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