Austin, Texas
April 30, 2013

Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
Ursula Parks, Director, Legislative Budget Board
HB3043 by Oliveira (relating to increasing the maximum rate at which certain municipalities may impose a hotel occupancy tax and to the use of revenue from that tax.), Committee Report 1st House, Substituted

Estimated Two-year Net Impact to General Revenue Related Funds for HB3043, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2015.

Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2014 $0
2015 $0
2016 $0
2017 $0
2018 $0

Fiscal Year Probable Revenue Gain/(Loss) from
City of South Padre Island
2014 $319,000
2015 $364,000
2016 $382,000
2017 $402,000
2018 $421,000

Fiscal Analysis

The bill would amend Chapter 351 of the Tax Code, regarding municipal hotel occupancy taxes.
The bill would allow a municipality authorized to impose a municipal hotel occupancy tax under Section 351.003(d) to set the tax rate at up to 9 percent of the price paid for a room, a change from the current maximum of 8.5 percent rate in current law.  The bill also would increase the amount of revenue derived from the imposition of this tax, from the current rate of 0.5 percent to a rate of one percent, that must be used by the municipality for erosion response projects.

The bill would take effect immediately upon receiving two-thirds majority vote in each house. Otherwise, the bill would take effect September 1, 2013.


The bill's provisions would apply to the City of South Padre Island.  To estimate the potential fiscal impact of this bill, data on taxable hotel receipts for South Padre Island were gathered from Comptroller tax files, which were then multiplied by 0.5 percent.  The fiscal impact was then adjusted for the bill's effective date and extrapolated through 2018.

Local Government Impact

The local fiscal implications cannot be determined as the timing for the imposition of this new rate is unknown.  However, the table illustrates the fiscal impact should the City of South Padre Island adopt a 9 percent municipal hotel occupancy tax rate (increased from the current rate of 8.5 percent) at the earliest date permissible, and the amount of revenues available for erosion response projects were one percent of the cost of a room.

Source Agencies:
304 Comptroller of Public Accounts
LBB Staff: