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 ************************************************************************** * No fiscal implication to the State is anticipated. * ************************************************************************** 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