LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                              March 8, 1999
  
  
          TO:  Honorable Frank Madla, Chair, Senate Committee on
               Intergovernmental Relations
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  SB89  by Madla (Relating to municipal annexation.), As
               Introduced
  
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*  No significant fiscal implication to the State is anticipated.        *
*                                                                        *
*  The bill would make no appropriation but could provide the legal      *
*  basis for an appropriation of funds to implement the provisions of    *
*  the bill.                                                             *
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Local Government Impact
  
A municipality could incur costs associated with the preparation of a
three-year annexation plan, depending on whether the municipality would
intend to annex territory in the future, the number of areas a
municipality intends to annex, and the frequency with which the plan
would be amended. Such planning costs would be incurred almost
immediately upon enactment of the bill, since the bill requires that an
annexation plan be adopted by December 31, 1999.

There could be some costs to districts or other public entities providing
services in areas proposed for annexation. These costs would result from
the requirement that such entities provide information to municipalities
including: an engineers report, expenditure data and service delivery
information. The cost would depend on the amount of existing data could
be used to submit to the municipality.

The bill's provision requiring municipalities to provide full municipal
services no later than two and one-half years after annexation, instead
of the current requirement of four and one-half years, could result in
increased costs to a municipality in the initial years of annexation. In
some cases, the provision could make certain annexations less feasible,
thereby reducing a municipality's ability to expand its tax base through
annexation.

Since the bill would give a municipality the burden of proving that
services have been provided in accordance with a service plan, a
municipality could incur additional legal costs when a writ of mandamus
application is made.

Municipalities and districts could incur administrative costs associated
with the negotiations requirement in Section 43.0562 of the bill. These
costs are not expected to be significant. However, in cases where such
negotiations fail to reach an agreement, the municipality would incur
costs of arbitration.

A municipality could incur administrative costs associated with the
community associations negotiation requirement, depending on the number
of associations requesting negotiations with the municipality.

Municipalities could incur costs associated with providing each person
living or owning property in an area proposed to be annexed. The cost
would depend on the number of persons living in the area and the method
of notification.

In some cases, upon disannexation, a municipality could incur costs
associated with refunding property taxes and fees previously collected
from the landowners of a disannexed area. If the amount of taxes and
fees collected was more than the amount the municipality had spent in
such areas, the municipality would be required to refund the difference
to the land owners.
  
  
Source Agencies:   
LBB Staff:         JK, TL