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