Austin, Texas
May 17, 2005

Honorable Robert Puente, Chair, House Committee on Natural Resources
John S. O'Brien, Deputy Director, Legislative Budget Board
SB1865 by Jackson, Mike (Relating to the creation of the Galveston County Municipal Utility District No. 53; providing authority to impose a tax and issue bonds; granting the power of eminent domain.), Committee Report 2nd House, Substituted

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

Subject to a confirmation election, the bill would create the Galveston County Municipal Utility District No. 53 with the powers and duties of a Municipal Utility District (MUD) governed by Chapters 30, 49, 50 and 54 of the Water Code.

1) Population- The population projections approved for use in the 2006 Region H Water Plan show a slight increase for the county from 250,158 in 2000 to 268,714 in 2010.

2) Location & Size- The District includes 4 tracts of land within Galveston County totaling 299 acres, and appears to be located in a small area between the cities of League City, Texas City and Dickinson. All cities are within Galveston County. The proposed district’s boundaries are described through named tracts recorded in the Galveston County Clerk’s Office, so staff is not able to provide a more detailed description of location or population.

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 road powers.

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 4-year terms. On or after September 1, 2005 a person owning land within the District may submit a petition to the TCEQ requesting that the Commission appoint as temporary directors the persons named in the petition.

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 exercise the power of eminent domain outside the District only to acquire an easement necessary for a pipeline that serves the District.

7) Ability to Tax- Yes, for bonds and maintenance purpose, subject to voter consent, which is consistent with general law for MUDs. The District may not impose an impact fee or assessment on the property of an electric utility, a gas utility, a telecommunications provider, or a cable television provider.

8) Ability to Exclude Property- Same as general law MUDs, the District has the power to exclude property.

9) Overlapping Services- An adequate boundary description was not provided for the proposed District. Therefore, an overlap check could not be determined.

10) Adequacy of Boundary Description- A closure check of the description of the proposed District boundaries has been performed. Tract 1 did not close, tracts 2 and 4 did close, and tract 3 did not provide enough information to check the closure.

11) Comments on Powers /Duties Different from Similar Types of Districts- The District may also provide for the construction, maintenance, and operation of roads or works, facilities, or improvements in aid of those roads. Road projects must be approved by any municipality and county in whose jurisdiction the District is located. Bonds to be issued for any road projects must be approved by a 2/3 majority of voters within the District’s area. Bonds or other obligations issued for these purposes may not exceed 1/4 of the assessed valuation of the real property of the District. If the District is not confirmed by an election before September 1, 2009, the District is dissolved.

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.

13) State Water Plan Objectives- The proposed district would be located over the Gulf Coast Aquifer and would be located in the Harris-Galveston Coastal Subsidence District. Only seven percent of Galveston County’s water use was supplied by groundwater. Of the groundwater used, 89 percent went towards municipal uses.

The vast majority of water used by the cities of League City and Texas City is surface water purchased from the Gulf Coast Water Authority. Though the proposed district may obtain its water from groundwater wells, it is perhaps more likely that the district will contract with the Gulf Coast Water Authority or one of the surrounding cities for surface water.

Source Agencies:
580 Water Development Board, 582 Commission on Environmental Quality
LBB Staff: