BILL ANALYSIS


                                                        S.B. 1629
                                                    By: Henderson
                                                          Finance
                                                         05-05-95
                                     Committee Report (Unamended)

BACKGROUND

Current law allows a municipality to build a convention center
hotel and dedicate both the city and state taxes generated by the
facility to the debt service created by the facility for a period
of seven years.

The city of Houston moved forward to utilize this financing tool
provided by the legislature, issuing request for proposals and
undertaking specific negotiations with the respondents to the RFPs. 
During the direct negotiations period, interest rates doubled,
wrecking the economics of the financing plan for the convention
center hotel.  However, the seven-year period allowing this
financing tool is not long enough for the city to continue with its
plans.

PURPOSE

As proposed, S.B. 1629 extends the period allowing a municipality
to build a convention center hotel and dedicate both city and state
taxes generated by the facility to the debt service for a period of
10 years.
 
RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 151.429(h), Tax Code, to require the
owner of a qualified hotel project to receive a rebate, refund, or
payment of 100 percent of the sales and use taxes paid or collected
by the qualified hotel project or businesses located in the
qualified hotel project pursuant to this chapter and 100 percent of
the hotel occupancy taxes paid by persons for the use or possession
of or for the right to the use or possession of a room or space at
the qualified hotel project, pursuant to the provisions of Chapter
156, during the first 10, rather than seven, years after such
qualified hotel project is open for initial occupancy.

SECTION 2. Emergency clause.
           Effective date:  upon passage.