Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB4689 by Hayes (Relating to hotel and convention center projects, including the authority of certain municipalities to receive certain tax revenue derived from those projects and to pledge certain tax revenue for the payment of obligations related to those projects.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB4689, 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
($1,520,000)
2028
($1,580,000)
All Funds, Five-Year Impact:
Fiscal Year
Probable Revenue Gain/(Loss) from General Revenue Fund 1
2024
$0
2025
$0
2026
$0
2027
($1,520,000)
2028
($1,580,000)
Fiscal Analysis
The bill would amend Chapter 351 of the Tax Code, relating to Municipal Hotel Occupancy Taxes, to add to Section 351.152(46), a municipality with a population of 45,000 or more that is not the county seat of a county; is located in a single county; and contains a portion of Lake Lewisville, 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 amend Section 351.157(b) to add (13) a municipality described by Section 351.152(46) (a municipality with a population of 45,000 or more that is not the county seat of a county; is located in a single county; and contains a portion of Lake Lewisville) and Section 351.157(c) to add (13) (for a municipality described by (b)(13)) restaurants, bars, retail establishments, and swimming pools and swimming facilities owned or operated by the qualified hotel.
The bill would also amend Section 351.152(2), regarding the definition of qualified convention center facility, to reduce the required square footage of continuous meeting space from 10,000 to 5,000.
Methodology
The bill's provisions would affect the city of Little Elm.
Little Elm would be eligible to receive funds described in Sections 351.156, relating to Entitlement to Certain Tax Revenue, and 351.157, relating to Additional Entitlement for Certain Municipalities, 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 351.157(d) provides, in relevant part, that a municipality to which the section applies is entitled to receive the revenue derived from the state sales and use taxes, and local mixed beverage taxes generated, paid, and collected from a qualified establishment. Section 351.158, relating to Period of Entitlement, would entitle Little Elm to receive the revenue until the tenth anniversary of the date the qualified hotel to which the entitlement relates is open for initial occupancy.
Little Elm 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 Little Elm.
Little Elm would be eligible to receive funds described in Sections 351.156 and 351.157 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.