Texas 2023 - 88th Regular

Texas Senate Bill SB1420 Compare Versions

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1	1	S.B. No. 1420
2	2
3	3
4	4	AN ACT
5	5	relating to municipal and county hotel occupancy taxes.
6	6	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
7	7	SECTION 1. Sections 351.001(2), (6), (8), and (10), Tax
8	8	Code, are amended to read as follows:
9	9	(2) "Convention center facilities" or "convention
10	10	center complex" means facilities that are primarily used to host
11	11	conventions and meetings. The term means civic centers, civic
12	12	center buildings, auditoriums, exhibition halls, and coliseums
13	13	that are owned by the municipality or other governmental entity or
14	14	that are managed in whole or part by the municipality. In a
15	15	municipality with a population of 1.5 million or more, "convention
16	16	center facilities" or "convention center complex" means civic
17	17	centers, civic center buildings, auditoriums, exhibition halls,
18	18	and coliseums that are owned by the municipality or other
19	19	governmental entity or that are managed in part by the
20	20	municipality, hotels owned by the municipality or a nonprofit
21	21	municipally sponsored local government corporation created under
22	22	Chapter 431, Transportation Code, within 1,000 feet of a convention
23	23	center owned by the municipality, or a historic hotel owned by the
24	24	municipality or a nonprofit municipally sponsored local government
25	25	corporation created under Chapter 431, Transportation Code, within
26	26	one mile of a convention center owned by the municipality. The term
27	27	includes parking areas or facilities that are for the parking or
28	28	storage of conveyances and that are located at or within 1,500 feet
29	29	of the [in the vicinity of other] convention center facilities. The
30	30	term also includes a hotel owned by or located on land that is owned
31	31	by an eligible central municipality or by a nonprofit corporation
32	32	acting on behalf of an eligible central municipality and that is
33	33	located within 1,000 feet of a convention center facility owned by
34	34	the municipality. The term also includes a hotel that is owned in
35	35	part by an eligible central municipality described by Subdivision
36	36	(7)(D) and that is located within 1,000 feet of a convention center
37	37	facility. For purposes of this subdivision, "meetings" means
38	38	gatherings [of people] that:
39	39	(A) are attended by:
40	40	(i) tourists; or
41	41	(ii) individuals who spend the night at a
42	42	hotel or attend a meeting at a hotel; and
43	43	(B) enhance and promote tourism and the
44	44	convention and hotel industry.
45	45	(6) "Tourist" means an individual who travels from the
46	46	individual's residence to a different municipality, county, state,
47	47	or country for business, pleasure, recreation, education, or
48	48	culture.
49	49	(8) "Visitor information center" or "tourism
50	50	information center" means a building or a portion of a building that
51	51	is primarily used to distribute or disseminate information to
52	52	tourists.
53	53	(10) "Multiuse facility" means a facility at which the
54	54	majority of events attract tourists who substantially increase
55	55	economic activity at hotels in the municipality in which the
56	56	facility is located. ["Revenue" includes any interest derived from
57	57	the revenue.]
58	58	SECTION 2. Section 351.009, Tax Code, is amended to read as
59	59	follows:
60	60	Sec. 351.009. ANNUAL REPORT TO COMPTROLLER. (a) Not
61	61	later than March 1 [February 20] of each year, a municipality that
62	62	imposes the tax authorized by this chapter shall report to the
63	63	comptroller:
64	64	(1) the rate of:
65	65	(A) the tax imposed by the municipality under
66	66	this chapter; and
67	67	(B) if applicable, the tax imposed by the
68	68	municipality under Subchapter H, Chapter 334, Local Government
69	69	Code;
70	70	(2) the amount of revenue collected during the
71	71	municipality's preceding fiscal year from:
72	72	(A) the tax imposed by the municipality under
73	73	this chapter; and
74	74	(B) if applicable, the tax imposed by the
75	75	municipality under Subchapter H, Chapter 334, Local Government
76	76	Code; [and]
77	77	(3) the amount and percentage of the revenue described
78	78	by Subdivision (2)(A) allocated by the municipality to each use
79	79	authorized by this chapter for which the municipality used the
80	80	revenue [described by Sections 351.101(a)(1), (2), (3), (4), (5),
81	81	and (9)] during the municipality's preceding fiscal year, stated
82	82	separately as an amount and percentage for each applicable use; and
83	83	(4) the total amount of any revenue described by
84	84	Subdivision (2)(A) collected in any preceding fiscal year of the
85	85	municipality that has not yet been spent by the municipality and the
86	86	amount of that unexpended revenue, if any, that remains in the
87	87	municipality's possession in the fiscal year in which the report is
88	88	due [of those subdivisions].
89	89	(b) The municipality must make the report required by this
90	90	section by[:
91	91	[(1)] submitting the report to the comptroller on a
92	92	form prescribed by the comptroller[; or
93	93	[(2) providing the comptroller a direct link to, or a
94	94	clear statement describing the location of, the information
95	95	required to be reported that is posted on the Internet website of
96	96	the municipality].
97	97	(c) The [Subject to Subsection (b)(2), the] comptroller
98	98	shall prescribe the form a municipality must use for the report
99	99	required to be submitted under this section.
100	100	(d) A municipality that is required to make a report to the
101	101	comptroller under this section may use a portion of the revenue
102	102	described by Subsection (a)(2)(A) for the costs incurred by the
103	103	municipality in making and submitting the report. The amount of
104	104	revenue a municipality may use each year for the purpose authorized
105	105	by this subsection may not exceed:
106	106	(1) $1,000 if the municipality has a population of
107	107	less than 10,000; or
108	108	(2) $2,500 if the municipality has a population of
109	109	10,000 or more.
110	110	(e) The comptroller may adopt rules necessary to administer
111	111	this section.
112	112	SECTION 3. Section 351.101, Tax Code, is amended by adding
113	113	Subsection (f-1) to read as follows:
114	114	(f-1) A municipality may not use municipal hotel occupancy
115	115	tax revenue for a visitor information center under Subsection
116	116	(a)(1) to acquire a site for, construct, improve, enlarge, equip,
117	117	repair, staff, operate, or maintain any part of a building or
118	118	facility that is not primarily used to distribute or disseminate
119	119	tourism-related information to tourists.
120	120	SECTION 4. Section 351.1021(a)(3), Tax Code, is amended to
121	121	read as follows:
122	122	(3) "Multipurpose convention center facility project"
123	123	means a project that consists of a hotel owned by an eligible
124	124	municipality or another person and a multipurpose convention center
125	125	facility, the nearest exterior wall of which is located not more
126	126	than 2,500 feet from the nearest exterior wall of the hotel. A
127	127	multipurpose convention center facility project may include:
128	128	(A) each new or existing business located in the
129	129	municipality, regardless of who owns the business or the property
130	130	on which the business is located, the nearest exterior wall of which
131	131	is located not more than 2,500 feet from the nearest exterior wall
132	132	of the multipurpose convention center facility or the hotel that is
133	133	part of the project;
134	134	(B) a parking shuttle or transportation system
135	135	used primarily by tourists; and
136	136	(C) any parking area or structure located in the
137	137	municipality, regardless of who owns the area or structure or the
138	138	property on which the area or structure is located, the nearest
139	139	property line of which is located not more than two miles from the
140	140	nearest exterior wall of the multipurpose convention center
141	141	facility.
142	142	SECTION 5. Sections 351.103(a), (b), and (c), Tax Code, are
143	143	amended to read as follows:
144	144	(a) A municipality [At least 50 percent of the hotel
145	145	occupancy tax revenue collected by a municipality with a population
146	146	of 200,000 or greater must be allocated for the purposes provided by
147	147	Section 351.101(a)(3). For municipalities] with a population of
148	148	less than 200,000 shall allocate[, allocations] for the purposes
149	149	provided by Section 351.101(a)(3) an amount of hotel occupancy tax
150	150	revenue collected by the municipality that is [are as follows:
151	151	[(1) if the tax rate in a municipality is not more than
152	152	three percent of the cost paid for a room, not less than the amount
153	153	of revenue received by the municipality from the tax at a rate of
154	154	one-half of one percent of the cost of the room; or
155	155	[(2) if the tax in a municipality exceeds three
156	156	percent of the cost of a room,] not less than the amount of revenue
157	157	received by the municipality from the tax at a rate of one percent
158	158	of the cost of a room. [This subsection does not apply to a
159	159	municipality, regardless of population, that before October 1,
160	160	1989, adopted an ordinance providing for the allocation of an
161	161	amount in excess of 50 percent of the hotel occupancy tax revenue
162	162	collected by the municipality for one or more specific purposes
163	163	provided by Section 351.101(a)(1) until the ordinance is repealed
164	164	or expires or until the revenue is no longer used for those specific
165	165	purposes in an amount in excess of 50 percent of the tax revenue.]
166	166	(b) A [Subsection (a) does not apply to a municipality in a
167	167	fiscal year of the municipality if the total amount of hotel
168	168	occupancy tax collected by the municipality in the most recent
169	169	calendar year that ends at least 90 days before the date the fiscal
170	170	year begins exceeds $2 million. A municipality excepted from the
171	171	application of Subsection (a) by this subsection shall allocate
172	172	hotel occupancy tax revenue by ordinance, consistent with the other
173	173	limitations of this section. The portion of the tax revenue
174	174	allocated by a] municipality with a population of more than 1.6
175	175	million shall allocate at least 23 percent of the hotel occupancy
176	176	tax revenue collected by the municipality for the purposes provided
177	177	by Section 351.101(a)(3) [may not be less than 23 percent], except
178	178	that the allocation is subject to and may not impair the authority
179	179	of the municipality to:
180	180	(1) pledge all or any portion of that tax revenue to
181	181	the payment of bonds as provided by Section 351.102(a) or bonds
182	182	issued to refund bonds secured by that pledge; or
183	183	(2) spend all or any portion of that tax revenue for
184	184	the payment of operation and maintenance expenses of convention
185	185	center facilities.
186	186	(c) Not more than 15 percent of the hotel occupancy tax
187	187	revenue collected by a municipality, other than a municipality
188	188	having a population of more than 1.6 million, or the amount of tax
189	189	received by the municipality at the rate of one percent of the cost
190	190	of a room, whichever is greater, may be used for the purposes
191	191	provided by Section 351.101(a)(4). Not more than 19.30 percent of
192	192	the hotel occupancy tax revenue collected by a municipality having
193	193	a population of more than 1.6 million, or the amount of tax received
194	194	by the municipality at the rate of one percent of the cost of a room,
195	195	whichever is greater, may be used for the purposes provided by
196	196	Section 351.101(a)(4). Not more than 15 percent of the hotel
197	197	occupancy tax revenue collected by a municipality [having a
198	198	population of more than 125,000] may be used for the purposes
199	199	provided by Section 351.101(a)(5). A municipality that before
200	200	January 1, 2023, adopted in accordance with state law an ordinance
201	201	providing for the allocation of an amount in excess of 15 percent of
202	202	the hotel occupancy tax revenue collected by the municipality for
203	203	one or more of the specific purposes provided by Section
204	204	351.101(a)(5) may allocate tax revenue as provided by that
205	205	ordinance until the ordinance is repealed or expires or until the
206	206	revenue is no longer used for those specific purposes.
207	207	SECTION 6. Section 351.110(c), Tax Code, is amended to read
208	208	as follows:
209	209	(c) This section does not authorize the use of revenue
210	210	derived from the tax imposed under this chapter for a
211	211	transportation system that serves the general public other than for
212	212	a system [that transports tourists as] described by Subsection (a)
213	213	that is primarily used by tourists.
214	214	SECTION 7. Subchapter C, Chapter 351, Tax Code, is amended
215	215	by adding Sections 351.161, 351.162, and 351.163 to read as
216	216	follows:
217	217	Sec. 351.161. APPLICATION OF OTHER LAW. This subchapter
218	218	may not be construed as authorizing the taking of private property
219	219	for economic development purposes in a manner inconsistent with the
220	220	requirements of Section 17, Article I, Texas Constitution, or
221	221	Section 2206.001, Government Code.
222	222	Sec. 351.162. RECAPTURE OF LOST STATE TAX REVENUE FROM
223	223	CERTAIN MUNICIPALITIES. (a) This section:
224	224	(1) applies only to a qualified project that is first
225	225	commenced on or after:
226	226	(A) January 1, 2024, unless Paragraph (B) applies
227	227	to the qualified project; or
228	228	(B) January 1, 2027, if the qualified project was
229	229	authorized before January 1, 2023, by a municipality with a
230	230	population of 175,000 or more; and
231	231	(2) notwithstanding Subdivision (1), does not apply to
232	232	a qualified project that is the subject of an economic development
233	233	agreement authorized by Chapter 380, Local Government Code, entered
234	234	into on or before January 1, 2022.
235	235	(b) On the 20th anniversary of the date a hotel designated
236	236	as a qualified hotel by a municipality as part of a qualified
237	237	project to which this section applies is open for initial
238	238	occupancy, the comptroller shall determine:
239	239	(1) the total amount of state tax revenue received
240	240	under Section 351.156 and, if applicable, under Section 351.157 by
241	241	the municipality from the qualified project during the period for
242	242	which the municipality was entitled to receive that revenue; and
243	243	(2) the total amount of state tax revenue described by
244	244	Subdivision (1) received by the state during the period beginning
245	245	on the 10th anniversary of the date the qualified hotel opened for
246	246	initial occupancy and ending on the 20th anniversary of that date
247	247	from the same sources from which the municipality received the
248	248	revenue described by Subdivision (1).
249	249	(c) If the amount determined under Subsection (b)(1)
250	250	exceeds the amount determined under Subsection (b)(2), the
251	251	comptroller shall promptly provide written notice to the
252	252	municipality stating that the municipality must remit to the
253	253	comptroller the difference between those two amounts in the manner
254	254	provided by this subsection. The municipality shall, using money
255	255	lawfully available to the municipality for the purpose, remit
256	256	monthly payments to the comptroller in an amount equal to the total
257	257	amount of municipal hotel occupancy tax revenue received by the
258	258	municipality from the qualified hotel in the preceding month until
259	259	the amount remitted to the comptroller equals the total amount due
260	260	as stated in the notice. The first payment required under this
261	261	subsection must be made not later than the 30th day after the date
262	262	the municipality receives the notice from the comptroller.
263	263	Subsequent payments are due on the 20th day of each month until the
264	264	total amount stated in the notice is paid. The comptroller shall
265	265	prescribe the procedure a municipality must use to remit a payment
266	266	required by this subsection to the comptroller.
267	267	(d) The comptroller shall deposit revenue received under
268	268	this section in the manner prescribed by Section 156.251.
269	269	Sec. 351.163. REPORT ON QUALIFIED PROJECTS. (a) Not later
270	270	than December 1 of each even-numbered year, the comptroller shall
271	271	prepare a report on the status of each qualified project.
272	272	(b) The report must include, for each qualified project:
273	273	(1) the location and a description of the project,
274	274	including the current status of the project;
275	275	(2) the number of qualified hotels and qualified
276	276	convention center facilities associated with the project;
277	277	(3) the total amount of tax revenue received by a
278	278	municipality under Section 351.156 and, if applicable, Section
279	279	351.157 as a result of the project;
280	280	(4) the amount of state tax revenue generated by the
281	281	project that has been received by the state after the period of
282	282	entitlement for the project as prescribed by Section 351.158 has
283	283	ended; and
284	284	(5) whether the municipality is required to remit
285	285	payments to the comptroller under Section 351.162 as a result of the
286	286	project.
287	287	(c) The comptroller may include in the report any additional
288	288	information the comptroller determines is necessary to evaluate the
289	289	effect of each qualified project on the economy of this state.
290	290	(d) The comptroller shall:
291	291	(1) post a copy of the report on the comptroller's
292	292	Internet website; and
293	293	(2) provide a copy of the report to the lieutenant
294	294	governor, the speaker of the house of representatives, and each
295	295	other member of the legislature.
296	296	SECTION 8. Section 352.009, Tax Code, is amended to read as
297	297	follows:
298	298	Sec. 352.009. ANNUAL REPORT TO COMPTROLLER. (a) Not
299	299	later than March 1 [February 20] of each year, a county that imposes
300	300	the tax authorized by this chapter shall report to the comptroller:
301	301	(1) the rate of:
302	302	(A) the tax imposed by the county under this
303	303	chapter; and
304	304	(B) if applicable, the tax imposed by the county
305	305	under Subchapter H, Chapter 334, Local Government Code; [and]
306	306	(2) the amount of revenue collected during the
307	307	county's preceding fiscal year from:
308	308	(A) the tax imposed by the county under this
309	309	chapter; and
310	310	(B) if applicable, the tax imposed by the county
311	311	under Subchapter H, Chapter 334, Local Government Code;
312	312	(3) the amount and percentage of the revenue described
313	313	by Subdivision (2)(A) allocated by the county to each use
314	314	authorized by this chapter for which the county used the revenue
315	315	during the county's preceding fiscal year, stated separately as an
316	316	amount and percentage for each applicable use; and
317	317	(4) the total amount of any revenue described by
318	318	Subdivision (2)(A) collected in any preceding fiscal year of the
319	319	county that has not yet been spent by the county and the amount of
320	320	that unexpended revenue, if any, that remains in the county's
321	321	possession in the fiscal year in which the report is due.
322	322	(b) The county must make the report required by this section
323	323	by[:
324	324	[(1)] submitting the report to the comptroller on a
325	325	form prescribed by the comptroller[; or
326	326	[(2) providing the comptroller a direct link to, or a
327	327	clear statement describing the location of, the information
328	328	required to be reported that is posted on the Internet website of
329	329	the county].
330	330	(c) The [Subject to Subsection (b)(2), the] comptroller
331	331	shall prescribe the form a county must use for the report required
332	332	to be submitted under this section.
333	333	(d) A county that is required to make a report to the
334	334	comptroller under this section may use a portion of the revenue
335	335	described by Subsection (a)(2)(A) for the costs incurred by the
336	336	county in making and submitting the report. The amount of revenue a
337	337	county may use each year for the purpose authorized by this
338	338	subsection may not exceed:
339	339	(1) $1,000 if the county has a population of less than
340	340	10,000; or
341	341	(2) $2,500 if the county has a population of 10,000 or
342	342	more.
343	343	(e) The comptroller may adopt rules necessary to administer
344	344	this section.
345	345	SECTION 9. The following provisions of the Tax Code are
346	346	repealed:
347	347	(1) Sections 351.103(d) and (e); and
348	348	(2) Section 351.110(b).
349	349	SECTION 10. The comptroller of public accounts shall
350	350	prescribe the form of the report required under Sections 351.009
351	351	and 352.009, Tax Code, as amended by this Act, not later than
352	352	January 1, 2024. A municipality or county required to make a report
353	353	under those sections must submit the 2024 report using the form
354	354	prescribed by the comptroller under this section.
355	355	SECTION 11. This Act takes effect immediately if it
356	356	receives a vote of two-thirds of all the members elected to each
357	357	house, as provided by Section 39, Article III, Texas Constitution.
358	358	If this Act does not receive the vote necessary for immediate
359	359	effect, this Act takes effect September 1, 2023.
360	360	______________________________ ______________________________
361	361	President of the Senate Speaker of the House
362	362	I hereby certify that S.B. No. 1420 passed the Senate on
363	363	April 12, 2023, by the following vote: Yeas 29, Nays 2; and that
364	364	the Senate concurred in House amendment on May 17, 2023, by the
365	365	following vote: Yeas 29, Nays 2.
366	366	______________________________
367	367	Secretary of the Senate
368	368	I hereby certify that S.B. No. 1420 passed the House, with
369	369	amendment, on May 12, 2023, by the following vote: Yeas 106,
370	370	Nays 34, two present not voting.
371	371	______________________________
372	372	Chief Clerk of the House
373	373	Approved:
374	374	______________________________
375	375	Date
376	376	______________________________
377	377	Governor