LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 9, 1999 TO: Honorable Gary Walker, Chair, House Committee on Land & Resource Management FROM: John Keel, Director, Legislative Budget Board IN RE: HB 2659 by Krusee (Relating to the regulation of land development by a political subdivision that affects certain property in certain road districts.), As Introduced ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** This analysis assumes that the term "political subdivision" refers to a local government and therefore does not apply to any agency of the state. If the term would apply to the state, the state could potentially incur costs similar to those shown below for local governments. Local Government Impact Fiscal Analysis The bill would prohibit a political subdivision from changing development regulations in such a way that the amount of impervious cover or total floor area allowed in land development would be reduced by more than 5 percent. This prohibition would apply to areas located within an assessment road district or within 1,500 feet of such a road district. The bill would also require that if a political subdivision would change development regulations reducing the amount of impervious cover or total floor area allowed on developed land by less than 5 percent, the political subdivision would be required to pay the outstanding bonded indebtedness of the assessment road district and pay all landowners within the assessment road district any prepaid assessments on any part of the land for which no building permit has been issued or no improvement has been constructed. Methodology The bill would affect any political subdivision that has authority to regulate impervious cover or allowable floor area relating to land development. The bill could have a fiscal impact on cities that reduce allowable impervious cover by requiring them to pay the outstanding debt of the road district and prepaid assessments made by owners of undeveloped land within the district. Data on outstanding road district debt and the number of years such debt has to maturity, as of August 31, 1998, was provided by the Comptroller's office. According to the Comptroller, total outstanding bonded indebtedness for 13 road districts is approximately $83 million, with the amount for any single district ranging from $30,000 for the Pioneer Trail County Road District 1 to $28,910,000 for the Woodlands Road Utility District 1. The period remaining until road district bonds mature ranges from 1 to 24 years. For the purposes of this analysis, the outstanding debt was amortized for the given number of years to maturity with an interest rate of 7 percent assumed. It is assumed that political subdivisions would make annual payments on the debt, rather than defeasing the debt immediately. If more than one political subdivision were required to make payments to a road district, it is assumed that those subdivisions would share the costs equally. Fiscal Impact If a political subdivisions would reduce allowable impervious cover or floor area development regulations in the area within or adjacent to one of the following areas, the political subdivision could be required to make the following annual payments for the number of years specified: Denton County Road Utility District 1, $1.6 million per year, 22 years Fort Bend Parkway Road District, $168,000 per year, 12 years Hidalgo County Road District 5, $304,000 per year, 2 years Northeast Round Rock Road District 1, $768,000 per year, 20 years Northwest Travis County Road District 3, $744,000 per year, 17 years Pioneer Trail County Road District 1, $32,000, 1 year Southeast Williamson County Road District, $325,000 per year, 14 years Southwest Travis County Road District 1, $308,000 per year, 16 years Southwest Williamson County Road District 1, $1.6 million per year, 12 years Springlake Road District 1, $76,000 per year, 3 years Stony Point Road District, $39,000 per year, 15 years South Montgomery County Road District 1, $326,000 per year, 2 years Woodlands Road Utility District 1, $2.5 million per year, 24 years There could be additional costs associated with the bill's requirement that political subdivisions provide reimburse landowners for prepaid assessments. The cost would depend on the number of landowners within a road district that have prepaid assessments on land for which no building permit has been issued or no improvements constructed and the amount of such assessments. Source Agencies: 304 Comptroller of Public Accounts LBB Staff: JK, DE, TL