86R5722 SMT-D
 
  By: Springer H.B. No. 1557
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the authority of a municipality to pledge certain tax
  revenue for the payment of obligations related to hotel projects.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Sections 351.102(b), (c), and (d), Tax Code, are
  amended to read as follows:
         (b)  A [An eligible central] municipality[, a municipality
  with a population of 173,000 or more that is located within two or
  more counties, a municipality with a population of 96,000 or more
  that is located in a county that borders Lake Palestine or contains
  the headwaters of the San Gabriel River, or a municipality with a
  population of at least 99,900 but not more than 111,000 that is
  located in a county with a population of at least 135,000] may
  pledge the revenue derived from the tax imposed under this chapter
  from a hotel project that is owned by or located on land owned by the
  municipality [or, in an eligible central municipality], by a
  nonprofit corporation acting on behalf of the [an eligible central]
  municipality, or by the federal government, and that is located
  within 1,000 feet of a convention center facility owned by the
  municipality, for the payment of bonds or other obligations issued
  or incurred to acquire, lease, construct, and equip the hotel and
  any facilities ancillary to the hotel, including convention center
  entertainment-related facilities, meeting spaces, restaurants,
  shops, street and water and sewer infrastructure necessary for the
  operation of the hotel or ancillary facilities, and parking
  facilities within 1,000 feet of the hotel or convention center
  facility.  [A municipality with a population of 173,000 or more
  that is located within two or more counties may pledge for the
  payment of bonds or other obligations described by this subsection
  the revenue derived from the tax imposed under this chapter from a
  hotel project not owned by or located on land owned by the
  municipality if the project is located on land that is owned by the
  federal government and the project is located within 1,000 feet of a
  convention center facility owned by the municipality.] For bonds
  or other obligations issued under this subsection, a [an eligible
  central] municipality [or a municipality described by this
  subsection or Subsection (e)] may only pledge revenue or other
  assets of the hotel project benefiting from those bonds or other
  obligations. For purposes of this subsection, "hotel project"
  includes a project that is an existing hotel owned by the
  municipality or another person and a convention center facility to
  be acquired, constructed, equipped, or leased, that will be located
  within 1,000 feet of the hotel, and that will be owned by or located
  on land owned by the municipality.
         (c)  Subject to Section 351.1025 [Except as provided by this
  subsection], a municipality that pledges revenue for a hotel
  project under [to which] Subsection (b) [or (e) applies] is
  entitled to receive all funds from the [a] project [described by
  Subsection (b)] that an owner of a project may receive under Section
  151.429(h) of this code, or Section 2303.5055, Government Code, and
  may pledge the funds for the payment of obligations issued under
  this section.  [A municipality described by Subsection (e) is not
  entitled to receive funds from a project under this subsection
  unless the municipality has pledged the revenue derived from the
  tax imposed under this chapter from the project for the payment of
  bonds or other obligations issued or incurred for the project.]
         (d)  Except as provided by this subsection, a [an eligible
  central] municipality [or another municipality described by
  Subsection (b) or (e)] that uses revenue derived from the tax
  imposed under this chapter or funds received under Subsection (c)
  for a hotel project described by Subsection (b) may not reduce the
  percentage of revenue from the tax imposed under this chapter and
  allocated for a purpose described by Section 351.101(a)(3) to a
  percentage that is less than the average percentage of that revenue
  allocated by the municipality for that purpose during the 36-month
  period preceding the date the municipality begins using the revenue
  or funds for the hotel project.  This subsection does not apply to
  an eligible central municipality described by Section
  351.001(7)(D).
         SECTION 2.  Subchapter B, Chapter 351, Tax Code, is amended
  by adding Section 351.1025 to read as follows:
         Sec. 351.1025.  REIMBURSEMENT OF STATE REVENUE USED FOR
  QUALIFIED HOTEL PROJECT. (a) This section does not apply to a
  municipality that was eligible to pledge revenue for a hotel
  project under Section 351.102(b) on January 1, 2019.
         (b)  In this section:
               (1)  "Base year amount" means the total amount of hotel
  occupancy tax revenue collected by a municipality from all hotels
  during the 12-month period preceding the date a qualified hotel
  project opens for initial occupancy.
               (2)  "Incremental increase in hotel occupancy tax
  revenue" means the amount by which the total amount of hotel
  occupancy tax revenue collected by a municipality from all hotels
  during a reporting period exceeds the base year amount.
               (3)  "Qualified hotel project" means a hotel project in
  relation to which state tax revenue is rebated, refunded, or paid
  under Section 351.102(c).
               (4)  "Reporting period" means a 12-month period ending
  on the most recent anniversary of the date a qualified hotel project
  opens for initial occupancy.
               (5)  "State financing period" means the period:
                     (A)  beginning on the date state tax revenue is
  first rebated, refunded, or paid in relation to a qualified hotel
  project under Section 351.102(c); and
                     (B)  ending on the date the last rebate, refund,
  or payment of that revenue is made. 
         (c)  Beginning on the date prescribed by the comptroller
  under Subsection (d) that is not later than the first day of the
  first calendar quarter that begins on or after the first
  anniversary of the date a qualified hotel project in a municipality
  opens for initial occupancy, the municipality shall annually send
  to the comptroller a report that states:
               (1)  the total amount of state tax revenue rebated,
  refunded, or paid under Section 351.102(c) in relation to the
  qualified hotel project as of the end of the reporting period;
               (2)  the amount of state tax revenue rebated, refunded,
  or paid under Section 351.102(c) in relation to the qualified hotel
  project during the reporting period; 
               (3)  the incremental increase in hotel occupancy tax
  revenue collected by the municipality during the reporting period;
  and
               (4)  any other information required by the comptroller.
         (d)  The comptroller:
               (1)  shall prescribe:
                     (A)  the form of the report required by Subsection
  (c); and
                     (B)  the date by which the report must be sent to
  the comptroller each year; and
               (2)  may prescribe the date on which a municipality may
  cease sending the report.
         (e)  Notwithstanding any other law and subject to Subsection
  (g), the comptroller shall, beginning as soon as possible after
  receiving a report under Subsection (c), withhold from the
  municipality's share of mixed beverage taxes under Section 183.051
  and sales and use taxes under Section 321.502, for the next 12-month
  period, a total amount equal to the lesser of:
               (1)  the total amount of state tax revenue rebated,
  refunded, or paid under Section 351.102(c) in relation to the
  qualified hotel project as of the end of the reporting period for
  the report, less amounts previously withheld; or
               (2)  the incremental increase in hotel occupancy tax
  revenue collected by the municipality during the reporting period.
         (f)  A municipality may propose the manner in which the
  comptroller will withhold amounts under Subsection (e), including
  the percentage to be deducted from each tax and the frequency of the
  deductions. The comptroller shall comply with the municipality's
  proposal if possible.
         (g)  The total amount the comptroller may withhold under
  Subsection (e) may not exceed the total amount of state tax revenue
  rebated, refunded, or paid under Section 351.102(c) in relation to
  the qualified hotel project during the state financing period. The
  period during which the comptroller may withhold amounts under
  Subsection (e) may not exceed a period equal to the state financing
  period regardless of whether the amount withheld is less than the
  total amount of state tax revenue rebated, refunded, or paid under
  Section 351.102(c) in relation to the qualified hotel project.
         SECTION 3.  Section 351.102(f), Tax Code, is redesignated as
  Section 351.1032, Tax Code, and amended to read as follows:
         Sec. 351.1032.  ALLOCATION OF REVENUE: CERTAIN
  MUNICIPALITIES THAT CONTAIN COMPONENT OF TEXAS TECH UNIVERSITY
  SYSTEM. A municipality with a population of at least 200,000 but not
  more than 300,000 that contains a component institution of the
  Texas Tech University System [(f)     A municipality described by
  Subsection (e)(3)] that uses revenue derived from the tax imposed
  under this chapter or funds received under Section 351.102(c)
  [Subsection (c)] for repayment of bonds or other obligations issued
  or incurred for a hotel project described by Section 351.102(b)
  [Subsection (b)] may not, in a fiscal year that begins after
  construction of the hotel project is complete and during any part of
  which the bonds or other obligations are outstanding, reduce the
  amount of revenue derived from the tax imposed under this chapter
  and allocated for a purpose described by Section 351.101(a)(6) to
  an amount that is less than the sum of:
               (1)  the amount of the revenue derived from the tax
  imposed under this chapter and allocated by the municipality for a
  purpose described by Section 351.101(a)(6) during the fiscal year
  beginning October 1, 2016; and
               (2)  three percent of the amount of revenue derived
  from the tax imposed under this chapter during the fiscal year for
  which the amount required by this section [subsection] is being
  determined.
         SECTION 4.  Sections 351.102(c-1), (e), and (g), Tax Code,
  are repealed.
         SECTION 5.  The changes in law made by this Act to Sections
  351.102(b), (c), (c-1), and (e), Tax Code, do not affect the
  authority granted to a municipality to receive or pledge revenue or
  funds under those sections before the effective date of this Act,
  and that law is continued in effect for that purpose.
         SECTION 6.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2019.