LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7649 NOTE PREPARED: Feb 6, 2025
BILL NUMBER: HB 1473 BILL AMENDED: Feb 4, 2025
SUBJECT: Pocket Annexations.
FIRST AUTHOR: Rep. Steuerwald BILL STATUS: 2
nd
Reading - 1
st
House
FIRST SPONSOR:
FUNDS AFFECTED: GENERAL IMPACT: Local
DEDICATED
FEDERAL
Summary of Legislation: This bill allows a municipality to annex unincorporated property that becomes
completely surrounded by the municipality after June 30, 2025. It requires the municipality to: (1) adopt an
annexation fiscal plan; (2) provide notice to landowners in the territory; and (3) hold a public hearing.
The bill provides that the following apply in a pocket annexation: (1) The annexation territory may be
divided by railroad tracks. (2) The annexation territory satisfies the contiguity requirements, if the territory
on at least one side of the railroad tracks is contiguous to the municipality.
Effective Date: July 1, 2025.
Explanation of State Expenditures:
Explanation of State Revenues:
Explanation of Local Expenditures: This bill’s provision may potentially increase the administrative
workload for municipal legislative bodies since it would expand the ability to annex unincorporated property
that is completely surrounded by the applicable municipality. Additionally, fiscal expenditures for the
municipalities will increase since the currently unincorporated areas would be eligible to receive municipal
services once they are annexed. Actual impact would be contingent on the ultimate decision of those
municipal legislative bodies that are considering the annexation of unincorporated areas surrounded by the
municipality.
Explanation of Local Revenues: Should a municipal legislative body decide to annex unincorporated
property that is completely surrounded by the municipality, those properties will be subject to any property
tax rates pertaining to the municipality, potentially increasing the property tax revenue received by the
municipality. This increase in revenue will help to partially offset the increase in local expenditures for the
municipality to provide municipal services.
State Agencies Affected:
HB 1473 1 Local Agencies Affected: Municipalities and any applicable taxing units that are associated with the
territory being annexed.
Information Sources:
Fiscal Analyst: James Johnson, 317-232-9869.
HB 1473 2