H.B. No. 5012
AN ACT
relating to the authority of certain municipalities to use certain
tax revenue for hotel and convention center projects and other
qualified projects.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 351.1015(a)(2), Tax Code, is amended to
read as follows:
(2) "Hotel-associated revenue" means the sum of:
(A) state tax revenue collected in a project
financing zone from all hotels located in the zone that would be
available to the owners of qualified hotel projects under Section
151.429(h) if the hotels were qualified hotel projects, excluding
the amount of that revenue received by a municipality:
(i) under Section 351.156 or 351.157 in
connection with a qualified hotel located in the zone that exists on
the date the municipality designates the zone, except as provided
by Paragraph (B); or
(ii) under Section 351.102(c) for a hotel
project described by Section 351.102(b) and located in the zone
that exists on the date the municipality designates the zone; and
(B) tax revenue collected from all permittees
under Chapter 183 at hotels located in the zone, excluding revenue
disbursed by the comptroller under Section 183.051(b).
SECTION 2. Section 351.1015, Tax Code, is amended by
amending Subsections (b) and (e) and adding Subsection (j) to read
as follows:
(b) This section applies only to a qualified project located
in:
(1) a municipality with a population of at least
650,000 but less than 750,000 according to the most recent federal
decennial census;
(2) a municipality described by Section
351.001(7)(B); or
(3) a municipality described by Section 351.152(61).
(e) A municipality may pledge for the payment of bonds or
other obligations described by Subsection (d) the local revenue
from eligible tax proceeds as defined by Section 2303.5055(e),
Government Code, from hotels located in a project financing zone
that would be available to the owners of qualified hotel projects
under that section if the hotels were qualified hotel projects,
excluding any amount received by the municipality:
(1) in connection with a qualified hotel, as defined
by Section 351.151, located in the zone that exists on the date the
municipality designates the zone; or
(2) for a hotel project described by Section
351.102(b) and located in the zone that exists on the date the
municipality designates the zone.
(j) For a municipality described by Subsection (b)(2) or
(3), the term "qualified project" also means a venue described by
Section 334.001(4)(A), Local Government Code, and any related
infrastructure.
SECTION 3. 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 70 [75]
percent of the population of a county with a population of 1.5
million or more;
(6) a municipality with a population of 175,000
[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 250,000
[150,000] or more but less than one million that is located in one
county with a population of 2.5 [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 at least
95,000 [99,900 or more but less than 111,000] that is located in a
county that is bisected by United States Highway 385 and has [with]
a population of not more than 170,000 [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 28,000
[9,000] or more but less than 31,000 [10,000] that is located in two
counties, each of which has a population of 900,000 [662,000] or
more and a southern border with a county with a population of 2.5
[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 2.5 [two] million or more and one of which has a
population of 190,000 [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
10,000 [6,000] that:
(A) is almost wholly located in a county with a
population of 900,000 [600,000] or more that is adjacent to a county
with a population of 2.5 [two] million or more;
(B) is partially located in a county with a
population of 2.1 [1.8] million or more that is adjacent to a county
with a population of 2.5 [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 60,000
[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 110,000 [80,000];
(19) a municipality with a population of 110,000
[83,000] or more that:
(A) borders Clear Lake; and
(B) is primarily located in a county with a
population of less than 355,000 [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 800,000 [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
70,000 [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 2,900 [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 25,000
[20,000] or more but less than 30,000 [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 70,000
[48,000] or more but less than 115,000 [95,000] that is located in
two counties, one of which has a population of 1.1 million [900,000]
or more but less than 1.9 [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
2.1 [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 800,000 [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
17,000 [6,100] that:
(A) is located in two counties, each of which has
a population of 900,000 [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 3,200 [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 that contains a portion of the Blanco River and in which is
located 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 800,000 [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 is the county seat of a county
bordering the Gulf of Mexico and the United Mexican States;
(48) 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;
(49) a municipality with a population of 70,000 or
more but less than 150,000 that borders Joe Pool Lake;
(50) a municipality with a population of 115,000 or
more that borders the Neches River;
(51) a municipality described by Section 351.101(k);
(52) 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;
(53) 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;
(54) a municipality that is the county seat of a county
with a population of more than 900,000 that is adjacent to two
counties, each of which has a population of more than 1.8 million;
(55) a municipality that hosts an annual wine festival
and is located in three counties, each of which has a population of
more than 900,000;
(56) a municipality that has a population of at least
150,000 but less than 1,300,000 and is partially located in a county
that contains a portion of Cedar Creek Reservoir;
(57) a municipality that is located in a county that
contains a portion of Cedar Creek Reservoir and in which a private
college is located;
(58) a municipality that is the county seat of a
county:
(A) with a population of one million or more;
(B) in which all or part of a municipality with a
population of one million or more is located; and
(C) that is located adjacent to a county with a
population of 2.5 million or more;
(59) a municipality that is the county seat of a county
that contains a portion of Cedar Creek Reservoir and borders a
county with a population of more than 240,000;
(60) a municipality with a population of more than
80,000 but less than 150,000 that is located in a county with a
population of more than 369,000 but less than 864,000 that contains
part of an active duty United States Army installation;
(61) a municipality with a population of 750,000 or
more that is located in a county with a population of 1.5 million or
less;
(62) a municipality with a population of less than
7,000 that contains a country music hall of fame;
(63) a municipality with a population of 35,000 or
more that contains a railroad museum and is located in a county
that:
(A) has a population of 800,000 or more; and
(B) is adjacent to a county with a population of
four million or more; and
(64) a municipality:
(A) that is the county seat of a county:
(i) with a population of 60,000 or less; and
(ii) that borders the Rio Grande; and
(B) in which is located a United States military
fort listed in the National Register of Historic Places.
SECTION 4. Section 351.153(a), Tax Code, is amended to read
as follows:
(a) This section applies only to a municipality described by
Section 351.152(5), (6), [351.152(6) or] (29), or (58).
SECTION 5. Section 351.157, Tax Code, is amended by
amending Subsections (a) and (b) and adding Subsection (c-1) to
read as follows:
(a) In this section, "qualified establishment" means an
establishment:
(1) that is located on land:
(A) owned by a municipality; or
(B) owned by:
(i) any person if the establishment is
located in a municipality described by Section 351.152(3);
(ii) [or owned by] the federal government
if the establishment is located in a municipality described by
Section 351.152(6); or
(iii) a nonprofit corporation, including a
public facility corporation, that is acting as or on behalf of, or
that is controlled by, a municipality, if the establishment is
located in a municipality described by Section 351.152(5);
(2) the nearest exterior wall of which is located not
more than 1,000 feet from the nearest exterior wall of a qualified
hotel or qualified convention center facility;
(3) that is constructed:
(A) on or after the date the municipality
commences a qualified project under this subchapter; or
(B) at any time if the establishment is located
in a municipality described by Section 351.152(3);
(4) that is not a sports stadium; and
(5) that is the type of establishment described by
Subsection (c-1) [(c)] from which the municipality is entitled to
receive revenue under Subsection (d).
(b) This section applies only to:
(1) a municipality described by Section 351.152(3);
(1-a) a municipality described by Section 351.152(5);
(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]
(11-a) a municipality described by Section
351.152(41);
(12) a municipality described by Section 351.152(43);
(13) a municipality described by Section 351.152(46);
(14) a municipality described by Section 351.152(47);
(15) a municipality described by Section 351.152(49);
(16) a municipality described by Section 351.152(53);
(17) a municipality described by Section 351.152(54);
(18) a municipality described by Section 351.152(56);
and
(19) a municipality described by Section 351.152(58).
(c-1) A municipality to which this section applies 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) restaurants;
(2) bars;
(3) retail establishments; and
(4) swimming pools and swimming facilities owned or
operated by the related qualified hotel.
SECTION 6. Subchapter C, Chapter 351, Tax Code, is amended
by adding Section 351.161 to read as follows:
Sec. 351.161. RECAPTURE OF LOST STATE TAX REVENUE FROM
CERTAIN MUNICIPALITIES. (a) This section:
(1) applies only to a qualified project that is first
commenced on or after:
(A) January 1, 2024, unless Paragraph (B) applies
to the qualified project; or
(B) January 1, 2027, if the qualified project was
authorized before January 1, 2023, by a municipality with a
population of 175,000 or more; and
(2) notwithstanding Subdivision (1), does not apply to
a qualified project that is the subject of an economic development
agreement authorized by Chapter 380, Local Government Code, entered
into on or before January 1, 2022.
(b) On the 20th anniversary of the date a hotel designated
as a qualified hotel by a municipality as part of a qualified
project to which this section applies is open for initial
occupancy, the comptroller shall determine:
(1) the total amount of state tax revenue received
under Section 351.156 and, if applicable, under Section 351.157 by
the municipality from the qualified project during the period for
which the municipality was entitled to receive that revenue; and
(2) the total amount of state tax revenue described by
Subdivision (1) received by the state during the period beginning
on the 10th anniversary of the date the qualified hotel opened for
initial occupancy and ending on the 20th anniversary of that date
from the same sources from which the municipality received the
revenue described by Subdivision (1).
(c) If the amount determined under Subsection (b)(1)
exceeds the amount determined under Subsection (b)(2), the
comptroller shall promptly provide written notice to the
municipality stating that the municipality must remit to the
comptroller the difference between those two amounts in the manner
provided by this subsection. The municipality shall, using money
lawfully available to the municipality for the purpose, remit
monthly payments to the comptroller in an amount equal to the total
amount of municipal hotel occupancy tax revenue received by the
municipality from the qualified hotel in the preceding month until
the amount remitted to the comptroller equals the total amount due
as stated in the notice. The first payment required under this
subsection must be made not later than the 30th day after the date
the municipality receives the notice from the comptroller.
Subsequent payments are due on the 20th day of each month until the
total amount stated in the notice is paid. The comptroller shall
prescribe the procedure a municipality must use to remit a payment
required by this subsection to the comptroller.
(d) The comptroller shall deposit revenue received under
this section in the manner prescribed by Section 156.251.
SECTION 7. Section 351.157(c), Tax Code, is repealed.
SECTION 8. This Act takes effect September 1, 2023.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 5012 was passed by the House on May 9,
2023, by the following vote: Yeas 117, Nays 20, 4 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 5012 on May 26, 2023, by the following vote: Yeas 119, Nays 21,
1 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 5012 was passed by the Senate, with
amendments, on May 24, 2023, by the following vote: Yeas 22, Nays
8.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor