H.B. No. 2974 seeks to amend the Local Government Code and Tax Code to enhance the authority of certain municipalities and counties in Texas to impose hotel occupancy taxes, particularly for financing hotel and convention center projects. The bill allows municipalities with populations between 70,000 and 180,000, as well as those with populations of 25,000 or less that contain a cultural heritage museum, to impose these taxes to support convention centers built before specified dates. The authority to impose these taxes will expire when the related debt is repaid or on specific future dates (January 1, 2054, and January 1, 2056). Additionally, the bill introduces restrictions on municipalities pledging revenue for multiple projects and ensures that hotel occupancy tax revenue is not used discriminatorily.

The bill also expands eligibility criteria for municipalities based on population and geographic characteristics, allowing more municipalities to impose hotel occupancy taxes. It introduces provisions for counties to impose these taxes under specific conditions, including those near certain rivers or hosting annual festivals. The tax rates vary based on the municipality's existing tax structure, with some capped at two percent and others at seven percent. The bill outlines permissible uses for the generated revenue, such as constructing civic centers and promoting tourism, while repealing certain sections of the Tax Code related to hotel occupancy taxes. 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 352, Local Government Code 334, Subchapter C, Chapter , Tax Code 351, Tax Code 351, Subchapter B, Chapter , Tax Code 351)
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 156, Tax Code 352, Local Government Code 334, Subchapter C, Chapter , Tax Code 351, Tax Code 351, Subchapter B, Chapter , Tax Code 351)