| TO: | Honorable Frank Madla, Chair, Senate Committee on Intergovernmental Relations |
| FROM: | John Keel, Director, Legislative Budget Board |
| IN RE: | SB12 by West (Relating to the financing of certain sports and community venues.), As Introduced |
The bill would amend Chapter 334, Local Government Code, to allow cities and counties that undertake certain sports and community venue projects, to finance the project with a local short-term motor vehicle rental tax and a local hotel occupancy tax if the project would be part of a municipal parks and recreation system. Under Section 334.001(4)(A), the project would have to be an arena, coliseum, stadium, or other type of area or facility for which a fee for admission to events is charged or planned to be charged.
The bill would take effect immediately upon enactment if it were to receive the requisite two-thirds vote in both houses of the Legislature; otherwise, it would take effect on the 91st day after the last day of the legislative session.
Under current law, funding certain sports and community venue projects with a local short-term motor vehicle rental tax or a local hotel occupancy tax is prohibited if the project will be part of a municipal parks and recreation system.
According to data collected by the Comptroller of Public Accounts, the Harris County–Houston Sports Authority collected $13.3 million in calendar year 2003 from its 2 percent hotel occupancy tax and $15.6 million in the same period from its 5 percent short-term motor vehicle rental tax. Bexar County collected $8.8 million in hotel tax collections at a 1.75 percent rate and $5.4 million in motor vehicle rental tax collections at a 5 percent rate.
Dallas County does not currently impose a hotel occupancy tax, but if it had in 2003, at a rate of 3 percent, the approximate revenue from the tax would have been nearly $21 million. Dallas County did not have vehicle rental data available; therefore, no estimates were projected.
If a county were to ask and receive voter approval to assess hotel occupancy taxes and short-term vehicle rental taxes for the purpose of funding an applicable venue, the county would experience a revenue gain. The amount of revenue would vary by county, depending on the volume of hotel occupancy and short-term vehicle rentals that occur, as well as by what rate the taxes would be set within the statutorily allowed amounts.
| Source Agencies: | 304 Comptroller of Public Accounts
|
| LBB Staff: | JK, DLBa
|