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 the Harris County Improvement District No. 7 (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 City of Houston population 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 District includes an area within Harris County. It is located in an area generally bounded by local thoroughfares. The proposed district would be located in central Houston near the intersection of Montrose Boulevard and Allen Parkway.

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 five persons serving staggered four year terms. By resolution, the board may increase or decrease the number of directors to not fewer than five and not more than nine.

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) Ability to Exclude Property- Same as a general law municipal management district under Local Government Code Chapter 375.

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

10) Adequacy of Boundary Description- The description provided follows generally along streets and roads, a state highway, and indicates some approximate distances. The bill does not provide a detailed metes and bounds description, thus, it cannot be determined if it creates an acceptable closure.

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.