SWB C.S.H.B. 2929 75(R)BILL ANALYSIS WAYS & MEANS C.S.H.B. 2929 By: Coleman 4-25-97 Committee Report (Substituted) BACKGROUND Section 151.429, Tax Code (Tax Refunds for Enterprise Projects), provides certain tax rebates to enterprise projects located in enterprise zones. Some qualified hotel projects are established as enterprise projects. Owners of such hotels receive a rebate, refund, or payment of sales and use taxes and hotel occupancy taxes, but not mixed beverage taxes. PURPOSE The bill would permit owners of qualified hotels or businesses located in these hotels to receive a rebate, refund or payment of mixed beverage taxes and provide the comptroller with a method to set up an agreement so that the owner of a qualified hotel will collect and retain mixed beverage and other approved taxes as the comptroller's agent. The bill also provides a method for owners of businesses located in the hotel to collect and pay to the hotel owner certain approved taxes. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1.Amends Section 151.429, Tax Code (Tax Funds for Enterprise Zones), by amending Subsection (h) as follows: (h) Provides that rebates, refunds or payments allotted in Subsection (h) apply only during the first 10 years after a qualified hotel project is open for initial occupancy. (h)(3) Provides for the owner of a qualified hotel project to receive a rebate, refund, or payment of the mixed beverage taxes paid by permittees located at the qualified hotel project (that are not rebated to the county or municipality under Section 183.051). SECTION 2.Amends Chapter 151, Tax Code (Tax Funds for Enterprise Zones), by adding Section 151.4295. COLLECTION OF CERTAIN TAXES. (a) Provides that in order to receive a rebate, refund, or payment under Section 151.429, the owner of a qualified hotel project shall enter into an agreement with the comptroller that allows the owner to collect and retain the taxes as the comptroller's agent. (b) Establishes criteria for the agreement: (1) specify dates for the beginning and ending of the agreement; (2) require the owner to file with the comptroller detailed periodic reports concerning the amounts and types of taxes collected and retained; (3) and mandate the owner to keep and retain records relating to such taxes. (c) Provides that the comptroller will issue to the owner of a qualified hotel project and each owner of a business located in the qualified hotel project a certificate that: (1) authorizes each owner to present a copy of the certificate to a seller of taxable items relating to the hotel or business in lieu of payment of sales and use taxes; and (2) requires a business located in the qualified hotel project to remit any taxes subject to rebate, refund or payment to the owner of the qualified hotel project. SECTION 3.Amends Section 2303.5055, Government Code (Refund, Rebate, or Payment of Tax Proceeds to Qualified Hotel Project), by adding subsections (f) and (g) as follows: (f) Provides that an agreement entered into under this section may: 1) provide that eligible taxable proceeds need not be paid to or collected by any governmental or tax-collecting body but may be paid to, collected, or retained by the owner of a hotel; 2) require the owner of a hotel to file periodic reports with such governmental body that include information relating to the total amount of taxable proceeds collected and retained by the owner; 3) require the owner to keep and retain records relating to the total amount of eligible taxable proceeds collected and retained by the owner. (g) Provides that in connection with an agreement under this section a governmental body may issue to each owner of a business in a hotel a certificate requiring the owner to pay all eligible taxable proceeds directly to the owner of the hotel in lieu of paying such eligible taxable proceeds to such governmental body of the comptroller. SECTION 4.Establishes the effective date of the Act, and states that this Act does not apply to taxes imposed before the effective date. SECTION 5.Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 2929 differs from H.B. 2929 in four ways. Language is added to Section 151.429(h), Tax Code (Tax Funds for Enterprise Zones), to clarify that rebates, refunds or payments allotted in Subsection (h) apply only during the first 10 years after a qualified hotel project is open for initial occupancy. Language is deleted from Section 151.429(i), Tax Code (Tax Funds for Enterprise Zones), which establishes a time table for receiving the tax rebate, refund or payment: Beginning on the date of construction of the hotel project and ending on the day before the 10th anniversary of the date the hotel project opens for initial occupancy. Section151.4295 (c)(1), Tax Code (Collection of Certain Taxes), [a new section created by the bill] is substituted with language which provides that a certificate will be presented by a hotel or business owner for the purchase of taxable items in lieu of paying taxes. Language is added which amends Section 2303.5055, Government Code (Refund, Rebate, or Payment of Tax Proceeds to Qualified Hotel Project) to provide a method for hotel owners retain taxable proceeds, keep a record of and file reports detailing such retentions and provide a method for business owner in the hotel to pay taxable proceeds to the hotel owner.