H.B. No. 1264
    1-1                                AN ACT
    1-2  relating to the rate at which certain municipalities may impose the
    1-3  hotel occupancy tax and to the use of the revenue from the tax.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Section 351.001, Tax Code, is amended by adding
    1-6  Subdivision (8) to read as follows:
    1-7              (8)  "Eligible central municipality" means a
    1-8  municipality with a population of more than 850,000 that has
    1-9  adopted a capital improvement plan for the expansion of an existing
   1-10  convention center facility.
   1-11        SECTION 2.  Section 351.003, Tax Code, is amended by adding
   1-12  Subsection (c) to read as follows:
   1-13        (c)  The rate in an eligible central municipality may not
   1-14  exceed nine percent of the price paid for a room.  This subsection
   1-15  does not apply to a municipality to which Section 351.1015 or
   1-16  351.106 applies.
   1-17        SECTION 3.  Subchapter B, Chapter 351, Tax Code, is amended
   1-18  by adding Section 351.1065 to read as follows:
   1-19        Sec. 351.1065.  ALLOCATION OF REVENUE: ELIGIBLE CENTRAL
   1-20  MUNICIPALITY.  (a)  An eligible central municipality shall use the
   1-21  amount of revenue from the tax that is derived from the application
   1-22  of the tax at a rate of more than seven percent of the cost of a
   1-23  room only for:
   1-24              (1)  the construction of an expansion of an existing
    2-1  convention center facility; and
    2-2              (2)  pledging payment of revenue bonds and revenue
    2-3  refunding bonds issued under Chapter 63, Acts of the 59th
    2-4  Legislature, Regular Session, 1965 (Article 1269j-4.1, Vernon's
    2-5  Texas Civil Statutes), for the construction of the expansion.
    2-6        (b)  Any interest income derived from the application of the
    2-7  tax at a rate of more than seven percent of the cost of a room may
    2-8  be used only for the purposes provided by this section.
    2-9        (c)  An eligible central municipality expending tax revenue
   2-10  under this section shall attempt to include minority-owned
   2-11  businesses in the issuance of at least 32 percent of the total
   2-12  dollar value of the bonds issued, and in at least 32 percent of the
   2-13  total fees paid by the issuer, in connection with the construction.
   2-14        SECTION 4.  If on or after the effective date of this Act a
   2-15  municipality increases the rate of the tax authorized by Section
   2-16  351.003(c), Tax Code, as added by this Act, the increased tax rate
   2-17  does not apply to the tax imposed on the use or possession of a
   2-18  room under a contract executed before the effective date of this
   2-19  Act that provides for the payment of the tax at the rate in effect
   2-20  when the contract was executed, unless the contract is subject to
   2-21  change or modification by reason of the tax rate increase.  The tax
   2-22  rate applicable to the use or possession of a room under the
   2-23  contract is the rate in effect when the contract was executed, and
   2-24  the law governing that rate is continued in effect for that
   2-25  purpose.
   2-26        SECTION 5.  The importance of this legislation and the
   2-27  crowded condition of the calendars in both houses create an
    3-1  emergency and an imperative public necessity that the
    3-2  constitutional rule requiring bills to be read on three several
    3-3  days in each house be suspended, and this rule is hereby suspended,
    3-4  and that this Act take effect and be in force from and after its
    3-5  passage, and it is so enacted.