Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
HB1742 by Márquez (Relating to a qualified hotel project.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB1742, As Introduced: a negative impact of ($1,110,000) through the biennium ending August 31, 2017.
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2016
$0
2017
($1,110,000)
2018
($1,170,000)
2019
($1,230,000)
2020
($1,290,000)
Fiscal Year
Probable Revenue Gain/(Loss) from General Revenue Fund 1
2016
$0
2017
($1,110,000)
2018
($1,170,000)
2019
($1,230,000)
2020
($1,290,000)
Fiscal Analysis
The bill would amend Chapter 351 of the Tax Code, regarding municipal hotel occupancy taxes, to expand the definition of an eligible central municipality authorized to levy this tax to include a municipality with a population of 640,000 or more located in a county on an international border.
The bill amends Section 151.429(h) of the Tax Code to eliminate language to disqualify a qualified hotel project described by Section 2303.003(8)(B) of the Government Code from receiving a 100 percent refund of state sales tax and hotel tax.
The bill would take effect September 1, 2015.
Methodology
In fiscal year 2014, a total of $11,308,406 in state revenue was allocated for qualified hotel projects. Currently the cities of Dallas, Fort Worth, and San Antonio receive allocations of state sales and use tax and state hotel tax associated with qualified hotel projects. This estimate is based on amounts of state sales and hotel tax revenues retained by the existing qualified hotel projects in relation to their share of host city hotel markets as indicated by state hotel tax receipts, and applied to the size of the El Paso hotel market. The estimate assumes a qualified hotel would not be operational until fiscal 2017.
Local Government Impact
Being a qualified hotel project under Section 2303.003(8)(C) as amended, the city of El Paso would be entitled to state sales tax and state hotel tax associated with a qualified hotel project under Section 151.429(h) of the Tax Code via Section 351.102(b) & (c) of the Tax Code. Such funds must be deposited in a suspense account outside the state treasury to be paid to the owner of the qualified hotel project.