Texas Senate Bill SB2138

Texas 2023 - 88th Regular

• Filed: 3/9/23

Caption

Relating to 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.

Impact

The legislation impacts the Tax Code by amending Section 351.152, which governs the applicability of tax revenue from hotel and convention developments. It outlines specific criteria for municipalities eligible to benefit from these provisions, including population thresholds and geographic considerations. This shift allows for more significant local involvement in managing and utilizing generated revenues, giving municipalities increased authority to fund and maintain local projects essential for economic growth.

Summary

SB2138 addresses the financial frameworks for specific municipalities regarding the collection and use of tax revenue from hotel and convention center projects. The bill specifically allows certain municipalities to receive tax revenues derived from these projects and enables them to pledge this revenue for obligations associated with the projects. This legislative measure reflects an effort to potentially bolster local economies and incentivize the development of hospitality-related infrastructure in selected areas, thus promoting tourism and related activities.

Sentiment

The sentiment around SB2138 appears to garner support from local leaders and businesses who argue that enabling municipalities to tap into hotel and convention center tax revenues would foster economic development and create jobs. Conversely, there are concerns expressed by some fiscal watchdogs about ensuring that the pledged revenues adhere to responsible spending practices and that the bill does not lead to financial overreach by local governments, potentially jeopardizing wider fiscal stability.

Contention

Notable points of contention surrounding SB2138 involve the implications of granting specific municipalities enhanced financial capabilities compared to others. Critics fear that this could lead to inequalities among municipalities, with well-resourced areas benefiting at the expense of less affluent communities. Additionally, there are discussions around the transparency and accountability measures that should accompany the use of pledged tax revenues, ensuring that they are used for the intended development purposes rather than for broader governmental budget deficits.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 351. Municipal Hotel Occupancy Taxes
  • Section: 152