TO:	Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM:	Jerry McGinty, Director, Legislative Budget Board
IN RE:	HB3324 by Gerdes (Relating to the authority of certain municipalities to use certain tax revenue for hotel and convention center projects and other qualified projects.), As Introduced

General Revenue-Related Funds, Five- Year Impact:

All Funds, Five-Year Impact:

Fiscal Analysis

This bill would amend Chapter 351 of the Tax Code, relating to Municipal Hotel Occupancy Taxes, to add Section 351.152(46), a municipality described by Section 351.101(k) (a municipality intersected by both State Highways 71 and 95), to the list of municipalities that are entitled to receive certain tax revenue derived from a hotel and convention center project and to pledge certain revenue for the payment of obligations related to the project.

The bill would amend Section 351.155, relating to Pledge or Commitment of Certain Tax Revenue for Obligations for Qualified Project, to add Subsection (f), which applies only to a municipality described by Section 351.152(46) (a municipality described by Section 351.101(k); a municipality intersected by both State Highways 71 and 95)), to authorize the municipality to pledge the revenue for the payment of bonds issued for a convention center facility that, at the time the bonds or other obligations were issues, was not a convention center facility.

Methodology

The bill's provisions would affect the city of Bastrop.

Bastrop would be eligible to receive funds described in Sections 351.156, relating to Entitlement to Certain Tax Revenue, which provides, in relevant part, that a municipality to which Section 351.152 applies is entitled to receive from the qualified hotel and each restaurant, bar, and retail establishment located in or connected to the hotel or the related qualified convention center facility, the state sales and use tax and the state hotel occupancy tax. Section 351.158, relating to Period of Entitlement, would entitle Bastrop to receive the revenue until the tenth anniversary of the date the qualified hotel to which the entitlement relates is open for initial occupancy.

Bastrop has tentative plans for a 120 room hotel as an expansion of the Bastrop Convention & Exhibit Center and could avail itself of the tax rebates should eligibility be acquired through this legislation. The estimate is based on a projected opening date of September 1, 2026, or state fiscal year 2027, a comparison and review of revenues paid to the owners of extant qualified hotel projects, and estimated attributes of such prospective hotel.

Local Government Impact