LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 16, 2001 TO: Honorable Bill G. Carter, Chair, House Committee on Urban Affairs 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.), Committee Report 1st House, Substituted ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** 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 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 at an election called and held for that purpose. 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 If the voters approve the creation of a new tax and a fire control, prevention, and emergency medical services district, the taxes would offset the associated costs of the district, other than the cost of the election held. Based on an average of the per registered voter costs from a sample of cities, the average election cost is approximately $0.91 per registered voter. 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