LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session March 5, 1997 TO: Honorable Eddie Lucio, Jr., Chair IN RE: Senate Bill No. 858 Committee on Intergovernmental Relations By: Gallegos Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB858 ( Relating to the provision of municipal services and the creation of special municipal districts in areas annexed on or after December 1, 1996, by certain municipalities.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB858-As Introduced No fiscal implication to the State is anticipated. This bill would only affect the City of Houston, the Harris County District Court, and any "special municipal districts" created as a result of the bill. This bill would add Subchapter I to Chapter 43, Local Government Code, allowing a person residing in an annexed area to apply for a writ of mandamus, placing the burden of proof on a municipality to show that the municipality has not provided fewer services or a lower level of services than were in the area immediately preceeding the date of annexation. No significant fiscal implication is anticipated as a result of this section. This bill would add Subchapter J to Chapter 43, Local Government Code, which would allow the City of Houston to create a special municipal district pursuant to an election within the area of the proposed special district. The special district would be created to provide services to the area, in accordance with a municipal services agreement executed between the City of Houston and the special municipal district. The City of Houston would be required to pay for the cost of an election to create a special municipal district. The City of Houston estimates that such an election would cost $65,000 in an area with approximately 50,000 residents. The fiscal implications of the creation of a special municipal district to the City of Houston would depend on the terms of a contract executed under the provisions of this bill, with lost revenues expected to be offset by corresponding decreases in the cost of providing services. A special municipal district might incur additional initial costs associated with creating such a district; however, it is anticipated that any operating costs would be covered pursuant to the terms of a municipal services agreement executed according to the provisions of this bill. Source: Agencies: 302 Office of the Attorney General LBB Staff: JK ,TL