TO:	Honorable Jim Murphy, Chair, House Committee on Special Purpose Districts
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	SB2276 by Creighton ( Relating to the creation of Lakewood Improvement District of Harris County; providing authority to issue bonds; providing authority to impose assessments, fees, or taxes.), Committee Report 2nd 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 amends the Special District Local Laws Code by adding Chapter 3951 which creates Lakewood Improvement District of Harris County (District) with the powers and duties of a standard municipal management district (MMD) 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 2276, 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 5.75 square miles in northeastern Harris County, located east of the City of Houston and the San Jacinto River.  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 Committee Substitute removes Section 3951.115, Subsection 3, relating to reconnecting lines, described in Subdivision 2, to buildings or improvements to which the lines were connected.

The District is to be governed by a board of five voting directors that are appointed by the TCEQ from persons recommended by the board; the District has the powers provided by Chapter 372, Local Government Code, to a municipality or county; 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 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 may construct, acquire, improve, maintain, finance, and operate rail facilities and improvements; 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; the District has the powers provided by the general laws relating to road districts and road utility districts created under Section 52(b), Article III, Texas Constitution, including Chapters 257 and 441, Transportation Code; the District may finance, acquire, construct, improve, operate, maintain, or charge a fee for the use of conduits for: fiber-optic cable and supporting facilities; electronic transmission and distribution lines and supporting facilities; or other types of transmission and distribution lines and supporting facilities; 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: a tax imposed by the District or a required payment for a service provided by 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; 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; and, the bill allows the District to dissolve.

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 - 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.