H.B. No. 2445
AN ACT
relating to the imposition of hotel occupancy taxes by and the
collection and use of certain tax revenue in certain municipalities
and counties, including the authority of certain municipalities to
pledge certain tax revenue for the payment of obligations related
to hotel and hotel and convention center projects; authorizing the
imposition of a tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 334.001, Local Government Code, is
amended by amending Subdivisions (1) and (4) and adding Subdivision
(1-a) to read as follows:
(1) "Active transportation" means transportation that
is wholly or primarily powered by human energy. The term includes
walking, running, and bicycling.
(1-a) "Approved venue project" means a sports and
community venue project that has been approved under this chapter
by the voters of a municipality or county.
(4) "Venue" means:
(A) an arena, coliseum, stadium, or other type of
area or facility:
(i) that is used or is planned for use for
one or more professional or amateur sports events, community
events, or other sports events, including rodeos, livestock shows,
agricultural expositions, promotional events, and other civic or
charitable events; and
(ii) for which a fee for admission to the
events is charged or is planned to be charged;
(B) a convention center, convention center
facility as defined by Section 351.001(2) or 352.001(2), Tax Code,
or related improvement such as a civic center hotel, theater, opera
house, music hall, rehearsal hall, park, zoological park, museum,
aquarium, or plaza located in the vicinity of a convention center or
facility owned by a municipality or a county;
(C) a tourist development area [along an inland
waterway];
(D) a municipal parks and recreation system, or
improvements or additions to a parks and recreation system, or an
area or facility, including an area or facility for active
transportation use, that is part of a municipal parks and
recreation system;
(E) a project authorized by Section 4A or 4B,
Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas
Civil Statutes), as that Act existed on September 1, 1997; [and]
(F) a watershed protection and preservation
project; a recharge, recharge area, or recharge feature protection
project; a conservation easement; or an open-space preservation
program intended to protect water; and
(G) an airport facility located in a municipality
located on the international border.
SECTION 2. Section 334.1015, Local Government Code, is
amended to read as follows:
Sec. 334.1015. APPLICATION. (a) Except as provided by
Subsection (b), this [This] subchapter does not apply to the
financing of a venue project that is an area or facility that is
part of a municipal parks and recreation system.
(b) A municipality located on the international border may
finance a venue project described by Section 334.001(4)(D) with the
revenue from a tax imposed under this subchapter.
SECTION 3. Section 334.2515, Local Government Code, is
amended to read as follows:
Sec. 334.2515. APPLICATION. Except as provided by Section
334.2516, this subchapter does not apply to the financing of a venue
project that is:
(1) an area described by Section 334.001(4)(C);
(2) an area or facility that is part of a municipal
parks and recreation system as described by Section 334.001(4)(D);
[or]
(3) [(2)] a project described by Section
334.001(4)(E), except for a project [projects] described by [in]
Section 334.001(4)(A); or
(4) a facility described by Section 334.001(4)(G).
SECTION 4. Section 351.005, Tax Code, is amended to read as
follows:
Sec. 351.005. REIMBURSEMENT FOR EXPENSES OF TAX COLLECTION
AND USE OF ELECTRONIC TAX ADMINISTRATION SYSTEM. (a) A
municipality may permit a person who is required to collect and pay
over to the municipality the tax authorized by this chapter to
withhold not more than one percent of the amount of the tax
collected and required to be reported as reimbursement to the
person for the cost of [costs in] collecting the tax [and, if
applicable, the use of an electronic tax administration system
described by Section 351.1012].
(b) If a municipality uses revenue derived from the tax
authorized by this chapter to create, maintain, operate, or
administer an electronic tax administration system as authorized by
Section 351.1012, the municipality shall permit a person who is
required to collect and pay over to the municipality the tax
authorized by this chapter to withhold not more than one percent of
the amount of the tax collected and required to be reported as
reimbursement to the person for the cost of collecting the tax.
(c) The municipality may provide that the reimbursement
provided or required by this section be forfeited because of a
failure to pay the tax or to file a report as required by the
municipality.
SECTION 5. Section 351.101(a), Tax Code, as amended by
Chapters 666 (H.B. 3772) and 979 (H.B. 3615), Acts of the 84th
Legislature, Regular Session, 2015, is reenacted and amended to
read as follows:
(a) Revenue from the municipal hotel occupancy tax may be
used only to promote tourism and the convention and hotel industry,
and that use is limited to the following:
(1) the acquisition of sites for and the construction,
improvement, enlarging, equipping, repairing, operation, and
maintenance of convention center facilities or visitor information
centers, or both;
(2) the furnishing of facilities, personnel, and
materials for the registration of convention delegates or
registrants;
(3) advertising and conducting solicitations and
promotional programs to attract tourists and convention delegates
or registrants to the municipality or its vicinity;
(4) the encouragement, promotion, improvement, and
application of the arts, including instrumental and vocal music,
dance, drama, folk art, creative writing, architecture, design and
allied fields, painting, sculpture, photography, graphic and craft
arts, motion pictures, radio, television, tape and sound recording,
and other arts related to the presentation, performance, execution,
and exhibition of these major art forms;
(5) historical restoration and preservation projects
or activities or advertising and conducting solicitations and
promotional programs to encourage tourists and convention
delegates to visit preserved historic sites or museums:
(A) at or in the immediate vicinity of convention
center facilities or visitor information centers; or
(B) located elsewhere in the municipality or its
vicinity that would be frequented by tourists and convention
delegates;
(6) for a municipality located in a county with a
population of one million or less, expenses, including promotion
expenses, directly related to a sporting event in which the
majority of participants are tourists who substantially increase
economic activity at hotels and motels within the municipality or
its vicinity;
(7) subject to Section 351.1076, the promotion of
tourism by the enhancement and upgrading of existing sports
facilities or fields, including facilities or fields for baseball,
softball, soccer, flag football, and rodeos, if:
(A) the municipality owns the facilities or
fields;
(B) the municipality:
(i) has a population of 80,000 or more and
is located in a county that has a population of 350,000 or less;
(ii) has a population of at least 75,000 but
not more than 95,000 and is located in a county that has a
population of less than 200,000 but more than 160,000;
(iii) has a population of at least 36,000
but not more than 39,000 and is located in a county that has a
population of 100,000 or less that is not adjacent to a county with
a population of more than two million;
(iv) has a population of at least 13,000 but
less than 39,000 and is located in a county that has a population of
at least 200,000;
(v) has a population of at least 70,000 but
less than 90,000 and no part of which is located in a county with a
population greater than 150,000;
(vi) is located in a county that:
(a) is adjacent to the Texas-Mexico
border;
(b) has a population of at least
500,000; and
(c) does not have a municipality with
a population greater than 500,000;
(vii) has a population of at least 25,000
but not more than 26,000 and is located in a county that has a
population of 90,000 or less;
(viii) [(ix)] is located in a county that
has a population of not more than 300,000 and in which a component
university of the University of Houston System is located; [or]
(ix) [(x)] has a population of at least
40,000 and the San Marcos River flows through the municipality; or
(x) contains an intersection of Interstates
35E and 35W and at least two public universities; and
(C) the sports facilities and fields have been
used, in the preceding calendar year, a combined total of more than
10 times for district, state, regional, or national sports
tournaments;
(8) for a municipality with a population of at least
70,000 but less than 90,000, no part of which is located in a county
with a population greater than 150,000, the construction,
improvement, enlarging, equipping, repairing, operation, and
maintenance of a coliseum or multiuse facility;
(9) signage directing the public to sights and
attractions that are visited frequently by hotel guests in the
municipality;
(10) the construction, improvement, enlarging,
equipping, repairing, operation, and maintenance of a coliseum or
multiuse facility, if the municipality:
(A) has a population of at least 90,000 but less
than 120,000; and
(B) is located in two counties, at least one of
which contains the headwaters of the San Gabriel River; and
(11) for a municipality with a population of more than
175,000 but less than 225,000 that is located in two counties, each
of which has a population of less than 200,000, the construction,
improvement, enlarging, equipping, repairing, operation, and
maintenance of a coliseum or multiuse facility and related
infrastructure or a venue, as defined by Section 334.001(4), Local
Government Code, that is related to the promotion of tourism.
SECTION 6. Section 351.101, Tax Code, is amended by
amending Subsection (g) and adding Subsections (g-1), (n), and (o)
to read as follows:
(g) This [Nothing in this] section does not [shall] prohibit
a [any private entity,] person that receives a grant from a
municipality to conduct an activity authorized by Subsection
(a)(4)[, or organization] from making a grant [subgrants] by
contract to another [any other] person to conduct an activity
authorized by that subdivision[, entity, or private organization
for expenditures under Section 351.101(a)(4)]. A person that
receives a grant from a grantee of the municipality under this
subsection [subgrantee] shall:
(1) at least annually submit a report of the person's
expenditures of funds received from the grantee [make periodic
reports] to the governing body of the municipality [of its
expenditures from the tax authorized by this chapter]; and
(2) make records of those [these] expenditures
available for review to the governing body of the municipality and
any [or] other person.
(g-1) A municipality may not require a person that receives
funds directly from the municipality through a grant to conduct an
activity authorized by Subsection (a)(4) to waive a right
guaranteed by law to the person or to enter into an agreement with
another person.
(n) In addition to other authorized uses, a municipality
that has a population of not more than 1,500 and is located in a
county that borders Arkansas and Louisiana may use revenue from the
municipal hotel occupancy tax for the promotion of tourism by the
enhancement and upgrading of an existing sports facility or field
as specified by Subsection (a)(7), provided that the requirements
of Subsections (a)(7)(A) and (C) and Section 351.1076 are met.
(o) In addition to the purposes provided by Subsection (a),
a municipality that has a population of not more than 10,000, that
contains an outdoor gear and sporting goods retailer with retail
space larger than 175,000 square feet, and that hosts an annual
wiener dog race may use revenue from the municipal hotel occupancy
tax to promote tourism and the convention and hotel industry by
constructing, operating, or expanding a sporting related facility
or sports field owned by the municipality, if the majority of the
events at the facility or field are directly related to a sporting
event in which the majority of participants are tourists who
substantially increase economic activity at hotels in the
municipality. If a municipality to which this subsection applies
uses revenue derived from the municipal hotel occupancy tax for a
purpose described by this subsection, the municipality may not
reduce the percentage of revenue from that tax allocated for a
purpose described by Subsection (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 this subsection.
SECTION 7. Section 351.1012(a), Tax Code, is amended to
read as follows:
(a) Notwithstanding any other provision of this chapter, a
municipality may spend each year not more than the lesser of one
percent or $75,000 of the revenue derived from the tax authorized by
this chapter during that year for the creation, maintenance,
operation, and administration of an electronic tax administration
system. A municipality may not use revenue the municipality is
authorized to spend under this subsection to conduct an audit.
SECTION 8. Section 351.102, Tax Code, is amended by
amending Subsections (b), (c), and (d) and adding Subsections
(c-1), (e), (f), and (g) to read as follows:
(b) An eligible central municipality, a municipality with a
population of 173,000 or more that is located within two or more
counties, a municipality with a population of 96,000 or more that is
located in a county that borders Lake Palestine or contains the
headwaters of the San Gabriel River, or a municipality with a
population of at least 99,900 but not more than 111,000 that is
located in a county with a population of at least 135,000 may pledge
the revenue derived from the tax imposed under this chapter from a
hotel project that is owned by or located on land owned by the
municipality or, in an eligible central municipality, by a
nonprofit corporation acting on behalf of an eligible central
municipality, and that is located within 1,000 feet of a convention
center facility owned by the municipality for the payment of bonds
or other obligations issued or incurred to acquire, lease,
construct, and equip the hotel and any facilities ancillary to the
hotel, including convention center entertainment-related
facilities, meeting spaces, restaurants, shops, street and water
and sewer infrastructure necessary for the operation of the hotel
or ancillary facilities, and parking facilities within 1,000 feet
of the hotel or convention center facility. For bonds or other
obligations issued under this subsection, an eligible central
municipality or a municipality described by this subsection or
Subsection (e) may only pledge revenue or other assets of the hotel
project benefiting from those bonds or other obligations.
(c) Except as provided by this subsection, a [A]
municipality to which Subsection (b) or (e) applies is entitled to
receive all funds from a project described by Subsection (b) [this
section] that an owner of a project may receive under Section
151.429(h) of this code, or Section 2303.5055, Government Code, and
may pledge the funds for the payment of obligations issued under
this section. A municipality described by Subsection (e) is not
entitled to receive funds from a project under this subsection
unless the municipality has pledged the revenue derived from the
tax imposed under this chapter from the project for the payment of
bonds or other obligations issued or incurred for the project.
(c-1) A municipality to which this subsection applies is
entitled to receive all funds from a hotel and convention center
project that the owner of a project could receive under Section
151.429(h) of this code or Section 2303.5055, Government Code, if a
project for purposes of those provisions included a hotel and
convention center project. The municipality may pledge the funds
for payment of obligations issued under this section for the hotel
and convention center project. For purposes of this subsection,
"hotel and convention center project" means a project that is an
existing hotel owned by the municipality or another person and a
convention center facility to be acquired, constructed, equipped,
or leased, that will be located within 1,000 feet of the hotel, and
that will be owned by or located on land owned by the municipality.
This subsection applies only to a municipality that:
(1) is the county seat of a county that:
(A) borders the United Mexican States;
(B) has a population of less than 300,000; and
(C) contains one or more municipalities with a
population of 200,000 or more; and
(2) holds an annual jalapeño festival.
(d) Except as provided by this subsection, an eligible
central municipality or another municipality described by
Subsection (b) or (e) that uses revenue derived from the tax imposed
under this chapter or funds received under Subsection (c) for a
hotel project described by Subsection (b) may not reduce the
percentage of revenue from the tax imposed under this chapter and
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
or funds for the hotel project. This subsection does not apply to
an eligible central municipality described by Section
351.001(7)(D).
(e) In addition to the municipalities described by
Subsection (b), that subsection also applies to:
(1) a municipality with a population of at least
110,000 but not more than 135,000 at least part of which is located
in a county with a population of not more than 135,000;
(2) a municipality with a population of at least 9,000
but not more than 10,000 that is located in two counties, each of
which has a population of at least 662,000 and a southern border
with a county with a population of 2.3 million or more;
(3) a municipality with a population of at least
200,000 but not more than 300,000 that contains a component
institution of the Texas Tech University System;
(4) a municipality with a population of at least
95,000 that borders Lake Lewisville;
(5) a municipality that:
(A) contains a portion of Cedar Hill State Park;
(B) has a population of more than 45,000;
(C) is located in two counties, one of which has a
population of more than two million and one of which has a
population of more than 149,000; and
(D) has adopted a capital improvement plan for
the construction or expansion of a convention center facility;
(6) a municipality with a population of less than
6,000 that:
(A) is located in two counties each with a
population of 600,000 or more that are both adjacent to a county
with a population of two million or more;
(B) has full-time police and fire departments;
and
(C) has adopted a capital improvement plan for
the construction or expansion of a convention center facility;
(7) a municipality with a population of at least
56,000 that:
(A) borders Lake Ray Hubbard; and
(B) is located in two counties, one of which has a
population of less than 80,000;
(8) a municipality with a population of more than
83,000, that borders Clear Lake, and that is primarily located in a
county with a population of less than 300,000;
(9) a municipality with a population of less than
2,000 that:
(A) is located adjacent to a bay connected to the
Gulf of Mexico;
(B) is located in a county with a population of
290,000 or more that is adjacent to a county with a population of
four million or more; and
(C) has a boardwalk on the bay;
(10) a municipality with a population of 75,000 or
more that:
(A) is located wholly in one county with a
population of 575,000 or more that is adjacent to a county with a
population of four million or more; and
(B) has adopted a capital improvement plan for
the construction or expansion of a convention center facility;
(11) a municipality with a population of less than
75,000 that is located in three counties, at least one of which has
a population of at least four million; and
(12) an eligible coastal municipality with a
population of more than 3,000 but less than 5,000.
(f) A municipality described by Subsection (e)(3) that uses
revenue derived from the tax imposed under this chapter or funds
received under Subsection (c) for repayment of bonds or other
obligations issued or incurred for a hotel project described by
Subsection (b) may not, in a fiscal year that begins after
construction of the hotel project is complete and during any part of
which the bonds or other obligations are outstanding, reduce the
amount of revenue derived from the tax imposed under this chapter
and allocated for a purpose described by Section 351.101(a)(6) to
an amount that is less than the sum of:
(1) the amount of the revenue derived from the tax
imposed under this chapter and allocated by the municipality for a
purpose described by Section 351.101(a)(6) during the fiscal year
beginning October 1, 2016; and
(2) three percent of the amount of revenue derived
from the tax imposed under this chapter during the fiscal year for
which the amount required by this subsection is being determined.
(g) A municipality to which this section applies may not
receive or pledge revenue or funds under Subsection (b) or (c) for a
hotel project unless the municipality enters into an agreement with
a person for the development of the hotel project before September
1, 2019.
SECTION 9. Subchapter B, Chapter 351, Tax Code, is amended
by adding Section 351.10711 to read as follows:
Sec. 351.10711. ALLOCATION OF REVENUE FOR MAINTENANCE,
ENHANCEMENT, AND UPGRADE OF SPORTS FACILITIES AND FIELDS BY CERTAIN
MUNICIPALITIES. (a) This section applies only to a municipality
that is the county seat of a county that has a population of more
than 10,000 and contains a portion of Mound Lake.
(b) In addition to other authorized uses, a municipality to
which this section applies may use revenue derived from the tax
imposed under this chapter to promote tourism by maintaining,
enhancing, or upgrading sports facilities or fields, provided that:
(1) the requirements of Section 351.1076 are met if
the municipality uses the revenue to enhance or upgrade a sports
facility or field;
(2) the municipality owns the sports facilities or
fields; and
(3) the sports facilities and fields have been used,
in the preceding calendar year, a combined total of more than 10
times for district, state, regional, or national sports
tournaments.
(c) A municipality that uses revenue derived from the tax
imposed under this chapter as authorized by Subsection (b) may not
reduce the percentage of revenue from the tax imposed under this
chapter and 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 as authorized by Subsection
(b).
SECTION 10. Section 351.1076(a), Tax Code, is amended to
read as follows:
(a) A municipality that spends municipal hotel occupancy
tax revenue for the enhancement and upgrading of existing sports
facilities or fields as authorized by Section 351.101(a)(7) or (n)
or Section 351.10711:
(1) shall determine the amount of municipal hotel
occupancy tax revenue generated for the municipality by hotel
activity attributable to the sports events and tournaments held on
the enhanced or upgraded facilities or fields for five years after
the date the enhancements and upgrades are completed; and
(2) may not spend hotel occupancy tax revenue for the
enhancement and upgrading of the facilities or fields in a total
amount that exceeds the amount of area hotel revenue attributable
to the enhancements and upgrades.
SECTION 11. Section 351.1078, Tax Code, is amended to read
as follows:
Sec. 351.1078. ALLOCATION OF REVENUE: CERTAIN
MUNICIPALITIES. (a) A municipality that spends municipal hotel
occupancy tax revenue as authorized by Section 351.101(i) or (o):
(1) may not use municipal hotel occupancy tax revenue
for the acquisition of land for the sporting related facility or
sports field described by that subsection;
(2) shall annually determine and prepare and publish
on the municipality's Internet website a report on the events held
at the facility or field, the number of hotel room nights
attributable to events held at the facility or field, and the amount
of hotel revenue and municipal tax revenue attributable to the
sports events and tournaments held at the facility or field for five
years after the date the construction expenditures are completed;
and
(3) may only spend hotel occupancy tax revenue for
operational expenses of the facility or field if the costs are
directly related to a sporting event in which the majority of
participants are tourists who substantially increase economic
activity at hotels in or near the municipality.
(b) The municipality shall reimburse to the municipality's
hotel occupancy tax revenue fund from the municipality's general
fund any expenditure in excess of the amount of area hotel revenue
attributable to sporting events held at the sporting related
facility or sports field described by Section 351.101(i) or (o) for
five years after the date the construction or expansion of the
facility or field described by that subsection is completed.
SECTION 12. Section 352.002, Tax Code, is amended by adding
Subsection (x) to read as follows:
(x) The commissioners court of a county that has a
population of less than 100,000 and that borders Lake Ray Roberts
may impose a tax as provided by Subsection (a).
SECTION 13. Section 352.003, Tax Code, is amended by adding
Subsection (u) to read as follows:
(u) The tax rate in a county authorized to impose the tax
under Section 352.002(x) may not exceed two percent of the price
paid for a room in a hotel.
SECTION 14. Section 352.103, Tax Code, is amended to read as
follows:
Sec. 352.103. USE OF REVENUE: COUNTIES WITH NO
MUNICIPALITY. (a) Except as provided by Subsection (b), the [The]
revenue from a tax imposed under this chapter by a county that has
no municipality may be used only for:
(1) the purposes provided by Sections 351.101(a)(1),
(2), and (4);
(2) advertising for general promotional and tourist
advertising of the county and conducting a solicitation program to
attract conventions and visitors either by the county or through
contracts with persons or organizations selected by the
commissioners court; and
(3) historical preservation and restoration.
(b) Notwithstanding any other provision of this chapter, a
county described by Subsection (a) that owns an airport may use
revenue from a tax imposed under this chapter for repairs and
improvements to the county airport or reimbursement for repairs and
improvements to the airport.
(c) A county to which Subsection (b) applies may not use
revenue from a tax imposed under this chapter for a purpose
described by Subsection (b) in a total amount that would exceed the
amount of hotel revenue in the county that is likely to be
reasonably attributable to guests traveling through the airport
during the 15-year period beginning on the date the county first
uses the tax revenue for that purpose.
(d) A county to which Subsection (b) applies may not use
revenue from a tax imposed under this chapter for a purpose
described by Subsection (b) after the 10th anniversary of the date
the county first uses that revenue for that purpose.
SECTION 15. Subchapter B, Chapter 352, Tax Code, is amended
by adding Section 352.113 to read as follows:
Sec. 352.113. USE OF REVENUE: CERTAIN COUNTIES BORDERING
LAKE RAY ROBERTS. In addition to the purposes authorized by this
chapter, the revenue from a tax imposed under this chapter by a
county authorized to impose the tax under Section 352.002(x) may be
used for any purpose described by Section 352.101(a).
SECTION 16. To the extent of any conflict, this Act controls
over another Act of the 85th Legislature, Regular Session, 2017,
relating to nonsubstantive additions to and corrections in enacted
codes.
SECTION 17. 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, 2017.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2445 was passed by the House on May 4,
2017, by the following vote: Yeas 139, Nays 4, 2 present, not
voting; that the House refused to concur in Senate amendments to
H.B. No. 2445 on May 26, 2017, and requested the appointment of a
conference committee to consider the differences between the two
houses; and that the House adopted the conference committee report
on H.B. No. 2445 on May 28, 2017, by the following vote: Yeas 128,
Nays 19, 1 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2445 was passed by the Senate, with
amendments, on May 23, 2017, by the following vote: Yeas 24, Nays
7; at the request of the House, the Senate appointed a conference
committee to consider the differences between the two houses; and
that the Senate adopted the conference committee report on H.B. No.
2445 on May 28, 2017, by the following vote: Yeas 25, Nays 5, 1
present, not voting.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor