LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 2, 1999 TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John Keel, Director, Legislative Budget Board IN RE: HB1014 by Oliveira (relating to use of state hotel occupancy tax revenue to clean and maintain beaches in certain municipalities), Committee Report 1st House, as amended ************************************************************************** * Estimated Two-Year Net Impact to General Revenue Related Fundsfor * * HB1014, Committee Report 1st House, as amended: negative impact * * of $(957,917) through the biennium ending August 31, 2001. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $(465,667) * * 2001 (492,250) * * 2002 (522,500) * * 2003 (552,750) * * 2004 (588,500) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Probable Probable Probable * * Year Revenue Savings/(Cost) Revenue Revenue * * Gain/(Loss) from General Gain/(Loss) Gain/(Loss) * * from General Revenue Fund from Hotel from * * Revenue Fund (due to reduced Occupancy Tax Municipality of * * 0001 transfer to (Econ Dev Dept) South Padre * * Account 5003) Account/ Island * * 0001 GR-Dedicated * * 5003 * * 2000 $(508,000) $42,333 $(42,333) $508,000 * * 2001 (537,000) 44,750 (44,750) 537,000 * * 2002 (570,000) 47,500 (47,500) 570,000 * * 2003 (603,000) 50,250 (50,250) 603,000 * * 2004 (642,000) 53,500 (53,500) 642,000 * *************************************************************************** Fiscal Analysis The bill would amend the Tax Code to require the Comptroller to submit quarterly payments of 1 percent of state hotel occupancy tax collections from "eligible general-law coastal municipalities" to the individual municipalities. The funds could be used only to clean and maintain public beaches within an eligible municipality. Eligible municipalities would be defined as those general-law municipalities with a population of less than 5,000, bordering on the Gulf of Mexico, and having boundaries within 30 miles of Mexico. Methodology Based on the bill's definition of an eligible municipality, the bill only would apply to the municipality of South Padre Island. Data on taxable hotel revenues from South Padre Island was gathered from Comptroller tax files. Revenues were multiplied by the 1 percent rate required to be returned to the municipality to determine the loss to the General Revenue Fund 0001 and the gain to the municipality of South Padre Island. The bill would take effect September 1, 1999. NOTE: The bill would reduce the amount of state hotel tax revenue used to fund the Texas Department of Economic Development by 1/12 of the loss to the General Revenue Fund - Hotel Occupancy Tax Deposits Account 5003. Local Government Impact The fiscal implications to the municipality of South Padre Island are estimated proportionally. Source Agencies: LBB Staff: JK, BB, DE, WP