Fiscal Notes
A fiscal note dated May 6, 2015 anticipates no fiscal implication to the State.
The fiscal note adds that the bill would affect the city of Bryan. The bill would have no fiscal impact on the state, but would affect the city's use of their tax revenue collections.
Bill Analysis
House Bill 3629 would amend Section 351.101 of the Tax Code relating to the use of tax revenues from the municipal hotel occupancy taxes to allow certain municipalities to use the tax revenues to construct, operate, or expand a sporting related facility or sports field owned by the municipality, if the majority of the events at the facility or field are directly related to a sporting event in which the majority of participants are tourists who substantially increase economic activity at hotels in the municipality.
In such cases, a municipality would not be allowed to use the tax revenues to acquire land for the sports facility or field. It would have to prepare an annual report on the events and their economic impact, and publish it on its Internet website. The money could only be spent on operational expenses of the facility and field if the costs are related to events that are attended in majority by tourists
A municipality would have to reimburse to the municipality’s hotel occupancy tax revenue fund from the municipality’s general fund any expenditure in excess of the amount of area hotel revenue attributable to sporting events held at the sporting related facility or sports field for five years after the date the construction or expansion of the facility or field described is completed.
Vote Recommendation Notes
According to the fiscal note, the bill would affect the city of Bryan. According to the statement of purpose for the bill, the permitted uses of municipal hotel tax revenue in certain municipalities may be overly narrow and could encourage more tourism and benefit the local economy if expanded.
House Bill 3629 would seek to expand the authorized uses of these revenues in order to subsidize sports facilities or fields that welcome events mostly attended by tourists. The bill would also apply restrictions on what this additional use mean and can be. Nonetheless, local tourists, or any visitor that needs to spend a night in a hotel room, would be forced to subsidize these facilities every time they spend a night in a hotel room in that city, whether they take part in these events or not.
The role of a limited government is not to grow tourism or to subsidize certain events facilities, at the expense of others, with taxpayer money. Like any city whose concern is to see more tourists come and visit, a better solution would be the repeal of the municipal hotel occupancy tax, which would encourage 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, and in tourism events and activities. Such a situation would benefit tourists, municipalities and their communities and would also favor a limited government and the free market system.
As a consequence, we oppose House Bill 3629.
The second chamber sponsor is Senator Charles Schwertner.
