TO:	Honorable Cody Harris, Chair, House Committee on Natural Resources
FROM:	Jerry McGinty, Director, Legislative Budget Board
IN RE:	SB1194 by Flores (Relating to creating the Central Texas Water Alliance; providing authority to issue bonds; granting the power of eminent domain; providing authority to impose fees.), As Engrossed

The Legislative Budget Board, in cooperation with the Texas Commission on Environmental Quality (TCEQ) and Texas Water Development Board, has determined that:

This bill creates Central Texas Water Alliance (the “Alliance”) with the powers under Section 59, Article XVI, Texas Constitution.

Population - SB 1194 states that the boundaries of the proposed authority are coextensive with Bell County and McLennan County. The 2020 Census population for Bell County was 370,647. The Bell County population projections adopted for the 2027 State Water Plan project the population to be 455,602 in 2030 and 517,098 in 2040. The 2020 Census population for McLennan County was 260,579. The McLennan County population projections adopted for the 2027 State Water Plan project the population to be 287,633 in 2030 and 311,844 in 2040.

Location - The proposed authority's area is approximately 2,148 square miles, and the proposed boundaries of the authority are coextensive with the boundaries of Bell and McLennan Counties.

Comments on Powers/Duties Different from Similar Types of Districts -
Engrossed:
The engrossed version makes no changes to the Senate Committee Substitute (SCS) version.

Senate Committee Substitute:
The SCS adds Section 11020.0210, Special District Local Laws Code, which relates to procedures for director conflicts of interest.

Introduced:
The bill specifies that the initial boundaries of the Alliance include the sponsors of the Alliance, which the bill names as: Bell County; Bell County Water Control and Improvement District No. 1; Clearwater Underground Water Conservation District; and McLennan County. Upon petition to the board of the Alliance, the bill allows the Alliance to add and remove sponsors. The bill specifies that, except for the initial board of directors, the alliance is governed by a board of directors consisting of at least five and not more than 18 members and specifies the requirements to be eligible to serve as a director. The bill specifies the types of water and wastewater projects which the Alliance can acquire, purchase, own, maintain and allows the Alliance to issue bonds, notes, and other obligations to finance any purchase or acquisition. The bill allows the Alliance to adopt and enforce policies, rules, and bylaws reasonably required to implement the Alliance powers, duties, and responsibilities provided by the bill. The bill specifies that the Alliance may not impose an ad valorem tax. If this Act does not receive a two-thirds vote of all the members elected to each house, the Alliance 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 Bell County, 86% of the total water use was supplied by surface water, and municipal was the largest volume water use category comprising 85% of the county total water use in 2022. Within McLennan County, 64% of the total water use was supplied by surface water, and municipal was the largest volume water use category comprising 83% of the county total water use in 2022. The water source the proposed authority might pursue is unknown.