TO:	Honorable Tom Craddick, Chair, House Committee on Land & Resource Management
FROM:	John McGeady, Assistant Director     Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:	SB2530 by Fallon (Relating to the creation of the Van Alstyne Municipal Utility District No. 2 of Collin County; 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 creates Van Alstyne Municipal Utility District No. 2 of Collin County (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.
           
Population growth in the specific area since the 2010 census is unknown. The 2010 population estimate for areas of Collin County served by small water systems or private wells (County-Other) was 2,051. The Collin County-Other population projections adopted for the 2022 State Water Plan projects the population to be 4,000 in 2020 and 4,000 in 2030.
 
Location - The proposed district's initial boundaries are described with a combination of Original Texas Land Surveys, Official Public Records of Collin 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 consists of five separate tracts and covers approximately 2.57 square miles in north Collin County near the southern border of Grayson County. The proposed district appears to be near the intersection of United States Highway 75 and Emerson Xing (County Line Road). It appears to be south of the City of Van Alstyne and north of the City of Anna. The proposed boundary appears to overlap with the Certificates of Convenience and Necessity for South Grayson Water Supply Corporation and the City of Anna.

Comments on Powers/Duties Different from Similar Types of Districts:
Engrossed:
The Engrossed version of the bill does not make any changes to the Senate Committee Substitute (SCS) version of the bill.

Senate Committee Substitute:
The SCS makes several non-substantive formatting changes to the Introduced version of the bill; in addition, the SCS adds certain conditions that must be met prior to holding a confirmation election, including entering into a contract, reviewed by the Commissioners Court of Collin County, with a municipality, Collin County, or another entity for adequate supplemental police, fire, emergency, and animal control services; the contract must be approved by the Commissioners Court of Collin County and the voters in the District if the contract includes such provision; the SCS specifies that the District shall maintain all roads that the District constructs except for roads constructed by the District that another governmental entity agrees to maintain; the SCS specifies that the District may adopt an animal control ordinance and enforce the ordinance inside the District; the SCS specifies that a municipality has exclusive authority in the District to issue building permits and certificates of occupancy, enforce the municipality's building codes and health regulations, and perform an inspection necessary to accomplish those purposes; the fees for a permit or certificate issued by a municipality for use in the District may not exceed the fees charged for the same permit or certificate issued for use in the corporate limits of the municipality; the SCS makes changes to the District's territory. The SCS does not make any other changes to the Introduced version of the bill.

Introduced:
The District must receive consent to the creation of the District from each municipality in whose corporate limits or extraterritorial jurisdiction the District is located prior to holding a confirmation election; 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 allows the district to divide; the District may not annex territory outside the District's boundaries unless the City of Van Alstyne by ordinance or resolution has consented to the annexation; the District may not exercise the power of eminent domain outside the District to acquire a site or easement for a road project or a recreational facility as defined by Section 49.462, 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; 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 - Within Collin County, 97% of the total water use was supplied by surface water and municipal was the largest volume water use category, comprising 97% of the county total water use in 2016. The water source the proposed district might pursue is unknown.