TO:	Honorable Garnet Coleman, Chair, House Committee on County Affairs
FROM:	John McGeady, Assistant Director     Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:	HB4763 by Rose (Relating to the creation of the Spradley Farms Improvement District of Kaufman County; providing the authority to issue bonds; providing authority to impose assessments, fees, and taxes.), As Introduced

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 Spradley Farms Improvement District of Kaufman County (District) with the powers and duties of a standard municipal utility district under Chapters 49 and 54, Water Code, a municipal management district under Chapter 375, Local Government Code, and a public improvement district under Chapter 372, Local Government Code.

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 areas of Kaufman County served by small water systems or private wells (County-Other) was 3,010. The Kaufman County-Other population projections adopted for the 2022 State Water Plan projects the population to be 1,559 in 2020 and 2,889 in 2030.
 
Location - The proposed district's initial boundaries are described with a combination of Original Texas Land Surveys, Deed Records of Kaufman County, 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 0.97 square miles in northwest Kaufman County, located north of the City of Crandall, and south of the City of Forney. The proposed boundary appears to be near the intersection of Interstate Highway 20 and Farm to Market Road 2757.

Comments on Powers/Duties Different from Similar Types of Districts:
The bill specifies that the District will provide for road, bridge, and recreational facilities for the District; the bill grants the District road powers; the bill specifies that Sections 49.216 and 49.351, Water Code, do not apply to the District; the District may provide, design, construct, acquire, improve, relocate, operate, maintain, or finance an improvement project or service using money available to the District, or contract with a governmental or private entity to provide, design, construct, acquire, improve, relocate, operate, maintain, or finance an improvement project or service; the District may make an agreement with or accept a gift, grant, or loan from any person; 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 finance, acquire, construct, improve, operate, maintain, or charge a fee for the use of conduits for fiber-optic cable, electronic transmission and distribution lines, other types of transmission and distribution lines, and supporting facilities; the board may add or remove territory under Subchapter J, Chapter 49, and Section 54.016, Water Code, except that the addition or removal of the territory must be approved by the governing body of the City of Mesquite (City) and the owners of the territory being added or removed; territory may not be removed from the District if bonds or other obligations of the District payable from ad valorem taxes on the territory are outstanding; 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 bill specifies that Section 375.162, Local Government Code, related to the payment of assessments, does not apply to an assessment imposed by the District; the bill specifies that Section 375.141, Local Government Code, related to the imposition of impact fees, does not apply to the District; the District may not adopt and enforce an impact fee described by Section 49.212(d), 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 District may levy an operation and maintenance tax as provided for in Section 49.107 of the Water Code; 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 board may dissolve the District on its own motion and shall dissolve the district on receipt of a written petition requesting dissolution signed by the owners of at least 75 percent of the acreage of real property in the District; the board may not dissolve the District until the District's outstanding debt and contractual obligations have been repaid or discharged; the City by ordinance may dissolve the District; and the bill allows the District to divide.

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 Kaufman County, 57% of the total water use was supplied by surface water, and municipal was the largest volume water use category comprising 52% of the county total water use in 2016. The water source the proposed district might pursue is unknown.