TO:	Honorable Jim Murphy, Chair, House Committee on Special Purpose Districts
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	SB2271 by Creighton (Relating to the creation of Port Neches Improvement District; providing authority to issue bonds; providing authority to impose assessments, fees, or 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 3956 which creates the Port Neches Improvement District (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 SB 2271, 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 Port Neches is 13,040.  The City of Port Neches population projections approved for the 2017 State Water Plan projects the population to grow to 13,821 in 2020, 14,713 in 2030 and 15,649 in 2040.
 
Location - The Proposed district's initial boundaries are described with a combination of Original Texas Land Surveys and Jefferson County Real Property Records. 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 0.01 square miles in northeastern Jefferson County, located in the northern portion of the city limits of the City of Port Neches.  The Neches River is just to the north of the proposed district.
 
Comments on Powers/Duties Different from Similar Types of Districts:  The District is governed by a board of seven voting directors appointed by the governing body of the City of Port Neches (City), including the mayor; 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 or the city, 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 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 has the powers applicable to navigation districts created under Section 59, Article XVI, Texas Constitution, including Chapters 60 and 62, Water Code; the District may not take any of the following actions until the City has consented by ordinance or resolution to the creation of the District and to the inclusion of land in the District: hold an election under Subchapter L, Chapter 375, Local Government Code; impose an ad valorem tax; impose an assessment; issue bonds; or enter into an agreement to reimburse the costs of facilities; the District may not exercise the power of eminent domain; 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 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; and, House Bill 4299 by Rep. Phelan is the companion to this proposed bill.
 
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 2271 specifies that "the district has the powers provided by the general law of this state applicable to navigation districts created under Section 59, Article XVI, Texas Constitution, including Chapters 60 and 62, Water Code". 
 
Within the City of Port Neches, 100 percent of the total water use was surface water in 2015.