CHAPPELL HILL WATER SUPPLY CORPORATION Water Tariff

SECTION 3.1

NOTICE OF REQUIREMENT TO COMPLY WITH THE SUBDIVISION SERVICE EXTENSION POLICY OF THE CHAPPELL HILL WATER SUPPLY CORPORATION

Pursuant to Chapter 13.2502 of the Texas Water Code, the Chappell Hill Water Supply Corporation hereby gives notice that any person who subdivides land by dividing any lot, tract, or parcel of land, within the service area of the Chappell Hill Water Supply Corporation, Certificate of Convenience and Necessity No. 11161 in Washington County, into two or more lots or sites for the purpose of sale or development, whether immediate or future, including re-subdivision of land for which a plat has been filed and recorded or requests more than two water connections on a single contiguous tract of land must comply with Section 3.0 – Service Extension Policy (the “Subdivision Policy”), contained in the Chappell Hill Water Supply Corporation's Water Tariff.

The Chappell Hill Water Supply Corporation is not required to extend retail water service to a service applicant in a subdivision where the developer of the subdivision has failed to comply with the “Subdivision Policy”.

Applicable elements of the Subdivision Policy include:

1. Evaluation by the Chappell Hill Water Supply Corporation of the impact a proposed subdivision service extension will make on the Chappell Hill Water Supply Corporation's water supply system and payment of the costs for this evaluation;

2. Payment of reasonable costs or fees by the developer for providing water supply capacity;

3. Payment of fees for reserving water supply service capacity;

4. Forfeiture of reserved water supply service capacity for failure to pay applicable fees;

5. Payment of costs of any improvements to the Chappell Hill Water Supply Corporation's system that are necessary to provide the water service;

6. Construction according to design approved by the Chappell Hill Water Supply Corporation and dedication by the developer of water facilities within the subdivision following inspection.

The Chappell Hill Water Supply Corporation's Tariff and a map showing the Chappell Hill Water Supply Corporation's service area may be reviewed at the Chappell Hill Water Supply Corporation's offices at 5145 Main Street, Chappell Hill, Texas 77426; the Tariff and service area map also are filed of record at the Texas Commission on Environmental Quality and may be reviewed by contacting the TCEQ, c/o Utility Rates and Services Section, Water Supply Division, P. O. Box 13087, Austin, Texas 78711.

Effective 10/23/2008