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