By: Menéndez S.B. No. 627
(In the Senate - Filed January 26, 2023; February 17, 2023,
read first time and referred to Committee on Natural Resources &
Economic Development; April 17, 2023, reported adversely, with
favorable Committee Substitute by the following vote: Yeas 8,
Nays 0; April 17, 2023, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 627 By: Zaffirini
A BILL TO BE ENTITLED
AN ACT
relating to the entitlement of certain municipalities to certain
tax revenue related to a hotel and convention center project.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 351.153(a), Tax Code, is amended to read
as follows:
(a) This section applies only to a municipality described by
Section 351.152(5), (6), [351.152(6)] or (29).
SECTION 2. Sections 351.157(a), (b), and (c), Tax Code, are
amended to read as follows:
(a) In this section, "qualified establishment" means an
establishment:
(1) that is located on land:
(A) owned by a municipality; or
(B) owned by:
(i) any person if the establishment is
located in a municipality described by Section 351.152(3); [or]
(ii) [owned by] the federal government if the
establishment is located in a municipality described by Section
351.152(6); or
(iii) a nonprofit corporation, including a
public facility corporation, that is acting as or on behalf of, or
that is controlled by, a municipality, if the establishment is
located in a municipality described by Section 351.152(5);
(2) the nearest exterior wall of which is located not
more than 1,000 feet from the nearest exterior wall of a qualified
hotel or qualified convention center facility;
(3) that is constructed:
(A) on or after the date the municipality
commences a qualified project under this subchapter; or
(B) at any time if the establishment is located
in a municipality described by Section 351.152(3);
(4) that is not a sports stadium; and
(5) that is the type of establishment described by
Subsection (c) from which the municipality is entitled to receive
revenue under Subsection (d).
(b) This section applies only to:
(1) a municipality described by Section 351.152(3);
(1-a) a municipality described by Section 351.152(5);
(2) a municipality described by Section 351.152(6);
(3) a municipality described by Section 351.152(7);
(4) a municipality described by Section 351.152(10);
(4-a) a municipality described by Section
351.152(14);
(5) a municipality described by Section 351.152(16);
(6) a municipality described by Section 351.152(22);
(7) a municipality described by Section 351.152(25);
(8) a municipality described by Section 351.152(34);
(9) a municipality described by Section 351.152(35);
(10) a municipality described by Section 351.152(36);
(11) a municipality described by Section 351.152(38);
and
(12) a municipality described by Section 351.152(43).
(c) A municipality is entitled to receive revenue under
Subsection (d) derived from the following types of establishments
that meet the requirements of Subsections (a)(1), (2), (3), and
(4):
(1) for a municipality described by Subsection (b)(1):
(A) restaurants, bars, and retail
establishments; and
(B) swimming pools and swimming facilities owned
or operated by the related qualified hotel;
(1-a) for a municipality described by Subsection
(b)(1-a):
(A) restaurants, bars, spas, and retail
establishments; and
(B) swimming pools and swimming facilities owned
or operated by the related qualified hotel;
(2) for a municipality described by Subsection (b)(2),
swimming pools and swimming facilities, restaurants, bars, and
retail establishments;
(3) for a municipality described by Subsection (b)(3),
restaurants, bars, and retail establishments;
(4) for a municipality described by Subsection (b)(4):
(A) restaurants, bars, and retail
establishments; and
(B) swimming pools and swimming facilities owned
or operated by the related qualified hotel;
(4-a) for a municipality described by Subsection
(b)(4-a):
(A) restaurants, bars, and retail
establishments; and
(B) swimming pools and swimming facilities owned
or operated by the related qualified hotel;
(5) for a municipality described by Subsection (b)(5),
restaurants, bars, and retail establishments;
(6) for a municipality described by Subsection (b)(6),
restaurants, bars, and retail establishments;
(7) for a municipality described by Subsection (b)(7),
restaurants, bars, and retail establishments;
(8) for a municipality described by Subsection (b)(8),
restaurants, bars, and retail establishments;
(9) for a municipality described by Subsection (b)(9),
restaurants, bars, and retail establishments;
(10) for a municipality described by Subsection
(b)(10):
(A) restaurants, bars, and retail
establishments; and
(B) swimming pools and swimming facilities owned
or operated by the related qualified hotel;
(11) for a municipality described by Subsection
(b)(11):
(A) restaurants, bars, and retail
establishments; and
(B) swimming pools and swimming facilities owned
or operated by the related qualified hotel; and
(12) for a municipality described by Subsection
(b)(12):
(A) restaurants, bars, and retail
establishments; and
(B) swimming pools and swimming facilities owned
or operated by the related qualified hotel.
SECTION 3. Subchapter C, Chapter 351, Tax Code, is amended
by adding Section 351.161 to read as follows:
Sec. 351.161. RECAPTURE OF LOST STATE TAX REVENUE FROM
CERTAIN MUNICIPALITIES. (a) This section applies only to a
qualified project that is first commenced on or after January 1,
2027, and was authorized before January 1, 2023, by a municipality
with a population of 175,000 or more.
(b) On the 20th anniversary of the date a hotel designated
as a qualified hotel by a municipality to which this section applies
is open for initial occupancy, the comptroller shall determine:
(1) the total amount of state tax revenue received
under Section 351.156 and, if applicable, under Section 351.157 by
the municipality from the qualified project of which the qualified
hotel was a part during the period for which the municipality was
entitled to receive that revenue; and
(2) the total amount of state tax revenue described by
Subdivision (1) received by the state during the period beginning
on the 10th anniversary of the date the qualified hotel opened for
initial occupancy and ending on the 20th anniversary of that date
from the same sources from which the municipality received the
revenue described by Subdivision (1).
(c) If the amount determined under Subsection (b)(1)
exceeds the amount determined under Subsection (b)(2), the
comptroller shall promptly provide written notice to the
municipality stating that the municipality must remit to the
comptroller the difference between those two amounts in the manner
provided by this subsection. The municipality shall, using money
lawfully available to the municipality for the purpose, remit
monthly payments to the comptroller in an amount equal to the total
amount of municipal hotel occupancy tax revenue received by the
municipality from the qualified hotel in the preceding month until
the amount remitted to the comptroller equals the total amount due
as stated in the notice. The first payment required under this
subsection must be made not later than the 30th day after the date
the municipality receives the notice from the comptroller.
Subsequent payments are due on the 20th day of each month until the
total amount stated in the notice is paid. The comptroller shall
prescribe the procedure a municipality must use to remit a payment
required by this subsection to the comptroller.
(d) The comptroller shall deposit revenue received under
this section in the manner prescribed by Section 156.251.
SECTION 4. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2023.
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