To determine that an area is economically distressed, the board shall consider information and data presented with the application or otherwise available to the board to determine that the water or sewer services are inadequate to meet the minimal needs of residential users; that the financial resources of the residential users of the services are inadequate to provide water or sewer services that will satisfy those minimal needs; and that an established residential subdivision was located in the economically distressed area on June 1, 2005.
  (1) Water service is inadequate to meet the minimal needs of the residential users in an economically distressed area if the board determines that water service:
    (A) does not exist or is not provided;
    (B) is provided by a community water system that does not meet drinking water standards established by the commission;
    (C) is provided by individual wells that, after treatment, do not meet drinking water standards established by the commission; or
    (D) does not meet applicable drinking water standards of any other governmental unit with jurisdiction over such area.
  (2) Sewer service is inadequate to meet the minimal needs of residential users in an economically distressed area if the board determines that sewer service:
    (A) does not exist or is not provided;
    (B) is provided by an organized sewage collection and treatment facility that does not comply with the standards and requirements established by the commission;
    (C) is provided by on-site sewerage facilities that do not comply with the standards and requirements established by the commission; or
    (D) does not meet applicable wastewater standards of any other governmental unit with jurisdiction over such area.
  (3) The financial resources of the residential users in the economically distressed area are inadequate to provide the needed services if the board finds that the area to be served by a proposed project has a median household income that is not greater than 75% of the median state household income for the most recent year for which statistics are available.
  (4) An established residential subdivision was located in the economically distressed area on June 1, 2005, if the board determines the following:
    (A) either a plat of the area is recorded in the county plat or deed records; or a pattern of subdivision, without a recorded plat, is evidenced by the existence of multiple residential lots with roads, streets, utility easements, or other such incidents of common usage or origin;
    (B) at least one occupied residential dwelling existed within the platted or subdivided area on June 1, 2005; and
    (C) such other factors as may be determined relevant by the board.
  (5) The boundary or limits of a water or sewage project to serve an economically distressed area may be determined by:
    (A) a subdivision plat prepared by a registered engineer, whether recorded or not;
    (B) a metes and bounds description, natural boundaries, roads, or other natural features that delineate an unplatted area within which a feasible cost-effective project can be developed; or
    (C) inclusion of occupied dwellings with inadequate water or wastewater services in close proximity to an economically distressed area determined as provided in paragraph (4) of this section when such dwellings can be feasibly served by the proposed project.

Source Note: The provisions of this §363.503 adopted to be effective January 4, 2000, 24 TexReg 12070; amended to be effective November 7, 2001, 26 TexReg 8847; amended to be effective January 2, 2007, 31 TexReg 10804; amended to be effective December 25, 2007, 32 TexReg 9721; amended to be effective February 4, 2009, 34 TexReg 669; amended to be effective May 1, 2022, 47 TexReg 2550