TO:	Honorable Garnet Coleman, Chair, House Committee on County Affairs
FROM:	John McGeady, Assistant Director     Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:	HB4683 by Stucky (Relating to the creation of the Hunter Ranch Improvement District No. 1 of Denton County, Texas; providing authority to impose an assessment, 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 Hunter Ranch Improvement District No. 1 of Denton County (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.
     
Population growth in the specific area since the 2010 census is unknown. The 2010 population estimate for the City of Denton Water Utility was 110,300 and the 2016 population estimate was 124,681. Population projections for the same area, adopted for the 2022 State Water Plan, projects the population to be 145,000 in 2020 and 186,773 in 2030.
 
Location - The proposed district's initial boundaries are described with a combination of Original Texas Land Surveys, Real Property Records of Denton County, Texas, and metes and bounds. Due to the complexity of these boundaries for the various subareas of the district, staff is only able to determine the general location of the proposed district.
 
The proposed district's area is approximately 4.95 square miles in three separate tracts, located within the City of Denton, near Interstate Highway 35 West. The first tract appears to lie west of the interstate, between Robson Ranch Road and Farm to Market Road 2249. The second tract appears to lie east of Interstate Highway 35 West, near the intersection of John Paine Road and Johnson Lane.  The third tract appears to lie near the intersection of Underwood Road and Farm to Market Road 2249, west of Interstate Highway 35 West.

Comments on Powers/Duties Different from Similar Types of Districts:
House Committee Substitute (HCS):
The HCS names five of the temporary directors on the board; the HCS does not make any other changes to the Introduced version of the bill.

Introduced:
The bill specifies that the District will provide for water, wastewater, drainage, road, and recreational facilities for the District; the bill specifies that before the District may exercise any powers under this chapter, the City of Denton (City) must adopt an ordinance or resolution consenting to the creation of the District and the inclusion of land in the District, the City and the District must execute an accepted operating agreement, and the City and each developer of property in the District must execute a project agreement; 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 bill specifies that the District may add or exclude land in the manner provided by Subchapter J, Chapter 49, Water Code, or by Subchapter H, Chapter 54, Water Code; the district may not add or exclude land unless the City consents to the addition or exclusion; the District may not exercise the power of eminent domain; the board may not finance a service or improvement project with assessments under this chapter unless a written petition requesting that service or improvement has been filed with the board; the bill specifies that Section 375.161, Local Government Code, related to certain residential property exemptions, does not apply to a tax authorized or approved by the voters of the District or a required payment for a service provided by the District, including water and sewer services; the District may not adopt or impose an impact fee; the District may levy an operation and maintenance tax as provided for in Section 49.107 of the Water Code; Section 375.243, Local Government Code, 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; the bill specifies that except as provided by Section 375.263, Local Government Code, the City is not required to pay a bond, note, or other obligation of the District; the bill authorizes the District to establish defined areas; the bill allows the District to divide; the board shall dissolve the District on written petition filed with the board by owners of 66 percent or more of the assessed value of the property or 66 percent or more of the surface area of the District, excluding property exempt from assessment by the District; the board by majority vote may dissolve the District at any time; the board may not dissolve the District if the District has any outstanding bond indebtedness until that debt has been repaid or defeased, has a contractual obligation to pay money until that obligation has been fully paid, or owns, operates, or maintains public works, facilities, or improvements unless the District contracts with another person for the ownership and operation of the public works, facilities, or improvements; Sections 375.261, 375.262, and 375.264, Local Government Code, do 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 - Within the City of Denton Water Utility, 100% of the total water use was supplied by surface water, and the total municipal water use was 18,101 acre-feet reported in 2016.