Bill Text: TX SB1420 | 2023-2024 | 88th Legislature | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to municipal and county hotel occupancy taxes.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Passed) 2023-06-02 - Effective immediately [SB1420 Detail]

Download: Texas-2023-SB1420-Introduced.html
  88R11060 CJC-F
 
  By: Birdwell S.B. No. 1420
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to municipal and county hotel occupancy taxes.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Sections 351.001(2), (6), (8), and (10), Tax
  Code, are amended to read as follows:
               (2)  "Convention center facilities" or "convention
  center complex" means facilities that are primarily used to host
  conventions and meetings.  The term means civic centers, civic
  center buildings, auditoriums, exhibition halls, and coliseums
  that are owned by the municipality or other governmental entity or
  that are managed in whole or part by the municipality. In a
  municipality with a population of 1.5 million or more, "convention
  center facilities" or "convention center complex" means civic
  centers, civic center buildings, auditoriums, exhibition halls,
  and coliseums that are owned by the municipality or other
  governmental entity or that are managed in part by the
  municipality, hotels owned by the municipality or a nonprofit
  municipally sponsored local government corporation created under
  Chapter 431, Transportation Code, within 1,000 feet of a convention
  center owned by the municipality, or a historic hotel owned by the
  municipality or a nonprofit municipally sponsored local government
  corporation created under Chapter 431, Transportation Code, within
  one mile of a convention center owned by the municipality. The term
  includes parking areas or facilities that are for the parking or
  storage of conveyances and that are located at or within 1,500 feet
  of the [in the vicinity of other] convention center facilities. The
  term also includes a hotel owned by or located on land that is owned
  by an eligible central municipality or 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. The term also includes a hotel that is owned in
  part by an eligible central municipality described by Subdivision
  (7)(D) and that is located within 1,000 feet of a convention center
  facility.  For purposes of this subdivision, "meetings" means
  gatherings of people that enhance and promote tourism and the
  convention and hotel industry.
               (6)  "Tourist" means an individual who:
                     (A)  travels at least 50 miles from the
  individual's residence to a different municipality, county, state,
  or country for business, pleasure, recreation, education, or
  culture;
                     (B)  attends a meeting at a hotel or an event at a
  hotel; or
                     (C)  spends the night at a hotel.
               (8)  "Visitor information center" or "tourism
  information center" means a building or a portion of a building that
  is primarily used to distribute or disseminate information to
  tourists.
               (10)  "Multiuse facility" means a facility at which the
  majority of events attract tourists who substantially increase
  economic activity at hotels in the municipality in which the
  facility is located. ["Revenue" includes any interest derived from
  the revenue.]
         SECTION 2.  Section 351.009, Tax Code, is amended to read as
  follows:
         Sec. 351.009.  ANNUAL REPORT TO COMPTROLLER.  (a)  Not
  later than March 1 [February 20] of each year, a municipality that
  imposes the tax authorized by this chapter shall report to the
  comptroller:
               (1)  the rate of:
                     (A)  the tax imposed by the municipality under
  this chapter; and
                     (B)  if applicable, the tax imposed by the
  municipality under Subchapter H, Chapter 334, Local Government
  Code;
               (2)  the amount of revenue collected during the
  municipality's preceding fiscal year from:
                     (A)  the tax imposed by the municipality under
  this chapter; and
                     (B)  if applicable, the tax imposed by the
  municipality under Subchapter H, Chapter 334, Local Government
  Code; [and]
               (3)  the amount and percentage of the revenue described
  by Subdivision (2)(A) allocated by the municipality to each use
  authorized by this chapter for which the municipality used the
  revenue [described by Sections 351.101(a)(1), (2), (3), (4), (5),
  and (9)] during the municipality's preceding fiscal year, stated
  separately as an amount and percentage for each applicable use; and
               (4)  the total amount of any revenue described by
  Subdivision (2)(A) collected in any preceding fiscal year of the
  municipality that has not been spent by the municipality and the
  amount of that unexpended revenue, if any, that is spent in the
  municipality's budget for the fiscal year in which the report is due
  [of those subdivisions].
         (b)  The municipality must make the report required by this
  section by[:
               [(1)]  submitting the report to the comptroller on a
  form prescribed by the comptroller[; or
               [(2)  providing the comptroller a direct link to, or a
  clear statement describing the location of, the information
  required to be reported that is posted on the Internet website of
  the municipality].
         (c)  The [Subject to Subsection (b)(2), the] comptroller
  shall prescribe the form a municipality must use for the report
  required to be submitted under this section.
         (d)  A municipality that is required to make a report to the
  comptroller under this section may use a portion of the revenue
  described by Subsection (a)(2)(A) for the costs incurred by the
  municipality in making and submitting the report. The amount of
  revenue a municipality may use each year for the purpose authorized
  by this subsection may not exceed:
               (1)  $1,000 if the municipality has a population of
  less than 10,000; or
               (2)  $2,500 if the municipality has a population of
  10,000 or more.
         (e)  The comptroller may adopt rules necessary to administer
  this section.
         SECTION 3.  Section 351.101, Tax Code, is amended by adding
  Subsection (f-1) to read as follows:
         (f-1)  A municipality may not use municipal hotel occupancy
  tax revenue for a visitor information center under Subsection
  (a)(1) to acquire a site for, construct, improve, enlarge, equip,
  repair, staff, operate, or maintain any part of a building or
  facility that is not exclusively used to distribute or disseminate
  tourism-related information to tourists.
         SECTION 4.  Section 351.1021(a)(3), Tax Code, is amended to
  read as follows:
               (3)  "Multipurpose convention center facility project"
  means a project that consists of a hotel owned by an eligible
  municipality or another person and a multipurpose convention center
  facility, the nearest exterior wall of which is located not more
  than 2,500 feet from the nearest exterior wall of the hotel.  A
  multipurpose convention center facility project may include:
                     (A)  each new or existing business located in the
  municipality, regardless of who owns the business or the property
  on which the business is located, the nearest exterior wall of which
  is located not more than 2,500 feet from the nearest exterior wall
  of the multipurpose convention center facility or the hotel that is
  part of the project;
                     (B)  a parking shuttle or transportation system
  used primarily by tourists; and
                     (C)  any parking area or structure located in the
  municipality, regardless of who owns the area or structure or the
  property on which the area or structure is located, the nearest
  property line of which is located not more than two miles from the
  nearest exterior wall of the multipurpose convention center
  facility.
         SECTION 5.  Sections 351.103(a), (b), and (c), Tax Code, are
  amended to read as follows:
         (a)  A municipality [At least 50 percent of the hotel
  occupancy tax revenue collected by a municipality with a population
  of 200,000 or greater must be allocated for the purposes provided by
  Section 351.101(a)(3).  For municipalities] with a population of
  less than 200,000 shall allocate [, allocations] for the purposes
  provided by Section 351.101(a)(3) an amount of hotel occupancy tax
  revenue collected by the municipality that is [are as follows:
               [(1)  if the tax rate in a municipality is not more than
  three percent of the cost paid for a room, not less than the amount
  of revenue received by the municipality from the tax at a rate of
  one-half of one percent of the cost of the room; or
               [(2)  if the tax in a municipality exceeds three
  percent of the cost of a room,] not less than the amount of revenue
  received by the municipality from the tax at a rate of one percent
  of the cost of a room.  [This subsection does not apply to a
  municipality, regardless of population, that before October 1,
  1989, adopted an ordinance providing for the allocation of an
  amount in excess of 50 percent of the hotel occupancy tax revenue
  collected by the municipality for one or more specific purposes
  provided by Section 351.101(a)(1) until the ordinance is repealed
  or expires or until the revenue is no longer used for those specific
  purposes in an amount in excess of 50 percent of the tax revenue.]
         (b)  A [Subsection (a) does not apply to a municipality in a
  fiscal year of the municipality if the total amount of hotel
  occupancy tax collected by the municipality in the most recent
  calendar year that ends at least 90 days before the date the fiscal
  year begins exceeds $2 million.  A municipality excepted from the
  application of Subsection (a) by this subsection shall allocate
  hotel occupancy tax revenue by ordinance, consistent with the other
  limitations of this section.  The portion of the tax revenue
  allocated by a] municipality with a population of more than 1.6
  million shall allocate at least 23 percent of the hotel occupancy
  tax revenue collected by the municipality for the purposes provided
  by Section 351.101(a)(3) [may not be less than 23 percent], except
  that the allocation is subject to and may not impair the authority
  of the municipality to:
               (1)  pledge all or any portion of that tax revenue to
  the payment of bonds as provided by Section 351.102(a) or bonds
  issued to refund bonds secured by that pledge; or
               (2)  spend all or any portion of that tax revenue for
  the payment of operation and maintenance expenses of convention
  center facilities.
         (c)  Not more than 15 percent of the hotel occupancy tax
  revenue collected by a municipality, other than a municipality
  having a population of more than 1.6 million, or the amount of tax
  received by the municipality at the rate of one percent of the cost
  of a room, whichever is greater, may be used for the purposes
  provided by Section 351.101(a)(4).  Not more than 19.30 percent of
  the hotel occupancy tax revenue collected by a municipality having
  a population of more than 1.6 million, or the amount of tax received
  by the municipality at the rate of one percent of the cost of a room,
  whichever is greater, may be used for the purposes provided by
  Section 351.101(a)(4).  Not more than 15 percent of the hotel
  occupancy tax revenue collected by a municipality [having a
  population of more than 125,000] may be used for the purposes
  provided by Section 351.101(a)(5). A municipality that before
  January 1, 2023, adopted in accordance with state law an ordinance
  providing for the allocation of an amount in excess of 15 percent of
  the hotel occupancy tax revenue collected by the municipality for
  one or more of the specific purposes provided by Section
  351.101(a)(5) may allocate tax revenue as provided by that
  ordinance until the ordinance is repealed or expires or until the
  revenue is no longer used for those specific purposes.
         SECTION 6.  Section 351.110(c), Tax Code, is amended to read
  as follows:
         (c)  This section does not authorize the use of revenue
  derived from the tax imposed under this chapter for a
  transportation system that serves the general public other than for
  a system [that transports tourists as] described by Subsection (a)
  that is primarily used by tourists.
         SECTION 7.  Subchapter C, Chapter 351, Tax Code, is amended
  by adding Sections 351.161, 351.162, and 351.163 to read as
  follows:
         Sec. 351.161.  APPLICATION OF OTHER LAW. This subchapter
  may not be construed as authorizing the taking of private property
  for economic development purposes in a manner inconsistent with the
  requirements of Section 17, Article I, Texas Constitution, or
  Section 2206.001, Government Code.
         Sec. 351.162.  RECAPTURE OF LOST STATE TAX REVENUE FROM
  CERTAIN MUNICIPALITIES. (a) This section applies only to a
  municipality to which this subchapter first applied on or after
  January 1, 2023.
         (b)  On the 20th anniversary of the date a hotel designated
  as a qualified hotel by a municipality 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 by the municipality from the qualified
  project of which the qualified hotel was a part during the period
  for which the municipality was entitled to receive that revenue;
  and
               (2)  the total amount of state tax revenue described by
  Section 351.156 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 revenue
  under Section 351.156.
         (c)  If the amount determined under Subsection (b)(1)
  exceeds the amount determined under Subsection (b)(2), the
  municipality shall remit to the comptroller the municipal hotel
  occupancy tax revenue received by the municipality from the
  qualified hotel until the amount remitted to the comptroller equals
  the difference between the amount described by Subsection (b)(1)
  and the amount described by Subsection (b)(2).
         (d)  The comptroller shall deposit revenue received under
  this section in the manner prescribed by Section 156.251.
         Sec. 351.163.  REPORT ON QUALIFIED PROJECTS. (a) Not later
  than December 1 of each even-numbered year, the comptroller shall
  prepare a report on the status of each qualified project.
         (b)  The report must include, for each qualified project:
               (1)  the location and a description of the project,
  including the current status of the project;
               (2)  the number of qualified hotels and qualified
  convention center facilities associated with the project;
               (3)  the total amount of tax revenue received by a
  municipality under Section 351.156 and, if applicable, Section
  351.157 as a result of the project; and
               (4)  the amount of new state tax revenue generated by
  the project that has been received by the state.
         (c)  The comptroller may include in the report any additional
  information the comptroller determines is necessary to evaluate the
  effect of each qualified project on the economy of this state.
         (d)  The comptroller shall:
               (1)  post a copy of the report on the comptroller's
  Internet website; and
               (2)  provide a copy of the report to the lieutenant
  governor, speaker of the house of representatives, and each other
  member of the legislature.
         SECTION 8.  Section 352.009, Tax Code, is amended to read as
  follows:
         Sec. 352.009.  ANNUAL REPORT TO COMPTROLLER.  (a)  Not
  later than March 1 [February 20] of each year, a county that imposes
  the tax authorized by this chapter shall report to the comptroller:
               (1)  the rate of:
                     (A)  the tax imposed by the county under this
  chapter; and
                     (B)  if applicable, the tax imposed by the county
  under Subchapter H, Chapter 334, Local Government Code; [and]
               (2)  the amount of revenue collected during the
  county's preceding fiscal year from:
                     (A)  the tax imposed by the county under this
  chapter; and
                     (B)  if applicable, the tax imposed by the county
  under Subchapter H, Chapter 334, Local Government Code;
               (3)  the amount and percentage of the revenue described
  by Subdivision (2)(A) allocated by the county to each use
  authorized by this chapter for which the county used the revenue
  during the county's preceding fiscal year, stated separately as an
  amount and percentage for each applicable use; and
               (4)  the total amount of any revenue described by
  Subdivision (2)(A) collected in any preceding fiscal year of the
  county that has not been spent by the county and the amount of that
  unexpended revenue, if any, that is spent in the county's budget for
  the fiscal year in which the report is due.
         (b)  The county must make the report required by this section
  by[:
               [(1)]  submitting the report to the comptroller on a
  form prescribed by the comptroller[; or
               [(2)  providing the comptroller a direct link to, or a
  clear statement describing the location of, the information
  required to be reported that is posted on the Internet website of
  the county].
         (c)  The [Subject to Subsection (b)(2), the] comptroller
  shall prescribe the form a county must use for the report required
  to be submitted under this section.
         (d)  A county that is required to make a report to the
  comptroller under this section may use a portion of the revenue
  described by Subsection (a)(2)(A) for the costs incurred by the
  county in making and submitting the report. The amount of revenue a
  county may use each year for the purpose authorized by this
  subsection may not exceed:
               (1)  $1,000 if the county has a population of less than
  10,000; or
               (2)  $2,500 if the county has a population of 10,000 or
  more.  
         (e)  The comptroller may adopt rules necessary to administer
  this section.
         SECTION 9.  The following provisions of the Tax Code are
  repealed:
               (1)  Sections 351.103(d) and (e); and
               (2)  Section 351.110(b).
         SECTION 10.  The comptroller of public accounts shall
  prescribe the form of the report required under Sections 351.009
  and 352.009, Tax Code, as amended by this Act, not later than
  January 1, 2024.  A municipality or county required to make a report
  under those sections must submit the 2024 report using the form
  prescribed by the comptroller under this section.
         SECTION 11.  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, 2023.
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