By Coleman H.B. No. 1886
77R4229 DAK-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to municipal hotel occupancy taxes.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Sections 351.001(3)-(10), Tax Code, are amended to
1-5 read as follows:
1-6 (3) ["Eligible municipality" means a municipality that
1-7 has a population of at least 1,200,000 and that has adopted by
1-8 ordinance a capital improvement plan for convention and exposition
1-9 facilities for the municipality.]
1-10 [(4)] "Eligible coastal municipality" means a
1-11 home-rule municipality that borders on the Gulf of Mexico and has a
1-12 population of less than 80,000.
1-13 (4) [(5)] "Hotel" has the meaning assigned by Section
1-14 156.001(1).
1-15 (5) [(6)] "Tourism" means the guidance or management
1-16 of tourists.
1-17 (6) [(7)] "Tourist" means an individual who travels
1-18 from the individual's residence to a different municipality,
1-19 county, state, or country for pleasure, recreation, education, or
1-20 culture.
1-21 (7) [(8)] "Eligible central municipality" means a
1-22 municipality with a population of more than 440,000 but less than
1-23 1.5 million that is located in a county with a population of one
1-24 million or more and that has adopted a capital improvement plan for
2-1 the expansion of an existing convention center facility.
2-2 (8) [(9)] "Visitor information center" or "tourism
2-3 information center" means a building or a portion of a building
2-4 used to distribute or disseminate information to tourists.
2-5 (9) [(10)] "Revenue" includes any interest derived
2-6 from the revenue.
2-7 SECTION 2. Sections 351.003(b), (c), and (d), Tax Code, are
2-8 amended to read as follows:
2-9 (b) [The rate in an eligible municipality may not exceed six
2-10 percent of the price paid for a room in a hotel.]
2-11 [(c)] The rate in an eligible central municipality may not
2-12 exceed nine percent of the price paid for a room. This subsection
2-13 does not apply to a municipality to which Section 351.1015 or
2-14 351.106 applies.
2-15 (c) [(d)] The rate in a municipality that borders on the
2-16 Gulf of Mexico and has a population of more than 250,000 may not
2-17 exceed nine percent of the price paid for a room.
2-18 SECTION 3. Sections 351.101(d)-(j), Tax Code, are amended to
2-19 read as follows:
2-20 (d) [An eligible municipality, as defined in Section
2-21 351.001(3), Tax Code, may not contract with a private organization
2-22 under Subsection (c) unless the contract requires the organization
2-23 to select a new governing body as soon as practicable after the
2-24 contract takes effect and to limit the composition of its governing
2-25 body to not more than 54 members, and provides that the
2-26 appointment, election, or other designation of each member of the
2-27 governing body be submitted to and approved by the governing body
3-1 of the municipality as long as the contract is in effect. The
3-2 contract is not valid unless before the contract is executed the
3-3 private organization amends its charter, bylaws, or other governing
3-4 rules to conform to the requirements of this subsection.]
3-5 [(e)] A person with whom a municipality contracts under this
3-6 section to conduct an activity authorized by this section shall
3-7 maintain complete and accurate financial records of each
3-8 expenditure of hotel occupancy tax revenue made by the person and,
3-9 on request of the governing body of the municipality or other
3-10 person, shall make the records available for inspection and review
3-11 to the governing body or other person.
3-12 (e) [(f)] Hotel occupancy tax revenue spent for a purpose
3-13 authorized by this section may be spent for day-to-day operations,
3-14 supplies, salaries, office rental, travel expenses, and other
3-15 administrative costs only if those administrative costs are
3-16 incurred directly in the promotion and servicing expenditures
3-17 authorized under Section 351.101(a). If a municipal or other
3-18 public or private entity that conducts an activity authorized under
3-19 this section conducts other activities that are not authorized
3-20 under this section, the portion of the total administrative costs
3-21 of the entity for which hotel occupancy tax revenue may be used may
3-22 not exceed the portion of those administrative costs actually
3-23 incurred in conducting the authorized activities.
3-24 (f) [(g)] Municipal hotel occupancy tax revenue may not be
3-25 spent for travel for a person to attend an event or conduct an
3-26 activity the primary purpose of which is not directly related to
3-27 the promotion of tourism and the convention and hotel industry or
4-1 the performance of the person's job in an efficient and
4-2 professional manner.
4-3 [(h) The governing body of an eligible municipality, as
4-4 defined in Section 351.001(3), Tax Code, may not approve the budget
4-5 of a person with whom the eligible municipality enters into a
4-6 contract under Subsection (c) unless the governing body first holds
4-7 a public hearing to consider the proposed budget. The governing
4-8 body may not hold the hearing unless notice of the hearing is
4-9 published not later than the seventh day before the date of the
4-10 hearing. The notice must be published in at least three newspapers
4-11 having general circulation in the eligible municipality. If there
4-12 are at least two newspapers having general circulation in the
4-13 eligible municipality that are published daily, the notice must be
4-14 published in at least two of those newspapers. If there is at
4-15 least one newspaper having general circulation in the eligible
4-16 municipality that is published weekly, the notice must be published
4-17 in at least one of those newspapers. If there are fewer than three
4-18 newspapers having general circulation in the eligible municipality,
4-19 the notice must be published in every newspaper having general
4-20 circulation in the eligible municipality. The notice may not be
4-21 smaller than one-eighth of a page of the newspaper in which it
4-22 appears and may not be published in the part of the newspaper in
4-23 which legal notices and classified advertisements appear. The
4-24 notice must include the purpose, date, time, and exact location of
4-25 the public hearing and must clearly indicate that members of the
4-26 public will be permitted to present their views at the hearing. The
4-27 notice must contain a summary of the proposed budget, including the
5-1 name of the person whose budget is being considered, the total
5-2 amount to be budgeted, and the general uses for which the budget
5-3 authorizes hotel occupancy tax revenue to be spent. The hearing
5-4 must be held at a location convenient to members of the general
5-5 public in the downtown business district of the eligible
5-6 municipality. At the hearing, the governing body must afford all
5-7 interested persons an opportunity to present their views on the
5-8 proposed budget and its adoption.]
5-9 (g) [(i)] Nothing in this section shall prohibit any private
5-10 entity, person, or organization from making subgrants by contract
5-11 to any other person, entity, or private organization for
5-12 expenditures under Section 351.101(a)(4). A subgrantee shall:
5-13 (1) at least annually make periodic reports to the
5-14 governing body of its expenditures from the tax authorized by this
5-15 chapter; and
5-16 (2) make records of these expenditures available for
5-17 review to the governing body or other person.
5-18 [(j) Subsections (d) and (h) of this section do not apply to
5-19 any private entity, person, or organization that receives tax
5-20 revenue under Subsection (a) of this section and makes
5-21 expenditures under Paragraph (4) of Subsection (a) of this
5-22 section.]
5-23 SECTION 4. Sections 351.102(b) and (c), Tax Code, are amended
5-24 to read as follows:
5-25 (b) [Before an eligible municipality may issue bonds secured
5-26 in whole or part by the revenue received from the tax imposed under
5-27 this chapter, the municipality must certify that the average annual
6-1 debt service on outstanding bonds and bonds in the process of
6-2 issuance that are secured in whole or part by the tax authorized by
6-3 this chapter and that were issued for purposes other than
6-4 convention and exposition facilities does not exceed the maximum
6-5 annual revenues that the municipality could receive from the tax
6-6 imposed under this section in the absence of special provisions
6-7 under this chapter that apply solely to eligible municipalities,
6-8 plus any other revenue pledged to the payment of the bonds.]
6-9 [(c)] An eligible central municipality may pledge the
6-10 revenue derived from the tax imposed under this chapter from a
6-11 hotel project that is owned by or located on land owned by the
6-12 municipality or by a nonprofit corporation acting on behalf of an
6-13 eligible central municipality and that is located within 1,000 feet
6-14 of a convention center facility owned by the municipality for the
6-15 payment of bonds or other obligations issued or incurred to
6-16 acquire, lease, construct, and equip the hotel and any facilities
6-17 ancillary to the hotel, including shops and parking facilities. For
6-18 bonds or other obligations issued under this subsection, an
6-19 eligible central municipality may only pledge revenue or other
6-20 assets of the hotel project benefiting from those bonds or other
6-21 obligations.
6-22 SECTION 5. Sections 351.103(b) and (c), Tax Code, are amended
6-23 to read as follows:
6-24 (b) Subsection (a) does not apply to a municipality in a
6-25 fiscal year of the municipality if the total amount of hotel
6-26 occupancy tax collected by the municipality in the most recent
6-27 calendar year that ends at least 90 days before the date the fiscal
7-1 year begins exceeds $2 million. A municipality excepted from the
7-2 application of Subsection (a) by this subsection shall allocate
7-3 hotel occupancy tax revenue by ordinance, consistent with the other
7-4 limitations of this section. The portion of the tax revenue
7-5 allocated by a [the] municipality with a population of more than
7-6 1.6 million for the purposes provided by Section 351.101(a)(3)
7-7 [351.101(a)(1)] may not be less than 23 [exceed 75] percent, except
7-8 that the [75 percent limitation does not apply to an eligible
7-9 municipality, as defined in Section 351.001(3), Tax Code, that
7-10 before October 1, 1989, adopts an ordinance providing for the]
7-11 allocation is subject to and may not impair the authority of the
7-12 municipality to pledge all or any portion of that [of an amount in
7-13 excess of 75 percent of the hotel occupancy] tax revenue to the
7-14 payment of bonds as [collected by an eligible municipality for one
7-15 or more specific purposes] provided by Section 351.102(a)
7-16 [351.101(a)(1) until the ordinance is repealed or expires or until
7-17 the revenue is no longer used for those specific purposes in an
7-18 amount in excess of 75 percent of the tax revenue].
7-19 (c) Not more than 15 percent of the hotel occupancy tax
7-20 revenue collected by a municipality, other than a municipality
7-21 having a population of more than 1.6 million, or the amount of tax
7-22 received by the municipality at the rate of one percent of the cost
7-23 of a room, whichever is greater, may be used for the purposes
7-24 provided by Section 351.101(a)(4). Not more than 19.30 percent of
7-25 the hotel occupancy tax revenue collected by a municipality having
7-26 a population of more than 1.6 million, or the amount of tax
7-27 received by the municipality at the rate of one percent of the cost
8-1 of a room, whichever is greater, may be used for the purposes
8-2 provided by Section 351.101(a)(4). Not more than 15 percent of the
8-3 hotel occupancy tax revenue collected by a municipality having a
8-4 population of more than 125,000 may be used for the purposes
8-5 provided by Section 351.101(a)(5). [This subsection does not apply
8-6 to an eligible municipality that imposes the tax authorized by this
8-7 chapter at a rate that is less than seven percent of the price paid
8-8 for a room in a hotel.]
8-9 SECTION 6. Section 351.104, Tax Code, is repealed.
8-10 SECTION 7. This Act takes effect immediately if it receives
8-11 a vote of two-thirds of all the members elected to each house, as
8-12 provided by Section 39, Article III, Texas Constitution. If this
8-13 Act does not receive the vote necessary for immediate effect, this
8-14 Act takes effect September 1, 2001.