The bill, H.B. No. 3118, amends the Texas Tax Code to expand the permissible uses of municipal hotel occupancy tax revenue in certain municipalities. Specifically, it modifies Section 351.101(a) to include new criteria for municipalities eligible to use these funds for promoting tourism and the convention and hotel industry. Notably, it adds a new category (D) that allows municipalities with a population of at least 19,000 and located entirely in a county where the State Capitol is situated to utilize these funds. Additionally, it clarifies existing criteria for municipalities with populations over 67,000 and those with populations of at least 200,000, while removing the previous option for municipalities that do not meet the new criteria.

Furthermore, the bill amends Section 351.1066(a) to include a new category (8) for municipalities with a population of at least 19,000 that are wholly located in a county where the State Capitol is situated, thereby broadening the scope of municipalities that can benefit from hotel occupancy tax revenue. The bill aims to enhance tourism and economic activity in these municipalities by allowing them to invest in various projects and facilities that attract visitors. The act is set to take effect immediately upon receiving a two-thirds vote from both houses or on September 1, 2025, if that threshold is not met.

Statutes affected:
Introduced: Tax Code 351.101, Tax Code 351.1066 (Tax Code 351)