TO:	Honorable Jim Murphy, Chair, House Committee on Special Purpose Districts
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	HB4345 by Rodriguez, Eddie ( Relating to the creation of the Rio de Vida Municipal Utility District No. 1; providing authority to impose a tax and issue bonds.), 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 Rio de Vida Municipal Utility District No. 1 (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 HB 4345, 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 Travis County served by small systems or private wells (County-Other) is 82,569. The Travis County-Other population projections approved for the 2017 State Water Plan projects the population to be 59,888 in 2020, 54,930 in 2030 and 50,253 in 2040.
 
Location - The Proposed district's initial boundaries are described with a combination of Original Texas Land Surveys, Travis 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 3.33 square miles in eastern Travis County, located east of the City of Austin along State Highway 130. The proposed district may overlap portions of existing Certificate of Convenience and Necessity (CCN) boundaries held by City of Austin, Manville WSC, and Hornsby Bend Utility Co.
 
Comments on Powers/Duties Different from Similar Types of Districts:  The House Committee Substitute adds that the temporary directors shall hold an election to elect four permanent directors in addition to confirming the creation of the District. The City must consent to the creation of the District before February 14, 2020. The requirements related to affordable housing are removed. The board is governed by four elected directors and one director appointed by the governing body of the City; the board member appointed by the City is not required to reside in the District or to own real property in the District. The House Committee Substitute removes the names of the temporary directors and instead requires the owners of a majority of the assessed value of real property in the District to submit a petition to the TCEQ requesting appointment of five temporary directors. The House Committee Substitute removes the requirement that road projects meet regulations of each municipality in whose corporate limits or ETJ the road project is located; road projects are only required to meet regulations of the City. The House Committee Substitute specifies that compliance with the consent agreement includes affordable housing requirements established in the consent agreement. The House Committee Substitute removes Section 8013.107, powers for economic development. The District must obtain consent by City resolution or ordinance before dividing. The House Committee Substitute removes Section 8013.204; approval by City of Capital Improvements. The House Committee Substitute removes Section 8013.254, bonds for recreational facilities in its entirety, stating that the limitation on the outstanding principal amount of bonds, notes, and other obligations provided by Chapter 49, Water Code, does not apply to the District.
 
The bill specifies District requirements related to affordable housing; the District is governed by a board of five directors appointed by the governing board of the City of Austin (City); this bill grants the District authority for road projects; the District and City may contract on terms that the board and governing body of the City agree will further regional cooperation between the District and City; before exercising a power for economic development as described in Section 8013.107, the District must obtain the City's consent; the District may construct, acquire, improve, maintain, finance, or operate a facility or improvement related to reclaiming or grading land in the District; the District may not exercise the power of eminent domain; the bill allows the District to divide.
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; 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 bill specifies that the District is a "water or sewer district" under Section 43.071, Local Government Code; the bill specifies that Local Government Code, Section 43.075, relating to abolition of, or division of functions of, water-related special district that becomes part of not more than one municipality, applies 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 4345 specifies that "the district has the powers and duties provided by the general law of the state, including Chapters 49 and 54, Water Code, applicable to municipal utility districts created under Section 59, Article XVI, Texas Constitution".
 
Within Travis County, 91 percent of the total water use was surface water in 2014. Eighty eight percent of all the surface water use was for municipal purposes. The water source of the proposed district might pursue is unknown.