| 2 | 4 | | |
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| 3 | 5 | | |
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| 4 | 6 | | A BILL TO BE ENTITLED |
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| 5 | 7 | | AN ACT |
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| 6 | 8 | | relating to the use of hotel occupancy tax revenue by certain |
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| 7 | 9 | | municipalities. |
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| 8 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 11 | | SECTION 1. Section 351.101, Tax Code, is amended by adding |
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| 10 | 12 | | Section 351.1080 to read as follows: |
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| 11 | 13 | | (a) This section applies only to a municipality that |
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| 12 | 14 | | (1) is the county seat of a county that borders New |
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| 13 | 15 | | Mexico and contains a portion of a state park that is located in two |
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| 14 | 16 | | counties; |
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| 15 | 17 | | (2) in the most recent completed fiscal year, hotel |
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| 16 | 18 | | occupancy levels within the municipality and its extraterritorial |
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| 17 | 19 | | jurisdiction exceeded 90 percent; |
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| 18 | 20 | | (3) in the most recent completed fiscal year, on |
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| 19 | 21 | | average, more than forty percent of the individuals within the |
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| 20 | 22 | | municipality and its extraterritorial jurisdiction stay within a |
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| 21 | 23 | | hotel within the municipality each night; and |
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| 22 | 24 | | (4) in the most recent completed fiscal year, |
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| 23 | 25 | | unexpended balances of municipal hotel occupancy tax revenue |
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| 24 | 26 | | exceeded $1.8 million. |
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| 25 | 27 | | (b) Notwithstanding any other provision of this chapter, a |
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| 26 | 28 | | municipality to which this section applies may use hotel occupancy |
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| 27 | 29 | | tax revenue collected by the municipality for a public improvement |
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| 28 | 30 | | project that will directly benefit the hotel and tourism industry. |
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| 29 | 31 | | (c) If a municipality to which this section applies uses |
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| 30 | 32 | | hotel occupancy tax revenue as provided by subsection (b): |
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| 31 | 33 | | (1) Not more than 25 percent of the public improvement |
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| 32 | 34 | | project's total costs may be funded with municipal hotel occupancy |
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| 33 | 35 | | tax revenue; and |
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| 34 | 36 | | (2) The municipality may not reduce the amount of |
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| 35 | 37 | | revenue that it uses for a purpose described by Section 351.101(a) |
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| 36 | 38 | | to an amount that is less than the average amount of revenue used by |
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| 37 | 39 | | the municipality for those purposes during the 36-month period that |
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| 38 | 40 | | precedes the municipality's use of revenue under Subsection (b). |
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| 39 | 41 | | (d) Within eight fiscal years of using municipal hotel |
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| 40 | 42 | | occupancy tax revenue for a purpose provided by subsection (b), a |
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| 41 | 43 | | municipality to which this section applies shall reduce the rate of |
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| 42 | 44 | | municipal hotel occupancy tax to no more than two percent of the |
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| 43 | 45 | | price paid for a room in a hotel and may not increase its municipal |
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| 44 | 46 | | hotel occupancy tax rate to no more than two percent of the price |
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| 45 | 47 | | paid for a room in a hotel. |
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| 46 | 48 | | (e) A municipality to which this section applies may not use |
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| 47 | 49 | | municipal hotel occupancy tax revenue for a purpose provided by |
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| 48 | 50 | | subsection (b) after December 31, 2034. |
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| 49 | 51 | | (f) This section shall expire on December 31, 2034, except |
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| 50 | 52 | | than subsection (d), which shall remain in effect. |
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| 51 | 53 | | SECTION 2. This Act takes effect immediately if it receives |
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| 52 | 54 | | a vote of two-thirds of all the members elected to each house, as |
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| 53 | 55 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 54 | 56 | | Act does not receive the vote necessary for immediate effect, this |
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| 55 | 57 | | Act takes effect September 1, 2025. |
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