BILL ANALYSIS

Senate Research Center	H.B. 5321
	By: Bell, Cecil (Alvarado)
	Local Government
	5/20/2023
	Engrossed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Under current law, certain cities in Texas are authorized to receive a 10-year rebate of the state's portion of the hotel occupancy tax and the state sales tax if those taxes are generated by what the law refers to as a "qualified hotel project," which is defined by Chapter 351, Tax Code.

The legislature first created this public-private financing tool over 25 years ago for the City of Houston and since that time, has passed bills adding other municipalities to the list of qualified cities. Since its passage, the state has seen a 133 percent return on investment on the projects that have been built in Houston, San Antonio, and Fort Worth.

H.B. 5321 authorizes the East Montgomery County Improvement District to receive certain state tax rebates for the development of a hotel and convention center project.

H.B. 5321 amends current law relating to the authority of the East Montgomery County Improvement District to receive certain tax revenue derived from a hotel and convention center project and to pledge certain tax revenue for the payment of obligations related to the project.

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the Comptroller of Public Accounts of the State of Texas in SECTION 1 (Section 3846.502, Special District Local Laws Code) of this bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 3846, Special District Local Laws Code, by adding Subchapter K, as follows:

SUBCHAPTER K. HOTEL AND CONVENTION CENTER PROJECTS

Sec. 3846.501. DEFINITIONS. (a) Defines "qualified convention center facility," "qualified hotel," and "qualified project."

(b) Defines "qualified establishment."

Sec. 3846.502. HOTEL AND CONVENTION CENTER PROJECTS. (a) Authorizes the board of directors of the East Montgomery County Improvement District (board; district) to by order authorize proceeds from the hotel occupancy tax imposed under Subchapter J (Hotel Occupancy Tax) of Chapter 3846 (East Montgomery County Improvement District) to be used for a qualified project under Subchapter C (Municipal Hotel and Convention Center Projects), Chapter 351, Tax Code. Provides that the use authorized by this subsection is in addition to any other use authorized by law.

(b) Provides that if the board adopts an order described by Subsection (a):

(1) a reference in Subchapter C, Chapter 351, Tax Code, to a municipality is a reference to the district; and

(2) the district is considered to be a municipality for the purposes of Subchapter C, Chapter 351, Tax Code, with the same rights, privileges, and responsibilities as a municipality under that subchapter, including the ability to pledge or commit revenue under Section 351.155 (Pledge or Commitment of Certain Tax Revenue for Obligations for Qualified Project), Tax Code, for bonds or other obligations issued for a qualified project or contractual obligations for a qualified project and to receive certain tax revenue under Sections 351.156 (Entitlement to Certain Tax Revenue) and 351.157 (Additional Entitlement for Certain Municipalities), Tax Code.

(1) the qualified convention center facility and qualified hotel associated with a qualified project of the district is authorized to be located on land owned by any person; and

(2) the district is prohibited from pledging or committing revenue for more than one qualified project.

(d) Provides that in the event of a conflict between this section and another provision of this chapter, this section controls.

(e) Requires the Comptroller of Public Accounts of the State of Texas to adopt rules necessary to implement and administer this section.

SECTION 2. Provides that all requirements of the constitution and the laws of this state and the rules and procedures of the legislature with respect to the notice, introduction, and passage of this Act are fulfilled and accomplished.

SECTION 3. Effective date: upon passage or September 1, 2023.