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A BILL TO BE ENTITLED
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AN ACT
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relating to municipal and county hotel occupancy taxes. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 351.001(2), (6), (8), and (10), Tax |
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Code, are amended to read as follows: |
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(2) "Convention center facilities" or "convention |
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center complex" means facilities that are primarily used to host |
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conventions and meetings. The term means civic centers, civic |
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center buildings, auditoriums, exhibition halls, and coliseums |
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that are owned by the municipality or other governmental entity or |
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that are managed in whole or part by the municipality. In a |
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municipality with a population of 1.5 million or more, "convention |
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center facilities" or "convention center complex" means civic |
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centers, civic center buildings, auditoriums, exhibition halls, |
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and coliseums that are owned by the municipality or other |
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governmental entity or that are managed in part by the |
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municipality, hotels owned by the municipality or a nonprofit |
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municipally sponsored local government corporation created under |
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Chapter 431, Transportation Code, within 1,000 feet of a convention |
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center owned by the municipality, or a historic hotel owned by the |
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municipality or a nonprofit municipally sponsored local government |
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corporation created under Chapter 431, Transportation Code, within |
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one mile of a convention center owned by the municipality. The term |
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includes parking areas or facilities that are for the parking or |
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storage of conveyances and that are located at or within 1,500 feet |
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of the [in the vicinity of other] convention center facilities. The |
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term also includes a hotel owned by or located on land that is owned |
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by an eligible central municipality or by a nonprofit corporation |
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acting on behalf of an eligible central municipality and that is |
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located within 1,000 feet of a convention center facility owned by |
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the municipality. The term also includes a hotel that is owned in |
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part by an eligible central municipality described by Subdivision |
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(7)(D) and that is located within 1,000 feet of a convention center |
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facility. For purposes of this subdivision, "meetings" means |
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gatherings [of people] that: |
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(A) are attended by: |
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(i) tourists; or |
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(ii) individuals who spend the night at a |
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hotel or attend a meeting at a hotel; and |
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(B) enhance and promote tourism and the |
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convention and hotel industry. |
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(6) "Tourist" means an individual who travels from the |
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individual's residence to a different municipality, county, state, |
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or country for business, pleasure, recreation, education, or |
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culture. |
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(8) "Visitor information center" or "tourism |
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information center" means a building or a portion of a building that |
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is primarily used to distribute or disseminate information to |
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tourists. |
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(10) "Multiuse facility" means a facility at which the |
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majority of events attract tourists who substantially increase |
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economic activity at hotels in the municipality in which the |
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facility is located. ["Revenue" includes any interest derived from |
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the revenue.] |
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SECTION 2. Section 351.009, Tax Code, is amended to read as |
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follows: |
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Sec. 351.009. ANNUAL REPORT TO COMPTROLLER. (a) Not |
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later than March 1 [February 20] of each year, a municipality that |
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imposes the tax authorized by this chapter shall report to the |
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comptroller: |
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(1) the rate of: |
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(A) the tax imposed by the municipality under |
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this chapter; and |
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(B) if applicable, the tax imposed by the |
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municipality under Subchapter H, Chapter 334, Local Government |
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Code; |
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(2) the amount of revenue collected during the |
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municipality's preceding fiscal year from: |
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(A) the tax imposed by the municipality under |
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this chapter; and |
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(B) if applicable, the tax imposed by the |
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municipality under Subchapter H, Chapter 334, Local Government |
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Code; [and] |
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(3) the amount and percentage of the revenue described |
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by Subdivision (2)(A) allocated by the municipality to each use |
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authorized by this chapter for which the municipality used the |
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revenue [described by Sections 351.101(a)(1), (2), (3), (4), (5), |
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and (9)] during the municipality's preceding fiscal year, stated |
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separately as an amount and percentage for each applicable use; and |
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(4) the total amount of any revenue described by |
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Subdivision (2)(A) collected in any preceding fiscal year of the |
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municipality that has not yet been spent by the municipality and the |
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amount of that unexpended revenue, if any, that remains in the |
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municipality's possession in the fiscal year in which the report is |
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due [of those subdivisions]. |
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(b) The municipality must make the report required by this |
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section by[: |
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[(1)] submitting the report to the comptroller on a |
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form prescribed by the comptroller[; or |
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[(2) providing the comptroller a direct link to, or a |
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clear statement describing the location of, the information |
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required to be reported that is posted on the Internet website of |
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the municipality]. |
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(c) The [Subject to Subsection (b)(2), the] comptroller |
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shall prescribe the form a municipality must use for the report |
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required to be submitted under this section. |
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(d) A municipality that is required to make a report to the |
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comptroller under this section may use a portion of the revenue |
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described by Subsection (a)(2)(A) for the costs incurred by the |
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municipality in making and submitting the report. The amount of |
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revenue a municipality may use each year for the purpose authorized |
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by this subsection may not exceed: |
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(1) $1,000 if the municipality has a population of |
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less than 10,000; or |
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(2) $2,500 if the municipality has a population of |
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10,000 or more. |
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(e) The comptroller may adopt rules necessary to administer |
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this section. |
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SECTION 3. Section 351.101, Tax Code, is amended by adding |
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Subsection (f-1) to read as follows: |
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(f-1) A municipality may not use municipal hotel occupancy |
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tax revenue for a visitor information center under Subsection |
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(a)(1) to acquire a site for, construct, improve, enlarge, equip, |
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repair, staff, operate, or maintain any part of a building or |
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facility that is not primarily used to distribute or disseminate |
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tourism-related information to tourists. |
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SECTION 4. Section 351.1021(a)(3), Tax Code, is amended to |
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read as follows: |
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(3) "Multipurpose convention center facility project" |
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means a project that consists of a hotel owned by an eligible |
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municipality or another person and a multipurpose convention center |
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facility, the nearest exterior wall of which is located not more |
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than 2,500 feet from the nearest exterior wall of the hotel. A |
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multipurpose convention center facility project may include: |
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(A) each new or existing business located in the |
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municipality, regardless of who owns the business or the property |
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on which the business is located, the nearest exterior wall of which |
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is located not more than 2,500 feet from the nearest exterior wall |
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of the multipurpose convention center facility or the hotel that is |
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part of the project; |
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(B) a parking shuttle or transportation system |
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used primarily by tourists; and |
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(C) any parking area or structure located in the |
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municipality, regardless of who owns the area or structure or the |
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property on which the area or structure is located, the nearest |
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property line of which is located not more than two miles from the |
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nearest exterior wall of the multipurpose convention center |
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facility. |
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SECTION 5. Sections 351.103(a), (b), and (c), Tax Code, are |
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amended to read as follows: |
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(a) A municipality [At least 50 percent of the hotel |
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occupancy tax revenue collected by a municipality with a population |
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of 200,000 or greater must be allocated for the purposes provided by |
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Section 351.101(a)(3). For municipalities] with a population of |
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less than 200,000 shall allocate[, allocations] for the purposes |
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provided by Section 351.101(a)(3) an amount of hotel occupancy tax |
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revenue collected by the municipality that is [are as follows: |
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[(1) if the tax rate in a municipality is not more than |
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three percent of the cost paid for a room, not less than the amount |
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of revenue received by the municipality from the tax at a rate of |
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one-half of one percent of the cost of the room; or |
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[(2) if the tax in a municipality exceeds three |
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percent of the cost of a room,] not less than the amount of revenue |
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received by the municipality from the tax at a rate of one percent |
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of the cost of a room. [This subsection does not apply to a |
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municipality, regardless of population, that before October 1, |
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1989, adopted an ordinance providing for the allocation of an |
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amount in excess of 50 percent of the hotel occupancy tax revenue |
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collected by the municipality for one or more specific purposes |
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provided by Section 351.101(a)(1) until the ordinance is repealed |
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or expires or until the revenue is no longer used for those specific |
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purposes in an amount in excess of 50 percent of the tax revenue.] |
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(b) A [Subsection (a) does not apply to a municipality in a |
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fiscal year of the municipality if the total amount of hotel |
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occupancy tax collected by the municipality in the most recent |
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calendar year that ends at least 90 days before the date the fiscal |
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year begins exceeds $2 million. A municipality excepted from the |
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application of Subsection (a) by this subsection shall allocate |
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hotel occupancy tax revenue by ordinance, consistent with the other |
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limitations of this section. The portion of the tax revenue |
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allocated by a] municipality with a population of more than 1.6 |
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million shall allocate at least 23 percent of the hotel occupancy |
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tax revenue collected by the municipality for the purposes provided |
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by Section 351.101(a)(3) [may not be less than 23 percent], except |
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that the allocation is subject to and may not impair the authority |
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of the municipality to: |
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(1) pledge all or any portion of that tax revenue to |
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the payment of bonds as provided by Section 351.102(a) or bonds |
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issued to refund bonds secured by that pledge; or |
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(2) spend all or any portion of that tax revenue for |
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the payment of operation and maintenance expenses of convention |
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center facilities. |
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(c) Not more than 15 percent of the hotel occupancy tax |
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revenue collected by a municipality, other than a municipality |
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having a population of more than 1.6 million, or the amount of tax |
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received by the municipality at the rate of one percent of the cost |
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of a room, whichever is greater, may be used for the purposes |
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provided by Section 351.101(a)(4). Not more than 19.30 percent of |
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the hotel occupancy tax revenue collected by a municipality having |
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a population of more than 1.6 million, or the amount of tax received |
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by the municipality at the rate of one percent of the cost of a room, |
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whichever is greater, may be used for the purposes provided by |
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Section 351.101(a)(4). Not more than 15 percent of the hotel |
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occupancy tax revenue collected by a municipality [having a |
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population of more than 125,000] may be used for the purposes |
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provided by Section 351.101(a)(5). A municipality that before |
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January 1, 2023, adopted in accordance with state law an ordinance |
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providing for the allocation of an amount in excess of 15 percent of |
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the hotel occupancy tax revenue collected by the municipality for |
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one or more of the specific purposes provided by Section |
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351.101(a)(5) may allocate tax revenue as provided by that |
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ordinance until the ordinance is repealed or expires or until the |
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revenue is no longer used for those specific purposes. |
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SECTION 6. Section 351.110(c), Tax Code, is amended to read |
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as follows: |
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(c) This section does not authorize the use of revenue |
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derived from the tax imposed under this chapter for a |
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transportation system that serves the general public other than for |
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a system [that transports tourists as] described by Subsection (a) |
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that is primarily used by tourists. |
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SECTION 7. Subchapter C, Chapter 351, Tax Code, is amended |
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by adding Sections 351.161, 351.162, and 351.163 to read as |
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follows: |
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Sec. 351.161. APPLICATION OF OTHER LAW. This subchapter |
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may not be construed as authorizing the taking of private property |
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for economic development purposes in a manner inconsistent with the |
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requirements of Section 17, Article I, Texas Constitution, or |
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Section 2206.001, Government Code. |
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Sec. 351.162. RECAPTURE OF LOST STATE TAX REVENUE FROM |
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CERTAIN MUNICIPALITIES. (a) This section applies only to a |
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qualified project that is first commenced on or after: |
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(1) January 1, 2024, unless Subdivision (2) applies to |
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the qualified project; or |
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(2) January 1, 2027, if the qualified project was |
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authorized before January 1, 2023, by a municipality with a |
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population of 175,000 or more. |
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(b) On the 20th anniversary of the date a hotel designated |
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as a qualified hotel by a municipality as part of a qualified |
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project to which this section applies is open for initial |
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occupancy, the comptroller shall determine: |
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(1) the total amount of state tax revenue received |
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under Section 351.156 and, if applicable, under Section 351.157 by |
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the municipality from the qualified project during the period for |
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which the municipality was entitled to receive that revenue; and |
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(2) the total amount of state tax revenue described by |
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Subdivision (1) received by the state during the period beginning |
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on the 10th anniversary of the date the qualified hotel opened for |
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initial occupancy and ending on the 20th anniversary of that date |
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from the same sources from which the municipality received the |
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revenue described by Subdivision (1). |
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(c) If the amount determined under Subsection (b)(1) |
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exceeds the amount determined under Subsection (b)(2), the |
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comptroller shall promptly provide written notice to the |
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municipality stating that the municipality must remit to the |
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comptroller the difference between those two amounts in the manner |
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provided by this subsection. The municipality shall, using money |
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lawfully available to the municipality for the purpose, remit |
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monthly payments to the comptroller in an amount equal to the total |
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amount of municipal hotel occupancy tax revenue received by the |
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municipality from the qualified hotel in the preceding month until |
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the amount remitted to the comptroller equals the total amount due |
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as stated in the notice. The first payment required under this |
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subsection must be made not later than the 30th day after the date |
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the municipality receives the notice from the comptroller. |
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Subsequent payments are due on the 20th day of each month until the |
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total amount stated in the notice is paid. The comptroller shall |
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prescribe the procedure a municipality must use to remit a payment |
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required by this subsection to the comptroller. |
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(d) The comptroller shall deposit revenue received under |
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this section in the manner prescribed by Section 156.251. |
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Sec. 351.163. REPORT ON QUALIFIED PROJECTS. (a) Not later |
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than December 1 of each even-numbered year, the comptroller shall |
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prepare a report on the status of each qualified project. |
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(b) The report must include, for each qualified project: |
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(1) the location and a description of the project, |
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including the current status of the project; |
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(2) the number of qualified hotels and qualified |
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convention center facilities associated with the project; |
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(3) the total amount of tax revenue received by a |
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municipality under Section 351.156 and, if applicable, Section |
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351.157 as a result of the project; |
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(4) the amount of state tax revenue generated by the |
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project that has been received by the state after the period of |
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entitlement for the project as prescribed by Section 351.158 has |
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ended; and |
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(5) whether the municipality is required to remit |
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payments to the comptroller under Section 351.162 as a result of the |
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project. |
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(c) The comptroller may include in the report any additional |
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information the comptroller determines is necessary to evaluate the |
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effect of each qualified project on the economy of this state. |
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(d) The comptroller shall: |
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(1) post a copy of the report on the comptroller's |
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Internet website; and |
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(2) provide a copy of the report to the lieutenant |
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governor, the speaker of the house of representatives, and each |
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other member of the legislature. |
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SECTION 8. Section 352.009, Tax Code, is amended to read as |
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follows: |
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Sec. 352.009. ANNUAL REPORT TO COMPTROLLER. (a) Not |
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later than March 1 [February 20] of each year, a county that imposes |
|
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the tax authorized by this chapter shall report to the comptroller: |
|
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(1) the rate of: |
|
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(A) the tax imposed by the county under this |
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chapter; and |
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(B) if applicable, the tax imposed by the county |
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under Subchapter H, Chapter 334, Local Government Code; [and] |
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(2) the amount of revenue collected during the |
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county's preceding fiscal year from: |
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(A) the tax imposed by the county under this |
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chapter; and |
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(B) if applicable, the tax imposed by the county |
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under Subchapter H, Chapter 334, Local Government Code; |
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(3) the amount and percentage of the revenue described |
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by Subdivision (2)(A) allocated by the county to each use |
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authorized by this chapter for which the county used the revenue |
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during the county's preceding fiscal year, stated separately as an |
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amount and percentage for each applicable use; and |
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(4) the total amount of any revenue described by |
|
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Subdivision (2)(A) collected in any preceding fiscal year of the |
|
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county that has not yet been spent by the county and the amount of |
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that unexpended revenue, if any, that remains in the county's |
|
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possession in the fiscal year in which the report is due. |
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(b) The county must make the report required by this section |
|
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by[: |
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[(1)] submitting the report to the comptroller on a |
|
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form prescribed by the comptroller[; or |
|
|
[(2) providing the comptroller a direct link to, or a |
|
|
clear statement describing the location of, the information |
|
|
required to be reported that is posted on the Internet website of |
|
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the county]. |
|
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(c) The [Subject to Subsection (b)(2), the] comptroller |
|
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shall prescribe the form a county must use for the report required |
|
|
to be submitted under this section. |
|
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(d) A county that is required to make a report to the |
|
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comptroller under this section may use a portion of the revenue |
|
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described by Subsection (a)(2)(A) for the costs incurred by the |
|
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county in making and submitting the report. The amount of revenue a |
|
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county may use each year for the purpose authorized by this |
|
|
subsection may not exceed: |
|
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(1) $1,000 if the county has a population of less than |
|
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10,000; or |
|
|
(2) $2,500 if the county has a population of 10,000 or |
|
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more. |
|
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(e) The comptroller may adopt rules necessary to administer |
|
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this section. |
|
|
SECTION 9. The following provisions of the Tax Code are |
|
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repealed: |
|
|
(1) Sections 351.103(d) and (e); and |
|
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(2) Section 351.110(b). |
|
|
SECTION 10. The comptroller of public accounts shall |
|
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prescribe the form of the report required under Sections 351.009 |
|
|
and 352.009, Tax Code, as amended by this Act, not later than |
|
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January 1, 2024. A municipality or county required to make a report |
|
|
under those sections must submit the 2024 report using the form |
|
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prescribed by the comptroller under this section. |
|
|
SECTION 11. This Act takes effect immediately if it |
|
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receives a vote of two-thirds of all the members elected to each |
|
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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. |
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* * * * * |