TO:	Honorable Jim Murphy, Chair, House Committee on Special Purpose Districts
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	HB2332 by Thompson, Ed (Relating to the creation of the Brazoria County Management District No. 1; 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:
 
This bill creates Brazoria County Management District No. 1 (District) with the powers and duties of a standard municipal management district under Local Government Code, Chapter 375.
 
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 2332, 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 Brazoria County served by small systems or private wells (County-Other) is 85,152. The Brazoria County-Other population projections approved for the 2017 State Water Plan projects the population to grow to 109,994 in 2020, 142,514 in 2030 and 173,919 in 2040.
 
Location - The Proposed district's initial boundaries are described with a combination of Original Texas Land Surveys, Brazoria 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 1.17 square miles in north eastern Brazoria County, located south of the City of Manvel, along Farm to Market road 1462. The proposed district does not appear to overlap portions of any existing Certificate of Convenience and Necessity (CCN) boundaries.
 
Comments on Powers/Duties Different from Similar Types of Districts:  The Committee Substitute (CS) for HB 2332 removes the addition of Section 3944.153(b)(2), Special District Local Laws Code.  The omitted section removes the option for a petition to be signed by at least 50 persons who own real property in the district subject to assessment, if more than 50 persons own real property in the district according to the most recent certified tax appraisal roll for the county.  The bill still specifies that the board may not finance a service or improvement project with assessments under this chapter unless a written petition requesting that service or improvement has been filed with the board.  The petition must be signed by the owners of the assessed value of real property in the district subject to the assessment according to the most recent certified tax appraisal roll for the county; the CS amends Section 3944.256, Special District Local Laws Code, to specify that revenue from the hotel occupancy tax must be an authorized use of hotel occupancy tax revenue in accordance with Chapter 351, Tax Code.  The section clarifies that the district's pledge of revenue may be in combination with other revenue available to the district.
 
Filed Bill Summary:
The temporary directors of the District may not hold a confirmation election and elect permanent directors until each municipality in whose corporate limits or extraterritorial jurisdiction the District is located has consented by ordinance or resolution to the creation of the District and to the inclusion of land in the District; a director is entitled to receive fees of office and reimbursement for actual expenses provided by Section 49.060, Water Code; Sections 375.069 and 375.070, Local Government Code, do not apply to the board; the bill requires the TCEQ to appoint the five initial temporary directors upon receipt of a petition from the owners of a majority of the assessed value of the real property in the district; the District may develop or finance recreational facilities; this bill grants the District authority for road projects; the District may exercise the powers given to a development corporation under Chapter 505, Local Government Code; the board by resolution may authorize the creation of a nonprofit corporation with the powers created under Subchapter D, Chapter 431, Transportation Code; the District may contract for or employ peace officers under Section 49.216, Water Code; the bill allows the District to create economic development programs and exercise economic development powers under Chapter 380, Local Government Code and Subchapter A, Chapter 1509, Government Code; specifies that the District may annex or exclude land as provided by Subchapter J, Chapter 49, Water Code; Section 375.044(b), Local Government Code, does not apply to the District; the District may acquire, lease, construct, develop, own, operate, and maintain parking facilities; the District may not exercise the power of eminent domain; the board may not finance a service or improvement project with assessments under this chapter unless a written petition requesting that service or improvement has been filed with the board; the District may not impose an assessment on the property, including the equipment, rights-of-way, facilities, or improvements, of: an electric utility or a power generation company; a gas utility; a telecommunications provider; or a person who provides to the public cable television or advanced telecommunication services; Local Government Code Section 375.161 states that an MMD may not impose an impact fee, assessment, tax, or other requirement for payment, construction, alteration, or dedication under this chapter on single-family detached residential property, duplexes, triplexes, and fourplexes; the bill specifies that this section does not apply to: a tax imposed by the District; or a required payment for a service provided by the District, including water and sewer service; the District may levy a maintenance tax and a contract tax as provided for in Sections 49.107 and 49.108 of the Water Code; Section 375.243, Local Government Code, states that the board may not call a bond election unless a written petition has been filed with the board requesting an election; the bill specifies that this section does not apply to the District; the District may elect to complete an annual financial report in lieu of an annual audit under Section 375.096(a)(6), Local Government Code; the board may dissolve the District regardless of whether the District has debt; Section 375.264, Local Government Code, does not apply to the District; if the District has debt when it is dissolved, the District shall remain in existence solely for the purpose of discharging its debts; the dissolution is effective when all debts have been discharged.
 
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 2332 specifies that "the district has the powers and duties provided by the general law of the state, including Chapters 49 Water Code, applicable to the annexation of land created under Section 59, Article XVI, Texas Constitution".

Within Brazoria County, 24 percent of the total water use was groundwater (Gulf Coast Aquifer) in 2014. Eighty one percent of all the groundwater pumping was for municipal use. The water source of the proposed district might pursue is unknown.