BILL ANALYSIS

H.B. 5311

By: Toth

Urban Affairs

Committee Report (Unamended)

BACKGROUND AND PURPOSE

State law allows for the remittance of collected mixed beverage tax proceeds to municipal and county governments, but currently only the county portion of these taxes collected within the boundaries of The Woodlands Township is remitted for local use. There is also a need for additional hotel-related economic development services to support tourism within the district. H.B. 5311, which is supported by local stakeholders, seeks to address these issues by providing for the district to be treated as an incorporated municipality with regard to the disposition of mixed beverage tax proceeds and for the creation of economic development zones by the district to increase hotel activity.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 5311 amends Chapter 289, Acts of the 73rd Legislature, Regular Session, 1993, to authorize the board of directors of The Woodlands Township to create, designate, describe, assign a name to, and appoint the governing body for an economic development zone in the district to undertake one or more projects to provide supplemental advertising, promotion, or business recruitment services for the area to increase hotel activity if the area to be designated as the development zone is composed solely of one or more hotels. Such a development zone is subject to the same provisions that govern a development zone created by the board to promote initial development or substantial redevelopment of an area.

H.B. 5311 authorizes a development zone composed solely of one or more hotels to fund or provide services for the purposes for which the zone was created. The bill provides for the establishment of a project fund for a development zone as an alternative to a tax increment fund. The bill specifies that an agreement that the district's board and a development zone's governing body may enter into that is considered necessary or convenient to implement a project plan and development zone financing plan and achieve their purposes includes, for a development zone composed solely of one or more hotels, an agreement with a convention and visitors bureau within or adjacent to the district. The bill authorizes an agreement to dedicate revenue from the project fund to pay project costs.

H.B. 5311 requires a development zone composed solely of one or more hotels to be dissolved by the district's board on receipt of a petition for dissolution of the development zone signed by the owners of at least 60 percent of the assessed value of the real property in the development zone. The bill requires the district to expressly assume the assets, powers, functions, and liabilities, and any outstanding indebtedness or obligations, of the development zone.

H.B. 5311 restricts to only those existing development zones that impose or assess a property or sales and use tax the existing zones that are dissolved and abolished upon the creation and organization of a new development zone that is over the territory of the existing zones and that has such a tax.

H.B. 5311 requires the district to be treated the same in all respects as an incorporated municipality for the purposes of Tax Code provisions relating to the mixed beverage tax clearance fund, which provide for the certain disposition of mixed beverage tax proceeds to an incorporated municipality. This requirement applies only to taxes received on or after October 1, 2023. The bill requires the comptroller of public accounts to make the first applicable transfer not later than January 31, 2024.

EFFECTIVE DATE

September 1, 2023.