TO:	Honorable Jim Murphy, Chair, House Committee on Special Purpose Districts
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	HB4297 by Miller ( Relating to the creation of the Telfair Tract 5 Commercial Management District; providing authority to issue bonds; providing authority to impose assessments, fees, or 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 Telfair Tract 5 Commercial Management District (District) with the powers and duties of a standard municipal management district under Local Government Code Chapter 375 and a standard public improvement district under Local Government Code Chapter 372.

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 4297, 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 the City of Sugar Land is 94,037. The City of Sugar Land population projections approved for the 2017 State Water Plan projects the population to be 105,510 in 2020, 114,908 in 2030 and 122,172 in 2040.
 
Location - The Proposed district's initial boundaries are described with a combination of Original Texas Land Surveys, Fort Bend 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 0.50 square miles in eastern Fort Bend County, located  within the western city limits of the City of Sugarland, and south of US Highway 59.
 
Comments on Powers/Duties Different from Similar Types of Districts: The House Committee Substitute added names for the nine initial voting directors.

The District is to be governed by a board of nine voting directors that are appointed by the governing body of the City of Sugarland (City). The bill specifies that the governing body is not bound by the recommendations of the board or a City stakeholder and may appoint as a voting director any qualified person; a District improvement project may be located inside the District or outside of 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; 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 District may contract with a qualified party to provide law enforcement services for a fee; the District may join and pay dues to a charitable or nonprofit organization that performs a service or provides an activity consistent with the furtherance of a District purpose; the District may engage in activities that accomplish the economic development purposes of the District; the District may acquire, lease as lessor or lessee, construct, develop, own, operate, and maintain parking facilities or a system of parking facilities, including lots, garages, parking terminals, or other structures or accommodations for parking motor vehicles off the streets and related appurtenances; the District may annex or exclude territory as provided by Subchapter J, Chapter 49, Water Code; Section 375.044(b), Local Government Code, requiring the board to call a hearing on the exclusion of land or other property from the district if a signed petition evidencing the consent of the owners of a majority of the acreage in the district is filed with the secretary of the board requesting the hearing before the issuance of bonds does not apply to the District; the District must obtain the approval of the City for: the issuance of bonds for an improvement project financed by the bonds if any part of the project is carried out in the corporate limits of the City; and the plans and specifications of the improvement project financed by the bonds; the bill specifies that if the District obtains the approval of the City's governing body of a capital improvements budget for a period not to exceed five years, the District may finance the capital improvements and issue bonds specified in the budget without further approval from the City; 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 by resolution consents to that change; 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.

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 the District; the District may issue, without an election, bonds, notes, and other obligations secured by: revenue other than ad valorem taxes; or contract payments described by Section 3953.204; Local Government Code Section 375.243 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; Section 49.107(h), Water Code states that an operation and maintenance tax to be used for recreational facilities, as defined by Section 49.462, Water Code, levied by a district located in a county with a population of more than 3.3 million or in a county adjacent to that county may not exceed 10 cents per $100 of assessed valuation of taxable property in the District. The bill specifies that this section does not apply to the District; Section 375.205, Local Government Code, requiring the District to submit bonds that are public securities and the appropriate proceedings authorizing their issuance to the attorney general for examination, does not apply to a loan, line of credit, or other borrowing from a bank or financial institution secured by revenue other than ad valorem taxes; current statutes stipulate that a district may not issue bonds for recreational facilities that exceed one percent of the district's assessed valuation.  The bill specifies that this requirement does not apply to the District; 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 4297 specifies that the district "may annex land as provided by Subchapter J of Chapters 49 Water Code, applicable to management districts created under Section 59, Article XVI, Texas Constitution."
 
Within the City of Sugar Land, 57 percent of the total water use was surface water in 2015. Forty three percent of total water use was from groundwater (Gulf Coast Aquifer) in 2015.