LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 16, 1997
         
         
      TO: Honorable David Counts, Chair            IN RE:  House Bill No. 3552
          Committee on Natural Resources                              By:  Pickett
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on HB3552 ( Relating 
to the dissolution of the San Elizario Grant Municipal Utility 
District and the transfer of its territory, assets, and liabilities 
to the Lower Valley Water District.) this office has detemined 
the following:
         
         Biennial Net Impact to General Revenue Funds by HB3552-As Introduced
         

No fiscal implication to the State is anticipated.
         

         
 
          
This bill would provide for the Lower Valley Water District 
(LVWD) to annex the San Elizario Grant Municipal Utility District 
(SEGMUD), thereby dissolving SEGMUD.  The bill calls for SEGMUD 
to hold an election on the question of assuming LVWD s outstanding 
bonds, notes, taxes, or other obligations, as well as voted 
but unissued bonds.  The bill calls for LVWD and SEGMUD to enter 
into an agreement providing for an orderly transition of water 
service for SEGMUD customers and for the transfer of SEGMUD s 
facilities, assets, and liabilities to the LVWD.  In addition, 
the bill calls for the LVWD to complete the construction of 
the necessary facilities to provide adequate water capacity 
and pressures to serve the new area in accordance with Texas 
Natural Resource Conservation Commission (TNRCC) regulations. 
 

The cost of an election on the question of LVWD annexing 
SEGMUD is not anticipated to be significant.

It is not estimated 
that LVWD would experience negative fiscal implications associated 
with assuming SEGMUD's outstanding debt, since SEGMUD currently 
has not debt.  LVWD would, however, acquire the existing water 
distribution system currently owned by SEGMUD, and consequently 
realize increased revenues from user fees. 

The Water Development 
Board estimates that the LVWD would be required to seek approximately 
$2 million in funds to implement within the SEGMUD area service 
that meets TNRCC regulations.  If LVWD is required to issue 
bonds to raise these funds, all customers of the LVWD would 
contribute to the repayment of those bonds through user fees. 
 
          
   Source:            Agencies:   582   Natural Resources Conservation Commission
                                         580   Water Development Board
                                         304   Comptroller of Public Accounts
                                         
                      LBB Staff:   JK ,BB ,TL