Tepper Hotel Tax Bill Makes Opt-Outs Wait Until September 2027

The text as introduced · 1,550 words

89R4016 PRL-D

By: Tepper
H.B. No. 3259

A BILL TO BE ENTITLED

AN ACT

relating to the ability of certain municipalities and counties to

elect not to participate in certain event reimbursement programs

and to the allocation of a portion of the state hotel occupancy tax

revenue collected in those municipalities and counties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 475, Government Code, is amended by

adding Subchapter F to read as follows:

SUBCHAPTER F. OPTION FOR CERTAIN MUNICIPALITIES AND COUNTIES TO

ELECT NOT TO PARTICIPATE IN CERTAIN EVENT REIMBURSEMENT PROGRAMS

Sec. 475.0251. OPTION FOR CERTAIN MUNICIPALITIES AND

COUNTIES TO ELECT NOT TO PARTICIPATE IN CERTAIN EVENT REIMBURSEMENT

PROGRAMS. (a) A municipality or county with a population of

400,000 or less may elect not to participate in the major events

reimbursement program under Chapter 478 and the events trust fund

under Chapter 480.

(b) A municipality or county that makes the election

authorized under this section is eligible to receive an allocation

of state hotel occupancy tax revenue collected in the municipality

or county as provided by Section 156.2514, Tax Code.

(c) For a period of four state fiscal years beginning

September 1, 2027, and for each period of four state fiscal years

that occurs after that period ends, a municipality or county may

make the election authorized under this section by providing

written notice of the election to the office of the governor.

(d) A municipality or county that makes the election

authorized under this section may not participate as an endorsing

municipality or endorsing county under Chapter 478, and is

ineligible for receipt of a disbursement from a fund established

under Chapter 480, during the four-year period for which the

municipality or county submits the notice required by Subsection

(c).

(e) A municipality or county that made the election

authorized under this section and that wishes to resume

participation in the major events reimbursement program and the

events trust fund after the expiration of the most recent four-year

period for which the municipality or county submitted the notice

required by Subsection (c) may revoke the election by providing

notice of the revocation to the office of the governor before the

earlier of:

(1) September 1 of the first year of the four-year

period beginning after the end of the most recent four-year period

for which the municipality or county submitted the notice required

by Subsection (c); or

(2) the date that is four months before the date an

eligible event under Section 478.0051 or Section 480.0051 will be

held in the municipality or county.

(f) A municipality or county that revokes an election

authorized under this section in the manner required by Subsection

(e) is eligible to resume participation in the major events

reimbursement program and the events trust fund on September 1 of

the first year beginning after the end of the most recent four-year

period for which the municipality or county submitted the notice

required by Subsection (c).

SECTION 2. Section 478.0051, Government Code, is amended by

adding Subsection (d) to read as follows:

(d) Notwithstanding Subsection (b), an event listed in

Section 478.0001(3) may not receive funding through the program if

the event is held at a site in:

(1) a municipality that makes the election authorized

under Section 475.0251; or

(2) a county that makes the election authorized under

Section 475.0251, unless the event is held in a municipality that

does not make the election authorized under that section.

SECTION 3. Section 480.0051, Government Code, is amended to

read as follows:

Sec. 480.0051. EVENTS ELIGIBLE FOR FUNDING. (a) An event

is eligible for funding under this chapter only if:

(1) a site selection organization, after considering

through a highly competitive selection process one or more sites

not in this state, selects a site in this state for the event to be

held:

(A) one time; or

(B) if the event is scheduled under an event

contract or event support contract to be held each year for a period

of years, one time in each year;

(2) a site selection organization selects a site in

this state as:

(A) the sole site for the event; or

(B) the sole site for the event in a region

composed of this state and one or more adjoining states; and

(3) the event is held not more than one time in any

year in this state or an adjoining state.

(b) Notwithstanding Subsection (a), an event is ineligible

for funding under this chapter if the event is held at a site in:

(1) a municipality that makes the election authorized

under Section 475.0251; or

(2) a county that makes the election authorized under

Section 475.0251, unless the event is held in a municipality that

does not make the election authorized under that section.

SECTION 4. Section 480.00515, Government Code, is amended

to read as follows:

Sec. 480.00515. SINGLE YEAR CLASSIFICATION FOR ELIGIBILITY

PURPOSES FOR CERTAIN SPORTING EVENTS. For purposes of Sections

480.0051(a)(1) [ 480.0051(1) ] and (3), a sporting event is

considered to be held one time in each year if the event is held only

one time in any annual season for that sport.

SECTION 5. Subchapter F, Chapter 156, Tax Code, is amended

by adding Section 156.2514 to read as follows:

Sec. 156.2514. ALLOCATION OF REVENUE TO CERTAIN

MUNICIPALITIES AND COUNTIES. (a) In this section:

(1) "Eligible county" means a county that makes the

election described by Section 475.0251, Government Code.

(2) "Eligible municipality" means a municipality that

makes the election described by Section 475.0251, Government Code.

(b) For the public purpose of economic development in rural

areas of this state, not later than the last day of the month

following a calendar quarter during which a municipality or county

is an eligible municipality or county, the municipality or county

is entitled to receive an allocation of a portion of the revenue

derived from the tax imposed under this chapter and collected from

hotels in the municipality or county, as applicable, in the manner

provided by this section.

(c) This subsection applies to an eligible municipality

located in a county that is not an eligible county. The amount of

the allocation an eligible municipality to which this subsection

applies is entitled to receive is equal to the amount of revenue

derived from the collection of the tax imposed under this chapter at

a rate of four percent and received from hotels located in the

eligible municipality.

(d) This subsection applies to an eligible municipality

located in a county that is an eligible county. The amount of the

allocation an eligible municipality to which this subsection

applies is entitled to receive is equal to 50 percent of the amount

of revenue derived from the collection of the tax imposed under this

chapter at a rate of four percent and received from hotels located

in the eligible municipality.

(e) This subsection applies to an eligible county in which

only municipalities that are not eligible municipalities are

located. The amount of the allocation an eligible county to which

this subsection applies is entitled to receive is equal to the

amount of revenue derived from the collection of the tax imposed

under this chapter at a rate of four percent and received from all

hotels located in the eligible county that are not located in a

municipality.

(f) This subsection applies to an eligible county in which

only municipalities that are eligible municipalities are located.

An eligible county to which this subsection applies is entitled to

receive an allocation equal to the sum of:

(1) 50 percent of the amount of revenue derived from

the collection of the tax imposed under this chapter at a rate of

four percent and received from hotels located in each eligible

municipality located in the eligible county; and

(2) the amount of revenue derived from the collection

of the tax imposed under this chapter at a rate of four percent and

received from hotels located in the eligible county that are not

located in an eligible municipality.

(g) This subsection applies to an eligible county in which

both eligible municipalities and municipalities that are not

eligible municipalities are located. An eligible county to which

this subsection applies is entitled to receive an allocation equal

to the sum of:

(1) 50 percent of the amount of revenue derived from

the collection of the tax imposed under this chapter at a rate of

four percent and received from hotels located in each eligible

municipality located in the eligible county; and

(2) the amount of revenue derived from the collection

of the tax imposed under this chapter at a rate of four percent and

received from hotels located in the eligible county that are not

located in a municipality.

(h) As soon as practicable after determining the amount to

which an eligible municipality or eligible county is entitled under

this section, the comptroller shall issue to the municipality or

county a warrant drawn on the general revenue fund for that amount.

(i) Money received under this section may be used:

(1) by an eligible municipality only in the manner

prescribed by Subchapter B, Chapter 351; and

(2) by an eligible county only in the manner

prescribed by Subchapter B, Chapter 352.

SECTION 6. This Act takes effect September 1, 2025.