BILL ANALYSIS

C.S.H.B. 3196

By: Lopez, Janie

Ways & Means

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Under current state law, certain municipalities in Texas are authorized to receive certain tax revenue derived from hotel and convention center projects, which can then be used for the payment of obligations related to the project. The bill author has informed the committee that convention centers and hotels play a vital role in the state's economy by attracting out-of-state visitors, serving as host locations for conventions and business meetings, and supporting local revitalization efforts, and the bill author has further informed the committee that the presence of adequate lodging near a convention center is a critical factor for event planners and enhances the state's ability to compete nationally and internationally for tourism and business events. C.S.H.B. 3196 seeks to include the City of South Padre Island among the municipalities entitled to receive certain tax revenue derived from hotel and convention center projects, supporting the expansion of its convention center and the development of a full-service convention center hotel in the future and ensuring that the city remains a premier coastal destination and driver of economic success for Texas.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 3196 amends the Tax Code to include a municipality that borders on the Gulf of Mexico, that is located wholly on a barrier island, and the boundaries of which are within 30 miles of the United Mexican States among the municipalities entitled to receive certain tax revenue derived from a hotel and convention center project and authorized to pledge or commit certain tax revenue for the payment of obligations related to the project.

C.S.H.B. 3196, for purposes of the entitlement and the authorization granted by the bill, provides for certain exceptions applicable to such a municipality. The bill excepts a facility that meets the following criteria and otherwise meets the requirements for classification as a qualified convention center facility from the requirements for classification as such that the facility must be wholly owned by any municipality to which statutory provisions relating to municipal hotel and convention center projects apply, and none of which is or may be owned through an undivided common interest, and that the facility must be connected to a qualified hotel or have an exterior wall that is located not more than 1,000 feet from the nearest exterior wall of a qualified hotel:

· the facility is wholly owned by an applicable municipality or the county in which an applicable municipality is located and not owned in undivided interest;

· the nearest qualified hotel for the facility is located near a natural impediment, including open water or protected wetlands, that makes it impractical for the facility to be located not more than 1,000 feet from the nearest exterior wall of the qualified hotel; and

· the facility has an exterior wall that is located not more than 2,000 feet from the nearest exterior wall of a qualified hotel.

The bill excepts a hotel that meets the following criteria and otherwise meets the requirements for classification as a qualified hotel from the requirements for classification as such that the hotel must be located on land owned by the designating municipality and must be connected to a qualified convention center facility or have an exterior wall that is located not more than 1,000 feet from the nearest exterior wall of the qualified convention center facility:

· the hotel is located on land owned by the designating municipality or the county in which the designating municipality is located;

· the nearest qualified convention center facility for the hotel is located near a natural impediment, including open water or protected wetlands, that makes it impractical for the hotel to be located not more than 1,000 feet from the nearest exterior wall of the qualified convention center facility; and

· the hotel has an exterior wall that is located not more than 2,000 feet from the nearest exterior wall of a qualified convention center facility.

The bill authorizes a parking area or structure that otherwise meets the requirements for classification as a qualified project to be located not more than 2,000 feet from the nearest property line of a qualified convention center facility or qualified hotel if the facility or hotel is located near a natural impediment, including open water or protected wetlands, that makes it impractical to acquire, lease, construct, repair, remodel, expand, or equip a parking area or structure located not more than 1,000 feet from the facility or hotel as required under state law for classification as a qualified project. The bill establishes that the provision establishing that a qualified project may include acquiring, constructing, repairing, remodeling, or expanding infrastructure that is located within the property lines of the qualified convention center facility or qualified hotel, or not more than 1,000 feet from the nearest property line of the facility or hotel, does not apply to infrastructure that meets the following criteria:

· for which the qualified convention center facility or qualified hotel is located near a natural impediment, including open water or protected wetlands, that makes it impractical to acquire, construct, repair, remodel, or expand infrastructure located not more than 1,000 feet from the facility or hotel; and

· that is located not more than 2,000 feet from the nearest property line of the qualified convention center facility or qualified hotel.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 3196 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The substitute includes provisions absent from the introduced that do the following with respect to a municipality described by the bill for purposes of the entitlement and the authorization granted by the bill to such a municipality:

· excepts a facility that otherwise meets certain criteria and otherwise meets the requirements for classification as a qualified convention center facility from the requirements for classification as such that the facility must be wholly owned by any municipality to which statutory provisions relating to municipal hotel and convention center projects apply, and none of which is or may be owned through an undivided common interest, and that the facility must be connected to a qualified hotel or has an exterior wall that is located not more than 1,000 feet from the nearest exterior wall of a qualified hotel;

· excepts a hotel that meets certain criteria and otherwise meets the requirements for classification as a qualified hotel from the requirements for classification as such that the hotel must be located on land owned by the designating municipality and must be connected to a qualified convention center facility or have an exterior wall that is located not more than 1,000 feet from the nearest exterior wall of the qualified convention center facility;

· authorizes a parking area or structure that otherwise meets the requirements of a qualified project to be located not more than 2,000 feet from the nearest property line of a qualified convention center facility or qualified hotel if the facility or hotel is located near a natural impediment, including open water or protected wetlands, that makes it impractical to acquire, lease, construct, repair, remodel, expand, or equip a parking area or structure located not more than 1,000 feet from the facility or hotel as required under state law for classification as a qualified project; and

· establishes that the provision establishing that a qualified project may include acquiring, constructing, repairing, remodeling, or expanding infrastructure that is located within the property lines of the qualified convention center facility or qualified hotel, or not more than 1,000 feet from the nearest property line of the facility or hotel, does not apply to infrastructure that meets certain criteria.