LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                                May 9, 2001
  
  
          TO:  Honorable Frank Madla, Chair, Senate Committee on
               Intergovernmental Relations
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB1886  by Coleman (Relating to municipal hotel occupancy
               taxes.), Committee Report 2nd House, Substituted
  
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*  No fiscal implication to the State is anticipated.                    *
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The bill would amend Chapter 351 of the Tax Code to delete the definition
of an "eligible municipality."  An "eligible central municipality" would
be redefined as having a population of more than 440,000 but less than
1.5 million.

The bill would require a municipality with a population of more than 1.6
million to allocate not less than 23 percent of its hotel occupancy tax
revenue to advertising and conducting solicitations and promotional
programs to attract tourists to the municipality or its vicinity, so long
as the allocation did not impair the authority of the municipality to
dedicate all or any portion of the tax revenue to the payment of bonds.

Currently, Houston is the only municipality with a population of at least
1.2 million but has not adopted by ordinance a capital improvement plan
for convention and exposition facilities for the municipality, therefore
no municipalities would be affected by the deletion of the definition an
"eligible municipality" by the bill.  Houston is also the only
municipality in the state with a population of more than 1.6 million.
Therefore, it would be the only municipality affected by the provisions
relating to the allocation of no less than 23 percent of hotel occupancy
tax revenues to tourist promotion.

This 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 September 1, 2001.
  
Local Government Impact
  
No significant fiscal implication to units of local government is
anticipated.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, DB, SD