TO:	Honorable Jim Murphy, Chair, House Committee on Special Purpose Districts
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	HB3173 by Bell (Relating to the creation of the East Lake Houston Management District; providing authority to issue bonds; providing authority to impose assessments, fees, or taxes.), As Introduced

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 East Lake Houston Management District (District) with the powers and duties of a standard municipal management district under Local Government Code Chapter 375, and a standard municipal utility district under Chapter 54, Subchapters D and J, Water Code.

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 3173, 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 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 Original Texas Land Surveys, Harris 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 0.68 square miles in northeast Harris County, located east of Lake Houston and the City of Humble, and west of the City of Dayton. The proposed district may overlap portions of an existing Certificate of Convenience and Necessity (CCN) boundary held by Aqua Texas.
 
Comments on Powers/Duties Different from Similar Types of Districts: The District is to be governed by a board of five voting directors that are appointed by the governing body of the City of Houston (City) from persons recommended by the board.  Section 3936.052 (Director Qualifications) will not apply to initial directors; this bill specifies that an improvement project described by Section 3936.102 may be located: in the District; or in an area outside but adjacent to the District if the project is for the purpose of extending a public infrastructure improvement beyond the District's boundaries to a logical terminus; 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 to assist and act for the District in implementing a project or providing a service authorized by this chapter.  The nonprofit has each power of and is considered to be a local government corporation created under Subchapter D, Chapter 431, Transportation Code; the District may contract to provide law enforcement services in the District for a fee; this 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; the district may adopt and enforce restrictions on the use of real property in the district in the manner provided for a municipal utility district by Section 54.237, Water Code; this bill specifies that if the legislature grants the District a power that is in addition to the powers approved by the initial resolution of the governing body of the City consenting to the creation of the District, the District may not exercise that power unless the governing body of the City consents to that change by resolution; 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 ad valorem tax to pay for an improvement project under this chapter unless the imposition is approved by the voters of the District voting at an election held for that purpose; and, the governing body of the City may dissolve the district by ordinance.
 
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 3173 specifies that "the district has the powers and duties provided by the general law of the state, including subchapter D, Chapter 54, 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.