LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                               May 17, 1999
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  SB1876  by Nixon, Drew (relating to the authority of
               certain municipalities to impose a sales and use tax to
               retire the debt of a municipal power agency created by
               the municipalities), Committee Report 2nd House, as
               amended
  
**************************************************************************
*  No significant fiscal implication to the State is anticipated.        *
**************************************************************************
  
Local Government Impact
  
The bill would allow a municipality that participates in a municipal
power agency created under Subchapter D, Chapter 163, Utilities Code to
adopt or abolish the sales and use tax at the rate of one-half percent to
provide revenue to retire the municipality's share of the bonded
indebtedness of the municipal power agency.

A municipality would incur the costs of an election to adopt or abolish a
sales and use tax, if the election could not be combined with a
previously scheduled election. The cost of an election would depend on
the population of the municipality. Based on a recent survey of local
governments, the median cost of a local election is calculated at $.52
per capita.

Revenues to a municipality resulting from an adopted tax would depend on
the level of sales within the corporate limits of a municipality. Based
on sales tax data from the Comptroller's "Allocation Historical Summary"
for calendar year 1998, an additional one-half percent sales and use tax
would generate the following additional annual revenues for three
selected eligible municipalities: Jasper, $707,365; Liberty, $549,657;
and Livingston, $636,803. The revenues from these three municipalities
totaling $1,893,825 per year would be used to retire the debt of the Sam
Rayburn Municipal Power Authority.
  
  
Source Agencies:   473   Public Utility Commission of Texas, 304
                   Comptroller of Public Accounts
LBB Staff:         JK, BB, TL