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