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

The bill would create the Galveston County Management District No. 1 (District) in Galveston County with the powers and duties of a Municipal Management District (MMD) governed by Local Government Code Chapter 375.

1) Population- The City of League City’s population projection for use in the 2006 State Water Plan shows an increase from 45,444 in the year 2000 to 53,546 in 2010.

2) Location & Size- The proposed district would be composed of approximately 97 acres within the City of League City and Galveston County.

3) Powers- The District has the rights, powers, privileges, authority, and functions of a general law MMD. The District has the powers 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, voting directors named in the bill. The members of the governing body shall appoint the four voting directors from persons recommended by the Board. Nonvoting members may be appointed by the Board. By resolution, the board may increase or decrease the number of directors to not fewer than five and not more than fifteen.

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 395.

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

10) Adequacy of Boundary Description- The boundary description provided forms 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: Creation of this district would have no impact on the State Water Plan objectives.