HB 3052

84(R) - 2015
House Ways & Means
House Ways & Means
Economic & Small Business Development

Vote Recommendation

  • Neutral
  • Neutral
  • Neutral
  • Neutral
  • Neutral


Dennis Bonnen

Bill Caption

Relating to the allocation of state hotel occupancy tax revenue to certain barrier island coastal municipalities.

Fiscal Notes

A fiscal note dated March 23, 2015 anticipates a negative two-year net impact to General Revenue Related Funds of $157,000 through the biennium ending August 31, 2017.

Bill Analysis

House Bill 3052 would amend Chapter 156 of the Tax Code related to the state hotel occupancy tax, and particularly Section 156.2512 related to the allocation of revenue from the tax to certain municipalities.

House Bill 3052 would change the definition of an "Eligible barrier island coastal municipality" to add to the definition a municipality that "has a population of less than 10,000 and is located in a county with a population of at least 300,000 that is adjacent to a county with a population of at least 3,000,000."

It would then add this newly-considered eligible barrier island coastal municipality to the list of municipalities for which the comptroller must compute the amount of revenue derived from the collection of taxes imposed under this chapter at a rate of one percent and received from hotels located on barrier islands in eligible barrier island coastal municipalities and issue to the municipality a warrant drawn on the general revenue fund for that amount (Section 153.2512 (a) of the Tax Code).

Vote Recommendation Notes

Under current law, eligible barrier island coastal municipalities receive a portion of the state hotel occupancy tax that is collected in hotels located on barrier islands in such municipalities. This money can only be used to clean and maintain public beaches and for erosion response projects in these municipalities.

According to its statement of intent, "the Village of Surfside Beach and Quintana, small coastal communities that rely heavily on tourism to support the local economies, continue to experience a high rate of beach erosion that requires aggressive and ongoing renourishment and prevention projects to rebuild and protect the existing beaches." House Bill 3052 aims at applying the same standard of funding to the Village of Surfside Beach and Quintana than the one that already exists for other coastal municipalities.

While House Bill 3052 aims at applying the law equally, and does not seem to favor certain municipalities above others with the same issue, we will remain neutral on this bill because it is a local matter.

Nevertheless, the use of the hotel occupancy tax to fund the fight of erosion of beaches of some municipalities because they rely heavily on tourism is questionable. What it concretely does is impose that any person who stays at a hotel in these municipalities, regardless of the reason, pays to fight erosion of the beaches in this municipality regardless of whether they take advantage of the beaches or not. Erosion of beaches could be fought instead by asking a voluntary fee of those that come for and use these beaches. Repealing the hotel occupancy tax would also have the benefit of encouraging individuals to stay longer in hotels and to spend more of their money -- that would have otherwise been paid in taxes -- within the local economy. Such a situation would benefit tourists, municipalities and their communities and would also favor a limited government and the free market system.