LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 10, 2001 TO: Honorable Frank Madla, Chair, Senate Committee on Intergovernmental Relations FROM: John Keel, Director, Legislative Budget Board IN RE: HB1543 by Luna, Vilma (Relating to the sales and use tax imposed by municipal crime control and prevention districts.), As Engrossed ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** The bill would amend Chapter 363 of the Local Government Code to specify that a municipality that created a crime control and prevention district would have to adopt a sales and use tax under Section 321.106 of the Tax Code, as created by this bill. The bill would also amend Chapter 321 of the Tax Code to create the "municipal crime control and prevention district tax." If approved at an election, revenue from such a tax could only be used for the purpose of financing the operation of the district. The Comptroller would have to remit to the municipality creating a district amounts collected from the sales and use tax as part of the regular allocation of municipal tax revenue collected by the Comptroller, if the district was composed of the entire municipality. In cases where the district was composed of less than the entire municipality, the allocation would be made to the district. The bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2001. Note: Currently, residential gas and electricity are exempt from sales and use taxes adopted for the operation of crime control and prevention districts under Section 323.105 of the Tax Code. A crime control district implemented under the provisions of this bill (Chapter 321.106) would include residential gas and electricity in the tax base. Local Government Impact It is not known which municipalities would create a crime control district and adopt a sales tax under the provisions of this bill, at what rate the tax would be levied, or when a municipality would choose to do so. Source Agencies: 304 Comptroller of Public Accounts LBB Staff: JK, DB, SD, WP, SM