TO:	Honorable Joe Deshotel, Chair, House Committee on Land & Resource Management
FROM:	Jerry McGinty, Director, Legislative Budget Board
IN RE:	HB4652 by Metcalf (Relating to the creation of the Montgomery County Municipal Utility District No. 208; granting a limited power of eminent domain; providing 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 Montgomery County Municipal Utility District No. 208 (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 Montgomery County served by small water systems or private wells (‘County-Other') was 108,679. The Montgomery County-Other population projections adopted for the 2022 State Water Plan projects the population to grow to 286,757 in 2030 and 425,330 in 2040.

Location: The proposed district's initial boundaries are described with a combination of Original Texas Land Surveys, Montgomery County Deed Records, Montgomery County Plat Records, Montgomery County Clerk's File, Montgomery County Map Records, 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 0.78 square miles in north central Montgomery County, located northwest of the City of Conroe, and south of the City of Willis. The proposed boundary appears to be near the intersection of Longmire Road and Pine Valley Drive.

Comments on Powers/Duties Different from Similar Types of Districts: 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 specifies that if all or part of the territory of the District is annexed by the City of Conroe, Texas into the City's corporate limits, the District retains all of the District's outstanding debt and obligations and is not dissolved. 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 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. 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 Montgomery County, 88% of the total water use was supplied by groundwater (Gulf Coast Aquifer), and municipal was the largest volume water use category comprising 90% of the county total water use in 2018. The water source the proposed district might pursue is unknown.