LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
May 16, 1995
TO: Honorable Curtis Seidlits, Chair IN RE: Committee Substitute
Committee on State Affairs forSenate Bill
House of Representatives No. 1346
Austin, Texas By: West
FROM: John Keel, Director
In response to your request for a Fiscal Note on Senate Bill No.
1346 (relating to the creation of sports authorities and sports
facility enterprise zones and to the financing of sports
facilities) this office has determined the following:
This bill would authorize the creation of sports facility
enterprise zones ("zones") and qualified sports facility projects
("projects"). A sports facility enterprise zone would be defined
as an area designated by a municipality as a reinvestment zone
pursuant to the provisions of the Tax Increment Financing Act
chapter of the Tax Code and containing a project. A sports
authority ("authority") would be a non-profit corporation created
by local government pursuant to the Texas Transportation
Corporation Act.
A qualified sports facility project would mean an arena,
coliseum, stadium, or speedway (including administrative,
service, concession and parking facilities) intended to be used
for NFL, NBA, National Hockey League, major league or minor
league baseball games; NASCAR or Indy Car events; professional
rodeo events; national cutting horse events; or for Olympic or
international games. The project would be constructed,
remodeled, or rehabilitated by a municipality, county, or other
local government or by a sports authority which receives or will
receive rebates, refunds, or payments from the state or local
government.
A local government could enter into an agreement to guarantee,
from hotel occupancy or sales taxes, the bonds or other
obligations of an authority issued or incurred to pay for a
project.
The Tax Code would be amended to authorize a sports authority
which owns a project or is assisting a local government with a
project to receive a rebate, refund, or payment of:
- the incremental increase in state sales and use taxes
generated, paid, or collected by the project, businesses
operating in the project, or for events at the project;
- the incremental increase in state mixed beverage taxes
generated, paid, or collected by the project or businesses
operating in the project; and
- the incremental increase in mixed beverage taxes, hotel
occupancy taxes, and sales and use taxes on food service at
restaurants. Incremental increase means the amount of tax
generated, paid, or collected in a year by all businesses
operating in a zone that exceeds the amount of tax generated,
paid, or collected by those businesses in the year before the
year in which the zone was created.
A sports authority would not receive a rebate, refund, or payment
of state taxes until after August 31, 1998.
Two municipal taxes, specifically for use with projects, would be
authorized. An event parking tax could, by city ordinance, be
imposed within a zone during the time which an event at a project
is taking place. The tax could be based on a flat charge per
parked vehicle or on a percentage of the price; however, the tax
could not exceed $2.50 per vehicle. An admissions tax could be
imposed in the same manner and it could not exceed $2 per person.
The taxes could only be imposed if bonds are issued to finance a
project and only while those bonds are outstanding and unpaid.
The impact on local ad valorem tax revenue could be impacted to
the extent that properties which are currently on local tax rolls
are removed by local governments purchases.
This estimate assumes that all ten projects authorized by the
bill would be on-line by fiscal year 1999. Comptroller estimates
assume that projects would come on-line at a rate such that three
projects would be on-line by the end of fiscal year 1998 with a
resulting revenue loss of $5.1 million and four projects would be
on-line by the end of fiscal year 1999 with a corresponding
revenue loss of $9.6 million. The Comptroller estimates total
losses to the General Revenue Fund of $30-$35 million when all
ten projects are on-line.
The probable fiscal implication of implementing the provisions of
the bill following passage is estimated as follows. There would
be no fiscal implications during fiscal years 1996, 1997, and
1998 because no rebates would be available until fiscal year
1999.
Fiscal Probable Revenue
Year Loss from General
Revenue Fund 001
1999 $31,300,000
2000 33,500,000
2001 35,800,000
2002 38,400,000
2003 41,400,000
Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.
The fiscal implication to units of local government cannot be
determined.
Source: Comptroller of Public Accounts
LBB Staff: JK, SM, DF