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
  
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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 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