LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session March 12, 1995 TO: Honorable Rene O. Oliveira, Chair IN RE: House Bill No. 788 Committee on Economic Development By: Brimer House of Representatives Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 788 (relating to the authority of a municipality to create an industrial development corporation and to levy a sales and use tax to carry out the projects of the corporation) this office has determined the following: The bill would amend Section 4B of the Development Corporation Act of 1979 by changing the definition of cities eligible to create an industrial development corporation. Under current law, an "eligible city" includes a city that is located in a county with a population of more than 750,000, and in which the combined rate of sales and use taxes imposed by the state, city and other political subdivisions of the state having territory in the city does not exceed 7.25 percent. The bill would raise this rate to 7.75 percent. Current law allows "eligible cities" to levy a sales and use tax to carry out the projects of the corporation. No significant fiscal implication to the State is anticipated. The fiscal implication to units of local government cannot be determined because the number of cities that would become eligible and subsequently create industrial development corporations, with the authority to levy sales and use taxes, cannot be determined. Source: LBB Staff: JK, SM, RR. Comptroller of Public Accounts