LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session May 13, 1999 TO: Honorable David Sibley, Chair, Senate Committee on Economic Development FROM: John Keel, Director, Legislative Budget Board IN RE: HB1014 by Oliveira (relating to state and municipal hotel occupancy tax revenue), Committee Report 2nd House, Substituted ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB1014, Committee Report 2nd House, Substituted: negative impact * * of $(957,917) through the biennium ending August 31, 2001. * * * * The bill would make no appropriation but could provide the legal * * basis for an appropriation of funds to implement the provisions of * * the bill. * ************************************************************************** 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 from Hotel from * * Revenue Fund Fund(due to Occupancy Tax Municipality of * * 0001 reduced (Econ Dev Dept) South * * transfer to Account/ Padre Island * * Account 5003) GR-Dedicated Other - Other * * 0001 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: 304 Comptroller of Public Accounts LBB Staff: JK, TH