84(R) - 2015
House Ways & Means
House Ways & Means
Relating to the authority of certain municipalities to undertake a qualified hotel project.
A fiscal note dated April 21, 2015 anticipates a negative two-year net impact to General Revenue Related Funds for CSHB 2095 of $90,000 through the biennium ending August 31, 2017.
It adds that for a qualified hotel project under Section 2303.003(8)(C) as amended, the city of McKinney would be entitled to state sales tax and state hotel tax associated with a qualified hotel project under Section 151.429(h) of the Tax Code via Section 351.102(b) & (c) of the Tax Code. Such funds must be deposited in a suspense account outside the state treasury to be paid to the owner of the qualified hotel project.
House Bill 2095 would amend Section 2303.003 of the Government Code to change the definition of a "qualified hotel project" related to enterprise zones.
The bill would add as a qualified hotel project a hotel a privately owned hotel adjoining a convention center owned by a political subdivision of this state, proposed to be constructed by or in conjunction with a municipality having a population of more than 130,000 that is located within 50 miles of this state’s border with Oklahoma, or by a nonprofit municipally sponsored local government corporation created under the Texas Transportation Corporation Act, Chapter 431, Transportation Code, by that municipality, including shops, parking facilities, and any other facilities ancillary to the hotel.
Vote Recommendation Notes
House Bill 2095 seeks to extend certain state sales and hotel occupancy tax refunds, rebates or payments to the City of McKinney for a qualified hotel project.
While such rebates already exist for other municipalities, this is not the proper way to apply taxation. A tax should be low and broad-based enough that only necessary revenues are levied - and no more - and it doesn't impede private enterprise from starting new projects. If tax rebates are deemed necessary for some private projects to be started, maybe the tax is too high, or the project is not sustainable. In any case, the burden of paying the tax should not be placed on some to support others.
Additionally, tax privileges, because they favor some above others, distort the free market system and have the potential to create unintended consequences.
House Bill 2095 would not only increase the scope of government, it would also be bad for the free market. We oppose House Bill 2095.