1-1 By: Coleman (Senate Sponsor - Lindsay) H.B. No. 1886
1-2 (In the Senate - Received from the House April 23, 2001;
1-3 April 24, 2001, read first time and referred to Committee on
1-4 Intergovernmental Relations; May 9, 2001, reported adversely, with
1-5 favorable Committee Substitute by the following vote: Yeas 6, Nays
1-6 0; May 9, 2001, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 1886 By: Lindsay
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to municipal hotel occupancy taxes.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Sections 351.001(3)-(10), Tax Code, are amended to
1-13 read as follows:
1-14 (3) ["Eligible municipality" means a municipality that
1-15 has a population of at least 1,200,000 and that has adopted by
1-16 ordinance a capital improvement plan for convention and exposition
1-17 facilities for the municipality.]
1-18 [(4)] "Eligible coastal municipality" means a
1-19 home-rule municipality that borders on the Gulf of Mexico and has a
1-20 population of less than 80,000.
1-21 (4) [(5)] "Hotel" has the meaning assigned by Section
1-22 156.001 [156.001(1)].
1-23 (5) [(6)] "Tourism" means the guidance or management
1-24 of tourists.
1-25 (6) [(7)] "Tourist" means an individual who travels
1-26 from the individual's residence to a different municipality,
1-27 county, state, or country for pleasure, recreation, education, or
1-28 culture.
1-29 (7) [(8)] "Eligible central municipality" means a
1-30 municipality with a population of more than 440,000 but less than
1-31 1.5 million that is located in a county with a population of one
1-32 million or more and that has adopted a capital improvement plan for
1-33 the expansion of an existing convention center facility.
1-34 (8) [(9)] "Visitor information center" or "tourism
1-35 information center" means a building or a portion of a building
1-36 used to distribute or disseminate information to tourists.
1-37 (9) [(10)] "Revenue" includes any interest derived
1-38 from the revenue.
1-39 SECTION 2. Sections 351.003(b), (c), and (d), Tax Code, are
1-40 amended to read as follows:
1-41 (b) [The rate in an eligible municipality may not exceed six
1-42 percent of the price paid for a room in a hotel.]
1-43 [(c)] The rate in an eligible central municipality may not
1-44 exceed nine percent of the price paid for a room. This subsection
1-45 does not apply to a municipality to which Section [351.1015 or]
1-46 351.106 applies.
1-47 (c) [(d)] The rate in a municipality that borders on the
1-48 Gulf of Mexico and has a population of more than 250,000 may not
1-49 exceed nine percent of the price paid for a room.
1-50 SECTION 3. Sections 351.101(d)-(j), Tax Code, are amended to
1-51 read as follows:
1-52 (d) [An eligible municipality, as defined in Section
1-53 351.001(3), Tax Code, may not contract with a private organization
1-54 under Subsection (c) unless the contract requires the organization
1-55 to select a new governing body as soon as practicable after the
1-56 contract takes effect and to limit the composition of its governing
1-57 body to not more than 54 members, and provides that the
1-58 appointment, election, or other designation of each member of the
1-59 governing body be submitted to and approved by the governing body
1-60 of the municipality as long as the contract is in effect. The
1-61 contract is not valid unless before the contract is executed the
1-62 private organization amends its charter, bylaws, or other governing
1-63 rules to conform to the requirements of this subsection.]
1-64 [(e)] A person with whom a municipality contracts under this
2-1 section to conduct an activity authorized by this section shall
2-2 maintain complete and accurate financial records of each
2-3 expenditure of hotel occupancy tax revenue made by the person and,
2-4 on request of the governing body of the municipality or other
2-5 person, shall make the records available for inspection and review
2-6 to the governing body or other person.
2-7 (e) [(f)] Hotel occupancy tax revenue spent for a purpose
2-8 authorized by this section may be spent for day-to-day operations,
2-9 supplies, salaries, office rental, travel expenses, and other
2-10 administrative costs only if those administrative costs are
2-11 incurred directly in the promotion and servicing expenditures
2-12 authorized under Section 351.101(a). If a municipal or other
2-13 public or private entity that conducts an activity authorized under
2-14 this section conducts other activities that are not authorized
2-15 under this section, the portion of the total administrative costs
2-16 of the entity for which hotel occupancy tax revenue may be used may
2-17 not exceed the portion of those administrative costs actually
2-18 incurred in conducting the authorized activities.
2-19 (f) [(g)] Municipal hotel occupancy tax revenue may not be
2-20 spent for travel for a person to attend an event or conduct an
2-21 activity the primary purpose of which is not directly related to
2-22 the promotion of tourism and the convention and hotel industry or
2-23 the performance of the person's job in an efficient and
2-24 professional manner.
2-25 [(h) The governing body of an eligible municipality, as
2-26 defined in Section 351.001(3), Tax Code, may not approve the budget
2-27 of a person with whom the eligible municipality enters into a
2-28 contract under Subsection (c) unless the governing body first holds
2-29 a public hearing to consider the proposed budget. The governing
2-30 body may not hold the hearing unless notice of the hearing is
2-31 published not later than the seventh day before the date of the
2-32 hearing. The notice must be published in at least three newspapers
2-33 having general circulation in the eligible municipality. If there
2-34 are at least two newspapers having general circulation in the
2-35 eligible municipality that are published daily, the notice must be
2-36 published in at least two of those newspapers. If there is at
2-37 least one newspaper having general circulation in the eligible
2-38 municipality that is published weekly, the notice must be published
2-39 in at least one of those newspapers. If there are fewer than three
2-40 newspapers having general circulation in the eligible municipality,
2-41 the notice must be published in every newspaper having general
2-42 circulation in the eligible municipality. The notice may not be
2-43 smaller than one-eighth of a page of the newspaper in which it
2-44 appears and may not be published in the part of the newspaper in
2-45 which legal notices and classified advertisements appear. The
2-46 notice must include the purpose, date, time, and exact location of
2-47 the public hearing and must clearly indicate that members of the
2-48 public will be permitted to present their views at the hearing. The
2-49 notice must contain a summary of the proposed budget, including the
2-50 name of the person whose budget is being considered, the total
2-51 amount to be budgeted, and the general uses for which the budget
2-52 authorizes hotel occupancy tax revenue to be spent. The hearing
2-53 must be held at a location convenient to members of the general
2-54 public in the downtown business district of the eligible
2-55 municipality. At the hearing, the governing body must afford all
2-56 interested persons an opportunity to present their views on the
2-57 proposed budget and its adoption.]
2-58 (g) [(i)] Nothing in this section shall prohibit any private
2-59 entity, person, or organization from making subgrants by contract
2-60 to any other person, entity, or private organization for
2-61 expenditures under Section 351.101(a)(4). A subgrantee shall:
2-62 (1) at least annually make periodic reports to the
2-63 governing body of its expenditures from the tax authorized by this
2-64 chapter; and
2-65 (2) make records of these expenditures available for
2-66 review to the governing body or other person.
2-67 [(j) Subsections (d) and (h) of this section do not apply to
2-68 any private entity, person, or organization that receives tax
2-69 revenue under Subsection (a) of this section and makes
3-1 expenditures under Paragraph (4) of Subsection (a) of this
3-2 section.]
3-3 SECTION 4. Sections 351.102(b) and (c), Tax Code, are amended
3-4 to read as follows:
3-5 (b) [Before an eligible municipality may issue bonds secured
3-6 in whole or part by the revenue received from the tax imposed under
3-7 this chapter, the municipality must certify that the average annual
3-8 debt service on outstanding bonds and bonds in the process of
3-9 issuance that are secured in whole or part by the tax authorized by
3-10 this chapter and that were issued for purposes other than
3-11 convention and exposition facilities does not exceed the maximum
3-12 annual revenues that the municipality could receive from the tax
3-13 imposed under this section in the absence of special provisions
3-14 under this chapter that apply solely to eligible municipalities,
3-15 plus any other revenue pledged to the payment of the bonds.]
3-16 [(c)] An eligible central municipality may pledge the
3-17 revenue derived from the tax imposed under this chapter from a
3-18 hotel project that is owned by or located on land owned by the
3-19 municipality or by a nonprofit corporation acting on behalf of an
3-20 eligible central municipality and that is located within 1,000 feet
3-21 of a convention center facility owned by the municipality for the
3-22 payment of bonds or other obligations issued or incurred to
3-23 acquire, lease, construct, and equip the hotel and any facilities
3-24 ancillary to the hotel, including shops and parking facilities. For
3-25 bonds or other obligations issued under this subsection, an
3-26 eligible central municipality may only pledge revenue or other
3-27 assets of the hotel project benefiting from those bonds or other
3-28 obligations.
3-29 SECTION 5. Sections 351.103(b) and (c), Tax Code, are amended
3-30 to read as follows:
3-31 (b) Subsection (a) does not apply to a municipality in a
3-32 fiscal year of the municipality if the total amount of hotel
3-33 occupancy tax collected by the municipality in the most recent
3-34 calendar year that ends at least 90 days before the date the fiscal
3-35 year begins exceeds $2 million. A municipality excepted from the
3-36 application of Subsection (a) by this subsection shall allocate
3-37 hotel occupancy tax revenue by ordinance, consistent with the other
3-38 limitations of this section. The portion of the tax revenue
3-39 allocated by a [the] municipality with a population of more than
3-40 1.6 million for the purposes provided by Section 351.101(a)(3)
3-41 [351.101(a)(1)] may not be less than 23 [exceed 75] percent, except
3-42 that the [75 percent limitation does not apply to an eligible
3-43 municipality, as defined in Section 351.001(3), Tax Code, that
3-44 before October 1, 1989, adopts an ordinance providing for the]
3-45 allocation is subject to and may not impair the authority of the
3-46 municipality to:
3-47 (1) pledge all or any portion of that [of an amount in
3-48 excess of 75 percent of the hotel occupancy] tax revenue to the
3-49 payment of bonds as [collected by an eligible municipality for one
3-50 or more specific purposes] provided by Section 351.102(a) or bonds
3-51 issued to refund bonds secured by that pledge; or
3-52 (2) spend all or any portion of that tax revenue for
3-53 the payment of operation and maintenance expenses of convention
3-54 center facilities [351.101(a)(1) until the ordinance is repealed or
3-55 expires or until the revenue is no longer used for those specific
3-56 purposes in an amount in excess of 75 percent of the tax revenue].
3-57 (c) Not more than 15 percent of the hotel occupancy tax
3-58 revenue collected by a municipality, other than a municipality
3-59 having a population of more than 1.6 million, or the amount of tax
3-60 received by the municipality at the rate of one percent of the cost
3-61 of a room, whichever is greater, may be used for the purposes
3-62 provided by Section 351.101(a)(4). Not more than 19.30 percent of
3-63 the hotel occupancy tax revenue collected by a municipality having
3-64 a population of more than 1.6 million, or the amount of tax
3-65 received by the municipality at the rate of one percent of the cost
3-66 of a room, whichever is greater, may be used for the purposes
3-67 provided by Section 351.101(a)(4). Not more than 15 percent of the
3-68 hotel occupancy tax revenue collected by a municipality having a
3-69 population of more than 125,000 may be used for the purposes
4-1 provided by Section 351.101(a)(5). [This subsection does not apply
4-2 to an eligible municipality that imposes the tax authorized by this
4-3 chapter at a rate that is less than seven percent of the price paid
4-4 for a room in a hotel.]
4-5 SECTION 6. Section 351.104, Tax Code, is repealed.
4-6 SECTION 7. This Act takes effect immediately if it receives
4-7 a vote of two-thirds of all the members elected to each house, as
4-8 provided by Section 39, Article III, Texas Constitution. If this
4-9 Act does not receive the vote necessary for immediate effect, this
4-10 Act takes effect September 1, 2001.
4-11 * * * * *