LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 87TH LEGISLATIVE REGULAR SESSION April 11, 2021 TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB2690 by Reynolds (Relating to the authority of certain municipalities to receive certain tax revenue derived from a hotel and convention center project and related establishments 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 HB2690, As Introduced : an impact of $0 through the biennium ending August 31, 2023. A negative fiscal impact to the state will begin in fiscal year 2025. General Revenue-Related Funds, Five- Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact toGeneral Revenue Related Funds2022$02023$02024$02025($9,770,000)2026($10,160,000)All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund12022$02023$02024$02025($9,770,000)2026($10,160,000) Fiscal AnalysisThe bill would amend Sections 351.152, 351.153, and 351.157 of the Tax Code to permit a municipality with a population of more than 67,000 located in two counties with 90 percent of the municipality's territory in a county with a population of at least 580,000 and the remaining territory in a county with a population of at least 4 million to use rebates of state sales and use tax and hotel tax revenue for hotel and convention center projects.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, 2021.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 87TH LEGISLATIVE REGULAR SESSION
April 11, 2021
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB2690 by Reynolds (Relating to the authority of certain municipalities to receive certain tax revenue derived from a hotel and convention center project and related establishments and to pledge certain tax revenue for the payment of obligations related to the project.), As Introduced
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB2690 by Reynolds (Relating to the authority of certain municipalities to receive certain tax revenue derived from a hotel and convention center project and related establishments and to pledge certain tax revenue for the payment of obligations related to the project.), As Introduced
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB2690 by Reynolds (Relating to the authority of certain municipalities to receive certain tax revenue derived from a hotel and convention center project and related establishments and to pledge certain tax revenue for the payment of obligations related to the project.), As Introduced
HB2690 by Reynolds (Relating to the authority of certain municipalities to receive certain tax revenue derived from a hotel and convention center project and related establishments 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 HB2690, As Introduced : an impact of $0 through the biennium ending August 31, 2023. A negative fiscal impact to the state will begin in fiscal year 2025.
Estimated Two-year Net Impact to General Revenue Related Funds for HB2690, As Introduced : an impact of $0 through the biennium ending August 31, 2023. A negative fiscal impact to the state will begin in fiscal year 2025.
A negative fiscal impact to the state will begin in fiscal year 2025.
General Revenue-Related Funds, Five- Year Impact:
2022 $0
2023 $0
2024 $0
2025 ($9,770,000)
2026 ($10,160,000)
All Funds, Five-Year Impact:
2022 $0
2023 $0
2024 $0
2025 ($9,770,000)
2026 ($10,160,000)
Fiscal Analysis
The bill would amend Sections 351.152, 351.153, and 351.157 of the Tax Code to permit a municipality with a population of more than 67,000 located in two counties with 90 percent of the municipality's territory in a county with a population of at least 580,000 and the remaining territory in a county with a population of at least 4 million to use rebates of state sales and use tax and hotel tax revenue for hotel and convention center projects.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, 2021.
Methodology
The bill would apply to the City of Missouri City. Missouri City would be entitled to receive state sales and use tax and state hotel tax revenue generated, paid, and collected by a qualified hotel and each restaurant, bar, and retail establishment not more than 1,000 feet from the hotel or qualified convention center. Entitlement to state tax revenue would be for a period of 10 years after the qualified hotel is open for initial occupancy.Missouri City has proposed plans for a 1,000 room hotel and mixed-use project near Highway 6 and the Fort Bend Toll Road which includes shopping, dining, entertainment and a hotel. Planned opening date would be September 2024 or state fiscal year 2025.This estimate is based on the planned room size of the prospective hotel, an assumed average nightly room rate and annual average occupancy rate, and the ratio of state sales tax to hotel tax revenues paid to the owners of the extant qualified hotel project authorized for the additional entitlement to state sales tax revenue from establishments within 1,000 feet of the project hotel as provided under Section 351.157.
Local Government Impact
The bill would apply to the City of Missouri City. Missouri City would be entitled to receive state sales and use tax and state hotel tax revenue generated, paid, and collected by a qualified hotel and each restaurant, bar, and retail establishment not more than 1,000 feet from the hotel or qualified convention center. Entitlement to state tax revenue would be for a period of 10 years after the qualified hotel is open for initial occupancy.
Source Agencies: b > td > 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: b > td > JMc, KK, SD, BRI
JMc, KK, SD, BRI