.
October 18, 1988
Honorable James L. Anderson, Jr. Opinion No. JM-965
Aransas County Attorney
Aransas County Courthouse Re: Whether a municipal-
301 N. Live Oak ity may utilize a portion
Rockport, Texas 78382 of the hotel-motel tax
for supplementing the
operations budget for
certain recreational
facilities and related
questions (RQ-1438)
Dear Mr. Anderson:
You ask whether the city of Rockport may use a portion
of its hotel tax for supplementing the operations budget for
city recreational facilities at Rockport Beach.
. Section
. _. . 350.002
. of the .Tax Code authorizes
municipalities to impose a tax on tne use or possession of a
hotel room. M Tax Code 55 351.001(5); 156.001 (d;::n:;y
qlhotelt*for purposes of section 350.002). Section .
of the Tax Code provides:
(a) Revenue from the municipal hotel
occupancy tax may be used only for:
(1) the acquisition of sites for and
the construction, improvement, enlarging,
equipping, repairing, operation, and
maintenance of convention center
facilities;
(2) the furnishing of facilities,
personnel, and materials for the
registration of convention delegates or
registrants:
(3) advertising for general promotional
and tourist advertising of the
municipality and its vicinity and
conducting a solicitation and operating
P* 4912
Honorable James L. Anderson, Jr. - Page 2 (JM-965)
program to attract conventions and
visitors either by Tthmunicipality or
through contracts persons
organizations selected bY t::
municipality:
(4) the encouragement, promotion,
improvement, and application of the arts,
including instrumental and vocal music,
dance, drama, folk art, creative writing,
architecture, design and allied fields,
painting, sculpture, photography, graphic
and craft arts, motion pictures, radio,
television, tape and sound recording, and
other arts related to the presentation,
performance, execution, and exhibition of
these major art forms; and
(5) historical restoration and
preservation projects or activities:
(A) at or in the immediate vicinity
of convention center facilities: or
(B) that would be frequented by
tourists and visitors to the
municipality.
(b) It is the intent of the legislature
that revenues derived from the tax authorized
by this chapter are to be expended in a man-
ner directly enhancing and promoting tourism
and the convention and hotel industry.
Although you do not describe in detail the facilities
at Rockport Beach or their operation, the information you
provide suggests that the facilities are used for general
recreation rather than for any of the purposes set out in
section (a) of article 351.101.
It has been suggested that subdivision (b) of article
351.101, which provides that is the intent of the legisla-
ture that the hotel tax be used to promote tourism and the
convention and hotel industry, adds to the purposes for
which the hotel tax may be used. We conclude, however! that
section (b) does not add to section (a). Rather, it limits
it by providing that when money is spent for one of the
purposes listed in subsection (a), it should be done so in a
manner that promotes tourism and the convention and hotel
industry.
p. 4913
Honorable James L. Anderson, Jr. - Page 3 (JM-965)
The language of section 351.101 set out in the text of
this opinion was adopted by the 70th Legislature as part of
a nonsubstantive revision of statutes relating to local
taxation. Acts 1987, 70th Leg., ch. 191, p. 1410 (herein-
after "Chapter 191"). Section 351.101 was a recodification
of former section 3c of article 12693-4.1, V.T.C.S.
Another bill adopted by the 70th Legislature purported
to amend subsection (a) of section 3c of article 12693-4.1,
which Chapter 191 expressly repealed. Acts 1987, 70th Leg.,
ch. 1125, p. 3856 (hereinafter "Chapter 1125"). That bill
purported to amend subsection (a) of section 3c of article
12693-4.1 as follows:
(a) The revenue derived from any occupancy
tax authorized or validated by this Act may
only be used to nromote tourism and the
convention and hotel industrv. and such use
is limited to the followinq [for]:
(1) 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 buildings, auditoriums, coliseums,
civic theaters, museums, 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 [adverkising---Ser] general
promotional and tourist advertising of the
city and its vicinity and conducting a
solicitation and operating a program to
attract conventions and visitors either by
the city or through contracts with persons or
organizations selected by the city:
(4) the encouragement, promotion,
improvement, and application of the arts,
including music (instrumental and vocal),
dance, drama, folk art, creative writing,
architecture, design and allied fields,
painting, sculpture, photography, graphic and
p. 4914
I
.
Honorable James L. Anderson, Jr. - Page 4 (JM-965)
craft arts, motion pictures, television,
radio, tape and sound recording, and the arts
related to the presentation, performance,
execution, and exhibition of these major art
forms:
(5) historical preservation and
restoration projects or activities at or in
the immediate vicinity of convention center
facilities or historical preservation and
restoration projects or activities located
elsewhere in the city that would be
frequented by tourists and visitors to the
city.
Chapter 1125 amended subsection (c) of section 3c as
follows:
Re nue (I~-is-the-ia~ea~-ef-~he--~eg~s~Q~~~e
thzz---revenues] derived from the tax
authorized by this Act & [are] to be
expended solely in a manner directly
enhancing and promoting tourism and the
convention and hotel industry as oermitted in
Subsection (a) of this section. Such revenue
Shall not be used for the aeneral revenue
p rn es or aeneral a0 ernmental onerations
(UnderlXning indicates new
i&i&- . overstriking indicates deleted
language:)
The repeal of a statute as part of a recodification
does not affect an amendment of the statute by the same
legislature that enacted the code. The amendment *
preserved and given effect as part of the code provisio?
Gov't Code 5 311.031(c). .Therefore, the substance of
Chapter 1125 is be be given effect. We think that Chapter
1125 was intended to clarify, rather than change, the
existing law, in regard to the purposes for which the city
hotel tax may be spent. a Bill Analysis, S.B. No. 1532,
70th Leg. (prepared for House Committee on Ways and Means);
see also Attorney General Opinion JM-690 (1987). In any
case, no matter how the prior law was interpreted, Chapter
1125 provides unequivocally that the promotion of tourism
and the convention and hotel industry is not a separate,
general category for which cities may use the hotel tax.
Rather, the law requires that when a hotel tax is used for
one of the purposes set out in section (a) of article
351.101, it must also have the effect of promoting tourism
and the hotel and convention industry.
p. 4915
Honorable James L. Anderson, Jr. - Page 5 (JM-965)
You also ask whether the hotel tax may be used to
reduce the debt on bonds issued under article 12693-4.1,
V.T.C.S. Article 12693-4.1 authorizes cities to issue
revenue bonds for the westablishment, acquisition, purchase,
construction, improvement, enlargement, equipment or repair"
of a variety of public improvements. Section 351.102(a) of
the Tax Code provides:
Subject to the limitations provided by
this subchapter, a municipality may pledge
the revenue derived from the tax imposed
under this chapter [the hotel tax] for the
payment of bonds that are issued under
Section 3, Chapter 63, Acts of the 59th
Legislature, Regular Session, 1965 (Article
12693-4.1, Vernon's Texas Civil Statutes),
for one or more of the nurnoses nrovided bv
Section 351.101. (Emphasis added.)
That provision allows the hotel tax to be used for payment
of bonds issued under article 12693-4.1 only if the bonds
were issued for one of the purposes set out in section
351.101 of the Tax Code. In other words, section 351.102(a)
does not expand the purposes for which the hotel tax may be
used. Rather, it merely provides that the tax may be used
for payment of bonds that were issued for purposes listed in
section 351.101 as well as for direct expenditures for
purposes listed in section 351.101.
We do note that section 351.105 does permit an
"eligible coastal municipality" that levies a hotel tax of
at least seven percent to use a portion of the tax for
certain recreation facilities that "serve the purpose of
attracting visitors and tourists to the municipality." An
eligible coastal municipality is @Iahome-rule municipality
that borders on the Gulf of Mexico and has a population of
less than 80,000." Tax Code 8 351.001(4). Because you
state that Rockport "does not adjoin a Gulf of Mexico
beach," we need not consider whether section 351.105 would
permit the use of the tax for operation of the type of
facilities you ask about.
p. 4916
Honorable James L. Anderson, Jr. - Page 6 (JM-965)
Section 351.101 of the Tax Code sets out
the exclusive purposes for which the
municipal hotel tax may be used. The tax may
not be used for the operation of general
recreational facilities.
JIM MATTOX
Attorney General of Texas
MARYKELLER
First Assistant Attorney General
LOU MCCREARY
Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLHY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Sarah Woelk
Assistant Attorney General
p. 4917