LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  March 5, 1997
         
         
      TO: Honorable Eddie Lucio, Jr., Chair            IN RE:  Senate Bill No. 727
          Committee on Intergovernmental Relations                              By: Gallegos
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB727 ( Relating 
to contracts between municipal utility districts located in 
extraterritorial areas and municipalities.) this office has 
detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB727-As Introduced
         
No fiscal implication to the State is anticipated.  
         

         
 
          
This bill would allow a municipality and and a municipal utility 
district (MUD) in that municipality's extraterritorial jurisdiction 
(ETJ) to enter into contracts for the joint funding of services 
in lieu of annexation.  It would also require a municipality 
assessing taxes in the ETJ to notify the comptroller of the 
changes in the municipality's boundaries.

The fiscal implications 
of this bill would depend on the terms of a contract executed 
under the provisions of the bill.  Such a contract would define 
the terms for revenue-sharing and cost-sharing between the municipality 
and the utility district.  Since it is anticipated that a municipality 
and a MUD would agree upon terms that would allocate sufficient 
revenues to each party to cover the costs associated with providing 
the services required under the contract, no significant fiscal 
implication is expected to a municipality or a MUD as a result 
of this bill's enactment.    
          
   Source:            Agencies:   304   Comptroller of Public Accounts
                                         
                      LBB Staff:   JK ,TL ,BR