Tax Code § 351.1015

Sec. 351.1015. CERTAIN QUALIFIED PROJECTS. (a) In this section: (1) "Base year amount" means the amount of hotel-associated revenue collected in a project financing zone during the calendar year in which a municipality designates the zone. (2) "Hotel-associated revenue" means the sum of: (A) state tax revenue collected in a project financing zone from all hotels located in the zone that would be available to the owners of qualified hotel projects under Section 151.429(h) if the hotels were qualified hotel projects, excluding the amount of that revenue received by a municipality: (i) under Section 351.156 or 351.157 in connection with a qualified hotel located in the zone that exists on the date the municipality designates the zone, except as provided by Paragraph (B); or (ii) under Section 351.102(c) for a hotel project described by Section 351.102(b) and located in the zone that exists on the date the municipality designates the zone; and (B) tax revenue collected from all permittees under Chapter 183 at hotels located in the zone, excluding revenue disbursed by the comptroller under Section 183.051(b). (3) "Incremental hotel-associated revenue" means the amount in any calendar year by which hotel-associated revenue, including hotel-associated revenue from hotels built in the project financing zone after the year in which a municipality designates the zone, exceeds the base year amount. (4) "Project financing zone" means an area within a municipality: (A) that the municipality by ordinance or by agreement under Chapter 380, Local Government Code, designates as a project financing zone; (B) the boundaries of which are: (i) within a three-mile radius of the center of a qualified project; or (ii) if designated by a municipality described by Section 351.001(7)(B) on or before December 31, 2024, a continuous geographic area the total area of which is less than or equal to the maximum area allowed under Subparagraph (i) that contains the qualified project; (C) the designation of which specifies: (i) for a zone the boundaries of which are prescribed by Paragraph (B)(i), the longitude and latitude of the center of the qualified project; or (ii) for a zone the boundaries of which are prescribed by Paragraph (B)(ii), the exact boundaries of the zone; and (D) the designation of which expires not later than the 30th anniversary of the date of designation. (5) "Qualified project" means: (A) a convention center facility or venue and any related infrastructure; or (B) a multipurpose arena or venue that includes a livestock facility and is located within or adjacent to a recognized cultural district, and any related infrastructure, that is: (i) located on land owned by a municipality or by the owner of the venue; (ii) partially financed by private contributions that equal not less than 40 percent of the project costs; and (iii) related to the promotion of tourism and the convention and hotel industry. (6) "Venue" and "related infrastructure" have the meanings assigned by Section 334.001, Local Government Code. (b) This section applies only to a qualified project located in: (1) a municipality with a population of at least 700,000 but less than 950,000 according to the most recent federal decennial census; (2) a municipality that contains more than 70 percent of the population of a county with a population of 1.5 million or more; (3) a municipality described by Section 351.001(7)(B); (4) a municipality described by Section 351.152(61); (5) a municipality with a population of at least two million; or (6) a municipality described by Section 351.152(14) with a population of more than 250,000. (c) In addition to the uses provided by Section 351.101, revenue from the municipal hotel occupancy tax may be used to fund a qualified project. (d) A municipality may pledge the revenue derived from the tax imposed under this chapter from a hotel located in the project financing zone for the payment of bonds or other obligations issued or incurred to acquire, lease, construct, improve, enlarge, and equip the qualified project. (e) A municipality may pledge for the payment of bonds or other obligations described by Subsection (d) the local revenue from eligible tax proceeds as defined by Section 2303.5055(e), Government Code, from hotels located in a project financing zone that would be available to the owners of qualified hotel projects under that section if the hotels were qualified hotel projects, excluding any amount received by the municipality: (1) in connection with a qualified hotel, as defined by Section 351.151, located in the zone that exists on the date the municipality designates the zone; or (2) for a hotel project described by Section 351.102(b) and located in the zone that exists on the date the municipality designates the zone. (f) A municipality shall notify the comptroller of the municipality's designation of a project financing zone not later than the 30th day after the date the municipality designates the zone. Notwithstanding other law, the municipality is entitled to receive the incremental hotel-associated revenue from the project financing zone for the period beginning on the first day of the year after the year in which the municipality designates the zone and ending on the last day of the month during which the designation expires. The municipality may pledge the revenue for the payment of bonds or other obligations described by Subsection (d). (g) The comptroller shall deposit incremental hotel-associated revenue collected by or forwarded to the comptroller in a separate suspense account to be held in trust for the municipality that is entitled to receive the revenue. The suspense account is outside the state treasury, and the comptroller may make a payment authorized by this section from the account without the necessity of an appropriation. The comptroller shall begin making payments from the suspense account to the municipality for which the money is held on the date the qualified project in the project financing zone is commenced. If the qualified project is not commenced by the fifth anniversary of the first deposit to the account, the comptroller shall transfer the money in the account to the general revenue fund and cease making deposits to the account. (h) The comptroller may estimate the amount of incremental hotel-associated revenue that will be deposited to a suspense account under Subsection (g) during each calendar year. The comptroller may make deposits to the account and the municipality may request disbursements from the account on a monthly basis based on the estimate. At the end of each calendar year, the comptroller shall adjust the deposits and disbursements to reflect the amount of revenue actually deposited to the account during the calendar year. (i) A municipality shall notify the comptroller if the qualified project in the project financing zone is abandoned. If the qualified project is abandoned, the comptroller shall transfer to the general revenue fund the amount of money in the suspense account that exceeds the amount required for the payment of bonds or other obligations described by Subsection (d). (j) A local government corporation may act as a municipality under this section and is considered to be a municipality for purposes of this section. (j-1) A local government corporation to which this subsection applies may act as a municipality under this section and is considered to be a municipality for purposes of this section. With respect to a local government corporation to which this subsection applies, the term "qualified project" includes a venue and any related infrastructure. This subsection applies only to a local government corporation that: (1) is authorized to collect a municipal hotel occupancy tax; and (2) is located in a county with a population of 3.3 million or more. (k) For a municipality described by Subsection (b)(2), the term "qualified project" means only a convention center facility or a venue described by Section 334.001(4)(A), Local Government Code, and any related infrastructure. (l) For a municipality described by Subsection (b)(3) or (4), the term "qualified project" also means a venue described by Section 334.001(4)(A), Local Government Code, and any related infrastructure. Added by Acts 2013, 83rd Leg., R.S., Ch. 127 (S.B. 748), Sec. 1, eff. September 1, 2013. Amended by: Acts 2023, 88th Leg., R.S., Ch. 644 (H.B. 4559), Sec. 229, eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 779 (H.B. 5012), Sec. 1, eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 779 (H.B. 5012), Sec. 2, eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 927 (S.B. 2220), Sec. 1, eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 927 (S.B. 2220), Sec. 2, eff. September 1, 2023. Acts 2023, 88th Leg., R.S., Ch. 1110 (S.B. 1057), Sec. 1, eff. September 1, 2023. Acts 2025, 89th Leg., R.S., Ch. 204 (H.B. 1620), Sec. 19.003, eff. September 1, 2025. Acts 2025, 89th Leg., R.S., Ch. 204 (H.B. 1620), Sec. 19.004(a), eff. September 1, 2025. Acts 2025, 89th Leg., R.S., Ch. 204 (H.B. 1620), Sec. 19.004(b), eff. September 1, 2025. Acts 2025, 89th Leg., R.S., Ch. 520 (H.B. 2313), Sec. 1, eff. September 1, 2025. Acts 2025, 89th Leg., R.S., Ch. 520 (H.B. 2313), Sec. 2, eff. September 1, 2025.