SRC-JLB H.B. 2718 78(R) BILL ANALYSIS Senate Research Center H.B. 2718 78R12754 SMJ-DBy: Smith, Wayne (Jackson) Intergovernmental Relations 5/20/2003 Engrossed DIGEST AND PURPOSE Currently, the Texas Tax Code allows for coastal municipalities to levy and collect a hotel occupancy tax at a rate of seven percent and to pledge at least one percent of that revenue to either or both the payment of bonds issued for the establishment, acquisition, purchase, construction, improvement, enlargement, maintenance, or operation of facilities that serve the purpose of attracting visitors and tourists. However, this form of occupancy taxing is not available to home-rule municipalities adjacent to bays. H.B. 2718 allows home-rule municipalities adjacent to a bay of this state, with a population less than 80,000, to allocate revenues for items that are currently allowable for eligible coastal communities. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter B, Chapter 351, Tax Code, by adding Section 351.104, as follows: Sec. 351.104. ALLOCATION OF REVENUE: CERTAIN MUNICIPALITIES BORDERING BAYS. (a) Provides that this section applies only to a home-rule municipality that borders a bay, that has a population of less than 80,000, and that is not an eligible coastal municipality. (b) Defines "adjacent public land" and "clean and maintain." (c) Prohibits a municipality to which this section applies, notwithstanding any other provision of this chapter, from using more than 10 percent of the revenue derived from the tax imposed under this chapter for certain purposes. (d) Prohibits a municipality to which this section applies from reducing the amount of revenue that it uses for a purpose described by Section 351.101(a)(3) to an amount that is less than the average amount of revenue used by the municipality for that purpose during the 36-month period that precedes the municipality's use of revenue under Subsection (c). SECTION 2. Effective date: September 1, 2003.