LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session March 15, 1999 TO: Honorable Frank Madla, Chair, Senate Committee on Intergovernmental Relations FROM: John Keel, Director, Legislative Budget Board IN RE: SB 790 by Moncrief (Relating to certain hotel facilities.), As Introduced ************************************************************************** * Implementing the provisions of the bill could result in negative * * fiscal impacts under the various scenarios possible. * ************************************************************************** FISCAL ANALYSIS The bill would amend Chapter 2303 of the Government Code to expand the definition of a "qualified hotel project" to include a hotel owned or operated by or located on land owned by an eligible central municipality, as defined by Section 351.001 of the Tax Code, or by a nonprofit corporation acting on behalf of an eligible central municipality, and located within 1,000 feet of a convention center facility owned by the municipality, including shops, parking facilities, and any other facilities ancillary to the hotel. Eligible central municipalities would be allowed to pledge the revenue from hotel occupancy taxes, ad valorem taxes, local sales and use taxes and mixed beverage taxes originating from a qualified hotel project for the payment of bonds issued for the construction of the hotel. Based on the definition of an eligible central municipality under Chapter 351 of the Tax Code, the cities of San Antonio and Fort Worth are the only municipalities that would be classified as eligible central municipalities METHODOLOGY The bill could result in reduced tax revenue to state and on local governments. The loss would depend on the number and size of "qualified hotel projects" constructed under the provisions of the bill that would normally be subject to property taxes but would be exempt as "public-use property," as allowed under Section 4B. Passage of the bill could cause a reduction in a school district's taxable values reported to the Commissioner of Education by the Comptroller. The Texas Education Agency has estimated that as a general rule, a difference of $1 billion in property valuation would change state aid requirements by about $14 million each year. Source Agencies: LBB Staff: JK, TL, SM