CHAPTER 351. MUNICIPAL HOTEL OCCUPANCY TAXES - Texas Statutes

TAX CODE

TITLE 3. LOCAL TAXATION

SUBTITLE D. LOCAL HOTEL OCCUPANCY TAXES

CHAPTER 351. MUNICIPAL HOTEL OCCUPANCY TAXES

SUBCHAPTER A. IMPOSITION AND COLLECTION OF TAX

Sec. 351.001. DEFINITIONS. In this chapter:

(1) "Municipality" includes any incorporated city, town, or

village.

(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 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.

(3) "Eligible coastal municipality" means a home-rule

municipality that borders on the Gulf of Mexico and has a

population of less than 80,000.

(4) "Hotel" has the meaning assigned by Section 156.001.

(5) "Tourism" means the guidance or management of tourists.

(6) "Tourist" means an individual who travels from the

individual's residence to a different municipality, county,

state, or country for pleasure, recreation, education, or

culture.

(7) "Eligible central municipality" means a municipality with a

population of more than 140,000 but less than 1.5 million that is

located in a county with a population of one million or more and

that has adopted a capital improvement plan for the expansion of

an existing convention center facility.

(8) "Visitor information center" or "tourism information center"

means a building or a portion of a building used to distribute or

disseminate information to tourists.

(9) "Revenue" includes any interest derived from the revenue.

(10) "Revenue" includes any interest derived from the revenue.

(11) "Eligible barrier island coastal municipality" means a

municipality:

(A) that borders on the Gulf of Mexico;

(B) that is located wholly on a barrier island; and

(C) the boundaries of which are within 30 miles of the United

Mexican States.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1989, 71st Leg., ch. 1110, Sec. 1, eff.

Oct. 1, 1989; Acts 1993, 73rd Leg., ch. 231, Sec. 1, eff. Aug.

30, 1993; Acts 1993, 73rd Leg., ch. 620, Sec. 1, eff. Aug. 30,

1993; Acts 1993, 73rd Leg., ch. 680, Sec. 1, eff. Sept. 1, 1993;

Acts 1995, 74th Leg., ch. 76, Sec. 17.01(51), eff. Sept. 1, 1995;

Acts 1995, 74th Leg., ch. 454, Sec. 5, eff. Sept. 1, 1995; Acts

1997, 75th Leg., ch. 165, Sec. 30.273, eff. Sept. 1, 1997; Acts

1999, 76th Leg., ch. 495, Sec. 1, eff. Sept. 1, 1999; Acts 1999,

76th Leg., ch. 1004, Sec. 1, eff. Sept. 1, 1999; Acts 1999, 76th

Leg., ch. 1467, Sec. 2.71, eff. Oct. 1, 1999; Acts 2001, 77th

Leg., ch. 1308, Sec. 1, eff. June 16, 2001.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

264, Sec. 3, eff. May 30, 2009.

Acts 2009, 81st Leg., R.S., Ch.

1220, Sec. 1, eff. September 1, 2009.

Acts 2009, 81st Leg., R.S., Ch.

1271, Sec. 1, eff. June 19, 2009.

Sec. 351.002. TAX AUTHORIZED. (a) A municipality by ordinance

may impose a tax on a person who, under a lease, concession,

permit, right of access, license, contract, or agreement, pays

for the use or possession or for the right to the use or

possession of a room that is in a hotel, costs $2 or more each

day, and is ordinarily used for sleeping.

(b) The price of a room in a hotel does not include the cost of

food served by the hotel and the cost of personal services

performed by the hotel for the person except for those services

related to cleaning and readying the room for use or possession.

(c) The tax does not apply to a person who is a permanent

resident under Section 156.101 of this code.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1991, 72nd Leg., ch. 328, Sec. 5, eff. Aug.

26, 1991.

Sec. 351.0025. EXTRATERRITORIAL JURISDICTION. (a) A

municipality with a population of less than 35,000 by ordinance

may impose the tax authorized under Section 351.002 in the

municipality's extraterritorial jurisdiction.

(b) The municipality may not impose a tax under this section if

as a result of the adoption the combined rate of state, county,

and municipal hotel occupancy taxes in the extraterritorial

jurisdiction exceeds 15 percent of the price paid for a room in a

hotel.

Added by Acts 1991, 72nd Leg., ch. 328, Sec. 3, eff. Aug. 26,

1991. Amended by Acts 1993, 73rd Leg., ch. 680, Sec. 2, eff.

Sept. 1, 1993.

Sec. 351.003. TAX RATES. (a) Except as provided by this

section, the tax authorized by this chapter may be imposed at any

rate not to exceed seven percent of the price paid for a room in

a hotel.

(b) The rate in an eligible central municipality may not exceed

nine percent of the price paid for a room. This subsection does

not apply to a municipality to which Section 351.106 applies or

to an eligible central municipality with a population of less

than 440,000.

(c) The rate in a municipality that borders on the Gulf of

Mexico and has a population of more than 250,000 or in a

municipality with a population of less than 5,000 adjacent to a

home-rule city with a population of less than 80,000 may not

exceed nine percent of the price paid for a room.

(d) The rate in an eligible barrier island coastal municipality

may not exceed 8-1/2 percent of the price paid for a room.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.23(a), eff.

Aug. 28, 1989; Acts 1993, 73rd Leg., ch. 620, Sec. 2, eff. Aug.

30, 1993; Acts 1999, 76th Leg., ch. 825, Sec. 1, eff. June 18,

1999; Acts 2001, 77th Leg., ch. 1308, Sec. 2, eff. June 16, 2001;

Acts 2003, 78th Leg., ch. 247, Sec. 2, eff. Sept. 1, 2003; Acts

2003, 78th Leg., ch. 382, Sec. 1, 3, eff. June 18, 2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

1220, Sec. 2, eff. September 1, 2009.

Acts 2009, 81st Leg., R.S., Ch.

1271, Sec. 2, eff. June 19, 2009.

For expiration of this section, see Subsection (d).

Sec. 351.0035. TAX RATE AND USE IN CERTAIN MUNICIPALITIES. (a)

The tax imposed by this chapter in a home-rule municipality that

was originally chartered in or after 1938, that is home to a

major state university, and that is located in a county bordered

by the Brazos and Navasota Rivers, may be imposed at any rate not

to exceed 7.75 percent of the price paid for a room in a hotel.

(b) The municipality shall allocate for the construction of a

convention center in the municipality all revenue received by the

municipality that is derived from the application of the tax at a

rate of more than seven percent of the price paid for a room in a

hotel.

(c) The municipality may not increase the rate of the tax to a

rate above seven percent before the date the municipality

executes a contract for the construction of the convention

center.

(d) This section expires on the date the governing body of the

municipality certifies that all debt relating to the convention

center payable from the tax, including interest and any costs

relating to the debt, has been paid in full or a deposit has been

made and an escrow agreement in relation to the debt has been

executed.

Added by Acts 2009, 81st Leg., R.S., Ch.

1057, Sec. 1, eff. June 19, 2009.

Sec. 351.004. TAX COLLECTION. (a) The municipal attorney or

other attorney acting for the municipality may bring suit against

a person who is required to collect the tax imposed by this

chapter and pay the collections over to the municipality and who

has failed to file a tax report or pay the tax when due to

collect the tax not paid or to enjoin the person from operating a

hotel in the municipality until the tax is paid or the report

filed, as applicable, as provided by the court's order. In

addition to the amount of any tax owed under this chapter, the

person is liable to the municipality for:

(1) the municipality's reasonable attorney's fees;

(2) the costs of an audit conducted under Subsection (a-1)(1),

as determined by the municipality using a reasonable rate, but

only if the tax has been delinquent for at least two complete

municipal fiscal quarters at the time the audit is conducted; and

(3) a penalty equal to 15 percent of the total amount of the tax

owed.

(a-1) If a person required to file a tax report under this

chapter does not file the report as required by the municipality,

the municipal attorney or other attorney acting for the

municipality may determine the amount of tax due under this

chapter by:

(1) conducting an audit of each hotel in relation to which the

person did not file the report as required by the municipality;

or

(2) using the tax report filed for the appropriate reporting

period under Section 156.151 in relation to that hotel.

(a-2) If the person did not file a tax report under Section

156.151 for that reporting period in relation to that hotel, the

municipal attorney or other attorney acting for the municipality

may estimate the amount of tax due by using the tax reports in

relation to that hotel filed during the previous calendar year

under this chapter or Section 156.151. An estimate made under

this subsection is prima facie evidence of the amount of tax due

for that period in relation to that hotel.

(a-3) The authority to conduct an audit under this section is in

addition to any other audit authority provided by statute,

charter, or ordinance.

(b) Section 16.061, Civil Practice and Remedies Code, applies to

the collection of a tax under this chapter. A limitation period

provided by Title 2 relating to the time allowed to assess taxes

and bring a suit to collect taxes does not apply to a tax imposed

under this chapter or to a suit brought under this section.

(c) A municipality by ordinance may authorize misdemeanor

punishment for a violation of an ordinance adopted under this

chapter.

(d) The remedies provided by this section are in addition to

other available remedies.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1989, 71st Leg., ch. 1110, Sec. 2, eff.

Oct. 1, 1989; Acts 1993, 73rd Leg., ch. 259, Sec. 1.

Amended by:

Acts 2005, 79th Leg., Ch.

488, Sec. 1, eff. September 1, 2005.

Sec. 351.0041. COLLECTION PROCEDURES ON PURCHASE OF HOTEL. (a)

If a person who is liable for the payment of a tax under this

chapter is the owner of a hotel and sells the hotel, the

successor to the seller or the seller's assignee shall withhold

an amount of the purchase price sufficient to pay the amount due

until the seller provides a receipt by a person designated by the

municipality to provide the receipt showing that the amount has

been paid or a certificate showing that no tax is due.

(b) The purchaser of a hotel who fails to withhold an amount of

the purchase price as required by this section is liable for the

amount required to be withheld to the extent of the value of the

purchase price.

(c) The purchaser of a hotel may request that the person

designated by the municipality to provide a receipt under

Subsection (a) issue a certificate stating that no tax is due or

issue a statement of the amount required to be paid before a

certificate may be issued. The person designated by the

municipality shall issue the certificate or statement not later

than the 60th day after the date that the person receives the

request.

(d) If the person designated by the municipality to provide a

receipt under Subsection (a) fails to issue the certificate or

statement within the period provided by Subsection (c), the

purchaser is released from the obligation to withhold the

purchase price or pay the amount due.

Added by Acts 1991, 72nd Leg., ch. 328, Sec. 1, eff. Aug. 26,

1991.

Sec. 351.005. REIMBURSEMENT FOR TAX COLLECTION EXPENSES. (a) A

municipality may permit a person who is required to collect and

pay over to the municipality the tax authorized by this chapter

not more than one percent of the amount collected and required to

be reported as reimbursement to the person for the costs in

collecting the tax.

(b) The municipality may provide that the reimbursement provided

by this section be forfeited because of a failure to pay the tax

or to file a report as required by the municipality.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987.

Sec. 351.006. EXEMPTION. (a) A United States governmental

entity described in Section 156.103(a) is exempt from the payment

of tax authorized by this chapter.

(b) A state governmental entity described in Section 156.103(b)

shall pay the tax imposed by this chapter but is entitled to a

refund of the tax paid.

(c) A person who is described by Section 156.103(d) is exempt

from the payment of the tax authorized by this chapter.

(d) A person who is described by Section 156.103(c) shall pay

the tax imposed by this chapter but the state governmental entity

with whom the person is associated is entitled to a refund of the

tax paid.

(e) To receive a refund of tax paid under this chapter, the

governmental entity entitled to the refund must file a refund

claim on a form provided by the municipality and containing the

information required by the municipality. The comptroller by rule

shall prescribe the form that must be used and the information

that must be provided.

(f) A governmental entity may file a refund claim with the

municipality under this chapter only for each calendar quarter

for all reimbursements accrued during that quarter. The

municipality may adopt an ordinance to enforce this section.

(g) The right to use or possess a room in a hotel is exempt from

taxation under this chapter if the person required to collect the

tax receives, in good faith from a guest, an exemption

certificate stating qualification for an exemption provided in

Subsection (c). The exemption must be supported by the

documentation required under rules adopted by the comptroller and

the municipality.

Added by Acts 1989, 71st Leg., ch. 504, Sec. 2, eff. Sept. 1,

1989. Amended by Acts 1995, 74th Leg., ch. 454, Sec. 6, eff.

Sept. 1, 1995; Acts 1999, 76th Leg., ch. 1467, Sec. 2.72, eff.

Oct. 1, 1999; Acts 2003, 78th Leg., ch. 209, Sec. 87, eff. Oct.

1, 2003.

Sec. 351.007. PREEXISTING CONTRACTS. If a municipality

increases the rate of the tax authorized by this chapter, the

increased tax rate does not apply to the tax imposed on the use

or possession of a room under a contract executed before October

1, 1989, that provides for the payment of the tax at the rate in

effect when the contract was executed, unless the contract is

subject to change or modification by reason of the tax rate

increase. The tax rate applicable to the use or possession of a

room under the contract is the rate in effect when the contract

was executed.

Added by Acts 1989, 71st Leg., ch. 1110, Sec. 3, eff. Oct. 1,

1989.

SUBCHAPTER B. USE AND ALLOCATION OF REVENUE

Sec. 351.101. USE OF TAX REVENUE.

Text of subsection as amended by Acts 2009, 81st Leg., R.S., Ch.

402, Sec. 1

(a) Revenue from the municipal hotel occupancy tax may be used

only to promote tourism and the convention and hotel industry,

and that use is limited to the following:

(1) the acquisition of sites for and the construction,

improvement, enlarging, equipping, repairing, operation, and

maintenance of convention center facilities or visitor

information centers, or both;

(2) the furnishing of facilities, personnel, and materials for

the registration of convention delegates or registrants;

(3) advertising and conducting solicitations and promotional

programs to attract tourists and convention delegates or

registrants to the municipality or its vicinity;

(4) the encouragement, promotion, improvement, and application

of the arts, including instrumental and vocal music, dance,

drama, folk art, creative writing, architecture, design and

allied fields, painting, sculpture, photography, graphic and

craft arts, motion pictures, radio, television, tape and sound

recording, and other arts related to the presentation,

performance, execution, and exhibition of these major art forms;

(5) historical restoration and preservation projects or

activities or advertising and conducting solicitations and

promotional programs to encourage tourists and convention

delegates to visit preserved historic sites or museums:

(A) at or in the immediate vicinity of convention center

facilities or visitor information centers; or

(B) located elsewhere in the municipality or its vicinity that

would be frequented by tourists and convention delegates;

(6) for a municipality located in a county with a population of

one million or less, expenses, including promotion expenses,

directly related to a sporting event in which the majority of

participants are tourists who substantially increase economic

activity at hotels and motels within the municipality or its

vicinity;

(7) subject to Section 351.1076, the promotion of tourism by the

enhancement and upgrading of existing sports facilities or

fields, including facilities or fields for baseball, softball,

soccer, and flag football, if:

(A) the municipality owns the facilities or fields;

(B) the municipality:

(i) has a population of 80,000 or more and is located in a

county that has a population of 350,000 or less;

(ii) has a population of at least 65,000 but not more than

70,000 and is located in a county that has a population of

155,000 or less;

(iii) has a population of at least 34,000 but not more than

36,000 and is located in a county that has a population of 90,000

or less;

(iv) has a population of at least 13,000 but less than 39,000

and is located in a county that has a population of at least

200,000;

(v) has a population of at least 65,000 but less than 80,000 and

no part of which is located in a county with a population greater

than 150,000; or

(vi) is located in a county that:

(a) is adjacent to the Texas-Mexico border;

(b) has a population of at least 500,000; and

(c) does not have a municipality with a population greater than

500,000; and

(C) the sports facilities and fields have been used, in the

preceding calendar year, a combined total of more than 10 times

for district, state, regional, or national sports tournaments;

and

(8) for a municipality with a population of at least 65,000 but

less than 80,000, no part of which is located in a county with a

population greater than 150,000, the construction, improvement,

enlarging, equipping, repairing, operation, and maintenance of a

coliseum or multiuse facility.

Text of subsection as amended by Acts 2009, 81st Leg., R.S., Ch.

1220, Sec. 3

(a) Revenue from the municipal hotel occupancy tax may be used

only to promote tourism and the convention and hotel industry,

and that use is limited to the following:

(1) the acquisition of sites for and the construction,

improvement, enlarging, equipping, repairing, operation, and

maintenance of convention center facilities or visitor

information centers, or both;

(2) the furnishing of facilities, personnel, and materials for

the registration of convention delegates or registrants;

(3) advertising and conducting solicitations and promotional

programs to attract tourists and convention delegates or

registrants to the municipality or its vicinity;

(4) the encouragement, promotion, improvement, and application

of the arts, including instrumental and vocal music, dance,

drama, folk art, creative writing, architecture, design and

allied fields, painting, sculpture, photography, graphic and

craft arts, motion pictures, radio, television, tape and sound

recording, and other arts related to the presentation,

performance, execution, and exhibition of these major art forms;

(5) historical restoration and preservation projects or

activities or advertising and conducting solicitations and

promotional programs to encourage tourists and convention

delegates to visit preserved historic sites or museums:

(A) at or in the immediate vicinity of convention center

facilities or visitor information centers; or

(B) located elsewhere in the municipality or its vicinity that

would be frequented by tourists and convention delegates;

(6) for a municipality located in a county with a population of

one million or less, expenses, including promotion expenses,

directly related to a sporting event in which the majority of

participants are tourists who substantially increase economic

activity at hotels and motels within the municipality or its

vicinity;

(7) subject to Section 351.1076, the promotion of tourism by the

enhancement and upgrading of existing sports facilities or

fields, including facilities or fields for baseball, softball,

soccer, and flag football, if:

(A) the municipality owns the facilities or fields;

(B) the municipality:

(i) has a population of 80,000 or more and is located in a

county that has a population of 350,000 or less;

(ii) has a population of at least 65,000 but not more than

70,000 and is located in a county that has a population of

155,000 or less; or

(iii) has a population of at least 34,000 but not more than

36,000 and is located in a county that has a population of 90,000

or less; and

(C) the sports facilities and fields have been used, in the

preceding calendar year, a combined total of more than 10 times

for district, state, regional, or national sports tournaments;

and

(8) signage directing the public to sights and attractions that

are visited frequently by hotel guests in the municipality.

Text of subsection as amended by Acts 2009, 81st Leg., R.S., Ch.

1322, Sec. 1

(a) Revenue from the municipal hotel occupancy tax may be used

only to promote tourism and the convention and hotel industry,

and that use is limited to the following:

(1) the acquisition of sites for and the construction,

improvement, enlarging, equipping, repairing, operation, and

maintenance of convention center facilities or visitor

information centers, or both;

(2) the furnishing of facilities, personnel, and materials for

the registration of convention delegates or registrants;

(3) advertising and conducting solicitations and promotional

programs to attract tourists and convention delegates or

registrants to the municipality or its vicinity;

(4) the encouragement, promotion, improvement, and application

of the arts, including instrumental and vocal music, dance,

drama, folk art, creative writing, architecture, design and

allied fields, painting, sculpture, photography, graphic and

craft arts, motion pictures, radio, television, tape and sound

recording, and other arts related to the presentation,

performance, execution, and exhibition of these major art forms;

(5) historical restoration and preservation projects or

activities or advertising and conducting solicitations and

promotional programs to encourage tourists and convention

delegates to visit preserved historic sites or museums:

(A) at or in the immediate vicinity of convention center

facilities or visitor information centers; or

(B) located elsewhere in the municipality or its vicinity that

would be frequented by tourists and convention delegates;

(6) for a municipality located in a county with a population of

one million or less, expenses, including promotion expenses,

directly related to a sporting event in which the majority of

participants are tourists who substantially increase economic

activity at hotels and motels within the municipality or its

vicinity;

(7) subject to Section 351.1076, the promotion of tourism by the

enhancement and upgrading of existing sports facilities or

fields, including facilities or fields for baseball, softball,

soccer, and flag football, if:

(A) the municipality owns the facilities or fields;

(B) the municipality:

(i) has a population of 80,000 or more and is located in a

county that has a population of 350,000 or less;

(ii) has a population of at least 65,000 but not more than

70,000 and is located in a county that has a population of

155,000 or less; or

(iii) has a population of at least 34,000 but not more than

36,000 and is located in a county that has a population of 90,000

or less; and

(C) the sports facilities and fields have been used, in the

preceding calendar year, a combined total of more than 10 times

for district, state, regional, or national sports tournaments;

and

(8) the construction of a recreational venue in the immediate

vicinity of area hotels, if:

(A) the municipality:

(i) is a general-law municipality;

(ii) has a population of not more than 900; and

(iii) does not impose an ad valorem tax;

(B) not more than $100,000 of municipal hotel occupancy tax

revenue is used for the construction of the recreational venue;

(C) a majority of the hotels in the municipality request the

municipality to construct the recreational venue;

(D) the recreational venue will be used primarily by hotel

guests; and

(E) the municipality will pay for maintenance of the

recreational venue from the municipality's general fund.

(b) Revenue derived from the tax authorized by this chapter

shall be expended in a manner directly enhancing and promoting

tourism and the convention and hotel industry as permitted by

Subsection (a). That revenue may not be used for the general

revenue purposes or general governmental operations of a

municipality.

(c) The governing body of a municipality by contract may

delegate to a person, including another governmental entity or a

private organization, the management or supervision of programs

and activities funded with revenue from the tax authorized by

this chapter. The governing body in writing shall approve in

advance the annual budget of the person to which it delegates

those functions and shall require the person to make periodic

reports to the governing body at least quarterly listing the

expenditures made by the person with revenue from the tax

authorized by this chapter. The person must maintain revenue

provided from the tax authorized by this chapter in a separate

account established for that purpose and may not commingle that

revenue with any other money. The municipality may not delegate

to any person the management or supervision of its convention and

visitors programs and activities funded with revenue from the tax

authorized by this chapter other than by contract as provided by

this subsection. The approval by the governing body of the

municipality of the annual budget of the person to whom the

governing body delegates those functions creates a fiduciary duty

in the person with respect to the revenue provided by the tax

authorized by this chapter.

(d) A person with whom a municipality contracts under this

section to conduct an activity authorized by this section shall

maintain complete and accurate financial records of each

expenditure of hotel occupancy tax revenue made by the person

and, on request of the governing body of the municipality or

other person, shall make the records available for inspection and

review to the governing body or other person.

(e) Hotel occupancy tax revenue spent for a purpose authorized

by this section may be spent for day-to-day operations, supplies,

salaries, office rental, travel expenses, and other

administrative costs only if those administrative costs are

incurred directly in the promotion and servicing expenditures

authorized under Section 351.101(a). If a municipal or other

public or private entity that conducts an activity authorized

under this section conducts other activities that are not

authorized under this section, the portion of the total

administrative costs of the entity for which hotel occupancy tax

revenue may be used may not exceed the portion of those

administrative costs actually incurred in conducting the

authorized activities.

(f) Municipal hotel occupancy tax revenue may not be spent for

travel for a person to attend an event or conduct an activity the

primary purpose of which is not directly related to the promotion

of tourism and the convention and hotel industry or the

performance of the person's job in an efficient and professional

manner.

(g) Nothing in this section shall prohibit any private entity,

person, or organization from making subgrants by contract to any

other person, entity, or private organization for expenditures

under Section 351.101(a)(4). A subgrantee shall:

(1) at least annually make periodic reports to the governing

body of its expenditures from the tax authorized by this chapter;

and

(2) make records of these expenditures available for review to

the governing body or other person.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.24(a), eff.

Aug. 28, 1989; Acts 1989, 71st Leg., ch. 1110, Sec. 4, eff. Oct.

1, 1989; Acts 1993, 73rd Leg., ch. 680, Sec. 3, eff. Sept. 1,

1993; Acts 1995, 74th Leg., ch. 1027, Sec. 1, eff. Aug. 28, 1995;

Acts 2001, 77th Leg., ch. 755, Sec. 1, eff. June 13, 2001; Acts

2001, 77th Leg., ch. 1308, Sec. 3, eff. June 16, 2001; Acts 2003,

78th Leg., ch. 209, Sec. 90, eff. Oct. 1, 2003; Acts 2003, 78th

Leg., ch. 303, Sec. 1, eff. June 18, 2003.

Amended by:

Acts 2005, 79th Leg., Ch.

1247, Sec. 1, eff. June 18, 2005.

Acts 2007, 80th Leg., R.S., Ch.

1144, Sec. 1, eff. June 15, 2007.

Acts 2009, 81st Leg., R.S., Ch.

402, Sec. 1, eff. June 19, 2009.

Acts 2009, 81st Leg., R.S., Ch.

1220, Sec. 3(a), eff. June 19, 2009.

Acts 2009, 81st Leg., R.S., Ch.

1322, Sec. 1, eff. June 19, 2009.

Sec. 351.102. PLEDGE FOR BONDS. (a) Subject to the limitations

provided by this subchapter, a municipality may pledge the

revenue derived from the tax imposed under this chapter for the

payment of bonds that are issued under Section 1504.002(a),

Government Code, for one or more of the purposes provided by

Section 351.101 or, in the case of a municipality of 1,500,000 or

more, for the payment of principal of or interest on bonds or

other obligations of a municipally sponsored local government

corporation created under Chapter 431, Transportation Code, that

were issued to pay the cost of the acquisition and construction

of a convention center hotel or the cost of acquisition,

remodeling, or rehabilitation of a historic hotel structure;

provided, however, such pledge may only be that portion of the

tax collected at such hotel.

(b) An eligible central municipality or a municipality with a

population of 173,000 or more that is located within two counties

may pledge the revenue derived from the tax imposed under this

chapter from a hotel project that is owned by or located on land

owned by the municipality or, in an eligible central

municipality, 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

for the payment of bonds or other obligations issued or incurred

to acquire, lease, construct, and equip the hotel and any

facilities ancillary to the hotel, including convention center

entertainment-related facilities, restaurants, shops, and parking

facilities within 1,000 feet of the hotel or convention center

facility. For bonds or other obligations issued under this

subsection, an eligible central municipality or a municipality

with a population of 173,000 or more that is located within two

counties may only pledge revenue or other assets of the hotel

project benefiting from those bonds or other obligations.

(b-1) A municipality with a population of 173,000 or more that

is located within two counties and is not an eligible central

municipality may not pledge revenue under Subsection (b) in

relation to a particular hotel project after the earlier of:

(1) the 20th anniversary of the date the municipality first

pledged the revenue to the hotel project; or

(2) the date the revenue pledged to the hotel project equals 40

percent of the hotel project's total construction cost.

(c) A municipality to which Subsection (b) applies is entitled

to receive all funds from a project described by this section

that an owner of a project may receive under Section 151.429(h)

of this code, or Section 2303.5055, Government Code, and may

pledge the funds for the payment of obligations issued under this

section.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1993, 73rd Leg., ch. 231, Sec. 3, eff. Aug.

30, 1993; Acts 1997, 75th Leg., ch. 165, Sec. 30.274, eff. Sept.

1, 1997; Acts 1999, 76th Leg., ch. 1004, Sec. 2, eff. Sept. 1,

1999; Acts 2001, 77th Leg., ch. 1308, Sec. 4, eff. June 16, 2001;

Acts 2001, 77th Leg., ch. 1420, Sec. 8.365, eff. Sept. 1, 2001;

Acts 2003, 78th Leg., ch. 209, Sec. 91, eff. Oct. 1, 2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

519, Sec. 1, eff. September 1, 2009.

Acts 2009, 81st Leg., R.S., Ch.

1087, Sec. 3, eff. June 19, 2009.

Acts 2009, 81st Leg., R.S., Ch.

1220, Sec. 4, eff. September 1, 2009.

Sec. 351.103. ALLOCATION OF REVENUE: GENERAL RULE. (a) 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,

allocations for the purposes provided by Section 351.101(a)(3)

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) 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 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).

(d) A municipality that does not allocate any hotel occupancy

tax revenue for the purposes provided by Section 351.101(a)(1)

may allocate not more than 50 percent of the hotel occupancy tax

revenue collected by the municipality for the purposes provided

by Section 351.101(a)(5). A municipality that before October 1,

1989, adopts 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)(5) may allocate the 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.

(e) A municipality may use hotel occupancy tax revenue collected

by the municipality for a purpose provided by Section

351.101(a)(1) only if the municipality complies with the

applicable provisions of this section.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.24(b), eff.

Aug. 28, 1989; Acts 1989, 71st Leg., ch. 1110, Sec. 6, eff. Oct.

1, 1989; Acts 1993, 73rd Leg., ch. 153, Sec. 1, eff. Aug. 30,

1993; Acts 1993, 73rd Leg., ch. 680, Sec. 5, eff. Sept. 1, 1993;

Acts 2001, 77th Leg., ch. 1308, Sec. 5, eff. June 16, 2001.

Sec. 351.1035. ALLOCATION OF REVENUE: CERTAIN MUNICIPALITIES IN

BORDER COUNTIES. (a) This section applies only to a

municipality that is the largest municipality in a county

described by Section 352.002(a)(14).

(b) At least 50 percent of the hotel occupancy tax revenue

collected by a municipality described by Subsection (a) must be

allocated for the purposes provided by Section 351.101(a)(3).

(c) Not more than 15 percent of the hotel occupancy tax revenue

collected by a municipality described by Subsection (a) may be

used for the purposes provided by Section 351.101(a)(4).

(d) Not more than 15 percent of the hotel occupancy tax revenue

collected by a municipality described by Subsection (a) may be

used for the purposes provided by Section 351.101(a)(5).

Added by Acts 2003, 78th Leg., ch. 303, Sec. 2, eff. June 18,

2003.

Sec. 351.104. ALLOCATION OF REVENUE: CERTAIN MUNICIPALITIES

BORDERING BAYS. (a) This section applies only to a home-rule

municipality that borders a bay, that has a population of less

than 80,000, and that is not an eligible coastal municipality.

(b) In this section:

(1) "Adjacent public land" means land that:

(A) is owned by this state or a local governmental entity; and

(B) is located adjacent to a bay that is bordered by a

municipality to which this section applies.

(2) "Clean and maintain" means the collection and removal of

litter and debris and the supervision and elimination of sanitary

and safety conditions that would pose a threat to personal health

or safety if not removed or otherwise corrected.

(c) Notwithstanding any other provision of this chapter and

subject to Subsections (d) and (e), a municipality to which this

section applies may use not more than 10 percent of the revenue

derived from the tax imposed under this chapter:

(1) for a purpose described by Section 351.105(a)(1) or (2);

(2) to clean and maintain adjacent public land; or

(3) to mitigate coastal erosion on adjacent public land.

(d) A municipality to which this section applies may not reduce

the amount of revenue that it uses for a purpose described by

Section 351.101(a)(3) to an amount that is less than the average

amount of revenue used by the municipality for that purpose

during the 36-month period that precedes the municipality's use

of revenue under Subsection (c).

(e) A municipality that uses revenue from the tax imposed under

this chapter for a purpose provided by this section must spend

the same amount of revenue for the same purpose from a source

other than that tax.

Acts 2003, 78th Leg., ch. 699, Sec. 1, eff. Sept. 1, 2003.

Sec. 351.105. ALLOCATION OF REVENUE: ELIGIBLE COASTAL

MUNICIPALITIES. (a) An eligible coastal municipality that

levies and collects an occupancy tax authorized by this chapter

at a rate of seven percent shall pledge a portion of the revenue

equal to at least one percent of the cost of a room to either or

both of the following purposes:

(1) the payment of the bonds that the municipality or a park

board of trustees may issue under Section 1504.002(a), Government

Code, or under Chapter 306, Local Government Code, in order to

provide all or part of the funds for the establishment,

acquisition, purchase, construction, improvement, enlargement,

equipment, or repair of public improvements, including parks,

civic centers, civic center buildings, auditoriums, exhibition

halls, coliseums, marinas, cruise ship terminal facilities,

hotels, motels, parking facilities, golf courses, trolley or

trolley transportation systems, and other facilities as may be

considered advisable in connection with these facilities that

serve the purpose of attracting visitors and tourists to the

municipality; or

(2) the maintenance, improvement, or operation of the parks,

civic centers, civic center buildings, auditoriums, exhibition

halls, coliseums, marinas, cruise ship terminal facilities,

hotels, motels, parking facilities, golf courses, trolley or

trolley transportation systems, and other facilities as may be

considered advisable in connection with these facilities that

serve the purpose of attracting visitors and tourists to the

municipality.

(b) If the tax authorized by this chapter is imposed by an

eligible coastal municipality at a rate of four or more percent

of the cost of a room, no lesser amount than the amount of

revenue derived from the application of the tax at a rate of

three percent of the cost of a room shall be used for the purpose

provided by Section 351.101(a)(3).

(c) If the tax authorized by this chapter is imposed by an

eligible coastal municipality at a rate of five or more percent

of the cost of a room, no lesser amount than the amount of

revenue derived from the application of the tax at a rate of one

percent shall be used for beach patrol, lifeguard services,

marine water safety, and park law enforcement.

(d) If the tax authorized by this chapter is imposed by an

eligible coastal municipality at a rate of six or more percent,

no lesser amount than the amount of revenue derived from the

application of the tax at a rate of one percent of the cost of a

room shall be used as matching funds for state funds available to

clean and maintain public beaches and for other public

beach-cleaning funds.

(e) Money received under Section 156.2511 and used to clean and

maintain beaches is included in determining whether the

municipality has met the funding obligation prescribed by

Subsections (c) and (d), and the municipality may credit that

money against the funding requirements prescribed by Subsections

(c) and (d).

(f) An eligible coastal municipality and a park board of

trustees created by the municipality may:

(1) contract for the park board to use the tax authorized by

this chapter as provided by this section; and

(2) without further authorization, use the tax authorized by

this chapter as provided by this section, including for the

purpose of issuing bonds or entering into other agreements.

(g) The following statutes prevail over any conflicting

provision in the charter of an eligible coastal municipality:

(1) this section;

(2) Chapter 306, Local Government Code; and

(3) Subchapter A, Chapter 1504, Government Code.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1993, 73rd Leg., ch. 680, Sec. 6, eff.

Sept. 1, 1993; Acts 1995, 74th Leg., ch. 76, Sec. 15.02, eff.

Sept. 1, 1995; Acts 1995, 74th Leg., ch. 454, Sec. 7, eff. Sept.

1, 1995; Acts 1999, 76th Leg., ch. 298, Sec. 1, eff. May 29,

1999; Acts 2001, 77th Leg., ch. 1420, Sec. 8.367, eff. Sept. 1,

2001.

Sec. 351.1055. ALLOCATION OF REVENUE: CERTAIN MUNICIPALITIES.

(a) In this section:

(1) "Clean and maintain" has the meaning assigned by Section

61.063, Natural Resources Code.

(2) "Public beach" has the meaning assigned by Section 61.001,

Natural Resources Code.

(3) "Beach security" means beach patrol, lifeguard services,

marine water safety, and park law enforcement.

(4) "Erosion response project" has the meaning assigned by

Section 33.601, Natural Resources Code.

(b) Notwithstanding any other provision of this chapter, a

home-rule municipality that borders on the Gulf of Mexico and has

a population of more than 250,000 may use all or any portion of

the revenue derived from the municipal hotel occupancy tax from

hotels in an area previously subject to a county hotel occupancy

tax and located on an island bordering the Gulf of Mexico to

clean and maintain public beaches in the municipality.

(c) Notwithstanding any other provision of this chapter, a

municipality that has a population of less than 5,000 adjacent to

a home-rule city with a population of less than 80,000 may use

all or any portion of the revenue heretofore or hereafter derived

from the municipal hotel tax:

(1) to clean and maintain the beaches in the municipality;

(2) to provide beach security within the municipality;

(3) for any of the purposes permitted or allowed by Section

1504.001, Government Code;

(4) for any purpose allowed by Section 351.105; or

(5) to pay the principal of or interest on bonds or notes issued

for any of these purposes.

(d) Notwithstanding any other provision of this chapter and

except as provided by Subsection (e), an eligible barrier island

coastal municipality shall use at least the amount of revenue

derived from the application of the tax at a rate of seven

percent of the cost of a room for the purposes authorized under

Sections 351.101(a)(1) and (3).

(e) An eligible barrier island coastal municipality that imposes

the tax at a rate equal to or greater than 7-1/2 percent of the

price paid for a room shall use at least the amount of revenue

derived from the application of the tax at a rate of one-half of

one percent of the cost of a room for erosion response projects.

Added by Acts 1999, 76th Leg., ch. 1359, Sec. 3, eff. Sept. 1,

1999. Amended by Acts 2003, 78th Leg., ch. 117, Sec. 1, eff. July

1, 2003; Acts 2003, 78th Leg., ch. 247, Sec. 1, eff. Sept. 1,

2003.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

1271, Sec. 3, eff. June 19, 2009.

Acts 2009, 81st Leg., R.S., Ch.

1271, Sec. 4, eff. June 19, 2009.

Sec. 351.106. ALLOCATION OF REVENUE: POPULOUS MUNICIPALITIES

WITH COUNCIL-MANAGER GOVERNMENT. (a) A municipality that has a

population of 1.18 million or more and that has adopted a

council-manager form of government shall use the amount of

revenue from the tax that is derived from the application of the

tax at a rate of more than four percent of the cost of a room as

follows:

(1) no more than 55 percent to:

(A) constructing, improving, enlarging, equipping, and repairing

the municipality's convention center complex; or

(B) pledging payment of revenue bonds and revenue refunding

bonds issued under Subchapter A, Chapter 1504, Government Code,

for the municipality's convention center complex; and

(2) at least 45 percent for the purposes provided by Section

351.101(a)(3).

(b) Revenue received by a municipality described by Subsection

(a) from the application of the tax at a rate of four percent or

less may be used as provided by Section 351.101.

Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1,

1987. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.23(b), eff.

Aug. 28, 1989; Acts 1991, 72nd Leg., ch. 597, Sec. 108, eff.

Sept. 1, 1991; Acts 2001, 77th Leg., ch. 669, Sec. 123, 124, eff.

Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1420, Sec. 8.368, eff.

Sept. 1, 2001.

Sec. 351.1065. ALLOCATION OF REVENUE: ELIGIBLE CENTRAL

MUNICIPALITY. (a) An eligible central municipality shall use

the amount of revenue from the tax that is derived from the

application of the tax at a rate of more than seven percent of

the cost of a room only for:

(1) the construction of an expansion of an existing convention

center facility; and

(2) pledging payment of revenue bonds and revenue refunding

bonds issued under Subchapter A, Chapter 1504, Government Code,

for the construction of the expansion.

(b) Any interest income derived from the application of the tax

at a rate of more than seven percent of the cost of a room may be

used only for the purposes provided by this section.

(c) An eligible central municipality expending tax revenue under

this section shall attempt to include minority-owned businesses

in the issuance of at least 32 percent of the total dollar value

of the bonds issued, and in at least 32 percent of the total fees

paid by the issuer, in connection with the construction.

Added by Acts 1993, 73rd Leg., ch. 620, Sec. 3, eff. Aug. 30,

1993. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.369, eff.

Sept. 1, 2001.

Sec. 351.107. ALLOCATION OF REVENUE; CERTAIN LARGE COASTAL

MUNICIPALITIES. (a) This section applies only to a municipality

that borders on the Gulf of Mexico and has a population of more

than 250,000.

(b) A municipality to which this section applies shall

separately account for all revenue derived from the application

of the tax imposed by this chapter at a rate of more than seven

percent of the cost of a room.

(c) Subject to Subsection (e), revenue described by Subsection

(b) may be used only for:

(1) acquiring land for a municipally owned convention center;

(2) constructing, improving, enlarging, equipping, repairing,

operating, and maintaining a municipally owned convention center;

and

(3) paying bonds used to finance activities described by

Subdivision (1) or (2).

(d) For the purpose of the allocation of revenue under Section

351.103, revenue described by Subsection (b) is not counted.

(e) Notwithstanding any other provision of this chapter, a

municipality to which this section applies may use all or any

portion of the revenue derived from the municipal hotel occupancy

tax from hotels in an area previously subject to a county hotel

occupancy tax and located on an island bordering the Gulf of

Mexico to clean and maintain public beaches in the municipality.

(f) In this section:

(1) "Clean and maintain" has the meaning assigned by Section

61.063, Natural Resources Code.

(2) "Public beach" has the meaning assigned by Section 61.001,

Natural Resources Code.

Added by Acts 1999, 76th Leg., ch. 825, Sec. 2, eff. June 18,

1999. Amended by Acts 2003, 78th Leg., ch. 117, Sec. 2, eff. July

1, 2003.

Sec. 351.1076. ALLOCATION OF REVENUE: CERTAIN MUNICIPALITIES.

(a) A municipality that spends municipal hotel occupancy tax

revenue for the enhancement and upgrading of existing sports

facilities or fields as authorized by Section 351.101(a)(7):

(1) shall determine the amount of municipal hotel occupancy tax

revenue generated for the municipality by hotel activity

attributable to the sports events and tournaments held on the

enhanced or upgraded facilities or fields for five years after

the date the enhancements and upgrades are completed; and

(2) may not spend hotel occupancy tax revenue for the

enhancement and upgrading of the facilities or fields in a total

amount that exceeds the amount of area hotel revenue attributable

to the enhancements and upgrades.

(b) The municipality shall reimburse from the municipality's

general fund any expenditure in excess of the amount of area

hotel revenue attributable to the enhancements and upgrades to

the municipality's hotel occupancy tax revenue fund.

Added by Acts 2005, 79th Leg., Ch.

1247, Sec. 2, eff. June 18, 2005.

For expiration of this section, see Subsection (f).

Sec. 351.1077. ALLOCATION OF REVENUE FOR THE ARTS FOR CERTAIN

MUNICIPALITIES. (a) This section applies only to a municipality

that:

(1) has a population of more than 190,000;

(2) is located in a county in which another municipality that

has a population of more than one million is predominately

located; and

(3) issued bonds before January 1, 2007, for the construction of

a municipal arts center payable from and secured by revenue from

the tax imposed under this chapter.

(b) Notwithstanding any other provision of this chapter, a

municipality to which this section applies may use an amount that

is less than or equal to 15 percent of the hotel occupancy tax

revenue collected by the municipality for the purposes provided

by Section 351.101(a)(4).

(c) Notwithstanding any other provision of this chapter, a

municipality to which this section applies may use an amount that

is less than or equal to an additional $1.6 million in hotel

occupancy tax revenue collected by the municipality for the

purposes provided by Section 351.101(a)(4). The $1.6 million is

in addition to the 15 percent amount allowed by Subsection (b).

(d) A municipality to which this section applies may not reduce

the amount of revenue that an arts center that receives funds

under Subsection (b) spends for a purpose described by Section

351.101(a)(3) to an amount that is less than the amount of

revenue spent by the arts center for those purposes during the

fiscal year of the arts center preceding the effective date of

this section. If the municipality reduces the funding of the

arts center under Subsection (b), the art center's required

funding amount for purposes described by Section 351.101(a)(3) is

also reduced by a proportional amount.

(e) An arts center that receives funds under Subsection (b)

shall include a website address that contains a link to area

hotels and lodging options in the municipality on all materials

produced for the purposes of Section 351.101(a)(3).

(f) This section expires September 1, 2022.

Added by Acts 2007, 80th Leg., R.S., Ch.

14, Sec. 1, eff. April 25, 2007.

Sec. 351.108. RECORDS. (a) A municipality shall maintain a

record that accurately identifies the receipt and expenditure of

all revenue derived from the tax imposed under this chapter.

(b) A municipality or entity that spends revenue derived from

the tax imposed under this chapter shall, before making an

expenditure, specify in a list each scheduled activity, program,

or event that:

(1) is directly funded by the tax or has its administrative

costs funded in whole or in part by the tax; and

(2) is directly enhancing and promoting tourism and the

convention and hotel industry.

(c) If a municipality delegates to another entity the management

or supervision of an activity or event funded by the tax imposed

under this chapter, each entity that is ultimately funded by the

tax shall, before making an expenditure, specify in a list each

scheduled activity, program, or event that:

(1) is directly funded by the tax or has its administrative

costs funded in whole or in part by the tax; and

(2) is directly enhancing and promoting tourism and the

convention and hotel industry.

(d) The list required in Subsections (b) and (c) should be

provided to the office of the city secretary or to the city

secretary's designee.

(e) Subsections (b) and (c) do not prevent a municipality or

funded entity from subsequently adding an activity, program, or

event to the list required by those subsections if the activity,

program, or event is directly enhancing and promoting tourism and

the convention and hotel industry.

(f) This section does not prevent a municipality or entity

receiving revenue from the tax imposed under this chapter from

setting aside tax revenue in a designated reserve fund for use in

supporting planned activities, future events, and facility

improvements that are directly enhancing and promoting tourism

and the convention and hotel industry.

(g) Subsections (b) and (c) do not apply if the funded entity

already provides written information to the municipality that

indicates which scheduled activities, programs, or events offered

by the entity are directly enhancing and promoting tourism and

the convention and hotel industry.

(h) Subsections (b) and (c) do not affect the level of local

hotel occupancy tax funding that was approved at an election held

pursuant to the initiative and referendum provisions of a city

charter, and do not prohibit the use of local hotel occupancy tax

for the encouragement, promotion, improvement, and application of

the arts or for historical restoration and preservation as

otherwise provided by this chapter.

Added by Acts 1999, 76th Leg., ch. 495, Sec. 2, eff. Sept. 1,

1999; Acts 1999, 76th Leg., ch. 1467, Sec. 2.73, eff. Oct. 1,

1999. Renumbered from Sec. 351.107 and amended by Acts 2001, 77th

Leg., ch. 636, Sec. 1, eff. Sept. 1, 2001; Acts 2001, 77th Leg.,

ch. 1420, Sec. 21.001(101), eff. Sept. 1, 2001.

Sec. 351.110. ALLOCATION OF REVENUE FOR CERTAIN TRANSPORTATION

SYSTEMS. (a) Notwithstanding any other provision of this

chapter, a municipality may use the revenue derived from the tax

imposed under this chapter for a transportation system to

transport tourists from hotels in and near the municipality to:

(1) the commercial center of the municipality;

(2) a convention center in the municipality;

(3) other hotels in or near the municipality; and

(4) tourist attractions in or near the municipality.

(b) The transportation system that transports tourists as

described by Subsection (a) may be:

(1) owned and operated by the municipality; or

(2) privately owned and operated but partially financed by the

municipality.

(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).

Added by Acts 2007, 80th Leg., R.S., Ch.

1231, Sec. 1, eff. June 15, 2007.