HBA-KDB H.B. 939 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 939 By: Hodge Ways & Means 3/15/2001 Introduced BACKGROUND AND PURPOSE In recent years, several film and television projects have been made in Texas because of the state's diverse natural and urban landscapes as well as its relatively moderate climate. However, there is strong competition between Texas and the other 49 states to attract filmmakers. Tax incentives may be an effective way to bring the filmmakers to this state. Currently, filmmakers may claim tax exemptions on several items, but motor vehicles are not included on this list. Furthermore, movie productions may only claim exemption from state occupancy taxes levied on hotel and motel stays of 30 consecutive days or longer. House Bill 939 provides a sales tax exemption on motor vehicles purchased, used, or leased by filmmakers and a refund of the hotel occupancy tax for film crews that stay 15 consecutive days or more. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 939 amends the Tax Code to provide that taxes imposed for the sale, rental, and use of motor vehicles do not apply to a motor vehicle if the motor vehicle is used in connection with the production for consideration of a television film, commercial, or program, a motion picture, or a video or audio recording, a copy of which is sold or offered for ultimate sale, licensed, distributed, broadcast, or otherwise commercially exhibited. The bill requires the tax that would have been remitted on gross rental receipts without such an exemption to be deemed to have been remitted for the purpose of computing the minimum gross rental receipts tax. H.B. 939 provides that a person involved in the production for consideration of a television film, commercial, or program, a motion picture, or a video or audio recording, a copy of which is sold or offered for ultimate sale, licensed, distributed, broadcast, or otherwise commercially exhibited, provided that the person has the right to use or possess a room in one hotel or in a series of two or more hotels for at least 15 consecutive days is entitled to a refund from the hotel occupancy tax. EFFECTIVE DATE July 1, 2001, or if the Act does not receive the necessary vote, the Act takes effect October 1, 2001.