TO:	Honorable Jim Murphy, Chair, House Committee on Special Purpose Districts
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	HB4318 by Bailes ( Relating to the creation of the River Ranch Municipal Utility District of Liberty County and the Riverside Municipal Utility District of Liberty County; granting a limited power of eminent domain; 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 River Ranch Municipal Utility District of Liberty County (District) and Riverside Municipal Utility District of Liberty County (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 CSHB 4318, 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 Liberty County served by small systems or private wells (County-Other) is 35,397. The Liberty County-Other population projections approved for the 2017 State Water Plan projects the population to grow to 36,449 in 2020, 37,531 in 2030 and 38,560 in 2040.
 
Location - The Proposed district's initial boundaries are described with a combination of Original Texas Land Surveys, Liberty 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 area for River Ranch Municipal Utility District is approximately 10.91 square miles, and the proposed area for Riverside Municipal Utility District is approximately 0.75 square miles. Both districts are located in southwestern Liberty County, south of the City of Dayton, generally between State Highway 146 and Farm to Market Road 1409. The proposed districts may overlap portions of an existing Certificate of Convenience and Necessity (CCN) boundary held by the Woodland Hills Water, LLC.
 
Comments on Powers/Duties Different from Similar Types of Districts: River Ranch Municipal Utility District of Liberty County (District): The Committee Substitute (CS) adds the names of the temporary directors under Sec. 7991.052 with Coby Trent Elliott for place one, Darrian Rainer Wright for place 2, Alma Lopez for place 3, Rosemarie S. Vitullo for place four, and Gary Joseph Mitchell for place five; the Committee Substitute (CS) replaces the word "creating" with "enacting" in Section 7991.106(c); the Committee Substitute (CS) updated the territory of the District.
Riverside Municipal Utility District of Liberty County (District): The Committee Substitute (CS) for HB 4318 amends the Special District Local Laws Code by adding Chapter 8012 which creates the Riverside Municipal Utility District of Liberty County (District) with the powers and duties of a standard municipal utility district under Water Code Chapters 49 and 54, with the following exceptions; this bill grants the District authority for road projects; this bill allows the District to divide; the District may not exercise the power of eminent domain outside the District to acquire a site or easement for: a road project; or a recreational facility as defined by Section 49.462, Water Code; the bill specifies that at the time of issuance, the total principal amount of bonds or other obligations issued or incurred to finance road projects and payable from ad valorem taxes may not exceed one-fourth of the assessed value of real property in the District; 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.
 
This bill grants the District authority for road projects; this bill allows the District to divide; the District may not exercise the power of eminent domain outside the District to acquire a site or easement for: a road project; or a recreational facility as defined by Section 49.462, Water Code; the bill specifies that at the time of issuance, the total principal amount of bonds or other obligations issued or incurred to finance road projects and payable from ad valorem taxes may not exceed one-fourth of the assessed value of real property in the District; 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.
 
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 - CSHB 4318 states the district "has the powers and duties provided by the general law of this state, including Chapters 49 and 54, Water Code, applicable to municipal utility districts created under Section 59, Article XVI, Texas Constitution".
 
Within Liberty County, 35 percent of the total water use was groundwater (Gulf Coast Aquifer) in 2014. Ninety five percent of all the groundwater pumping was for municipal use. The water source of the proposed district might pursue is unknown.