BILL ANALYSIS

Senate Research Center	C.S.S.B. 1057
88R20821 SRA-F	By: Whitmire
	Natural Resources & Economic Development
	4/6/2023
	Committee Report (Substituted)

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

The Texas Legislature passed S.B. 748 by Nelson/Geren in 2013, creating Section 351.1015, Tax Code, to allow a municipality with a population of at least 650,000, but less than 750,000, to use certain tax revenue to fund a convention center facility, a multipurpose arena or venue, and related infrastructure. The bill allowed the municipality, for a period of up to 30 years, to receive the incremental growth in state sales and use taxes, state hotel occupancy taxes, and state mixed beverage taxes collected by or at hotels within the project financing zone, less the amount distributed in the base year the zone is designated.

Section 351.1015 as currently written only applies to the cities of Dallas and Fort Worth. Dallas is using Section 351.1015 to construct a new 2.5-million-square-foot convention center located adjacent to the current Kay Bailey Hutchison Convention Center Dallas. Construction on the $2 billion center is expected to begin in 2024, with completion in 2028. Fort Worth utilized Section 351.1015 to construct Dickies Arena, a 14,000-seat multipurpose arena.

Houston needs to modernize and expand the George R. Brown Convention Center (GRB) to remain competitive and attract large conventions, such as the 2028 Republican National Convention (2028 RNC). Houston and Miami are finalists for the 2028 RNC, and the site selection will be made by summer 2023. Allowing Houston to expand the GRB will provide momentum to Houston's bid.

Houston First Corporation (HFC) is the convention and marketing local government corporation for the City of Houston (the COH). Legislation is needed that would specifically amend Section 351.1015, Tax Code, to apply to, in addition to the cities of Dallas and Fort Worth, the COH. It would also add the definition of project-associated infrastructure, and authorize HFC to act on behalf of the COH.

S.B. 1057 amends current law relating to the use of certain tax revenue to enhance and upgrade qualified projects and project-associated infrastructure, as defined in the bill, by a municipality that:

• Is authorized to collect a municipal hotel occupancy tax;
• Is located in a county with a population of at least 3.3 million; and
• Operates a convention center facility not more than three miles from the city hall of the municipality in which the convention center facility is located.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The committee substitute to S.B. 1057 simplifies the bill by:

• Adding bracketing language to include the COH among those who can utilize Section 351.1015, Tax Code; and
• Clarifying that the local government corporation currently authorized under law and which the COH currently uses for similar projects may continue to help bring these projects to fruition.

C.S.S.B. 1057 amends current law relating to the authority of certain municipalities and local government corporations to use certain tax revenue for certain qualified projects.

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 Section 351.1015, Tax Code, by amending Subsection (b) and adding Subsection (j), as follows:

(b) Provides that Section 351.1015 (Certain Qualified Projects) applies only to a qualified project located in certain locations, including a municipality with a population of at least two million. Makes nonsubstantive changes.

(j) Provides that a local government corporation to which this subsection applies is authorized to act as a municipality under this section and is considered to be a municipality for purposes of this section. Provides that the term "qualified project," with respect to a local government corporation to which this subsection applies, includes a convention center facility, a venue, and any related infrastructure. Provides that this subsection applies only to a local government corporation that is authorized to collect a municipal hotel occupancy tax, is located in a county with a population of 3.3 million or more, and operates a convention center facility located not more than three miles from the city hall of the municipality in which the convention center facility is located.

SECTION 2. Effective date: September 1, 2023.