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LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION
April 2, 2023
TO:
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB4529 by Capriglione (Relating to the authority of certain municipalities 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.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB4529, As Introduced : an impact of $0 through the biennium ending August 31, 2025.
However, there would be a negative impact to General Revenue Related Funds beginning in fiscal year 2027.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2024
$0
2025
$0
2026
$0
2027
($1,730,000)
2028
($1,800,000)
All Funds, Five-Year Impact:
Fiscal Year
Probable Revenue Gain/(Loss) from General Revenue Fund 1
2024
$0
2025
$0
2026
$0
2027
($1,730,000)
2028
($1,800,000)
Fiscal Analysis
The bill would amend Chapter 351 of the Tax Code, relating to Municipal Hotel Occupancy Taxes, to add Section 351.152(46). This would add: a municipality that has a historical commercial district designated on the National Register of Historic Places and hosts an annual Grapefest event; has a population of 50,000 or more; and is partially located in three counties all of which have a population of 900,000 or more, to the list of municipalities that are entitled to receive certain tax revenue derived from a hotel and convention center project and to pledge certain revenue for the payment of obligations related to the project.
The bill would also amend Section 351.152(42) to provide that the municipality with a population of 28,000 or more in which is located a historic railroad depot and heritage center must also be located in a county with a population of 240,000 or more in which is located a portion of the Balcones River.
Methodology
The bill's provisions would affect the city of Grapevine.
There is no Balcones River in Texas. The reference to a Balcones River added to Section 351.152(42) is unclear.
Grapevine would be eligible to receive funds described in Sections 351.156, relating to Entitlement to Certain Tax Revenue, which provides, in relevant part, that a municipality to which Section 351.152 applies is entitled to receive from the qualified hotel and each restaurant, bar, and retail establishment located in or connected to the hotel or the related qualified convention center facility, the state sales and use tax and the state hotel occupancy tax. Section 351.158, relating to Period of Entitlement, would entitle Grapevine to receive the revenue until the tenth anniversary of the date the qualified hotel to which the entitlement relates is open for initial occupancy.
The city of Grapevine has current plans for a qualified hotel with a first phase of 495 rooms and could avail itself of the tax rebates should eligibility be acquired through this legislation. The estimate is based on a projected opening date of September 1, 2026, or state fiscal year 2027, a comparison and review of revenues paid to the owners of extant qualified hotel projects, and estimated attributes of such prospective hotel.
Local Government Impact
The bill's provisions would affect the city of Grapevine.
Grapevine would be eligible to receive funds described in Sections 351.156, relating to Entitlement to Certain Tax Revenue, which provides, in relevant part, that a municipality to which Section 351.152 applies is entitled to receive from the qualified hotel and each restaurant, bar, and retail establishment located in or connected to the hotel or the related qualified convention center facility, the state sales and use tax and the state hotel occupancy tax.