By: Clardy H.B. No. 5012
A BILL TO BE ENTITLED
AN ACT
relating to the authority of certain municipalities to receive
certain tax revenue derived from a hotel and convention center
project and to pledge certain tax revenue for the payment of
obligations related to the project.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 351.001(12), Tax Code, is amended to
read as follows:
(12) "Retail establishment" means an establishment
engaged in activities described by North American Industry
Classification System subsector code 442, 443, 445, 446, 448, 451,
452, [or] 453, or 713.
SECTION 2. Section 351.152, Tax Code, is amended to read as
follows:
Sec. 351.152. APPLICABILITY. This subchapter applies only
to:
(1) a municipality described by Section
351.001(7)(B);
(2) a municipality described by Section
351.001(7)(D);
(3) a municipality described by Section
351.001(7)(E);
(4) a municipality described by Section
351.102(e)(3);
(5) a municipality that contains more than 75 percent
of the population of a county with a population of 1.5 million or
more;
(6) a municipality with a population of 150,000 or
more but less than 200,000 that is partially located in at least one
county with a population of 125,000 or more;
(7) a municipality with a population of 150,000 or
more but less than one million that is located in one county with a
population of 2.3 million or more;
(8) a municipality with a population of 180,000 or
more that:
(A) is located in two counties, each with a
population of 100,000 or more; and
(B) contains an American Quarter Horse Hall of
Fame and Museum;
(9) a municipality with a population of 96,000 or more
that is located in a county that borders Lake Palestine;
(10) a municipality with a population of 96,000 or
more that is located in a county that contains the headwaters of the
San Gabriel River;
(11) a municipality with a population of 99,900 or
more but less than 111,000 that is located in a county with a
population of 135,000 or more;
(12) a municipality with a population of 110,000 or
more but less than 135,000 at least part of which is located in a
county with a population of less than 135,000;
(13) a municipality with a population of 9,000 or more
but less than 10,000 that is located in two counties, each of which
has a population of 662,000 or more and a southern border with a
county with a population of 2.3 million or more;
(14) a municipality with a population of 200,000 or
more but less than 300,000 that contains a component institution of
the Texas Tech University System;
(15) a municipality with a population of 95,000 or
more that:
(A) is located in more than one county; and
(B) borders Lake Lewisville;
(16) a municipality with a population of 45,000 or
more that:
(A) contains a portion of Cedar Hill State Park;
(B) is located in two counties, one of which has a
population of two million or more and one of which has a population
of 149,000 or more; and
(C) has adopted a capital improvement plan for
the construction or expansion of a convention center facility;
(17) a municipality with a population of less than
6,000 that:
(A) is almost wholly located in a county with a
population of 600,000 or more that is adjacent to a county with a
population of two million or more;
(B) is partially located in a county with a
population of 1.8 million or more that is adjacent to a county with
a population of two million or more;
(C) has a visitor center and museum located in a
19th-century rock building in the municipality's downtown; and
(D) has a waterpark open to the public;
(18) a municipality with a population of 56,000 or
more that:
(A) borders Lake Ray Hubbard; and
(B) is located in two counties, one of which has a
population of less than 80,000;
(19) a municipality with a population of 83,000 or
more that:
(A) borders Clear Lake; and
(B) is primarily located in a county with a
population of less than 300,000;
(20) 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;
(21) 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;
(22) 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 four million or more;
(23) an eligible coastal municipality with a
population of 3,000 or more but less than 5,000;
(24) a municipality with a population of 90,000 or
more but less than 150,000 that:
(A) is located in three counties; and
(B) contains a branch campus of a component
institution of the University of Houston System;
(25) a municipality that is:
(A) primarily located in a county with a
population of four million or more; and
(B) connected by a bridge to a municipality
described by Subdivision (20);
(26) a municipality with a population of 20,000 or
more but less than 25,000 that:
(A) contains a portion of Mustang Bayou; and
(B) is wholly located in a county with a
population of less than 500,000;
(27) a municipality with a population of 70,000 or
more but less than 90,000 that is located in two counties, one of
which has a population of four million or more and the other of
which has a population of less than 50,000;
(28) a municipality with a population of 10,000 or
more that:
(A) is wholly located in a county with a
population of four million or more; and
(B) has a city hall located less than three miles
from a space center operated by an agency of the federal government;
(29) a municipality that is the county seat of a
county:
(A) through which the Pedernales River flows; and
(B) in which the birthplace of a president of the
United States is located;
(30) a municipality that contains a portion of U.S.
Highway 79 and State Highway 130;
(31) a municipality with a population of 48,000 or
more but less than 95,000 that is located in two counties, one of
which has a population of 900,000 or more but less than 1.7 million;
(32) a municipality with a population of less than
25,000 that contains a museum of Western American art;
(33) a municipality with a population of 50,000 or
more that is the county seat of a county that contains a portion of
the Sam Houston National Forest;
(34) a municipality with a population of less than
25,000 that:
(A) contains a cultural heritage museum; and
(B) is located in a county that borders the
United Mexican States and the Gulf of Mexico;
(35) a municipality that is the county seat of a county
that:
(A) has a population of 115,000 or more;
(B) is adjacent to a county with a population of
1.8 million or more; and
(C) hosts an annual peach festival;
(36) a municipality that is the county seat of a county
that:
(A) has a population of 585,000 or more; and
(B) is adjacent to a county with a population of
four million or more;
(37) a municipality with a population of less than
10,000 that:
(A) contains a component university of The Texas
A&M University System; and
(B) is located in a county adjacent to a county
that borders Oklahoma;
(38) a municipality with a population of less than
6,100 that:
(A) is located in two counties, each of which has
a population of 600,000 or more but less than two million; and
(B) hosts an annual Cajun Festival;
(39) a municipality with a population of 13,000 or
more that:
(A) is located on an international border; and
(B) is located in a county:
(i) with a population of less than 400,000;
and
(ii) in which at least one World Birding
Center site is located;
(40) a municipality with a population of 4,000 or more
that:
(A) is located on an international border; and
(B) is located not more than five miles from a
state historic site that serves as a visitor center for a state park
that contains 300,000 or more acres of land;
(41) a municipality with a population of 36,000 or
more that is adjacent to at least two municipalities described by
Subdivision (15);
(42) a municipality with a population of 28,000 or
more that is located in a county with a population of 240,000 or
more in which is located a portion of the Balcones River and a
historic railroad depot and heritage center;
(43) a municipality 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;
(44) a municipality with a population of less than
500,000 that is:
(A) located in two counties; and
(B) adjacent to a municipality described by
Subdivision (31); [and]
(45) a municipality that:
(A) has a population of more than 67,000; and
(B) is located in two counties with 90 percent of
the municipality's territory located in a county with a population
of at least 580,000, and the remaining territory located in a county
with a population of at least four million;
(46) a municipality that:
(A) has a population of 100,000 or more; and
(B) is wholly located in, but is not the county
seat of, a county with a population of one million or more:
(i) in which all or part of a municipality
with a population of one million or more is located; and
(ii) that is adjacent to a county with a
population of 2.5 million or more;
(47) a municipality that contains an intersection of
Interstates 35E and 35W and at least two public universities;
(48) a municipality that is the county seat of a county
bordering the Gulf of Mexico and the United Mexican States;
(49) a municipality that is bisected by the Guadalupe
River and is the county seat of a county with a population of
170,000 or more;
(50) a municipality with a population of 70,000 or
more but less than 150,000 that borders Joe Pool Lake;
(51) a municipality with a population of 115,000 or
more that borders the Neches River;
(52) a municipality described by Section 351.101(k);
(53) a municipality that is the county seat of a
county:
(A) through which the Brazos River flows; and
(B) in which a national monument is located;
(54) a municipality that:
(A) contains a historical commercial district
designated on the National Register of Historic Places and hosts an
annual Grapefest event;
(B) has a population of 50,000 or more; and
(C) is partially located in three counties all of
which has a population of 900,000 or more;
(55) a municipality with a population of 45,000 or
more that:
(A) is not the county seat of a county;
(B) is located in a single county; and
(C) contains a portion of Lake Lewisville;
(56) a municipality that has a population of at least
150,000 and is partially located in a county that contains a portion
of Cedar Creek Reservoir and has a population of at least
145,00054); and
(57) a municipality that:
(A) has an institution of higher education
designated as an historical black college and university;
(B) has a population of 17,400 or more; and
(C) is located a county with a population of
145,000 or more that is adjacent to a county with a population of
2.6 million or more.
SECTION 3. Section 351.155, Tax Code, is amended by adding
Subsection (f) to read as follows:
(f) This subsection applies only to a municipality
described by Section 351.152(52). A municipality to which this
subsection applies may pledge or commit the revenue derived from
the tax imposed under this chapter from a qualified hotel and the
revenue to which the municipality is entitled under Section 351.156
for the payment of bonds or other obligations issued for a
convention center facility that, at the time the bonds or other
obligations were issued, was not a qualified convention center
facility.
SECTION 4. Section 351.157, Tax Code, is amended by adding
the following subsections to read as follows:
(b) This section applies only to:
(1) a municipality described by Section 351.152(3);
(2) a municipality described by Section 351.152(6);
(3) a municipality described by Section 351.152(7);
(4) a municipality described by Section 351.152(10);
(4-a) a municipality described by Section
351.152(14);
(5) a municipality described by Section 351.152(16);
(6) a municipality described by Section 351.152(22);
(7) a municipality described by Section 351.152(25);
(8) a municipality described by Section 351.152(34);
(9) a municipality described by Section 351.152(35);
(10) a municipality described by Section 351.152(36);
(11) a municipality described by Section 351.152(38);
and
(12) a municipality described by Section
351.152(43).; and
(13) a municipality described by Section 351.152(46)
(c) A municipality is entitled to receive revenue under
Subsection (d) derived from the following types of establishments
that meet the requirements of Subsections (a)(1), (2), (3), and
(4):
(1) for a municipality described by Subsection (b)(1):
(A) restaurants, bars, and retail
establishments; and
(B) swimming pools and swimming facilities owned
or operated by the related qualified hotel;
(2) for a municipality described by Subsection (b)(2),
swimming pools and swimming facilities, restaurants, bars, and
retail establishments;
(3) for a municipality described by Subsection (b)(3),
restaurants, bars, and retail establishments;
(4) for a municipality described by Subsection (b)(4):
(A) restaurants, bars, and retail
establishments; and
(B) swimming pools and swimming facilities owned
or operated by the related qualified hotel;
(4-a) for a municipality described by Subsection
(b)(4-a):
(A) restaurants, bars, and retail
establishments; and
(B) swimming pools and swimming facilities owned
or operated by the related qualified hotel;
(5) for a municipality described by Subsection (b)(5),
restaurants, bars, and retail establishments;
(6) for a municipality described by Subsection (b)(6),
restaurants, bars, and retail establishments;
(7) for a municipality described by Subsection (b)(7),
restaurants, bars, and retail establishments;
(8) for a municipality described by Subsection (b)(8),
restaurants, bars, and retail establishments;
(9) for a municipality described by Subsection (b)(9),
restaurants, bars, and retail establishments;
(10) for a municipality described by Subsection
(b)(10):
(A) restaurants, bars, and retail
establishments; and
(B) swimming pools and swimming facilities owned
or operated by the related qualified hotel;
(11) for a municipality described by Subsection
(b)(11):
(A) restaurants, bars, and retail
establishments; and
(B) swimming pools and swimming facilities owned
or operated by the related qualified hotel; and
(12) for a municipality described by Subsection
(b)(12):
(A) restaurants, bars, and retail
establishments; and
(B) swimming pools and swimming facilities owned
or operated by the related qualified hotel; and.
(13) for a municipality described by Subsection
(b)(13), restaurants, bars and retail establishments.
SECTION 5. Chapter 351, Tax Code, is amended by adding
Subchapter D to read as follows:
SUBCHAPTER D. RECEIPT OF CERTAIN REVENUE BY CERTAIN MUNICIPALITIES
Sec. 351.201. EXTENSION OF PERIOD OF ENTITLEMENT TO CERTAIN
REVENUE FOR CERTAIN MUNICIPALITIES. (a) This section applies only
to a municipality or nonprofit corporation acting on behalf of a
municipality that received or was entitled to receive a rebate,
refund, or payment of taxes under Section 151.429(h), 351.102,
351.156, or 351.157 at any time during the period beginning March
12, 2020, and ending January 1, 2021, relating to a hotel project or
qualified hotel, convention center facility, or establishment, as
applicable.
(b) Notwithstanding any other law, a municipality or
nonprofit corporation acting on behalf of a municipality to which
this section applies and that is otherwise entitled to receive
revenue under Section 151.429(h), 351.1015, 351.102, 351.156, or
351.157 for the period following the date on which the qualifying
hotel to which the entitlement relates is open for initial
occupancy is entitled to receive that revenue for an additional
24-month period immediately following the expiration of the 10-year
period.
(c) A municipality or nonprofit corporation acting on
behalf of a municipality must request the extension of the period of
entitlement provided under Subsection (b) from the comptroller in
the manner the comptroller specifies. The comptroller is not
required to extend the period of entitlement under Subsection (b)
unless the municipality or nonprofit corporation requests the
extension.
Sec. 351.202. EXPIRATION OF SUBCHAPTER. This subchapter
expires January 1, 2035.
SECTION 6. Section 351.1015(a)(4), Tax Code, is amended by
amending Subsection (a)(4) and adding Subsection (4-a) to read as
follows:
(4) "Project financing zone" means an area within a
municipality:
(A) that the municipality by ordinance or by
agreement under Chapter 380, Local Government Code, designates as a
project financing zone;
(B) the boundaries of which are:
(i) within a three-mile radius of the
center of a qualified project; or
(ii) if designated by a municipality
described by Section 351.001(7)(B), a contiguous geographic area
located wholly within the corporate limits of the designating
municipality that, as measured by acres, is equal to or less than
the maximum area described by Subparagraph (i) and contains within
it the qualified project;
(C) the designation of which specifies the
longitude and latitude of the center of the qualified project; and
(D) the designation of which expires not later
than the 30th anniversary of the date of designation.
(4-a) "Project-associated infrastructure" means:
(A) a hotel, store, restaurant, concession,
automobile parking facility, theater, opera house, auditorium,
music hall, rehearsal hall, venue and related infrastructure,
entertainment facility, park, museum, plaza, recreational
facility, transportation facility, road, street, water or sewer
facility, or tourist development area that is:
(i) located in a project financing zone;
(ii) located on land owned, acquired, or
leased by a municipality or by a local government corporation to
which Subsection (j) applies; and
(iii) related to the promotion of tourism
and the convention and hotel industry; or
(B) the acquisition of public or private land and
related infrastructure that:
(i) is located in a project financing zone;
and
(ii) will be used in connection with a
purpose described by this subdivision.
SECTION 7. Section 351.1015, Tax Code, is amended by
amending Subsections (b), (c), (d), (g), and (i) and adding
Subsection (j) to read as follows:
(b) This section applies only to a qualified project and
project-associated infrastructure located in:
(1) a municipality with a population of at least
[650,000] 900,000 [according to the most recent federal decennial
census]; or
(2) a municipality that is described by Section
351.001(7)(b).
(c) In addition to the uses provided by Section 351.101,
revenue from the municipal hotel occupancy tax may be used to fund a
qualified project and project-associated infrastructure.
(d) A municipality may pledge the revenue derived from the
tax imposed under this chapter from a hotel located in the project
financing zone for the payment of bonds or other obligations issued
or incurred to acquire, lease, construct, improve, enlarge, and
equip the qualified project and project-associated infrastructure.
(g) The comptroller shall deposit incremental
hotel-associated revenue collected by or forwarded to the
comptroller in a separate suspense account to be held in trust for
the municipality that is entitled to receive the revenue. The
suspense account is outside the state treasury, and the comptroller
may make a payment authorized by this section from the account
without the necessity of an appropriation. The comptroller shall
begin making payments from the suspense account to the municipality
for which the money is held on the date the qualified project or
project-associated infrastructure in the project financing zone is
commenced. If the qualified project or project-associated
infrastructure is not commenced by the fifth anniversary of the
first deposit to the account, the comptroller shall transfer the
money in the account to the general revenue fund and cease making
deposits to the account.
(i) A municipality shall notify the comptroller if the
qualified project or project-associated infrastructure in the
project financing zone is abandoned. If the qualified project or
project-associated infrastructure is abandoned, the comptroller
shall transfer to the general revenue fund the amount of money in
the suspense account that exceeds the amount required for the
payment of bonds or other obligations described by Subsection (d).
(j) A local government corporation to which this subsection
applies may act as a municipality under this section and is
considered to be a municipality for purposes of this section. An
action a municipality is required to take by ordinance or order
under this section may be taken by order or resolution of the
corporation.
(k) Notwithstanding any other law or a term of any ordinance
or agreement adopted or entered into under this section, due to the
effect of the COVID-19 pandemic on hotel-associated revenues, the
date on which a project financing zone designated under this
section expires is automatically extended for two years if the zone
was:
(1) designated by a municipality as a project
financing zone in or before 2019; and
(2) in existence on March 15, 2020.
SECTION 8. This Act takes effect September 1, 2023.