H.B. No. 2974 seeks to amend the Local Government Code and Tax Code concerning municipal and county hotel occupancy taxes, particularly focusing on the authority of certain municipalities to collect tax revenue from hotel and convention center projects. The bill allows municipalities with populations between 70,000 and 180,000, as well as those with populations not exceeding 25,000 that house a cultural heritage museum, to impose taxes to finance convention centers built before specified dates. The authority to impose these taxes will expire upon repayment of related debt or by certain future dates (January 1, 2054, or January 1, 2056). Additionally, the bill introduces new regulations that restrict municipalities from pledging revenue for more than one qualified project under certain conditions and ensures that hotel occupancy tax funds are not used discriminatorily.

The bill also modifies various sections of the Tax Code to clarify definitions and eligibility criteria for municipalities engaging in revenue commitments. It introduces new classifications based on population thresholds and geographic features, allowing municipalities with populations of 130,000 or more to commit revenue for two projects instead of one. Furthermore, it expands the list of counties eligible to impose hotel occupancy taxes under specific conditions, including those near significant rivers or with certain population sizes. The revenue generated from these taxes can be used for civic center construction, tourism advertising, and historical preservation. The act will take effect immediately upon a two-thirds vote from both houses or on September 1, 2025, if that threshold is not met.

Statutes affected:
Introduced: Tax Code 351.155, Tax Code 351.157 (Tax Code 351)
House Committee Report: Tax Code 351.155, Tax Code 351.157 (Tax Code 351)
Engrossed: Local Government Code 334.0082, Tax Code 351.101, Tax Code 351.1066, Tax Code 351.10712, Tax Code 351.152, Tax Code 351.153, Subchapter C, Chapter , Tax Code 351.152, Tax Code 351.155, Tax Code 351.157, Tax Code 351.158, Tax Code 352.002, Tax Code 352.003, Subchapter B, Chapter , Tax Code 351.0025, Tax Code 351.1035 (Tax Code 351, Subchapter C, Chapter , Tax Code 351, Tax Code 352, Subchapter B, Chapter , Tax Code 351, Local Government Code 334)
Senate Committee Report: Local Government Code 334.0082, Tax Code 156.2511, Tax Code 351.101, Tax Code 351.1015, Tax Code 351.102, Tax Code 351.1021, Tax Code 351.1022, Tax Code 351.106, Tax Code 351.1066, Tax Code 351.10712, Tax Code 351.152, Tax Code 351.155, Tax Code 351.157, Tax Code 352.003, Subchapter B, Chapter , Tax Code 351.0025, Tax Code 351.1035 (Tax Code 351, Subchapter C, Chapter , Tax Code 351, Tax Code 352, Subchapter B, Chapter , Tax Code 351, Tax Code 156, Local Government Code 334)