Honorable Phil King, Chair, Senate Committee on Economic Development
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
SB1756 by Birdwell (Relating to the authority of certain municipalities to use certain tax revenue for hotel and convention center projects and other qualified projects.), As Introduced
No fiscal implication to the State is anticipated.
The bill would amend Chapter 351 of the Tax Code to limit the number of 1) qualified projects under Sections 351.1015 and 351.106, 2) hotel projects under Section 351.102 commenced after January 1, 2025, 3) multipurpose convention center projects under Section 351.1021, 4) and hotel projects under Section 351.1022, to one project per section of code per municipality. Once a municipality commences a project under these sections of the code, they would not be allowed to pledge or commit revenue for subsequent projects under the same sections of the code again.
The bill would repeal Section 351.155(d) of the Tax Code, excepting a municipality of population 175,000 or more from the limitation to one qualified project for which municipal hotel tax, and state tax revenues under Sections 351.156 and 351.357, may be pledged. The effect of the repeal would be to limit all municipalities to one qualified project, were more than one not commenced before the effective date of the bill.
The provisions of this bill would apply to all eligible municipalities, including local government corporations created to aid and act on behalf of municipalities, but would not affect any ongoing projects as of January 1, 2025 under Section 351.102. The bill further provides that revenue pledges or commitments made prior to the effect date of this bill would be governed by the law in effect that the time of the pledge or commitment. Municipalities would be limited to one project per section 351.1015, 351.106, 351.102, 351.1021 or 351.1022. Municipalities that have already commenced a project under these sections of code could not commence another project under the same sections of code.
Since the provision of this bill would not affect any ongoing projects, and would only limit the future actions of municipalities, this bill in itself would have no fiscal impact on the state.
The bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2025.
Local Government Impact
The provisions of the bill would limit future actions of municipalities but would not affect any ongoing projects.