TO:	Honorable Dan Patrick, Lieutenant Governor, Senate Honorable Dade Phelan, Speaker of the House, House of Representatives
FROM:	Jerry McGinty, Director, Legislative Budget Board
IN RE:	SB1160 by Taylor (Relating to the creation of the Gulf Coast Protection District; providing authority to issue bonds; providing authority to impose fees; providing authority to impose a tax; granting the power of eminent domain.), Conference Committee Report

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 Gulf Coast Protection District (District) with the powers and duties under Local Government Code Chapter 571.

Population: SB 1160 states that the boundaries of the proposed district are composed of territory in Chambers, Galveston, Harris, Jefferson, and Orange Counties.

The 2010 Census population for Chambers County was 35,096. The Chambers County projections adopted for the 2022 State Water Plan projects the population to grow to 50,543 in 2030 and 59,210 in 2040.

The 2010 Census population for Galveston County was 291,309. The Galveston County projections adopted for the 2022 State Water Plan projects the population to grow to 377,373 in 2030 and 403,820 in 2040.

The 2010 Census population for Harris County was 4,092,459. The Harris County projections adopted for the 2022 State Water Plan projects the population to grow to 5,058,144 in 2030 and 5,376,099 in 2040.

The 2010 Census population for Jefferson County was 252,273. The Jefferson County projections adopted for the 2022 State Water Plan projects the population to grow to 284,620 in 2030 and 302,744 in 2040.

The 2010 Census population for Orange County was 81,837. The Orange County projections adopted for the 2022 State Water Plan projects the population to grow to 90,233 in 2030 and 92,984 in 2040.

Location: The proposed district's initial boundaries are described as territory in Chambers, Galveston, Harris, Jefferson, and Orange Counties. Key cities within these counties are Houston, Galveston, and Beaumont.

Comments on Powers/Duties Different from Similar Types of Districts: 
Conference Committee Report (CCR)
The CCR adds back language removed in the Engrossed version of the bill that allows the District to grant an abatement for a tax owed to the District in the manner provided by Chapter 312, Tax Code.

The CCR adds back language removed in the Engrossed version of the bill that requires the District to relocate, raise, lower, reroute, or change the grade or alter construction of any electric transmission line or telephone property, facility, or pipeline at the sole expense of the District, if necessary, in the exercise of the power of eminent domain or power of relocation or any other power.

The CCR adds back language removed in the Engrossed version of the bill that requires the District to restore a used facility to its previous condition as nearly as possible at the sole expense of the District.

The CCR adds back language removed in the Engrossed version of the bill that allows the District to acquire, sell, lease, convey, or otherwise dispose of a right-of-way or easement under terms and conditions determined by the District.

Within the language in the CCR that states that an order or action relating to the operation or maintenance of a District project supersedes an order or action of the District to the extent of any conflict, the CCR version of the bill adds back the Harris County Flood Control District to the list of entities, which was removed in the Engrossed version of the bill.

Second House Committee Substitute (HCS):
The HCS specifies that the board may impose the ad valorem tax at a rate not to exceed 5 cents on each $100 valuation. The District, without an election, may issue bonds, notes, or other obligations secured by revenue other than ad valorem taxes. The District may grant an abatement for a tax owed to the District in the manner provided by Chapter 312, Tax Code. The District may acquire, sell, lease, convey, or otherwise dispose of a right-of-way or easement under terms and conditions determined by the District. The District may not exercise the power of eminent domain to acquire property owned or operated by a port authority, navigation district, drainage district, or common carrier railroad.

Introduced:
The bill states that the district may not be required to conduct a management audit under Chapter 292, Title 30, Texas Administrative Code. The bill states that the District must hold an election in the manner provided by Chapter 49, Water Code, to obtain voter approval before the District may impose an ad valorem tax or issue bonds payable from ad valorem taxes. 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 Chambers County, 93% of the total water use was supplied by surface water, and irrigation was the largest volume water use category comprising 67% of the county total water use in 2018. 6% of the county total water use was for municipal use in 2018.

Within Galveston County, 98% of the total water use was supplied by surface water, and municipal was the largest volume water use category comprising 51% of the county total water use in 2018.

Within Harris County, 76% of the total water use was supplied by surface water, and municipal use was the largest volume water use category comprising 67% of the county total water use in 2018.

Within Jefferson County, 99% of the total water use was supplied by surface water, and manufacturing was the largest volume water use category comprising 57% of the county total water use in 2018. 20% of the county total water use was for municipal use in 2018.

Within Orange County, 72% of the total water use was supplied by surface water, and manufacturing was the largest volume water use category comprising 75% of the county total water use in 2018. 19% of the county total water use was for municipal use in 2018.

The water source the proposed district might pursue is unknown.