TITLE: Relating to the authority of certain municipalities to use certain tax revenue for hotel and convention center projects and other qualified projects.

SUMMARY: Relating to the authority of certain municipalities to use certain tax revenue for hotel and convention center projects and other qualified projects.

FULL TEXT:
AN ACT relating to the authority of certain municipalities to use certain tax revenue for hotel and convention center projects and other qualified projects. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 351.1015, Tax Code, is amended by adding Subsection (m) to read as follows: (m) Notwithstanding any other provision of this section, a municipality may pledge or commit revenue under this section for only one qualified project. After a municipality pledges or commits revenue under this section for a qualified project, the municipality may not ever again pledge or commit revenue for a subsequent qualified project under this section. For purposes of this subsection, the term "municipality" includes a local government corporation created to aid and act on behalf of the municipality. This subsection may not be construed to prohibit a municipality from pledging or committing revenue under this section for a subsequent qualified project that is authorized by an act of the legislature that becomes law on or after January 1, 2026. SECTION 2. Section 351.102, Tax Code, is amended by adding Subsections (a-1), (b-1), and (b-2) to read as follows: (a-1) Notwithstanding Subsection (a), a municipality with a population of more than 1.5 million may not pledge or commit revenue under that subsection for the payment of principal of or interest on bonds or other obligations issued to pay the cost of the acquisition and construction of a convention center hotel or the cost of acquisition, remodeling, or rehabilitation of a historic hotel structure if the acquisition, construction, remodeling, or rehabilitation is commenced after December 1, 2016. This subsection may not be construed to prohibit a municipality with a population of more than 1.5 million from pledging or committing revenue under Subsection (a) for the payment of principal of or interest on bonds or other obligations for the acquisition, construction, remodeling, or rehabilitation of a historic hotel structure if the pledge or commitment of revenue for that purpose is authorized by an act of the legislature that becomes law on or after January 1, 2026. (b-1) Notwithstanding Subsection (b) or (c) and except as provided by Subsection (b-2), a municipality may pledge or commit revenue under Subsection (b) for only one hotel project. After a municipality pledges or commits revenue under Subsection (b) for a hotel project, the municipality may not ever again pledge or commit revenue for a subsequent hotel project under that subsection. This subsection may not be construed to prohibit a municipality from pledging or committing revenue under Subsection (b) for a subsequent hotel project that is authorized by an act of the legislature that becomes law on or after January 1, 2026. (b-2) A municipality that before January 1, 2025, pledged or committed revenue under this section for more than one hotel project: (1) is not subject to Subsection (b-1); and (2) may not on or after January 1, 2025, pledge or commit revenue under Subsection (b) for another hotel project unless that hotel project is authorized by an act of the legislature that becomes law on or after January 1, 2026. SECTION 3. Section 351.1021, Tax Code, is amended by adding Subsection (f) to read as follows: (f) An eligible municipality may pledge or commit revenue under this section for only one multipurpose convention center facility project. After an eligible municipality pledges or commits revenue under this section for a multipurpose convention center facility project, the municipality may never again pledge or commit revenue under this section for a subsequent multipurpose convention center facility project. For purposes of this subsection, the term "eligible municipality" includes a local government corporation created to aid and act on behalf of the municipality. This subsection may not be construed to prohibit a municipality from pledging or committing revenue under this section for a subsequent multipurpose convention center facility project that is authorized by an act of the legislature that becomes law on or after January 1, 2026. SECTION 4. Section 351.1022, Tax Code, is amended by adding Subsection (f) to read as follows: (f) A municipality may pledge or commit revenue under this section for only one hotel project. After a municipality pledges or commits revenue under this section for a hotel project, the municipality may never again pledge or commit revenue under this section for a subsequent hotel project. This subsection may not be construed to prohibit a municipality from pledging or committing revenue under this section for a subsequent hotel project that is authorized by an act of the legislature that becomes law on or after January 1, 2026. SECTION 5. Section 351.106, Tax Code, is amended by adding Subsection (d) to read as follows: (d) In this subsection, "qualified project" has the meaning assigned by Section 351.1015. Notwithstanding any other provision of this section, a municipality may pledge or commit revenue under this section for only one qualified project. After a municipality pledges or commits revenue under this section for a qualified project, the municipality may not ever again pledge or commit revenue for a qualified project. This subsection may not be construed to prohibit a municipality from pledging or committing revenue under this section for a qualified project that is authorized by an act of the legislature that becomes law on or after January 1, 2026. SECTION 6. Section 351.155(c), Tax Code, is amended to read as follows: (c) A municipality may pledge or commit revenue under this section for only one qualified project. After a municipality pledges or commits revenue under this section for a qualified project, the municipality may not ever again pledge or commit revenue for a qualified project. This subsection may not be construed to prohibit a municipality from pledging or committing revenue under this section for a qualified project that is authorized by an act of the legislature that becomes law on or after January 1, 2026. SECTION 7. Section 351.155(d), Tax Code, is repealed. SECTION 8. The changes in law made by this Act do not affect the validity of a bond, contractual obligation, or other obligation for which revenue was pledged, committed, or authorized by a municipality under Subchapter Bor C, Chapter 351, Tax Code, including an obligation relating to a qualified project under Section 351.1015 of that code, before the effective date of this Act. Bonds, contractual obligations, or other obligations for which revenue was pledged or committed before that date are governed by the law in effect when the revenue was pledged or committed, and that law is continued in effect for the purposes of the validity of those bonds, contractual obligations, and other obligations. SECTION 9. This Act takes effect January 1, 2026.