LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session May 10, 2001 TO: Honorable Frank Madla, Chair, Senate Committee on Intergovernmental Relations FROM: John Keel, Director, Legislative Budget Board IN RE: HB1022 by McCall (Relating to the recording of expenditures or revenue from the municipal hotel occupancy tax.), Committee Report 2nd House, Substituted ************************************************************************** * No fiscal implication to the State is anticipated. * ************************************************************************** The bill would require a municipality or entity funded by the municipal hotel occupancy tax to list scheduled activities, programs, or events directly funded by the tax or that are offered by an entity that has its administrative costs funded in whole or in part by the tax and that will directly promote tourism and convention and hotel activity. The city or entity would have to list the activity or event before making an expenditure of the tax proceeds. If a city delegates the management or supervision of the tax to another entity, then each entity that would ultimately be funded by the tax must generate the list. A municipality or entity would be able to add items to its list of hotel occupancy tax funded activities at any time. The list would be provided to the city secretary or the official custodian of records for the city. These requirements would not apply if the funded entity already provides written information to the municipality that indicates which scheduled activities, programs, or events offered by the entity are directly enhancing and promoting tourism and the convention and hotel industry. The bill would allow a municipality or entity receiving revenue from the tax to set aside tax revenue in a designated reserve fund for appropriate use. Current law requires the municipal hotel occupancy tax to be used to directly promote tourism and the convention and hotel industry. Additionally, municipalities and entities must maintain records that identify the receipt and expenditure of all revenue derived from the tax. Current law does not require that the funded entities indicate which of their hotel occupancy tax funded programs or activities directly promote tourism and convention and hotel industry. The bill would take effect September 1, 2001 and apply only to expenditures and contracts for local hotel occupancy tax funding executed after the effective date. Local Government Impact Local government entities would experience a small administrative cost for preparing, maintaining, and submitting lists of how hotel occupancy taxes were used. No significant fiscal implication to units of local government is anticipated. Source Agencies: 304 Comptroller of Public Accounts LBB Staff: JK, DB, SD, WP