Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB4098 by Harris Davila (relating to the authority of certain municipalities to use certain tax revenue for hotel and convention center projects.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB4098, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2027.
However, there would be a negative impact of ($3,136,000) in the biennium ending August 31, 2029. The negative impact would begin in fiscal year 2028 and continue for 10 years.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026
$0
2027
$0
2028
($1,229,000)
2029
($1,907,000)
2030
($1,983,000)
All Funds, Five-Year Impact:
Fiscal Year
Probable Revenue Gain/(Loss) from General Revenue Fund 1
2026
$0
2027
$0
2028
($1,229,000)
2029
($1,907,000)
2030
($1,983,000)
Fiscal Analysis
The bill would add a municipality that is located in a county with a population of 600,000 or more that is adjacent to the county that contains the State Capitol and has a population of more than 16,000 but less than 27,000, 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.
Methodology
The bill's provisions would affect the city of Taylor.
Taylor would be 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. Taylor would be entitled 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 Taylor has plans for a qualified hotel and could avail itself of the tax rebates under section 351.156 of the Tax Code should eligibility be acquired through this legislation. The estimate is based on a projected opening date of January 1, 2028, or state fiscal year 2028, 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
Taylor would be 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. Taylor would be entitled to receive the revenue until the tenth anniversary of the date the qualified hotel to which the entitlement relates is open for initial occupancy.