BILL ANALYSIS



C.S.H.B. 609
By: Brimer
03-10-95
Committee Report (Substituted)


BACKGROUND

During the 73rd Legislature, H.B. 1122, was enacted which limited
the use of revenue for administrative costs associated with certain
authorized uses of the hotel occupancy tax.  Section 351.101(a),
Tax Code, limits the uses for which a city may expend hotel
occupancy tax revenues.  Under this subsection, revenue may be used
to promote tourism and the convention and hotel industry, which is
limited to the following: (1) funding the establishment or
improvement of a convention center or visitor information center;
(2) paying the cost of facilitating convention registration; (3)
paying for tourism related advertising and promotion of the city;
(4) funding programs which enhance the arts; and (5) funding
historical preservation programs.

Although cities may incur administrative costs in each of the five
categories, a city may not retain any of the funds for
administrative costs unless: it has a convention center or visitor
information center or one is under construction (1 above); or is
conducting tourism and promotional activities of its own (3 above). 
A city may not use revenue for administrative costs for any of the
other authorized uses of tax revenue.

PURPOSE

This bill permits a city to expend hotel tax revenue for
administrative costs relating to all five purposes under Section
351.101(a), Tax Code.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency, or institution.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 351.101(f), Tax Code, to permit
           expenditure of hotel tax revenues for administrative
           costs incurred directly in the promotion and servicing
           expenditures for which a municipality may expend hotel
           tax revenues under Section 351.101(a).

SECTION 2. Emergency Clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

H.B. 609 allows for the expenditure of hotel tax revenues for
administrative costs incurred directly in "connection with a
purpose" authorized under Section 351.101(a).

C.S.H.B. 609 allows for the expenditure of hotel tax revenues for
administrative costs incurred directly in "the promotion and
servicing expenditures" authorized under Section 351.101(a).  H.B.
609 also has a section that states the changes in the law apply
only to costs incurred on or after the effective date.  C.S.H.B.
609 incorporates this in the emergency clause by stating that "this
Act take effect and be in force from and after its passage."




SUMMARY OF COMMITTEE ACTION

Public notice was posted in accordance to the rules and a public
hearing was held on March 7, 1995.  Without objection, the
committee adopted C.S.H.B 609 by Representative Holzheauser.  By a
record vote of 8 ayes, 0 nays, 0 present not voting and 3 absent,
the committee voted to report H.B. 609 to the House as substituted
with the recommendation that it be sent to the Local and Consent
Calendar and that it do pass.

     Testimony received in favor of the bill:
           James McCarley, representing the City of Plano, and the
           Texas Municipal         League
           Paul Stevens, representing the City of Burleson