plan indicates an increase from 1,953,631 to 2,240,974, a 15 percent increase.

2) Location & Size- Harris County; there is not enough information to determine the size of the District.  The proposed district would be located entirely in the northern portion of the City of Houston,  in Harris County.

3) Powers- The District has the rights, powers, privileges, authority, and functions governed by special local laws code, Chapter 3830. The District also has the power given to a corporation under the Development Corporation Act (Section 4B, Article 5190.6, VTCS), and can create a nonprofit corporation under Transportation Code Chapter 431 and can grant an abatement for a tax or assessment owed to the District under Tax Code Chapter 312.

4) District Finances- The District has the authority to levy benefit assessments, ad valorem taxes, and issue bonds. In addition, the District would have the ability to impose a sales use tax. The tax must be authorized by a majority of the voters of the District voting at an election called for that purpose. The combined rate of all sales and use taxes imposed by the District and other political subdivisions of this state may not exceed 2 percent. The District must obtain approval from the City of Houston to issue bonds.

5) Board of Directors- The initial board consists of nine persons, who will serve staggered terms of four years. Two voting directors must reside within the District.

6) Eminent Domain- 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 the property, equipment, or facilities of an electric utility.

8) Ability to Exclude Property- The District would have the power to exclude property from its domain.

9) Overlapping Services- An adequate boundary description and location map was not provided for the District. Therefore, an overlap check could not be performed.

10) Adequacy of Boundary Description- The description provided follows known landmarks and right of ways; however, a closure computation could not be performed as the bill does not provide a detailed metes and bounds description.

11) 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.

12) TCEQ’s Supervision- The District is exempt from TCEQ auditing and bond review authority unless the bonds are issued specifically for water, wastewater, or drainage facilities.

13) State Water Plan Objectives-Water Use:  Although the district would be given powers to sell bonds and to develop a capital improvement plan, the main intent of the district would be to promote “employment, commerce, transportation, housing, tourism, etc”.  The creation of this district does not relieve Harris County or the City of Houston from providing services that they are currently providing, including water and wastewater service.  For this reason, I believe that the creation of this district would have no impact on the State Water Plan objectives.