LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  February 25, 1997
         
         
      TO: Honorable Eddie Lucio, Jr., Chair            IN RE:  Senate Bill No. 601
          Committee on Intergovernmental Relations                              By: Lindsay
          Senate
          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 Introduced
         
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.  

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.  Based on estimates by the Metropolitan 
Transit Authority, if the City of Humble were to withdraw, it 
would owe the authority approximately $12.1 million in net financial 
obligations, which would be met through the continuation of 
the one cent sales tax until paid.  Since Humble's portion of 
the sales tax remitted to the authority is approximately $6 
million per year, Humble would be required to levy the one cent 
sales tax for approximately two more years.  Beginning two years 
after such a withdrawal was complete, 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