BILL ANALYSIS

C.S.H.B. 3042

By: Oliveira

Ways & Means

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Texas is home to many barrier islands, such as South Padre Island, that attract tourists from all over the country. Some beaches on these islands suffer from erosion, and millions of dollars are spent every year maintaining and nourishing the beaches for the benefit of the state. Current law requires the state to issue to an eligible barrier island coastal municipality a portion of state hotel occupancy tax revenue collected from hotels located within the municipality. Interested parties contend that this funding allows coastal barrier island cities to use tax dollars paid by tourists to improve the beaches and ensure future tourism continues without increasing local property taxes. It is reported that certain barrier island municipalities, such as the City of South Padre Island, are growing and annexing territory that includes new beaches but are not able to raise funds to maintain and nourish these additional beaches solely from beach property owners. The goal of C.S.H.B. 3042 is to provide certain barrier island municipalities with additional funding for erosion response and beach maintenance.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 3042 amends the Tax Code to require the comptroller of public accounts, not later than the last day of the month following a calendar quarter, to compute the amount of revenue derived from the collection of state hotel occupancy taxes imposed at a rate of two percent and received from hotels located on barrier islands in a municipality that borders on the Gulf of Mexico, that is located wholly or partly on a barrier island, and the boundaries of which are within 30 miles of the United Mexican States. The bill requires the comptroller to issue to such municipality a warrant drawn on the general revenue fund for that amount.

EFFECTIVE DATE

September 1, 2013.

COMPARISON OF ORIGINAL AND SUBSTITUTE

C.S.H.B. 3042 differs from the original in minor or nonsubstantive ways by conforming to certain bill drafting conventions.