LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                                May 6, 1999
  
  
          TO:  Honorable Gary Walker, Chair, House Committee on Land &
               Resource Management
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB 3165 by Keel (relating to the invalid annexation of a
               water or sewer district), Committee Report 1st House,
               Substituted
  
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*  No significant fiscal implication to the State is anticipated.        *
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Local Government Impact
  
The bill could result in costs to a municipality in which an annexation
of certain land would be determined invalid, if the land had previously
been contained within a water or sewer district that was dissolved
through the annexation, since the municipality would be required to:
transfer back to the district all assets held by the district at the time
of dissolution including revenues from taxes levied by the district; and
pay the district an amount equal to any difference between the sales
price of any assets the municipality would have sold and the value of
such assets as determined by an independent appraisal, along with
interest at an annual rate of six percent.

The cost to a municipality would depend on the value of assets and
revenues the municipality received from a district upon annexation and
the length of time between the annexation and the determination of its
invalidity.
  
  
Source Agencies:   582   Natural Resource Conservation Commission, 304
                   Comptroller of Public Accounts
LBB Staff:         JK, DE, TL