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.