LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                               May 12, 1999
  
  
          TO:  Honorable Frank Madla, Chair, Senate Committee on
               Intergovernmental Relations
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB 1655  by Luna, Vilma (Relating to the rate and
               allocation of the hotel occupancy tax in certain
               municipalities), Committee Report 2nd House, Substituted
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB1655, Committee Report 2nd House, Substituted:  positive impact     *
*  of $0 through the biennium ending August 31, 2001.                    *
*                                                                        *
*  No fiscal implication to the State is anticipated.                    *
**************************************************************************
  
General Revenue-Related Funds, Five-Year Impact:
  
          ****************************************************
          *  Fiscal Year  Probable Net Positive/(Negative)   *
          *               Impact to General Revenue Related  *
          *                             Funds                *
          *       2000                                   $0  *
          *       2001                                    0  *
          *       2002                                    0  *
          *       2003                                    0  *
          *       2004                                    0  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
         *****************************************************
         * Fiscal Year    Probable Revenue Gain/(Loss) from   *
         *                 Municipality of Corpus Christi     *
         *      2000                               $1,648,000 *
         *      2001                                1,735,000 *
         *      2002                                1,848,000 *
         *      2003                                1,957,000 *
         *      2004                                2,082,000 *
         *****************************************************
  
Fiscal Analysis
  
The bill would amend Chapter 351 of the Tax Code to allow a municipality
with a population of more than 250,000 and a border on the Gulf of Mexico
to impose a hotel tax not to exceed 9 percent.  Incremental tax revenues
attributable to a rate greater than 7 percent would be used to develop a
municipally-owned convention center. Revenue derived from a municipal
hotel occupancy tax from hotels previously subject to a county hotel
occupancy tax could be used to clean and maintain public beaches in the
municipality.

The bill would take effect immediately upon enactment, assuming that it
received the requisite two-thirds majority votes in both houses of the
Legislature.  Otherwise, it would take effect 90 days after adjournment.

  
  
Methodology
  
Based on the location and population restrictions, this bill only would
apply to the municipality of Corpus Christi.  The hotel tax rate in the
City of Corpus Christi currently is 7 percent.  Data on hotel tax
collections for the City of Corpus Christi were gathered from the Texas
Department of Economic Development.  Collections were adjusted to
reflect the potential maximum increase in the tax rate.  The difference
between collections at the current rate of 7 percent and the proposed
rate cap of 9 percent would represent the potential maximum revenue gain
to the City of Corpus Christi. 
  
  
Local Government Impact
  
The impact on the municipality of Corpus Christi was estimated
proportionately.
  
  
Source Agencies:   304   Comptroller of Public Accounts, 480
                   Department of Economic Development
LBB Staff:         JK, TL, BB, WP