TO:	Honorable Jim Murphy, Chair, House Committee on Special Purpose Districts
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	HB2744 by Hernandez ( Relating to the creation of the Channelview Improvement District; providing authority to issue bonds; providing authority to impose 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 Channelview Improvement District (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 boundaries mentioned in HB 2744 staff is able to approximate population based on Census block density calculation, and by selecting blocks with their centroid in the proposed district. The population is estimated in 2010 to be between 38,000 and 38,800.
     
Population growth in the specific area since the 2010 census is unknown. The 2010 population estimate for areas of Harris County served by small systems or private wells (County-Other) is 204,630. The Harris County-Other population projections approved for the 2017 State Water Plan projects the population to grow to 245,944 in 2020, 291,438 in 2030 and 311,968 in 2040.
 
Location - The Proposed district's initial boundaries are described with a combination of city boundaries, state highways and physical features, such as the San Jacinto River. 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 23 square miles in eastern Harris County, located east of the City of Houston, and west of the City of Baytown. The district is generally located north of the Houston Ship Channel, and east of the East Sam Houston Parkway (Beltway 8), west of the San Jacinto River, and south of Wallisville Road. The district does not include any of the municipal or corporate boundaries of the City of Houston.
 
Comments on Powers/Duties Different from Similar Types of Districts:  The board president may not vote except to break a tie vote; this bill allows the District to do the following: exercise the powers of a development corporation under Subtitle C1, Title 12, Local Government Code; adopt rules to administer and operate the District; adopt rules for the use, enjoyment, availability, protection, security, and maintenance of the District's facilities, and for the provision of public safety and security in the District; issue bonds and lease, acquire, or construct a building or facility as provided by Subchapter A, Chapter 1509, Government Code; establish and administer a program as provided by Section 380.002, Local Government Code; and, add or exclude territory in the manner provided by Subchapter J, Chapter 49, Water Code; the District may not employ peace officers; the District may not exercise the power of eminent domain; the District may not impose an ad valorem tax;; the District may impose the sales and use tax and the excise tax in increments of one-eighth of one percent, with a minimum tax of one-half percent and a maximum tax of one percent; the board may dissolve the district by: board order unless the District has outstanding indebtedness or contractual obligations; or, written petition signed by 75 percent or more of the individuals who own real property in the District.
 
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 2744 specifies that "the district has the powers and duties provided by the general law of the state, including Chapters 49 Water Code, applicable to municipal utility districts created under Section 59, Article XVI, Texas Constitution".
 
Within Harris County, 26 percent of the total water use was groundwater (Gulf Coast and other Aquifers) in 2014. Eighty two percent of all the groundwater pumping was for municipal use. The water source of the proposed district might pursue is unknown.