LEGISLATIVE BUDGET BOARD
Austin, Texas
 
WATER DEVELOPMENT POLICY IMPACT STATEMENT
 
85TH LEGISLATIVE REGULAR SESSION
 
May 13, 2017

TO:
Honorable Jim Murphy, Chair, House Committee on Special Purpose Districts
 
FROM:
Ursula Parks, Director, Legislative Budget Board
 
IN RE:
HB4343 by Oliverson ( Relating to the creation of the Harris County Improvement District No. 26; 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 Harris County Improvement District No. 26 (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 4343, 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 0.19 square miles in northern Harris County, west of the City of Tomball and south of Farm to Market Road 2920. The proposed district does not appear to overlap any existing Certificate of Convenience and Necessity (CCN) boundaries.
 
Comments on Powers/Duties Different from Similar Types of Districts:  The CS amends Section 3800.052 to add subsection b) to include that Section 49.052, Texas Water Code, relating to the disqualifications of directors does not apply; the CS adds Section 3800.105, relating to public facility corporations, as provided by Chapter 303, Local Government Code, the board by resolution may authorize the creation of a public facility corporation in the district to finance or to provide for the acquisition, construction, rehabilitation, renovation, repair, equipping, furnishing, or placement in service of public facilities in an orderly, planned manner and at the lowest possible borrowing costs; the CS names the initial board of directors; the CS amends Section 3800.114 to state that the district may not impose an assessment, impact fee, or standby fee on the property, including the equipment, rights-of-way, easements, facilities, or improvements, of certain utility and service providers; the CS amends Section 3800.115 to allow the district to impose an assessment to pay the costs associated with the use of electrical or optical lines; the CS adds Subchapter Z, Special Bond Provisions, applicable to bonds payable wholly or partly from revenue derived from assessments on real property in the district;  Sections 3800.901-906 are added providing requirements and agreements associated with bond issues; the CS revises the metes and bounds description and acreage of initial territory of the district.
 
The District is to be governed by a board of five voting directors appointed by the TCEQ from persons recommended by the board; 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, including the county, to provide law enforcement services in the District 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 land as provided by Subchapter J, Chapter 49, Water Code; the District has the powers provided by Chapter 372, Local Government Code, to a municipality or county; the District has the powers provided by the general laws relating to road utility districts; the District may finance, acquire, construct, improve, operate, maintain, or charge a fee for the use of District conduits for: fiber-optic cable and supporting facilities; electronic transmission lines and supporting facilities; or other types of transmission lines and supporting facilities; the District may negotiate and enter into a written strategic partnership agreement under Section 43.0751, Local Government Code, with a municipality in whose extraterritorial jurisdiction the District is located; the District may not exercise the power of eminent domain; 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; Sections 375.221 and 375.223, Local Government Code, relating to competitive bidding, do not apply to the District. The bill specifies that Subchapter I, Chapter 49, Water Code, relating to competitive bidding applies to the district; 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; 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 District may define areas or designate certain property of the district to pay for improvements, facilities, or services that primarily benefit that area or property and do not generally and directly benefit the District as a whole; the bill specifies that the District is a "water or sewer district" under Section 43.071, Local Government Code; Local Government Code Section 375.264 states that a district may not be dissolved by its board if the district has any outstanding bonded indebtedness until that bonded indebtedness has been repaid or defeased in accordance with the order or resolution authorizing the issuance of the bonds. The bill specifies that this section does not apply to 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 4343 specifies that the district "may annex land as provided by Subchapter J of Chapter 49 Water Code" applicable to management 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


Source Agencies:
580 Water Development Board, 582 Commission on Environmental Quality
LBB Staff:
UP, SZ