TO: | Honorable Frank Madla, Chair, Senate Committee on Intergovernmental Relations |
FROM: | John Keel, Director, Legislative Budget Board |
IN RE: | SB1784 by Lucio (Relating to the imposition of a hotel occupancy tax in eligible general-law coastal municipalities. ), Committee Report 1st House, Substituted |
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2004 | $0 |
2005 | $0 |
2006 | $0 |
2007 | $0 |
2008 | $0 |
Fiscal Year | Probable Revenue Gain/(Loss) fromMunicipality of South Padre Island |
---|---|
2004 | $566,000 |
2005 | $574,000 |
2006 | $585,000 |
2007 | $603,000 |
2008 | $629,000 |
The bill would amend Chapter 351 of the Tax Code to define an eligible general-law coastal municipality as a general-law municipality having a population of less than 5,000, bordering the Gulf of Mexico, and having boundaries within 30 miles of Mexico.
The bill would authorize an eligible general-law coastal municipality to hold an election to adopt a municipal hotel occupancy tax up to eight percent of the price paid for a hotel room. The bill would require an eligible general-law coastal municipality to use the revenue derived from imposing a rate more than 7 percent for the maintenance and operation of parks, a trolley transportation system, the town's beautification plan, facilities with the purpose to attract tourism, and enhancing and providing for public beach access. Interest income derived from the application of a tax rate of more than 7 percent would have to be used for the same purposes.
The bill would take effect immediately upon enactment, assuming it receives the requisite two-thirds majority votes in both houses of the legislature; otherwise, it would take effect September 1, 2003.
Based on the bill's eligibility requirements, the municipality of South Padre Island would be the only city eligible to impose the municipal hotel occupancy tax at a rate not to exceed 8 percent. Currently, South Padre Island imposes the maximum 7 percent rate allowed by a municipality.
Currently, revenue from the municipal hotel occupancy tax may be used only to promote tourism and the convention and hotel industry.
Data on taxable hotel revenues from South Padre Island were gathered from Comptroller tax files. Revenues were multiplied by the 1 percent difference in rate to determine the gain to the municipality of South Padre Island.
Source Agencies: | 304 Comptroller of Public Accounts
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LBB Staff: | JK, DLBa, WP, SD
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