LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 21, 2001
TO: Honorable James E. "Pete" Laney, Speaker of the House,
House of Representatives
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1096 by Luna, Vilma (Relating to the creation of fire
control, prevention, and emergency medical services
districts by certain municipalities.), As Passed 2nd
House
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* No significant fiscal implication to the State is anticipated. *
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The bill would add Chapter 344 to the Local Government Code and amend
Chapter 321 of the Tax Code to allow municipalities with a population of
not less than 25,000 nor more than 550,000, or a municipality with a
population of more than 1.9 million, to create and operate fire control,
prevention, and emergency medical service districts.
Districts would be governed by a board of directors. The board of
directors would be responsible for developing a fire control, prevention,
and emergency medical services plan and a budget plan for the district.
These plans would provide a detailed list of and amounts budgeted for
fire control, prevention, and emergency medical service strategies to be
supported by the district and a method of evaluating the effectiveness of
the strategies.
Districts would be able to finance all costs of a fire control,
prevention, and emergency medical service district program. This would
include costs for personnel, administration, expansion, enhancement, and
capital expenditures. The board of directors of a district would be able
to contract with state political subdivisions, state or federal
agencies, individuals, or private persons to furnish the staff
facilities, equipment, programs, or services the board considered
necessary for the effective operation of the district.
A municipality that creates a district would have to adopt a sales and
use tax under Section 321.106 of the Tax Code, as created by the
provisions of the bill, for financing district operations. The sales tax
rate could be 0.125 percent, 0.25 percent, 0.375 percent, or 0.5
percent. A district could be created and a tax could be authorized only
if the creation and the tax were approved by a majority of the qualified
voters of the proposed district voting on the issue on a uniform
election date. Revenue derived from the sales and use tax only could be
spent for administering and operating district programs.
Note: The sales and use tax authorized by the bill could be charged in
addition to any other sales and use tax authorized by law, and 0.125
percent or less of the tax would not be included in computing a combined
sales and use tax rate for purposes of any limitation provided by law on
the maximum combined sales and use tax rate of political subdivisions.
The 2 percent cap on local sales taxes could be exceeded under the
provisions of this bill.
The Comptroller would be required to remit to the municipality amounts
collected from the sales and use tax as part of the regular allocation of
other municipal tax revenue. The municipality would be required to
remit the amount collected from the district's sales and use tax to the
district.
Districts would be dissolved five years after the date the municipality
began to impose taxes for district purposes if the district had not held
a continuation or dissolution referendum.
The bill would take effect June 1, 2001.
Note: A June 1, 2001 effective date implies a two-thirds vote by each
chamber of the Legislature. If this were not to be the case, the bill
would take effect according to the State Constitution, on the 91st day
following the final adjournment of the Legislature.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 411 Texas Commission on Fire Protection, 333
Office of State-Federal Relations, 307 Secretary of
State, 304 Comptroller of Public Accounts
LBB Staff: JK, DB