Bill Caption

Fiscal Notes

Bill Analysis

Summary: HB 1324 pertains to the ability of a property owner to remove their property from a water district. This legislation was filed in response to a situation in Clear Lake, TX involving a company called Kaneka North America. Kaneka was included in the Clear Lake City Water Authority (CLCWA) district despite the fact that the CLCWA does not provide any water service to the Kaneka facility and is incapable of doing so. In fact, the nearest CLCWA infrastructure to the Kaneka facilities is eight miles away. As part of the water district, Kaneka is required to pay taxes to the CLCWA and to the city of Pasadena which is the city that actually provides water service to the company. 

HB 1324 would allow a property that has been taxed by the water district for 20 years, is unable to receive water service, and has paid all bond obligations (issued while the property is part of the district) to disannex itself from the water district. The property would still pay the taxes that apply to the utility which provides the water service.

Analysis: In the Kaneka example, the company is required to pay taxes to a water district that it is not served by as well as to the actual water district it is served by. This double taxation is in conflict with the principle of limited government and serves to diminish the rights of the property owner. It is not reasonable for a taxing jurisdiction to collect taxes for a service it does not provide. HB 1324 would provide some relief to dual taxed property owners in certain circumstances and in so doing would strengthen personal property rights and limit government. While we support this legislation, it could be strengthened by making it easier for duel tax payers to seek relief earlier, rather than having to pay dual taxes for 20 years first. We encourage legislators to support HB 1234.