LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 14, 1997 TO: Honorable Tom Craddick, Chair IN RE: House Bill No. 1029 Committee on Ways & Means By: Hawley House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB1029 ( Relating to qualifying certain municipalities to impose the municipal sales and use tax.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB1029-As Introduced No significant fiscal implication to the State is anticipated. FISCAL ANALYSIS The bill would amend Section 321.101 of the Tax Code to allow certain municipalities to impose an additional sales and use tax, which, when combined with other local sales and use taxes, would exceed the two cent local sales and use tax limit in a part of the municipality. The provision would apply only to municipalities located less than one mile from the Gulf of Mexico, with a population of less than 10,000, and located in three counties, with one of the counties having less than 20 percent of the population of the municipality. The bill would exclude from the local sales and use tax rate cap the portion of the municipality located in a county having less than 20 percent of the population of the municipality. The bill would allow the total sales and use tax rate to be greater than 8.25 percent in the one-county portion of a three-county municipality that met the conditions of the bill. LOCAL The amount of the additional local sales and use tax that might be imposed would vary depending on which municipalities meeting the qualifications of the bill chose to impose an additional sales and use tax and the rate of such an additional sales and use tax. Source: Agencies: 304 Comptroller of Public Accounts LBB Staff: JK ,RR ,SM