LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 22, 1997 TO: Honorable Rene Oliveira, Chair IN RE: Senate Bill No. 893, As Engrossed Committee on Economic Development By: Moncrief House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB893 ( Relating to certain convention center hotel facilities.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB893-As Engrossed FN Revision 1 The bill could have a fiscal impact on the State. However according to the Comptroller's office, these types of sales and use and hotel tax rebates have not been utilized to date and have not created a loss to the State. FISCAL ANALYSIS The fiscal impact on the state would vary depending on the number of hotel projects in enterprise zones in the additional five cities that would qualify under the provisions of the bill. Such qualified hotel projects and businesses located in a qualified hotel project would receive a rebate of 100 percent of the sales and use taxes and 100 percent of the hotel occupancy taxes collected at these establishments. To the extent that such sales and use taxes and hotel occupancy taxes are rebated, the state would bear a corresponding revenue loss. METHODOLOGY Currently, the definition of convention center facilities in the hotel tax law includes hotels within 1,000 feet of a convention center owned by a city with a population of 1.5 million or more, and historic hotels within one mile of a convention center owned by a city with a population of 1.5 million or more. Hotel tax revenue from these two types of hotels may be pledged by a city of population 1.5 million or more for the payment of bonds issued to acquire and construct a convention center hotel or to acquire, remodel or rehabilitate a historic hotel. A hotel owned by a city with a population of 1.5 million or more is a qualified hotel project in an enterprise zone. The bill would lower the city population bracket to 440,000 or more and include counties with a population of 440,000 or more in the hotel tax law and would allow the hotels to be within the same specified distance to a city-owned or county-owned convention center. By lowering the population bracket, the City of Houston would be joined by the cities of Dallas, San Antonio, El Paso, Austin and Fort Worth. The city population bracket would also be lowered to 440,000 for a qualified hotel project in an enterprise zone. LOCAL The fiscal impact on units of local government would vary depending on which cities or counties would choose to finance convention center facilities through the municipal hotel tax. Source: Agencies: 304 Comptroller of Public Accounts LBB Staff: JK ,TH