LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION April 24, 2009 TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB1324 by Rios Ybarra (Relating to the municipal hotel occupancy tax imposed in certain municipalities.), Committee Report 1st House, Substituted Estimated Two-year Net Impact to General Revenue Related Funds for HB1324, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2011.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
April 24, 2009
TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB1324 by Rios Ybarra (Relating to the municipal hotel occupancy tax imposed in certain municipalities.), Committee Report 1st House, Substituted
TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means
FROM: John S. O'Brien, Director, Legislative Budget Board
IN RE: HB1324 by Rios Ybarra (Relating to the municipal hotel occupancy tax imposed in certain municipalities.), Committee Report 1st House, Substituted
Honorable Rene Oliveira, Chair, House Committee on Ways & Means
Honorable Rene Oliveira, Chair, House Committee on Ways & Means
John S. O'Brien, Director, Legislative Budget Board
John S. O'Brien, Director, Legislative Budget Board
HB1324 by Rios Ybarra (Relating to the municipal hotel occupancy tax imposed in certain municipalities.), Committee Report 1st House, Substituted
HB1324 by Rios Ybarra (Relating to the municipal hotel occupancy tax imposed in certain municipalities.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB1324, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2011.
Estimated Two-year Net Impact to General Revenue Related Funds for HB1324, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2011.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2010 $0 2011 $0 2012 $0 2013 $0 2014 $0
2010 $0
2011 $0
2012 $0
2013 $0
2014 $0
All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain/(Loss) fromCity of South Padre Island 2010 $674,000 2011 $777,000 2012 $815,000 2013 $856,000 2014 $899,000
Fiscal Year Probable Revenue Gain/(Loss) fromCity of South Padre Island 2010 $674,000 2011 $777,000 2012 $815,000 2013 $856,000 2014 $899,000
2010 $674,000
2011 $777,000
2012 $815,000
2013 $856,000
2014 $899,000
Fiscal Analysis
The bill would amend Chapter 351 of the Tax Code, regarding the municipal hotel occupancy tax. The bill would set the maximum allowable municipal hotel occupancy tax rate for an "eligible barrier island costal municipality" at 8.5 percent of the price paid for a room. The bill would require the municipality to use at least the amount of tax revenue collected from this tax applied at 7 percent, on certain purposes, relating to the acquisition, construction and advertising of a convention center or visitor information center. If the tax rate is set at an amount equal to or greater than 7.5 percent, the municipality must use the amount of revenue collected from one-half of one percentage point of the tax rate for erosion response projects, as defined by the bill. The bill would take effect immediately upon enactment, if it receives two-thirds vote in each house. Otherwise, the bill would take effect September 1, 2009.
The bill would amend Chapter 351 of the Tax Code, regarding the municipal hotel occupancy tax. The bill would set the maximum allowable municipal hotel occupancy tax rate for an "eligible barrier island costal municipality" at 8.5 percent of the price paid for a room.
The bill would require the municipality to use at least the amount of tax revenue collected from this tax applied at 7 percent, on certain purposes, relating to the acquisition, construction and advertising of a convention center or visitor information center. If the tax rate is set at an amount equal to or greater than 7.5 percent, the municipality must use the amount of revenue collected from one-half of one percentage point of the tax rate for erosion response projects, as defined by the bill.
The bill would take effect immediately upon enactment, if it receives two-thirds vote in each house. Otherwise, the bill would take effect September 1, 2009.
Methodology
Based on geographical limitations set forth in the bill, the City of South Padre Island would be the only eligible municipality. To estimate the potential maximum fiscal impact of this bill, data on taxable hotel receipts for the City of South Padre Island were gathered from Comptroller tax files, which were then multiplied by 1.5 percent (the difference between the city's current 7 percent rate and the maximum rate should this bill become law). The fiscal impact was adjusted for the effective date and extrapolated through 2014. The table above assumes adoption of the maximum 8.5 percent municipal hotel occupancy tax rate at the earliest possible date.
Based on geographical limitations set forth in the bill, the City of South Padre Island would be the only eligible municipality. To estimate the potential maximum fiscal impact of this bill, data on taxable hotel receipts for the City of South Padre Island were gathered from Comptroller tax files, which were then multiplied by 1.5 percent (the difference between the city's current 7 percent rate and the maximum rate should this bill become law). The fiscal impact was adjusted for the effective date and extrapolated through 2014.
The table above assumes adoption of the maximum 8.5 percent municipal hotel occupancy tax rate at the earliest possible date.
Local Government Impact
The fiscal impact to the eligible municipality is reflected in the above table.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: JOB, MN, SD, TP
JOB, MN, SD, TP