Supplement: TX HB2282 | 2023-2024 | 88th Legislature | Fiscal Note (Introduced)
For additional supplements on Texas HB2282 please see the Bill Drafting List
Bill Title: Relating to the use of hotel occupancy tax revenue by certain municipalities and counties and 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.
Status: 2023-04-24 - Reported favorably as substituted [HB2282 Detail]
Download: Texas-2023-HB2282-Fiscal_Note_Introduced_.html
Bill Title: Relating to the use of hotel occupancy tax revenue by certain municipalities and counties and 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.
Status: 2023-04-24 - Reported favorably as substituted [HB2282 Detail]
Download: Texas-2023-HB2282-Fiscal_Note_Introduced_.html
| TO: |
Honorable Morgan Meyer, Chair, House Committee on Ways & Means |
| FROM: |
Jerry McGinty, Director, Legislative Budget Board
|
| IN RE: |
HB2282 by Gamez (Relating to the use of hotel occupancy tax revenue by certain municipalities and counties and 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 HB2282, As Introduced : an impact of $0 through the biennium ending August 31, 2025.
However, there would be a negative impact to General Related Funds of ($12,460,000) in the 2026-27 biennium, with a similar negative impact in subsequent years until 20 years after the date of entitlement.
General Revenue-Related Funds, Five- Year Impact:
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2024 | $0 |
| 2025 | $0 |
| 2026 | ($6,110,000) |
| 2027 | ($6,350,000) |
| 2028 | ($6,610,000) |
All Funds, Five-Year Impact:
| Fiscal Year | Probable Revenue Gain/(Loss) from General Revenue Fund 1 |
|---|---|
| 2024 | $0 |
| 2025 | $0 |
| 2026 | ($6,110,000) |
| 2027 | ($6,350,000) |
| 2028 | ($6,610,000) |
Fiscal Analysis
The bill would amend Section 351.1063 of the Tax Code, relating to Municipal Hotel Occupancy Taxes; Allocation of Revenue for Advertising and Promotion: Certain Municipalities with Certain Projects, to add Subsection (c) to state that a municipality described by Section 351.152(46) (a municipality that is the county seat of a county bordering the Gulf of Mexico and the United Mexican States) that uses municipal hotel tax revenue or funds received under Sections 351.156-7 for a qualified project may not reduce the percentage of revenue from municipal hotel tax and allocated for a purpose that is less than the greater of certain specified percentages.
The bill would amend Section 351.152, relating to Applicability to add (46), described above, 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 351.153, relating to Exception to the Ownership Requirement, to exempt a municipality described by Section 351.152(46), from the requirement that qualified hotel project must be owned by or located on land owned by the municipality.
The bill would amend Section 351.156, relating to Entitlement to Certain Tax Revenue, to add (b), stating a municipality described by Section 351.152(46) would be entitled to receive 75% of the revenue described by Subsection (a).
The bill would amend Section 351.157(b) to add (13) a municipality described by Section 351.152(46); and add Section 351.157(c) to add (13) (for a municipality described by (b)(13)) to make eligible to receive certain revenues from restaurants, bars, music venues, museums, and retail establishments, swimming pools and swimming facilities owned or operated by the related qualified hotel. Section 351.157(a) would also allow the county or federal government to own the qualified establishment.
The bill would amend Section 351.158, relating to Period of Entitlement, to entitle the municipality to receive the revenue until the twentieth anniversary of the date the qualified hotel to which the entitlement relates is open for initial occupancy.
The bill would amend Chapter 352 of the Tax Code, relating to County Hotel Occupancy Taxes, to add Section 352.1065, regarding the use of revenue for certain counties bordering Mexico and Gulf of Mexico, to allow a county authorized to impose tax by Section 352.002(a)(11) that borders the Gulf of Mexico and the United Mexican States to use all or any portion of county hotel occupancy tax revenue to enter into an agreement with a municipality that is the county seat of the county to pledge not more than 75 percent of the revenue derived from the tax imposed by the county under this chapter and collected by hotels located in the municipality for the payment of bonds or other obligations, including contractual obligations, for which the municipality has pledged or committed revenue under Section 351.155.
The bill would amend Section 351.152, relating to Applicability to add (46), described above, 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 351.153, relating to Exception to the Ownership Requirement, to exempt a municipality described by Section 351.152(46), from the requirement that qualified hotel project must be owned by or located on land owned by the municipality.
The bill would amend Section 351.156, relating to Entitlement to Certain Tax Revenue, to add (b), stating a municipality described by Section 351.152(46) would be entitled to receive 75% of the revenue described by Subsection (a).
The bill would amend Section 351.157(b) to add (13) a municipality described by Section 351.152(46); and add Section 351.157(c) to add (13) (for a municipality described by (b)(13)) to make eligible to receive certain revenues from restaurants, bars, music venues, museums, and retail establishments, swimming pools and swimming facilities owned or operated by the related qualified hotel. Section 351.157(a) would also allow the county or federal government to own the qualified establishment.
The bill would amend Section 351.158, relating to Period of Entitlement, to entitle the municipality to receive the revenue until the twentieth anniversary of the date the qualified hotel to which the entitlement relates is open for initial occupancy.
The bill would amend Chapter 352 of the Tax Code, relating to County Hotel Occupancy Taxes, to add Section 352.1065, regarding the use of revenue for certain counties bordering Mexico and Gulf of Mexico, to allow a county authorized to impose tax by Section 352.002(a)(11) that borders the Gulf of Mexico and the United Mexican States to use all or any portion of county hotel occupancy tax revenue to enter into an agreement with a municipality that is the county seat of the county to pledge not more than 75 percent of the revenue derived from the tax imposed by the county under this chapter and collected by hotels located in the municipality for the payment of bonds or other obligations, including contractual obligations, for which the municipality has pledged or committed revenue under Section 351.155.
Methodology
The bill's provisions would affect the city of Brownsville.
Brownsville 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, related to Period of Entitlement, would entitle Brownsville to receive the revenue until the twentieth anniversary of the date the qualified hotel to which the entitlement relates is open for initial occupancy.
Brownsville 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, 2025, or state fiscal year 2026, a comparison and review of revenues paid to the owners of extant qualified hotel projects, and estimated attributes of such prospective hotel.
The bill's provision's relating to county hotel occupancy taxes would affect Cameron County but would have no state revenue fiscal implications.
Brownsville 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, related to Period of Entitlement, would entitle Brownsville to receive the revenue until the twentieth anniversary of the date the qualified hotel to which the entitlement relates is open for initial occupancy.
Brownsville 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, 2025, or state fiscal year 2026, a comparison and review of revenues paid to the owners of extant qualified hotel projects, and estimated attributes of such prospective hotel.
The bill's provision's relating to county hotel occupancy taxes would affect Cameron County but would have no state revenue fiscal implications.
Local Government Impact
The bill's provisions would affect the city of Brownsville.
Brownsville 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.
Brownsville 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.
| Source Agencies: | 304 Comptroller of Public Accounts |
| LBB Staff: | JMc, KK, SD, BRI |
