LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              March 14, 2001
  
  
          TO:  Honorable Frank Madla, Chair, Senate Committee on
               Intergovernmental Relations
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  SB201  by Carona (Relating to authorizing counties and
               municipalities to enter into contracts for the payment of
               taxes, fees, or other charges through the Internet.),
               Committee Report 1st House, Substituted
  
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*  No fiscal implication to the State is anticipated.                    *
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Local Government Impact
  
The bill would amend Chapter 132, Local Government Code, to allow a
county or municipality to collect payments for taxes, fines, fees, court
costs, and other charges through the Internet. The government entity
would be authorized to charge a reasonable fee for providing the service.
The county or municipality could contract with a vendor to collect the
payments on their behalf and would be required to approve any fee charged
by the vendor for collection services.

The local government entities that are using an electronic system for
collecting fees and taxes have had varied experiences with regard to
costs.  In some cases, there have been no implementation charges; the
vendor has provided the software and equipment for no charge, but
collects a fee from the contracted third party.  If the local vendors do
not offer that option, implementation costs between $500 and $1,000,
provided the government entity already has computer equipment.  According
to the Texas Assessor-collectors Association of Texas, it is necessary
for the computer equipment of the entity collecting the fines to
interface with the tax assessor-collector's system in order to confirm no
outstanding fines prior to issuing licenses, permits, and titles. An
additional one-time software cost would be incurred if interfacing needs
to be established.

Various counties and municipalities already collecting certain fines and
fees via the Internet have experienced an increase in the use of credit
cards by the public to make the payments, which has reduced the number
of checks returned for insufficient funds (NSF). In those counties and
municipalities that would choose to offer the Internet as an option for
the public to pay taxes, fines, fees, and other charges, a revenue gain
is anticipated from increased collections and service fees charged.
There could also be a savings as a result of the decreased NSF checks
received. The revenue gains and cost savings would likely offset most or
all other expenses incurred for establishing and operating this payment
system.  This positive fiscal impact would vary by local government
unit.
  
  
Source Agencies:   
LBB Staff:         JK, DB