LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                              April 11, 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 annexations and water
               conservation and reclamation districts, including
               municipal utility districts.), As Introduced
  
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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; 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; and pay to the
property owners in the district the amount of property taxes collected in
the district, 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, the
amount of property taxes the municipality had collected within the
former district since 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