89R13953 CJD-F

By: Hunter H.B. No. 4095

A BILL TO BE ENTITLED

AN ACT

relating to the rate of the hotel occupancy tax in certain municipalities and the use of certain revenue from that tax by those municipalities; authorizing an increase in the rate of a tax.

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

SECTION 1. Section 351.003, Tax Code, is amended by adding Subsection (g) to read as follows:

(g) This subsection applies only to an eligible coastal municipality that has a population of 5,000 or less and in which a ferry system that is a part of the state highway system is located. The rate in a municipality to which this subsection applies may exceed the rate authorized by Subsection (a), but may not exceed eight percent of the price paid for a room, if a temporary increase in the tax rate is approved by a majority of the voters of the municipality voting at an election held for that purpose. This subsection expires December 31, 2035.

SECTION 2. Section 351.105, Tax Code, is amended by amending Subsection (a) and adding Subsections (h), (i), and (j) to read as follows:

(a) An eligible coastal municipality that levies and collects an occupancy tax authorized by this chapter at a rate of seven percent shall pledge a portion of the revenue equal to at least one percent of the cost of a room to either or both of the following purposes:

(1) the payment of the bonds that the municipality or a park board of trustees may issue under Section 1504.002(a), Government Code, or under Chapter 306, Local Government Code, in order to provide all or part of the funds for the establishment, acquisition, purchase, construction, improvement, enlargement, equipment, or repair of public improvements, including parks, civic centers, civic center buildings, auditoriums, exhibition halls, coliseums, marinas, cruise ship terminal facilities, hotels, motels, parking facilities, streetscapes, golf courses, trolley or trolley transportation systems, and other facilities as may be considered advisable in connection with these facilities that serve the purpose of attracting visitors and tourists to the municipality; or

(2) the maintenance, improvement, or operation of the parks, civic centers, civic center buildings, auditoriums, exhibition halls, coliseums, marinas, cruise ship terminal facilities, hotels, motels, parking facilities, streetscapes, golf courses, trolley or trolley transportation systems, and other facilities as may be considered advisable in connection with these facilities that serve the purpose of attracting visitors and tourists to the municipality.

(h) If the tax authorized by this chapter is imposed by an eligible coastal municipality to which Section 351.003(g) applies at a rate of more than seven percent of the cost of a room, the municipality may, subject to Subsection (i), use all or part of the revenue derived from the application of the tax at a rate of more than seven percent for the beautification of streetscapes and the improvement of the municipality's main streets, including improvements relating to pedestrian safety and accessibility.

(i) A municipality described by Subsection (h) may not spend more revenue for the purposes described by that subsection during a calendar year than the total amount the municipality spends for those purposes from all other sources of funds.

(j) Subsections (h) and (i) and this subsection expire December 31, 2035.

SECTION 3. 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, 2025.