H.B. No. 1122
1-1 AN ACT
1-2 relating to the use of municipal hotel occupancy taxes.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 351.001, Tax Code, is amended by adding
1-5 Subdivision (8) to read as follows:
1-6 (8) "Visitor information center" or "tourism
1-7 information center" means a building or a portion of a building
1-8 used to distribute or disseminate information to tourists.
1-9 SECTION 2. Section 351.0025, Tax Code, is amended to read as
1-10 follows:
1-11 Sec. 351.0025. Extraterritorial Jurisdiction. (a) A
1-12 municipality with a population of less than 35,000 by ordinance may
1-13 impose the tax authorized under Section 351.002 in the
1-14 municipality's extraterritorial jurisdiction.
1-15 (b) The municipality may not impose a tax under this section
1-16 if as a result of the adoption the combined rate of state, county,
1-17 and municipal hotel occupancy taxes in the extraterritorial
1-18 jurisdiction exceeds 15 percent of the price paid for a room in a
1-19 hotel.
1-20 SECTION 3. Sections 351.101(a), (b), (c), and (f), Tax Code,
1-21 are amended to read as follows:
1-22 (a) Revenue from the municipal hotel occupancy tax may be
1-23 used only to promote tourism and the convention and hotel industry,
1-24 and that use is limited to the following:
2-1 (1) the acquisition of sites for and the construction,
2-2 improvement, enlarging, equipping, repairing, operation, and
2-3 maintenance of convention center facilities or visitor information
2-4 centers, or both;
2-5 (2) the furnishing of facilities, personnel, and
2-6 materials for the registration of convention delegates or
2-7 registrants;
2-8 (3) advertising and conducting solicitations and
2-9 promotional programs to attract tourists and convention delegates
2-10 or registrants to the municipality or its vicinity;
2-11 (4) the encouragement, promotion, improvement, and
2-12 application of the arts, including instrumental and vocal music,
2-13 dance, drama, folk art, creative writing, architecture, design and
2-14 allied fields, painting, sculpture, photography, graphic and craft
2-15 arts, motion pictures, radio, television, tape and sound recording,
2-16 and other arts related to the presentation, performance, execution,
2-17 and exhibition of these major art forms; and
2-18 (5) historical restoration and preservation projects
2-19 or activities or advertising and conducting solicitations and
2-20 promotional programs to encourage tourists and convention delegates
2-21 to visit preserved historic sites or museums:
2-22 (A) at or in the immediate vicinity of
2-23 convention center facilities or visitor information centers; or
2-24 (B) located elsewhere in the municipality or its
2-25 vicinity that would be frequented by tourists and<,> convention
2-26 delegates<, or other visitors to the municipality>.
2-27 (b) Revenue derived from the tax authorized by this chapter
3-1 shall <is to> be expended in a manner directly enhancing and
3-2 promoting tourism and the convention and hotel industry as
3-3 permitted by Subsection (a). That revenue may not be used for the
3-4 general revenue purposes or general governmental operations of a
3-5 municipality.
3-6 (c) The governing body of a municipality by contract may
3-7 delegate to a person, including another governmental entity or a
3-8 private organization, the management or supervision of programs
3-9 and activities funded with revenue from the tax authorized by this
3-10 chapter. The governing body in writing shall approve in advance
3-11 the annual budget of the person to which it delegates those
3-12 functions and shall require the person to make periodic reports to
3-13 the governing body at least quarterly <annually> listing the
3-14 expenditures made by the person with <of> revenue from the tax
3-15 authorized by this chapter <provided by the municipality>. The
3-16 person must maintain revenue provided <by the municipality> from
3-17 the tax authorized by this chapter in a separate account
3-18 established for that purpose and may not commingle that revenue
3-19 with any other money <or maintain it in any other account>. The
3-20 municipality may not delegate to any person the management or
3-21 supervision of its convention and visitors programs and activities
3-22 funded with revenue from the tax authorized by this chapter other
3-23 than by contract as provided by this subsection. The approval by
3-24 the governing body of the municipality of the annual budget of the
3-25 person to whom the governing body delegates those functions creates
3-26 a fiduciary duty in the person with respect to the revenue provided
3-27 by the tax authorized by this chapter <municipality to the person
4-1 under the contract>.
4-2 (f) Hotel occupancy tax revenue spent for a purpose
4-3 authorized by this section may be spent for day-to-day operations,
4-4 supplies, salaries, office rental, travel expenses, and other
4-5 administrative costs only if those administrative costs are
4-6 incurred directly in the promotion and servicing expenditures
4-7 authorized under Section 351.101(a)(1) or (3) <351.101>. If a
4-8 municipal or other public or private entity that conducts an
4-9 activity authorized <for which hotel occupancy tax revenue may be
4-10 used> under this section conducts other activities that are not
4-11 authorized under this section <for which hotel occupancy tax
4-12 revenue may not be used>, the portion of the total administrative
4-13 costs of the entity for which hotel occupancy tax revenue may be
4-14 used may not exceed the portion of those administrative costs
4-15 actually incurred in conducting the authorized activities <for
4-16 which the hotel occupancy tax revenue may be used>.
4-17 SECTION 4. Section 351.1015(d), Tax Code, is amended to read
4-18 as follows:
4-19 (d) For any <eligible> municipality described in Subsection
4-20 (b), a nonprofit manned spaced flight tourism facility shall
4-21 conclusively be deemed to be a convention center facility within
4-22 the meaning of Section 351.101(a)(1).
4-23 SECTION 5. Section 351.103, Tax Code, is amended by amending
4-24 Subsection (a) and adding Subsection (e) to read as follows:
4-25 (a) At least 50 percent of the hotel occupancy tax revenue
4-26 collected by a municipality with a population of 200,000 or greater
4-27 <according to the most recent federal decennial census,> must be
5-1 allocated for the purposes provided by Section 351.101(a)(3). For
5-2 <According to the most recent federal decennial census, for>
5-3 municipalities with a population of less than 200,000, allocations
5-4 for the purposes provided by Section 351.101(a)(3) are as follows:
5-5 (1) if the tax rate in a municipality is not more than
5-6 three percent of the cost paid for a room, not less than the amount
5-7 of revenue received by the municipality from the tax at a rate of
5-8 one-half of one percent of the cost of the room; or
5-9 (2) if the tax in a municipality exceeds three percent
5-10 of the cost of a room, not less than the amount of revenue received
5-11 by the municipality from the tax at a rate of one percent of the
5-12 cost of a room. This subsection does not apply to a municipality,
5-13 regardless of population, that before October 1, 1989, adopted an
5-14 ordinance providing for the allocation of an amount in excess of 50
5-15 percent of the hotel occupancy tax revenue collected by the
5-16 municipality for one or more specific purposes provided by Section
5-17 351.101(a)(1) until the ordinance is repealed or expires or until
5-18 the revenue is no longer used for those specific purposes in an
5-19 amount in excess of 50 percent of the tax revenue.
5-20 (e) A municipality may use hotel occupancy tax revenue
5-21 collected by the municipality for a purpose provided by Section
5-22 351.101(a)(1) only if the municipality complies with the applicable
5-23 provisions of this section.
5-24 SECTION 6. Section 351.105(a), Tax Code, is amended to read
5-25 as follows:
5-26 (a) An eligible coastal municipality that levies and
5-27 collects an occupancy tax authorized by this chapter at a rate of
6-1 seven percent <or more> shall pledge a portion of the revenue equal
6-2 to at least one percent of the cost of a room to either or both of
6-3 the following purposes:
6-4 (1) the payment of the bonds that the municipality or
6-5 a park board of trustees may issue under Section 3, Chapter 63,
6-6 Acts of the 59th Legislature, Regular Session, 1965 (Article
6-7 1269j-4.1, Vernon's Texas Civil Statutes), or under Chapter 33,
6-8 Acts of the 57th Legislature, 3rd Called Session, 1962 (Article
6-9 6081g-1, Vernon's Texas Civil Statutes), in order to provide all or
6-10 part of the funds for the establishment, acquisition, purchase,
6-11 construction, improvement, enlargement, equipment, or repair of
6-12 public improvements, including parks, civic centers, civic center
6-13 buildings, auditoriums, exhibition halls, coliseums, marinas,
6-14 cruise ship terminal facilities, hotels, motels, parking
6-15 facilities, golf courses, trolley or trolley transportation
6-16 systems, and other facilities as may be considered advisable in
6-17 connection with these facilities that serve the purpose of
6-18 attracting visitors and tourists to the municipality; or
6-19 (2) the maintenance, improvement, or operation of the
6-20 parks, civic centers, civic center buildings, auditoriums,
6-21 exhibition halls, coliseums, marinas, cruise ship terminal
6-22 facilities, hotels, motels, parking facilities, golf courses,
6-23 trolley or trolley transportation systems, and other facilities as
6-24 may be considered advisable in connection with these facilities
6-25 that serve the purpose of attracting visitors and tourists to the
6-26 municipality.
6-27 SECTION 7. (a) This Act takes effect September 1, 1993.
7-1 (b) This Act does not apply to the use of tax revenue
7-2 pledged to secure bonds issued before the effective date of this
7-3 Act. Tax revenue pledged to secure bonds issued before the
7-4 effective date of this Act is governed by the law in effect on the
7-5 date the bonds were issued, and that law is continued in effect for
7-6 that purpose.
7-7 SECTION 8. The importance of this legislation and the
7-8 crowded condition of the calendars in both houses create an
7-9 emergency and an imperative public necessity that the
7-10 constitutional rule requiring bills to be read on three several
7-11 days in each house be suspended, and this rule is hereby suspended.