OF TEXAS 

January 16, 1974 

The Honorable Maurice Coats 

Executive Director 

Texas Commission on the Arts 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 a portion of the 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 of the following facts: 

’ “‘The Temple Cultural Activities Center is a nonprofit 

corporation. . . . It is a membership organization which 

provides programs in the arts and humanities for all of 

Temple. . . . . The Center sponsors performances of 

music, theatre, and dance, exhibits of the visual arts, 

programs in .the humanities, and a varied program of 

instruction in all of these 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. .982 
The Honorable Maurice Coats, page 2 (H-209) 

“The Center’s main purpose is the development of 

programs in the arts for the general public of central 

Texas. . . . ” 

The Hotel Occupancy Tax to which you refer is authorized by Art. 

1269j-4.1, V. T. C.S., which applies to incorporated cities with a population of 8.500 or more. The population of Temple, a Home Rule City, 

exceeds that figure. Section 3c of the 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 of convention center facilities 

including, but not limited to, civic center convention 

building 8, auditoriums, coliseums, and parking areas 

or facilities for the parking or storage of motor vehicles 

or other conveyances located at or in the immediate 

vicinity of the convention center’ facilities: 

“(2) the furnishing of facilities, personnel and materials 

for the registration of convention delegates or registrants; 

“(3) for advertising for general promotional and tourist 

advertising of the city and its vicinity and conducting a 

solicitation and operating program to attract conventions 

and visitors either by the city or through contracts with 

persons or organizations selected ,by the 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. 983 
The Honorable Maurice Coats, page 3 (H-209) 

404 S. W. 2d 810 (Tex. 1966); City of Crosbyton v. Texas-New Mexico 

Utilities Co., 157 S. W. 2d 418 (Tex. Civ.App., Amarillo, 1942, writ ref., 

want merit). However, we do not believe the permissible uses of occupancy 

tax revenues include general efforts to support the arts. It may be that the 

programs you describe, in certain situations, could have the ancillary effect 

of contributing to a “solicitation and operating program to attract conventions and visitors, ” but as you state in your inquiry, their main purpose 

is the development of programs in the arts for the general public of central 

Texas. Befdrk Hotel Occupancy Tax funds could be used to purchase services, activities or programs for the developme‘nt of’,the arts, we believe 

they would need to be directly related to the attraction of conventions or 

tourists. The question of whether such services or activities have such a 

direct relationship is ultimately one of fact for the courts, but should the 

city determine initially that a particular program would be developed as a 

means directly related to attracting conventions and visitors, we think it 

might then contract with the Center for such a program, 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 ,out so 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. 984 
The Honorable Mallrice Coats, page 4 (H-209) 

Opinion Committee 

p. 985