Legislative Blog
J.B. Williams, J.D.
2 bills that modify the Tax Code
A Blog about 88th Legislature Laws
A Bit of Background
The following backgrounds help summarize the author's views on both the general topic: Texas and more specifically 88th Legislature Laws as it relates to that topic.
Brief Summary of Texas
Texas is truly a Republic. There are a multitude of items that to modify the state constitution must be modified. So there are times when Constitutional amendments are on the voting ballots. While I sometimes abhor the wording, the concept that all of those legally able to vote in Texas must vote on the change is a good one. And bills in Texas are generally short, making it easier for everyone to understand.
Summary of 88th Legislature Laws
The blogs here will discuss the laws passed by Congress and signed into law, as well as those, passed by Congress and approved by the voters to become law. There are a multitude of laws and each time I post blogs I will notate here the current effective date if it is different from prior blogs. I am currently posting bills that took effect immediately - those bills total 336. I am currently posting regarding larger bills, so each blog covers a single bill.
Blog Summary
HB 3235 - Some specifics on the counties but the addition of a US President's childhood home was added.
HB 3727 - Permits hotel occupancy taxes, a portion of, to be used for certain tourist related matters in some municipalities
2 bills that modify the Tax Code
Published: 2024-07-15
HB 3235
Authority of certain counties to impose a county hotel occupancy tax
The commissioners court may impose a tax on a person staying in a hotel that costs $2 or more each day and is ordinarily used for sleeping under the following conditions:
- the county is more than 3.3 million;
- the population of the county is 90,000 or more, borders the United Mexican States, does not border the Gulf of Mexico, and does not have 4 or more cities with a population greater than 25,000;
- a county in which there is no municipality;
- a county located in an Indian reservation under the jurisdiction of the US government;
- a county with a population of 30,000 or less, no more than 1 municipality with a population less than 2,500, and that borders 2 counties wholly in Edwards Aquifer Authority;
- a county that borders the Gulf of Mexico;
- a county that has a population of less than 5,000, borders the United Mexican States, and has a major observatory;
- a county with a population of 12,000 or less and borders the Toledo Bend Reservoir;
- a county that has a population of less than 12,500 and an area of less than 275 square miles;
- a county that has a population of 30,000 or less and borders Possum Kingdom Lake;
- a county that borders the United Mexican States and has a population of more than 300,000 and less than 800,000;
- a county that has a population of 35,000 or more or contains a portion of Lake Fork Reservoir;
- a county that borders the United Mexican States and has a national park of more than 400,000 acres;
- a county that borders the United Mexican States and has a national recreation area;
- a county that has a population of 28,000 or less, has no more than 4 municipalities, and is located wholly in the Edwards Aquifer Authority;
- a county that has a population of 25,000 or less, territory of less than 750 square miles, and has 2 incorporated municipalities with a population of 800 or less, with one located on the Frio River;
- a county with a population of 34,000 or more and borders Lake Buchanan;
- a county with a population of more than 45,000 and less than 75,000 that borders the United Mexican States, and border or contains a portion of Falcon Lake;
- a county with a population of 22,000 or less that borders the Neches River and has a national preserve;
- a county with a population of 28,000 or less and borders or contains a portion of Lake Livingston;
- a county through which Pedernales River flows and in which the birthplace or childhood home (childhood home added) of a US President is located;
- a county that has a population of more than 15,000 but less than 20,000 and borders Lake Buchanan;
- a county that has a population of less than 11,000 that is bordered by the Sulphur River;
- a county that has a population of 16,000 or more and borders the entire north shore of Lake Somerville;
- a county that has a population of 20,000 or less and border by the Brazos and Navasota Rivers;
- a county that has a population of more than 15,000 and less than 25,000, and is located on the Trinity and Navasota Rivers;
- a county that has a population less than 15,000 and is bordered by the Trinity and Navasota River;
- a county that borders or contains a portion of the Neches River, Sabine River, and Sabine Lake; and
- a county that borders Whitney Lake
I'm not sure it wouldn't have taken less effort to list the counties by name and state any automatic reasons they would no longer be included.
HB 3727
Municipal and county hotel occupancy taxes
This is addressing convention centers managed in whole or in party by a municipality. For those with a population of 1.5 million or more, they include hotels owned by the municipality or other government entity or a nonprofit sponsored by the local government and are within 1,000 feet of the convention center. Also included are parking or storage of conveyances located within 1,500 feet of the convention center. A meeting is a gathering that are attended by tourists or individuals who spend the night at a hotel or attend a meeting at a hotel, and enhance and promote tourism and the convention and hotel industry. And tourist now includes business travel.
The annual report to the comptroller is now due no later than March 1 of each year, previously it was February 20. And the report must now include the total amount of revenue collecting in the preceding year that has not yet been spent, thereby remaining in the municipality's possession. A portion of revenue may be used to pay for the cost of making the report to the comptroller. The amount used may not exceed:
- $1,000 if the population is less than 10,000; or
- $2,500 if the population of 10,000 or more
A municipality may not use the hotel occupancy tax revenue for a visitor information center that is not primarily used to distribute tourism-related information to tourists.
A multipurpose convention center may include a parking shuttle or transportation system used primarily by tourists. Sounds more like shuttles between things within the convention center system. So transportation that is used by locals and can be used by tourists is not able to use the hotel occupancy tax revenue. The Galatyn Park Station on the Dart Rail system would not qualify as it is not primarily used by tourists. But it's great that the businesses there have access to the Dart system rather than needing a completely separate system for tourists.
This next section had a lot of modifications made to it. A municipality with a population of less than 200,000 must allocate an amount of the hotel occupancy tax revenue that is not less than the amount received at a rate of 1% of the cost of the room. A municipality with a population of more than 1.6 million must allocate at least 23% of the tax for purposes laid out in the Tax Code Section 351.101(a)(3). There are some exceptions that remained as they were previously. If a municipality prior to January 1, 2023 passed an ordinance allocating an amount in excess of 15% for specific purposes, they may continue to do so until the ordinance is repealed or expires or until the revenue is no longer being used for the specific purpose.
The recapture of lost state tax revenue from certian municipalities has been added. It applies only to qualified projects that first commenced on or after:
- January 1, 2024, unless the following applies to the qualified project; or
- January 1, 2027, if the project was authorized before January 1, 2023,in a municipality with a population of 175,000 or more; and
it does not apply to qualified projects that are subject to economic development agreements entered before January 1, 2022.
On the 20th anniversary of the date the qualified hotel opened, the comptroller shall determine the following:
- total amount of state tax revenue received, and if additional entitlements; and
- total amount of state tax revenue received by the state during the period beginning on the 10th anniversary the hotel opened and ending on the 20 anniversary.
If 1 above exceeds 2, then the comptroller shall promptly provide written notice stating that the municipality must remit the difference. The municipality shall remit monthly payments until the amount is paid in full. The first payment must not be made later than the 30th day after notice is received. Subsequent payments are due on the 20th day of each month.
Not later than December 1 in each even-numbered year, the comptroller shall report on the status of each qualified project. The report must include:
- the location and description of the project, including the current status;
- number of qualified hotels and qualified convention center facilities associated with each project;
- total amount of tax revenue received by a municipality as a result of the project;
- amount of state tax revenue generated by the project that has been received by the state;
- whether the municipality is required to remit payments to the comptroller
The report may include additional information the comptroller determines is necessary to evaluate the effect of each qualified project. The report must be posted on the comptroller's website and to the lieutentant governor, speaker of the house, and each member of the legislature.
Webpage created by and for J.B. Williams, J.D. - all rights reserved