LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  May 13, 1997
         
         
      TO: Honorable Eddie Lucio, Jr., Chair            IN RE:  House Bill No. 1029, As Engrossed
          Committee on Intergovernmental Relations                              By: Hawley
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on HB1029 ( Relating 
to the creation of municipal development districts; authorizing 
the imposition of certain local taxes and the issuance of local 
bonds.) this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by HB1029-As Engrossed
         
No significant fiscal implication to the State is anticipated.
         

         
 
FISCAL ANALYSIS
The bill would amend Title 12 of the Government 
Code by adding Chapter 377 which would allow certain municipalities 
to impose an additional sales and use tax.  This provision would 
apply only to a municipality with a population of less than 
10,000 and located in more than two counties, with one of the 
counties bordering the Gulf of Mexico.  The additional sales 
and use tax could be used for a municipal development district 
(district), but the adoption of such a tax could not result 
in a combined local sales and use tax in excess of 2 percent.

A 
municipality could call an election on the question of creating 
a municipal development district and imposing an additional 
sales and use tax.  The tax rate for a district could be one-eighth, 
one-fourth, three-eighths, or one-half of one percent.  A district 
would be required to establish a Development Project Fund (fund) 
to which all proceeds of the additional sales tax would be required 
to be deposited, in addition to all revenue from the sale of 
bonds or other obligations .

Money in the fund could only 
be used to pay the costs of planning, acquiring, constructing, 
or renovating development projects in the district and to pay 
principal, interest, and other costs of bonds or other obligations. 
 A district would be authorized to issue bonds to pay the costs 
of development projects.

The bill would take effect immediately 
upon enactment, assuming that it received the requisite two-thirds 
majority votes in both houses of the Legislature.  Otherwise, 
it would take effect 90 days after adjournment.  


LOCAL
The 
fiscal impact on local governments would vary depending on how 
many municipalities that qualified under the provisions of the 
bill would choose to create a municipal development district 
and the rate of sales tax increment approved by the voters in 
the district.
          
   Source:            Agencies:   304   Comptroller of Public Accounts
                                         
                      LBB Staff:   JK ,TL ,RR ,SM