LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION April 13, 2025 TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB4109 by Alders (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.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB4109, As Introduced: an impact of $0 through the biennium ending August 31, 2027. However, there would be a negative impact beginning in fiscal year 2030 and continuing for 10 years. General Revenue-Related Funds, Five- Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact toGeneral Revenue Related Funds2026$02027$02028$02029$02030($453,000)All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund12026$02027$02028$02029$02030($453,000) Fiscal AnalysisThe bill would add a municipality with a population of 96,000 or more that is located in a county that borders Lake Palestine, to the list of municipalities exempt from the ownership requirements for certain qualified convention center facilities and qualified hotels in Sections 351.151(2) (B) and 351.151 (3) (A) of the Tax Code respectively.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
April 13, 2025
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB4109 by Alders (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.), As Introduced
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB4109 by Alders (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.), 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
HB4109 by Alders (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.), As Introduced
HB4109 by Alders (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.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB4109, As Introduced: an impact of $0 through the biennium ending August 31, 2027. However, there would be a negative impact beginning in fiscal year 2030 and continuing for 10 years.
Estimated Two-year Net Impact to General Revenue Related Funds for HB4109, As Introduced: an impact of $0 through the biennium ending August 31, 2027. However, there would be a negative impact beginning in fiscal year 2030 and continuing for 10 years.
General Revenue-Related Funds, Five- Year Impact:
2026 $0
2027 $0
2028 $0
2029 $0
2030 ($453,000)
All Funds, Five-Year Impact:
2026 $0
2027 $0
2028 $0
2029 $0
2030 ($453,000)
Fiscal Analysis
The bill would add a municipality with a population of 96,000 or more that is located in a county that borders Lake Palestine, to the list of municipalities exempt from the ownership requirements for certain qualified convention center facilities and qualified hotels in Sections 351.151(2) (B) and 351.151 (3) (A) of the Tax Code respectively.
Methodology
The bill's provisions would affect the city of Tyler.Tyler is currently 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. Tyler would be 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. Tyler would be entitled to receive the revenue until the tenth anniversary of the date the qualified hotel to which the entitlement relates is open for initial occupancy.The city of Tyler does not have concrete plans for a qualified hotel and stated that they would be four to five years out from the initial opening date of any such project. The city would be entitled to commence a qualified hotel with the additional entitlement from restaurants, bars, retail establishments, swimming pools and swimming facilities as provided under Section 351.157 of the Tax Code, with the additional need for exemptions from certain ownership requirements granted by the bill and could avail itself of the tax rebates should eligibility be acquired through this legislation, but due to Section 351.157(e), which states that a qualified hotel would need to be opened before September 1, 2027, to receive the additional entitlements under 351.157, the city could only avail itself of the tax rebates under section 351.156 should eligibility be acquired through this legislation. The estimate is based on a projected opening date of September 1, 2029, or state fiscal year 2030, a comparison and review of revenues paid to the owners of extant qualified hotel projects, and estimated attributes of such prospective hotel.
Local Government Impact
Tyler would be 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. Tyler would be entitled to receive the revenue until the tenth anniversary of the date the qualified hotel to which the entitlement relates 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