Supplement: TX HB4764 | 2023-2024 | 88th Legislature | Fiscal Note (Introduced)
For additional supplements on Texas HB4764 please see the Bill Drafting List
Bill Title: Relating to the use of municipal hotel occupancy tax revenue in certain municipalities.
Status: 2023-04-03 - Left pending in committee [HB4764 Detail]
Download: Texas-2023-HB4764-Fiscal_Note_Introduced_.html
Bill Title: Relating to the use of municipal hotel occupancy tax revenue in certain municipalities.
Status: 2023-04-03 - Left pending in committee [HB4764 Detail]
Download: Texas-2023-HB4764-Fiscal_Note_Introduced_.html
| TO: |
Honorable Morgan Meyer, Chair, House Committee on Ways & Means |
| FROM: |
Jerry McGinty, Director, Legislative Budget Board
|
| IN RE: |
HB4764 by Bowers (Relating to the use of municipal hotel occupancy tax revenue in certain municipalities.), As Introduced |
Estimated Two-year Net Impact to General Revenue Related Funds for HB4764, 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 of ($4,080,000) in the 2026-27 biennium, continuing until 10 years after 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 | ($1,590,000) |
| 2027 | ($2,490,000) |
| 2028 | ($2,590,000) |
All Funds, Five-Year Impact:
| Fiscal Year | Probable Revenue Gain/(Loss) from General Revenue Fund 1 |
|---|---|
| 2024 | $0 |
| 2025 | $0 |
| 2026 | ($1,590,000) |
| 2027 | ($2,490,000) |
| 2028 | ($2,590,000) |
Fiscal Analysis
The bill would amend Chapter 351 of the Tax Code, relating to Municipal Hotel Occupancy Taxes, to add Section 351.003(g) to require the rate in a municipality that has a population of at least 150,000 and is partially located in a county that contains a portion of Cedar Creek Reservoir and has a population of at least 145,000 may not exceed nine percent of the price paid for a room. The municipality shall allocate for the construction, expansion, maintenance, or operation of convention center facilities all revenue received by the municipality that is derived from the application of the tax at a rate of more than seven percent of the price paid for a room in a hotel.
The bill would amend Section 351.152 to add (46), a municipality that has a population of at least 150,000 and is partially located in a county that contains a portion of Cedar Creek Reservoir and has a population of at least 145,000, 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.
The bill would amend Section 351.157(b) to add (13) a municipality described by added Section 351.152(46).
The bill would amend Section 351.152 to add (46), a municipality that has a population of at least 150,000 and is partially located in a county that contains a portion of Cedar Creek Reservoir and has a population of at least 145,000, 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.
The bill would amend Section 351.157(b) to add (13) a municipality described by added Section 351.152(46).
Methodology
The bill's provisions would affect the city of Mesquite.
Mesquite 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 (Period of Entitlement) would entitle Mesquite 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 Mesquite has tentative plans for a qualified hotel with the additional entitlement from restaurants, bars, and retail establishments as provided under Section 351.157 and could avail itself of the tax rebates should eligibility be acquired through this legislation. The estimate is based on a projected opening date of January 1, 2026, a comparison and review of revenues paid to the owners of extant qualified hotel projects, and estimated attributes of such prospective hotel.
Mesquite 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 (Period of Entitlement) would entitle Mesquite 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 Mesquite has tentative plans for a qualified hotel with the additional entitlement from restaurants, bars, and retail establishments as provided under Section 351.157 and could avail itself of the tax rebates should eligibility be acquired through this legislation. The estimate is based on a projected opening date of January 1, 2026, 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 Mesquite.
Mesquite 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.
Mesquite 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 |
