Honorable Dustin Burrows, Chair, House Committee on Ways & Means
FROM:
John McGeady, Assistant Director Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:
HB1557 by Springer (Relating to the authority of a municipality to pledge certain tax revenue for the payment of obligations related to hotel projects.), As Introduced
The fiscal implications of the bill cannot be determined at this time.
The bill would amend Chapter 351 of the Tax Code relating to the authority of a municipality to pledge certain tax revenue for the payment of obligations related to hotel projects.
The bill would amend Sections 351.102(b), (c), and (d) of the Tax Code to remove references to an "eligible central" municipality and other language limiting applicability to specific municipalities by reference to demographic, geographic, or other characteristics, with the result that the amended text of the section would be applicable to all municipalities.
All municipalities would be eligible to pledge municipal hotel occupancy tax revenue for certain hotels and convention center facilities and to receive state sales tax and state hotel tax revenue collected at the hotel projects authorized by the section. The bill would also include as a "hotel project" a project that is an existing hotel owned by a municipality or another person and a convention center facility to be acquired, constructed, equipped, or leased that will be located within 1,000 ft. of the hotel.
The bill would add Section 351.1025 to provide a mechanism for the reimbursement of state revenue used for a qualified hotel project, but this section would not apply to a municipality that was eligible to pledge revenue for a hotel project under Section 351.102(b) on January 1, 2019. Based on incremental growth in local municipal hotel tax revenue after a base year, the comptroller would deduct from allocations to a municipality of sales and use tax and mixed beverage tax revenue sufficient to reimburse the payments of state sales and hotel tax revenue made to a municipality under Section 151.429(h).
The bill would add Section 351.1032 of the Tax Code regarding 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, and would repeal Sections 351.102(c-1), (e), and (g) of the Tax Code.
This bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2019.
There would be no fiscal implications for the added Section 351.1025, as it would apply only to municipalities without authorization to pledge state sales and hotel tax revenue on January 1, 2019 and the bill provides no such authorizations.
Local Government Impact
The fiscal implications of allowing the municipalities with authorization for hotel projects on January 1, 2019 to include an existing hotel, whether owned by the municipality or another person, as part of a hotel project, cannot be determined.