KEN PAXTON
ATTORNEY GENERAL OF TEXAS
January 30, 2017
The Honorable Dennis Bonnen Opinion No. KP-0131
Chair, Committee on Ways & Means
Texas House of Representatives Re: Authority of a municipality to use hotel
Post Office Box 2910 occupancy tax revenue to fund a feasibility
Austin, Texas 78768-2910 study and the construction; operation, and
maintenance of a performing arts center
(RQ-0122-KP)
Dear Representative Bonnen:
You inquire about a municipality's authority to use revenue from its local hotel occupancy
tax to fund a feasibility study for a performing arts center as well as the construction, operation,
and maintenance of the center. 1 You tell us the City of Lakeway ("City") has commissioned a
feasibility study to build and operate a performing arts center (the "Center") "that includes a theater
with 500 to 800 fixed seats." See Request Letter at 1. You also tell us that the Center would
include "a small conference center that would accommodate 150 to 200 people and a hotel." Id
at 1-2. You explain that the City indicates the "use of the [Center] would directly promote tourism
and the hotel and convention industry in the City" as the Center "would be designed to ... have a
regional.and statewide draw." Id Finally, you state that the City expects the Center "will help to
establish the City as a destination location for culture and entertainment, and to attract visitors t