LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 9, 1997
         
         
      TO: Honorable Fred M. Bosse, Chair            IN RE:  House Bill No. 1394, Committee Report 1st House, Substituted
          Committee on Land and Resource Management                              By: Turner, Bob
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on HB1394 ( Relating 
to the provision of services to certain areas by a municipality.) 
this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by HB1394-Committee Report 1st House, Substituted
         

No fiscal implication to the State is anticipated.
         

         
 
FISCAL ANALYSIS
          
This bill would prohibit a municipality from refusing to provide 
water or wastewater service to any property within an annexed 
area upon request of a property owner, if the municipality provides 
such services to other parts of the municipality.  Current law 
does require a municipality to provide services to annexed areas 
which can not be supplied in a cost-effective manner due to 
topography, land use, and density considerations.

The bill 
would require a municipality with a population over 450,000 
to notify the owner of a water and wastewater utility in the 
municipality's extraterritorial jurisdiction at least 180 days 
prior to annexation proceedings.  The utility would be required 
to inform the municipality of their decision to remain independent 
or to require the annexing city to assume all assets and liabilities 
of the utility within 30 days of receiving the notice.  Currently, 
such municipalities are not required to negotiate with a private 
utility owner, nor are they required to provide 180 days notice 
to a private utility owner prior to annexation proceedings.

FISCAL 
IMPACT

A municipality's ability to expand its tax base through 
annexation could be somewhat limited by the enactment of this 
bill, since it would not be expected that a municipality affected 
by the bill would annex areas containing properties which can 
not be supplied with water or wastewater services in a cost-effective 
manner in the future.  

The requirement that a municipality 
seek approval from a utility provider prior to annexation is 
not expected to result in significant fiscal implications to 
municipalities over 450,000 population, since such municipalities 
would retain their powers of condemnation to acquire such entities.
          
   Source:            Agencies:   304   Comptroller of Public Accounts
                                         
                      LBB Staff:   JK ,TL ,BB