TO:	Honorable Doug Miller, Chair, House Committee on Special Purpose Districts
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	HB2478 by Keough (Relating to the creation of the Montgomery County Municipal Utility District No. 144; granting a limited power of eminent domain; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes.), Committee Report 1st House, Substituted

The Legislative Budget Board, in cooperation with the Texas Water Development Board (TWDB) and the Texas Commission on Environmental Quality (TCEQ), has determined that:
 
The bill, as substituted, creates the Montgomery County Municipal Utility District No. 144 (the "District") with the powers and duties of a standard municipal utility district under Water Code, Chapters 49 and 54.
 
Population - The very specific description of the proposed boundaries does not allow staff to develop precise population estimates. Based on the Original Texas Land Surveys mentioned in HB 2478, staff is unable to determine a population estimate.
     
Population growth in the specific area since the 2010 census is unknown. The 2010 population estimate for areas of Montgomery County served by small systems or private wells (County-Other) is 185,829. The Montgomery County-Other population projections approved for the 2016 Region H Water Plan projects the population to grow to 293,282 in 2020, 427,682 in 2030 and 585,027 in 2040.
 
Location - The Proposed districts initial boundaries are described with a combination of Original Texas Land Surveys, Montgomery County Real Property Records and metes and bounds. Due to the complexity of these boundaries for the various sub areas of the district, staff is able to determine only the general location of the proposed district.
 
The proposed district's area is approximately 1.1 square miles in central Montgomery County, located north of the communities of Carriage Hills and Red Oak Ranch. The city of Conroe is located to the north east. The proposed district could fall within Crystal Springs Water Co INC CCN. 
 
Comments on Powers/Duties Different from Similar Types of Districts:  The bill allows the district to be included in a tax increment reinvestment zone, and specifies that if the City of Conroe (the "City") has created such zone that includes the District's territory, the District may receive money from the tax increment fund (by contract); the bill grants the District road powers; the bill specifies that if the District violates the terms of an ordinance or resolution adopted under Water Code Sections 54.016 or 54.0165, the City is entitled to injunctive relief or writ of mandamus.  The bill specifies that the District may not exercise the power of eminent domain outside the District without the written consent of the City;  the bill specifies that an allocation agreement between the City and the District that provides for the allocation of the taxes or revenues of the District and the City following the date of inclusion of all the District's territory in the corporate limits of the City may provide that the total annual ad valorem taxes collected by the City and the District from taxable property in the District may exceed the City's ad valorem tax on that property; and if the bill does not receive a two-thirds vote of all members elected to each house, the District may not exercise the power of eminent domain as described above.
 
Overlapping Services:  TCEQ does not have mapping information for water and/or wastewater providers because this function was transferred from the TCEQ to the Public Utility Commission on September 1, 2014.  As a result, TCEQ is unaware of possible overlapping service providers.
 
TCEQ's Supervision:  As with general law districts, the TCEQ will have general supervisory authority, including bond review authority and review of financial reports.
 
Water Use - HB 2478 specifies that "the district has the powers and duties provided by the general law of the state, including Chapters 49 and 54, Water Code, applicable to municipal utility districts created under Section 59, Article XVI, Texas Constitution".
 
Within Montgomery County, 98 Percent of the total water use was groundwater (Gulf Coast Aquifer) in 2012. Ninety-one percent of all the groundwater pumping was for municipal use. The water source of the proposed district might pursue is unknown.