Honorable Dade Phelan, Speaker of the House, House of Representatives
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB5311 by Toth (Relating to the creation and operation of a development zone by and the tax revenue received by The Woodlands Township; providing authority to issue bonds; providing authority to impose assessments and taxes.), As Passed 2nd House
Estimated Two-year Net Impact to General Revenue Related Funds for HB5311, As Passed 2nd House : a negative impact of ($2,069,000) through the biennium ending August 31, 2025.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2024
($860,000)
2025
($1,209,000)
2026
($1,277,000)
2027
($1,348,000)
2028
($1,417,000)
All Funds, Five-Year Impact:
Fiscal Year
Probable Revenue Gain/(Loss) from General Revenue Fund 1
2024
($860,000)
2025
($1,209,000)
2026
($1,277,000)
2027
($1,348,000)
2028
($1,417,000)
Fiscal Analysis
The bill would require The Woodlands Township to be treated as an incorporated municipality for the purposes of allocating a portion of mixed beverage taxes, which would require the CPA to allocate 10.7 percent of the revenue collected from mixed beverage taxes from permittees within the area that is currently retained by the state to the township. This requirement would apply only to taxes received on or after October 1, 2023. The bill would require the CPA to make the first transfer not later than January 31, 2024.
The bill would also authorize The Woodlands Township to create a development zone and discontinue one or more existing development zones covering the same area while consolidating assets and debts into the new zone, which would also receive the respective tax allocation payments.
Methodology
According to the CPA, the revenue losses shown to the General Revenue Fund above are based on mixed beverage tax collections from the area of The Woodlands Township for fiscal year 2022 and projected forward based on the growth of mixed beverage tax revenue. Regarding the development zone, according to the CPA there is not enough information in the bill to determine the fiscal impact of the development zone consolidation; however, since the previous zone would appear to be absorbed into the newly created one, the fiscal impact on the state is likely insignificant.
Local Government Impact
According to the CPA, The Woodlands Township would see revenue gains equal to the amount of revenue losses to the General Revenue Fund shown above, and the impact as it relates to the development zone consolidation is likely insignificant.