1-1 By: Sibley S.B. No. 1603 1-2 (In the Senate - Filed March 12, 1999; March 15, 1999, read 1-3 first time and referred to Committee on Intergovernmental 1-4 Relations; April 6, 1999, reported adversely, with favorable 1-5 Committee Substitute by the following vote: Yeas 5, Nays 0; 1-6 April 6, 1999, sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1603 By: Moncrief 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to the expenditure of revenue and interest derived from 1-11 the municipal hotel occupancy tax. 1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-13 SECTION 1. Section 351.001, Tax Code, is amended by adding 1-14 Subdivision (10) to read as follows: 1-15 (10) "Revenue" includes any interest derived from the 1-16 revenue. 1-17 SECTION 2. Subchapter B, Chapter 351, Tax Code, is amended 1-18 by adding Sections 351.107 and 351.108 to read as follows: 1-19 Sec. 351.107. INJUNCTION AND RELIEF. (a) If it appears 1-20 that a municipality, a person with whom a municipality contracts, 1-21 or any other person is spending or is going to spend revenue from 1-22 the tax imposed under this chapter for a purpose not authorized by 1-23 this chapter, the owner or operator of a hotel that pays the tax 1-24 imposed under this chapter to the municipality or a state 1-25 association of hotels whose membership includes a hotel that pays 1-26 the tax imposed under this chapter to the municipality may 1-27 commence, not later than four years after the date the expenditure 1-28 was made, a civil action in a district court for: 1-29 (1) injunctive relief necessary to prevent the revenue 1-30 from being spent for the unauthorized purpose; and 1-31 (2) return of the full amount of any revenue spent for 1-32 an unauthorized purpose to the account or fund in which the 1-33 municipality's hotel tax is deposited. 1-34 (b) On a finding by the district court that revenue from the 1-35 tax imposed under this chapter has been spent or is going to be 1-36 spent by the municipality, by a person with whom the municipality 1-37 contracts, or by any other person for a purpose not authorized by 1-38 this chapter, the court may: 1-39 (1) grant any injunctive relief necessary to prevent 1-40 the revenue from being spent for the unauthorized purpose; and 1-41 (2) order the full amount of any revenue spent for an 1-42 unauthorized purpose be paid to the account or fund in which the 1-43 municipality's hotel occupancy tax is deposited and be spent only 1-44 for purposes authorized by this chapter. 1-45 (c) A court may not under this section review a pledge of 1-46 revenue from the tax imposed under this chapter for bonds if: 1-47 (1) the pledge has been approved by the attorney 1-48 general and registered by the comptroller; and 1-49 (2) the party requesting review does not allege 1-50 forgery or fraud. 1-51 Sec. 351.108. SEPARATE RECORDS. A municipality shall 1-52 maintain a record that identifies as separate items: 1-53 (1) the amount of revenue derived from the tax imposed 1-54 under this chapter; and 1-55 (2) the amount and purpose of each expenditure from 1-56 that revenue. 1-57 SECTION 3. (a) This Act takes effect September 1, 1999. 1-58 (b) Sections 351.107 and 351.108, Tax Code, as added by this 1-59 Act, apply only to an expenditure made on or after the effective 1-60 date of this Act, without regard to whether the expenditure is from 1-61 revenue collected under Chapter 351, Tax Code, before, on, or after 1-62 that date. 1-63 (c) An expenditure made before the effective date of this 1-64 Act is governed by the law applicable to the action immediately 2-1 before the effective date of this Act, and that law is continued in 2-2 effect for that purpose. 2-3 SECTION 4. The importance of this legislation and the 2-4 crowded condition of the calendars in both houses create an 2-5 emergency and an imperative public necessity that the 2-6 constitutional rule requiring bills to be read on three several 2-7 days in each house be suspended, and this rule is hereby suspended. 2-8 * * * * *