TO:	Honorable Jim Murphy, Chair, House Committee on Special Purpose Districts
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	SB2267 by Creighton (Relating to the creation of the Harris County Municipal Utility District No. 555; granting a limited power of eminent domain; providing authority to issue bonds; providing authority to impose assessments, fees, and taxes.), As Engrossed

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 amends the Special District Local Laws Code by adding Chapter 7999 which creates the Harris County Municipal Utility District No. 555 (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 SB 2267, 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 eastern Harris County, located north of the City of Baytown and east of the City of Houston along Farm to Market Road 1942.  The proposed district does not appear to overlap any existing Certificate of Convenience and Necessity (CCN) boundary.
 
Comments on Powers/Duties Different from Similar Types of Districts: The engrossed version adds "Save and Except the following described portion of said 119.398 acre tract:" beginning on page 10, line 10, and adds the metes and bounds for the exception continuing through page 11, line 27.
 
The bill requires the TCEQ to appoint the five initial temporary directors upon receipt of a petition from the owners of a majority of the assessed value of the real property in the District; the bill grants the District authority for road projects; 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; the bill specifies that the District may not be dissolved and continues in existence if all of the territory in the District is annexed into the corporate limits of the City of Baytown (City); the bill specifies that an allocation agreement between the City and the District that provides for the allocation of the taxes or revenues of the District and the City following the date of inclusion of all the District's territory in the corporate limits of the City may provide that the total annual ad valorem taxes collected by the City and the District from taxable property in the district may exceed the City's ad valorem tax on that property; and, 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 - SB 2267 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 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.