HB 4412

relating to the use of hotel occupancy tax revenue by certain
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 351.101, Tax Code, is amended by adding
Section 351.1080 to read as follows:
(a)  This section applies only to a municipality that
(1)  is the county seat of a county that borders New
Mexico and contains a portion of a state park that is located in two
(2)  in the most recent completed fiscal year, hotel
occupancy levels within the municipality and its extraterritorial
jurisdiction exceeded 90 percent;
(3)  in the most recent completed fiscal year, on
average,  more than forty percent of the individuals within the
municipality and its extraterritorial jurisdiction stay within a
hotel within the municipality each night; and
(4)  in the most recent completed fiscal year,
unexpended balances of municipal hotel occupancy tax revenue
(b)  Notwithstanding any other provision of this chapter, a
municipality to which this section applies may use hotel occupancy
tax revenue collected by the municipality for a public improvement
project that will directly benefit the hotel and tourism industry.
(c)  If a municipality to which this section applies uses
hotel occupancy tax revenue as provided by subsection (b):
(1)  Not more than 25 percent of the public improvement
project's total costs may be funded with municipal hotel occupancy
(2)  The municipality may not reduce the amount of
revenue that it uses for a purpose described by Section 351.101(a)
to an amount that is less than the average amount of revenue used by
the municipality for those purposes during the 36-month period that
precedes the municipality's use of revenue under Subsection (b).
(d)  Within eight fiscal years of using municipal hotel
occupancy tax revenue for a purpose provided by subsection (b), a
municipality to which this section applies shall reduce the rate of
municipal hotel occupancy tax to no more than two percent of the
price paid for a room in a hotel and may not increase its municipal
hotel occupancy tax rate to no more than two percent of the price
(e)  A municipality to which this section applies may not use
municipal hotel occupancy tax revenue for a purpose provided by
subsection (b) after December 31, 2034.
(f)  This section shall expire on December 31, 2034, except
than subsection (d), which shall remain in effect.
SECTION 2.  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, 2025.