H.B. No. 2497

AN ACT

relating to the use of municipal hotel occupancy tax revenue by certain municipalities.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter B, Chapter 351, Tax Code, is amended by adding Section 351.10713 to read as follows:

Sec. 351.10713. ALLOCATION OF REVENUE FOR CONSTRUCTION, EXPANSION, AND OPERATION OF RECREATIONAL OR SPORTS FACILITIES AND FIELDS BY CERTAIN MUNICIPALITIES. (a) This section applies only to a municipality that is the county seat of a county:

(1) that borders the Gulf of Mexico; and

(2) through which the Colorado River flows.

(b) Notwithstanding any other provision of this chapter and subject to Subsections (c), (d), and (e), a municipality to which this section applies may, for the purpose of promoting tourism and the convention and hotel industry, use revenue derived from the municipal hotel occupancy tax to:

(1) construct and expand recreational or sports facilities and fields owned by the municipality or another governmental entity; and

(2) operate recreational or sports facilities and fields owned by the municipality or another governmental entity.

(c) A municipality to which this section applies that uses municipal hotel occupancy tax revenue for a purpose described by Subsection (b)(1):

(1) shall determine the amount of municipal hotel occupancy tax revenue generated for the municipality by hotel activity attributable to the events held at the recreational or sports facilities and fields for five years after the date the construction or expansion of the facilities and fields is complete;

(2) may not spend municipal hotel occupancy tax revenue for a purpose described by Subsection (b)(1) in a total amount that exceeds the amount of area hotel revenue attributable to the construction or expansion of the facilities and fields; and

(3) shall reimburse from the municipality's general fund any expenditure in excess of the amount of area hotel revenue attributable to the construction or expansion of the facilities and fields to the municipality's hotel occupancy tax revenue fund.

(d) A municipality to which this section applies may not use municipal hotel occupancy tax revenue for a purpose described by Subsection (b)(2) in an amount each year that exceeds the amount of area hotel revenue in that year attributable to events held at the recreational or sports facilities and fields.

(e) If a municipality to which this section applies uses revenue derived from the municipal hotel occupancy tax for a purpose described by Subsection (b), the municipality may not reduce the percentage of revenue from that tax allocated for a purpose described by Section 351.101(a)(3) to a percentage that is less than the average percentage of that revenue allocated by the municipality for that purpose during the 36-month period preceding the date the municipality begins using the revenue for a purpose described by Subsection (b).

SECTION 2. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2023.

______________________________ ______________________________

President of the Senate Speaker of the House

I certify that H.B. No. 2497 was passed by the House on April 28, 2023, by the following vote: Yeas 111, Nays 33, 2 present, not voting.

______________________________ Chief Clerk of the House

I certify that H.B. No. 2497 was passed by the Senate on May 17, 2023, by the following vote: Yeas 25, Nays 6.

______________________________ Secretary of the Senate APPROVED: _____________________

Date

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Governor