LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  March 25, 1997
         
         
      TO: Honorable Fred Hill, Chair            IN RE:  Senate Bill No. 601, As Engrossed
          Committee on Urban Affairs                              By: Lindsay
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB601 ( Relating 
to withdrawal of a unit from a rapid transit authority.) this 
office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB601-As Engrossed
         
No significant fiscal implication to the State is anticipated.
         

         
 
          
This bill would allow a municipality belonging to the Metropolitan 
Transit Authority of Harris County to withdraw, by election, 
from the authority provided an election has not been held under 
this section on a date earlier than the sixth anniversary of 
the date of the most recent held election under this section. 
 

The Metropolitan Transit Authority of Harris County currently 
has 15 municipalities plus Harris County as members.  If any 
of these units were to hold an election on the question of withdrawal, 
the cost of the election would depend on the population of the 
entity and whether the election were being held specifically 
for that purpose.

There would be no significant cost associated 
with the addition of one additional item to a regularly scheduled 
municipal election.  It is estimated that a local option election 
held specifically for the question of withdrawal would costs 
approximately $.40 per resident, based on a recent survey of 
local governments.  Units with smaller populations might experience 
somewhat higher costs per resident.  For example, the City of 
Humble estimates that a special election in that municipality 
would cost $10,000, or $0.83 per resident.

If the voters 
in a local unit of government approved a measure to withdraw 
from the Metropolitan Transit Authority of Harris County, the 
one-cent sales tax levy would continue until the net financial 
obligation of the unit of election to the authority has been 
completed.  Once a unit withdraws from the authority and meets 
its net financial obligation, the Metropolitan Transit Authority 
of Harris County would realize a negative fiscal impact equal 
to the amount of sales tax received from the unit.  Annual sales 
tax collected from the member units ranged from $18,000 from 
Bunker Hill Village to $249.9 million from the City of Houston 
for fiscal year 1996.

According to the Metropolitan Transit 
Authority of Harris County, only one local government expressed 
interest in withdrawing from the authority in a recent poll, 
the City of Humble, which remits approximately $6 million in 
sales tax per year to the authority.  If the citizens of Humble 
voted to withdraw from the authority, Humble would be required 
to continue to levy the one cent sales tax until such time that 
the municipality has met its net financial obligation.  Once 
the financial obligation is met, the Metropolitan Transit Authority 
would experience a negative fiscal impact of approximately $6 
million per year. 
          
   Source:            Agencies:   
                                         601   Department of Transportation
                                         Metropolitan Transit Authority of Harris County
                                         City of Humble
                      LBB Staff:   JK ,TL