BILL ANALYSIS

 

 

Senate Research Center

C.S.H.B. 4305

87R24054 SRA-F

By: Morales, Eddie et al. (Blanco)

 

Natural Resources & Economic Development

 

5/21/2021

 

Committee Report (Substituted)

 

 

 

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

 

Under current Texas law, local hotel occupancy tax (HOT) revenue can be used only to directly promote tourism and the convention/hotel industry. Presidio and Jeff Davis Counties in the Greater Big Bend Region depend on dark skies as a tourist attraction and primary driver of their economy. Presidio and Jeff Davis counties are designated as a dark sky reserve by the International Dark Sky Association. Dark sky designation is only given when areas are able to meet certain criteria such as standards for typical nighttime conditions and initiatives to increase dark sky compliant lighting.

 

Current state law only allows municipalities that meet certain geographic and population requirements to use revenue collected from the municipal hotel occupancy tax for the promotion and preservation of dark skies. Municipalities in Jeff Davis and Presidio counties should also be allowed the same authority to use HOT funds for night sky friendly lighting to help promote tourism and preserve the valuable clear sky that drives economic development in the region. As people continue to find respite in parks and nature, now is the time to plan for future investments in night sky infrastructure with HOT funds�a proactive step that will preserve the night sky as an economic driver and protect our treasured national parks.

 

C.S.H.B. 4305 will update the hotel occupancy tax (HOT) code to allow municipalities in the counties of Presidio and Jeff Davis, excluding the City of Marfa, to use HOT revenue towards dark sky friendly infrastructure, if they so choose. C.S.H.B. 4305 also adds language from S.B. 2089 related to the City of Brownsville's use of hotel occupancy tax funds. C.S.H.B. 4305 will help provide municipalities in the Greater Big Bend Region with the resources they need to reduce light pollution and sky glow and ultimately preserve dark skies.

 

C.S.H.B. 4305 amends current law relating to the use of certain tax revenue by certain municipalities.

 

RULEMAKING AUTHORITY

 

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

 

SECTION BY SECTION ANALYSIS

 

SECTION 1. Amends Subchapter B, Chapter 351, Tax Code, by adding Section 351.1016, as follows:

 

Sec. 351.1016. CERTAIN QUALIFIED PROJECTS IN BORDER MUNICIPALITIES. (a) Defines "base year amount," "hotel-associated revenue," "incremental hotel-associated revenue," "project financing zone," "qualified project," "spacecraft," "spaceport," and "venue."

 

(b) Provides that this section applies only to a qualified project located in a municipality that is the county seat of a county bordering the Gulf of Mexico and the United Mexican States.

 

(c) Authorizes revenue from the municipal hotel occupancy tax, in addition to the uses provided by Section 351.101 (Use of Tax Revenue), to be used to fund a qualified project.

 

(d) Authorizes a municipality to pledge the revenue derived from the tax imposed under Chapter 351 (Municipal Hotel Occupancy Taxes) from a hotel located in the project financing zone for the payment of bonds or other obligations issued or incurred to acquire, lease, construct, improve, enlarge, equip, operate, maintain, and repair the qualified project or to acquire real property on which the qualified project is located.

 

(e) Authorizes a municipality to pledge for the payment of bonds or other obligations described by Subsection (d) the local revenue from eligible taxable proceeds as defined by Section 2303.5055(e) (relating to the definition of "eligible taxable proceeds"), Government Code, from hotels located in a project financing zone that would be available to the owners of qualified hotel projects under Section 2303.5055 (Refund, Rebate, or Payment of Tax Proceeds to Qualified Hotel Project) if the hotels were qualified hotel projects.

 

(f) Requires a municipality to notify the Comptroller of Public Accounts of the State of Texas (comptroller) of the municipality's designation of a project financing zone not later than the 30th day after the date the municipality designates the zone. Entitles the municipality, notwithstanding other law, to receive the incremental hotel-associated revenue from the project financing zone for the period beginning on the first day of the year after the year in which the municipality designates the zone and ending on the last day of the month during which the designation expires. Authorizes the municipality to pledge the revenue for the payment of bonds or other obligations described by Subsection (d).

 

(g) Requires the comptroller to deposit incremental hotel-associated revenue collected by or forwarded to the comptroller in a separate suspense account to be held in trust for the municipality that is entitled to receive the revenue. Provides that the suspense account is outside the state treasury, and the comptroller is authorized to make a payment authorized by this section from the account without the necessity of an appropriation. Requires the comptroller to begin making payments from the suspense account to the municipality for which the money is held on the date the qualified project in the project financing zone is commenced.� Requires the comptroller, if the qualified project is not commenced by the fifth anniversary of the first deposit to the account, to transfer the money in the account to the general revenue fund and cease making deposits to the account.

 

(h) Authorizes the comptroller to estimate the amount of the incremental hotel-associated revenue that will be deposited to a suspense account under Subsection (g) during each calendar year. Authorizes the comptroller to make deposits to the account and authorizes the municipality to request disbursements from the account on a monthly basis based on the estimate. Requires the comptroller, at the end of each calendar year, to adjust the deposits and disbursements to reflect the amount of revenue actually deposited to the account during the calendar year.

 

(i) Requires a municipality to notify the comptroller if the qualified project in the project financing zone is abandoned. Requires the comptroller, if the qualified project is abandoned, to transfer to the general revenue fund the amount of money in the suspense account that exceeds the amount required for the payment of bonds or other obligations described by Subsection (d).

 

SECTION 2. Amends Section 351.10692(a), Tax Code, as follows:

 

(a) Provides that Section 351.10692 (Allocation of Revenue: Certain Municipalities) applies only to:

 

(1) creates this subdivision from existing text and makes nonsubstantive changes;

 

(2) a municipality located in a county with a total area of more than 2,200 square miles but less than 2,350 square miles; and

 

(3) a municipality located in a county with a total area of more than 3,850 square miles but less than 4,000 square miles that is not the county seat.

 

SECTION 3. Effective date: upon passage or September 1, 2021.

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