H.B. No. 3954 amends Section 351.152 of the Texas Tax Code to expand the list of municipalities eligible to utilize certain tax revenues derived from hotel and convention center projects. The bill introduces new criteria for eligibility, specifically adding a new category for municipalities that have a population of 10,000 or more but less than 75,000, are located in two counties (one of which contains the State Capitol), and host an annual German festival. Additionally, it removes a previous eligibility criterion related to municipalities that are the county seat of a county with a population of 60,000 or less and that borders the Rio Grande, which is now replaced by the new insertion.

The bill aims to enhance the economic development potential of smaller municipalities by allowing them to access tax revenues that can be reinvested into local projects, particularly those related to tourism and convention facilities. The proposed changes reflect a broader strategy to support diverse communities across Texas, ensuring that a wider range of municipalities can benefit from the financial opportunities associated with hotel and convention center projects. 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 351.152, Tax Code 351.157 (Tax Code 351)
House Committee Report: Tax Code 351.152 (Tax Code 351)
Engrossed: Tax Code 351.152 (Tax Code 351)