LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION April 5, 2025 TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB2408 by Tepper (Relating to the authority of certain municipalities to pledge certain tax revenue for the payment of obligations related to, and receive certain tax revenue derived from, a hotel and convention center project.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB2408, As Introduced: an impact of $0 through the biennium ending August 31, 2027. However, a revenue loss would occur beginning in fiscal year 2029. Fiscal Impact if the projects would be developed under Section 351.157 All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund12026$02027$02028$02029($2,136,000)2030($2,221,000)Fiscal Impact if the projects would be developed under Section 351.1022 All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund12026$02027$02028$02029($2,573,000)2030($2,675,000) Fiscal AnalysisThe bill would amend Section 351.1022(a) of the Tax Code to add a municipality described by Section 351.152 (14).The bill would amend Section 351.157(e) to exclude a municipality described by Section 351.152(14) of the Tax Code from the requirement to commence a qualified project under Section 351.157 by September 1, 2027, to receive revenue under Section 351.157(d).
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
April 5, 2025
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB2408 by Tepper (Relating to the authority of certain municipalities to pledge certain tax revenue for the payment of obligations related to, and receive certain tax revenue derived from, a hotel and convention center project.), As Introduced
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB2408 by Tepper (Relating to the authority of certain municipalities to pledge certain tax revenue for the payment of obligations related to, and receive certain tax revenue derived from, a hotel and convention center 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
HB2408 by Tepper (Relating to the authority of certain municipalities to pledge certain tax revenue for the payment of obligations related to, and receive certain tax revenue derived from, a hotel and convention center project.), As Introduced
HB2408 by Tepper (Relating to the authority of certain municipalities to pledge certain tax revenue for the payment of obligations related to, and receive certain tax revenue derived from, a hotel and convention center project.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB2408, As Introduced: an impact of $0 through the biennium ending August 31, 2027. However, a revenue loss would occur beginning in fiscal year 2029.
Estimated Two-year Net Impact to General Revenue Related Funds for HB2408, As Introduced: an impact of $0 through the biennium ending August 31, 2027. However, a revenue loss would occur beginning in fiscal year 2029.
Fiscal Impact if the projects would be developed under Section 351.157
All Funds, Five-Year Impact:
2026 $0
2027 $0
2028 $0
2029 ($2,136,000)
2030 ($2,221,000)
Fiscal Impact if the projects would be developed under Section 351.1022
All Funds, Five-Year Impact:
2026 $0
2027 $0
2028 $0
2029 ($2,573,000)
2030 ($2,675,000)
Fiscal Analysis
The bill would amend Section 351.1022(a) of the Tax Code to add a municipality described by Section 351.152 (14).The bill would amend Section 351.157(e) to exclude a municipality described by Section 351.152(14) of the Tax Code from the requirement to commence a qualified project under Section 351.157 by September 1, 2027, to receive revenue under Section 351.157(d).
Methodology
Lubbock and Amarillo 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. 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 would entitle Lubbock and Amarillo to receive the revenue until the tenth anniversary of the date the qualified hotel to which the entitlement relates is open for initial occupancy.Lubbock and Amarillo would also be eligible to receive funds described in Section 351.1022(b) which provides, in relevant part, that an eligible municipality is entitled to receive all funds from a hotel project that an owner of a project may receive under Section 151.429(h) of the Tax Code, or 2302.5055 of the Government code, and all the tax revenue collected under Chapter 183 of the Tax Code by or from all permittees at the hotel project, excluding revenue disbursed by the comptroller under Section 183.051(b). Lubbock and Amarillo would be entitled to receive the revenue until the thirtieth anniversary of the date the qualified hotel to which the entitlement relates is open for initial occupancy.The City of Lubbock has plans for a qualified hotel and could chose to either develop that project under Section 351.157 or 351.1022. The city of Amarillo does not currently have plans for a qualified hotel but could also chose to either develop that project under Section 351.157 or 351.1022. The estimates below are based on a projected opening dates of September 1, 2028, or state fiscal year 2029, a comparison and review of revenues paid to the owners of extant qualified hotel projects, and estimated attributes such as prospective hotel. There is one estimate for each section the cities could develop a project under.
Local Government Impact
The bill's provisions would affect the cities of Lubbock and Amarillo.
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