# OF TEXAS

January 16, 1974
The Honorable Maurice Coats Executive Director Texas Commission on theArts and Humanities 403 Sixth Street Austin, ~Texas 78701 Opinion NO. H- 209 Re: Allowable uses of revenue created at the local level by the Hotel Occupancy Tax Dear Mr. Coats: Your request for an opinion concerns whether ornot the City of Temple may use aportion ofthe revenue collected from the Hotel Occupancy

. Tax to contract with the Temple Cultural Activzti’es ~Center for cultural services to the community. From a broadei’perspeotive, you ask “can units of.10&l government use revenues collected.f,rom the Hotel Occupancy Tax to contract with nongovernmental organizations which provide appropriate programs or services provided in [Art. ] 1269j-4.1, [V. T. C.S.]?” You have advised us ofthe following facts:

’ “‘The Temple Cultural Activities Center is a nonprofit corporation. . . . Itis a membership organization which provides programs inthe arts and humanities for all of Temple.
... . The Center sponsors performances of music, theatre, and dance, exhibits ofthe visual arts, programs in.thehumanities, and avaried program of instruction in all ofthese areas. “The Center has nine organizational members [including the Temple Civic Theatre, the Temple Boys Choir, etc.]

. . . ., These groups have a combined membership of approximately 1,200 persons. They provide the’major artistic and non-academic humanistic programsfor almost LOP,000 people.

p. .982The Honorable Maurice Coats, page 2 (H-209)

“The Center’s main purpose is the development of programs inthe arts for the general public of central Texas. . . .” The Hotel Occupancy Tax towhich you refer is authorized byArt. 1269j-4.1, V. T.C.S., which applies toincorporated cities with a population of 8.500 or more. The population of Temple, aHome Rule City, exceeds that figure. Section 3c ofthe statute reads:

“(a) The revenue derived fromany occupancy tax authorized or validated by this Act may only be used for:

“(I) the acquisition of sites for and the construction, improvement, enlarging, equipping, repairing, operation, and maintenance ofconvention center facilities including, butnot limited to, civic center convention building 8, auditoriums, coliseums, and parking areas or facilities for the parking or storage ofmotor vehicles or other conveyances located at or in the immediate vicinity ofthe convention center’ facilities:

“(2) thefurnishing offacilities, personnel and materials for the registration of convention delegates or registrants;

“(3) for advertising for general promotional and tourist advertising ofthe city and its vicinity and conducting a solicitation and operating program toattract conventions and visitors either bythe city or through contracts with persons or organizations selected ,bythe city. ,I I,

. . . . The powersof cities are wholly statutory, Home Rule cities, such as Temple, can contract with private persons or entities for the provision of services its citizens require, Article 1176, V. T. C.S. See Barrington v. Cokinos, 338 S.W. 2d 133(Tex. 1960); City of Big Spring v. Board of Control4

p. 983The Honorable Maurice Coats, page 3 (H-209)

404 S.W. 2d 810 (Tex. 1966); City of Crosbyton v. Texas-New Mexico Utilities Co., 157S.W. 2d 418 (Tex. Civ.App., Amarillo, 1942, writ ref., want merit). However, we do not believe the permissible uses ofoccupancy tax revenues include general efforts to support the arts. Itmay be that the programs you describe, in certain situations, could have the ancillary effect of contributing toa “solicitation and operating program to attract conventions and visitors, ” butas you state inyour inquiry, their main purpose is the development ofprograms inthe arts for the general public of central Texas. Befdrk Hotel Occupancy Tax funds could be used to purchase services, activities or programs for thedevelopme‘nt of’,the arts, we believe they would need tobe directly related to the attraction of conventions or tourists. The question ofwhether such services or activities have such a direct relationship is ultimately one offact for the courts, but should the city determine initially that a particular program would be developed as a means directly related toattracting conventions and visitors, we think it might then contract with the Center for such aprogram, and legally fund the contract with Hotel Occupancy Tax funds. Although we are sympathetic with efforts to support the arts, it is our conclusion that **the statutory**  provisions for use of occupancy tax revenues do not permit expenditures from those funds for -general cultural or artistic activities except in the limited instances where the activity is developed land carried ,outso as to be directly related to the attraction of conventions or tourists. SUMMARY The City of Temple may not use revenue collected from the hotel occupancy tax to contract for operation of the Temple Cultural Activities Center, except for programs which are developed so as to directly relate to the attraction of conventions and visitors to the city. Very truly **yours,**

Attorney General of Texas

p. 984The Honorable Mallrice Coats, page 4 (H-209)

Opinion Committee

p. 985