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 bill would create Harris County Municipal Utility District No. 406 in Harris County with the powers and duties of a Municipal Utility District (MUD) governed by Water Code Chapters 30, 49, 50 and 54. This also provides road powers under Chapter 441, Transportation Code, a Municipal Management District under Chapter 375, Local Government Code and a Tax Increment Reinvestment Zone under Chapter 311, Tax Code.

1) Population- The proposed district boundaries are primarily described through named tracts, so staff was not able to provide a detailed estimate of population.  The City of Houston population projection for use in the 2006 State Water Plan shows an increase from 1,953,631 to 2,240,974, a 15 percent increase.

2) Location & Size- The proposed district will be composed of 510 acres and appears to be located within the City of Houston and Harris County.  The only map feature mentioned in the district boundaries is the Beltway 8 (Sam Houston Tollway).

3) Powers- As with general law MUDs, the District would have the power to provide water, wastewater, and drainage services. The District would also have the power to provide road facilities, operate as a municipal management district and a tax increment reinvestment zone.

4) District Finances- Consistent with general law for municipal utility districts. The District may issue tax and/or revenue bonds, levy a maintenance tax, and set fees and rates.

5) Board of Directors- The District is to be governed by a board of 5 elected directors. The directors will serve staggered terms. The first three directors named in Subsection (a) expire in May 2007 and the last two directors terms will expire in May 2009.

6) Eminent Domain- Same as general law districts, the District will have the power of eminent domain under Texas Water Code Chapter 49. The District may condemn either fee simple title or a lesser property interest.

7) Ability to Tax- Yes, for bonds and maintenance purpose, subject to voter consent, which is consistent with general law for MUDs.

8) Ability to Exclude Property-No data available.

9) Overlapping Services- The boundary description provided for the proposed District was insufficient to determine any overlap.

10) Adequacy of Boundary Description- A closure check of the description of the proposed District boundaries has been performed and the boundary appears not to form an acceptable closure.

11) Comments on Powers /Duties Different from Similar Types of Districts- The District would have the power of a Tax Reinvestment Zone and not be subject to review under Sections 49.181 and 49.182, Water Code.  The District may also provide for the construction, maintenance, and operation of roads or works, facilities, or improvements in aid of those roads. Bonds to be issued for these purposes must be approved by a 2/3 majority of voting qualified voters within the District’s area to be affected by the bonds. Bonds or other obligations issued for these purposes may not exceed 1/4 of the assessed valuation of the real property of the District.

12) TCEQ’s Supervision- As with general law districts, the TCEQ will have general supervision authority, including bond review authority and review of audit reports relating to Water code only.

13) State Water Plan Objectives-Water Use: The proposed district would be located over the Gulf Coast Aquifer and would be located in the Harris Galveston Subsidence District.  Though the proposed district may obtain its water from groundwater wells, it is more likely that the district will receive water from the City of Houston.  The City receives approximately two-thirds of its water from Lake Livingston and one-third from the Gulf Coast Aquifer.