LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                               May 11, 2001
  
  
          TO:  Honorable Frank Madla, Chair, Senate Committee on
               Intergovernmental Relations
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB2215  by Crabb (Relating to the disannexation of
               certain areas by certain municipalities.), As Engrossed
  
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*  No fiscal implication to the State is anticipated.                    *
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Local Government Impact
  
The bill would require a county in which a tract of contiguous territory
was annexed on or after December 1, 1996 by a municipality with a
population of more than 1.5 million and no election approving the
annexation was held, to hold an election on disannexation of the tract if
at least 10 percent of the registered voters who reside in the tract
submit a petition to be disannexed.  If the tract of land is located in
more than one county, the county judge of each county in which the tract
is located would be required to call an election to be held in the part
of the tract that is located in the county in which the county judge
serves.  After the election returns are canvassed in each county, the
election returns would be combined to determine if disannexation was
approved or not.

The bill would also require the governing body of a general-law
municipality to adopt an ordinance to disannex an area that had been
annexed before June 1, 1980 that includes at least 200 contiguous acres,
is uninhabited or contains fewer than one occupied residence or business
structure for every two acres and fewer than three occupied residences or
business structures on any one acre, and has not been provided full
municipal services since the date of annexation if the governing body
receives a petition from the owners of the area. If the governing body
fails to adopt an ordinance for disannexation, the owner who signed the
petition may file suit in a district court in the county in which the
area to be disannexed is located. The court would be required to award to
an owner that prevails in such a lawsuit attorney's fees, court costs,
and other expenses reasonably incurred in connection with the suit.

If a municipality is required to disannex a tract, parts of a tract, or
more than one tract of land, there would be a loss of tax revenue;
however, there could also be a savings by no longer providing services,
if services had been provided.  If an election is held to consider
disannexation of tracts annexed on or after December 1, 1996 by a
municipality with a population of 1.5 million or more, the county or
counties would incur the costs of an election.  Based on election costs
from a sample of counties and municipalities statewide, the average per
registered voter cost is approximately $0.91.

If a general-law municipality that had annexed an area before June 1,
1980 is petitioned to disannex an area fails to do so and is sued and
loses the lawsuit, the municipality would incur their own legal expenses
and those of the prevailing complainant as well as incur the cost of
monetary damages, if any, that are awarded the complainant.

The potential loss of tax revenue could prove costly to affected
municipalities.
  
  
Source Agencies:   
LBB Staff:         JK, DB