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