| TO: | Honorable Anna Mowery, Chair, House Committee on Land & Resource Management |
| FROM: | John Keel, Director, Legislative Budget Board |
| IN RE: | HB568 by Mowery (Relating to a revision of the procedures for municipal annexation.), Committee Report 1st House, Substituted |
The bill would change the procedures and requirements a municipality must follow when annexing or disannexing an area, whether for full or limited purposes, including requiring the municipality to hold an election in the municipality to obtain approval by the voters within the municipality. An election would also be required in the area to be annexed unless a majority of the registered voters in the area petition the municipality to annex the area. If the area to be annexed has no residents, an election in the annexing municipality would still be required. A similar process would be required before an area would be disannexed. All elections related to annexing or disannexing would be required to be held on certain uniform election dates.
Authority related to annexation and other actions regarding boundaries that currently apply only to home-rule municipalities would apply to all municipalities under the provisions of the bill.
The bill would also repeal certain sections of the Local Government Code that would conflict with the new procedures. The bill would take effect immediately if it receives a two-thirds vote in each house; otherwise, it would take effect September 1, 2003. Processes begun prior to that date would be affected by either the new statute or the old depending on which procedure is occuring and at what stage the process has reached.
Annexing and disannexing procedures would include election costs for the municipality; however, because the vote would occur on a uniform election date, any increased costs associated with adding the issue to the ballot would be insignificant.
If a municipality seeks to annex an area, but does not receive approval, the municipality would lose potential revenue gain from what would have been an added tax base. Although a municipality would not be required to extend services to the area that the municipality was unable to annex, municipalities contacted indicated the revenue loss would still be significant, particularly because residents of the area that would have been annexed use the infrastructure and services within the municipality's limits, adding to maintenance costs.
If an area is disannexed, the municipality would lose existing revenue, which the municipalities estimate would be significant despite no longer having to provide services to the area. Harris County cited as an example that it would lose $6 million a year in taxes if an area that was annexed in 1996 were to be disannexed.
Municipalities indicate that the provisions of the bill would result in a signficant revenue loss if a municipality's annexation plans are voted down or if the municipality is required to disannex an area.
| Source Agencies: | |
| LBB Staff: | JK, CL, JB, DLBa
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