LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 2, 1997
         
         
      TO: Honorable Eddie Lucio, Jr., Chair            IN RE:  Senate Bill No. 1829
          Committee on Intergovernmental Relations                              By: Shapleigh
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB1829 ( Relating 
to the annexation of the territory of the San Elizario Grant 
Municipal Utility District by the Lower Valley Water District 
in El Paso County, the dissolution of the San Elizario Grant 
Municipal Utility District, and declaring an emergency.) this 
office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB1829-As Introduced
         
No fiscal implication to the State is anticipated.
         

         
 
Similar annual fiscal implications would continue as long as 
the provisions of the bill are in effect.
          
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 the assumption of LVWD s 
outstanding bonds, notes, taxes, or other obligations and 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 and have 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 dept.  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:   TL