Patent Troll Reform
Patent Troll activity has plagued commercial businesses including hotels with frivolous lawsuits alleging patent infringement for often bogus patent claims. SB 1457 creates a state law cause of action that will allow businesses such as hotels that have been sued in a frivolous patent infringement lawsuit to counterclaim that the suit was brought in bad faith, and allows the Texas Attorney General to pursue a case against entities filing frivolous patent lawsuits or making unwarranted demands. SB 1457 passed and has been signed by the Governor.
Local Hotel Tax Use
Nassau Bay. Use of Hotel Tax for Improvements to a Marina Based on Impact to Hotel Activity. The City of Nassau Bay requested legislation to expand the use of local hotel tax revenues: HB 1585 by Representative Dennis Paul. The initial filed version of the bill would have allowed Nassau Bay to use up to 45% of its hotel tax revenue for general construction and maintenance projects, projects improving the visual appeal of areas, and projects updating signage; as well as up to 15% of the local hotel tax revenue for peace officers, firefighters, emergency medical services personnel, or other local government employees working at special events attended by large numbers of tourists.
THLA opposed the original version of legislation. At the sponsor’s request, THLA rewrote the bill to tighten the provisions to ensure appropriate uses of the hotel tax that would have a direct and measurable impact on local hotel activity. The bill now:
- Allows the use of hotel tax for a convention center, marina, visitor center meeting room, or hotel facility that that substantially enhances hotel activity in the city.
- The facility must also be owned by a city and be located within a 1,000 feet of a hotel property.
- The total amount spent may not exceed the amount of hotel revenue attributable to events at that facility for the fifteen year period following the construction of the improvement.
- The City must annually publish a report noting the hotel activity that is generated from activities funded by this expenditure of hotel tax.
- The expenditures by the City for this purpose are subject to a requirement to refund the hotel tax fund from the City’s General Fund if the project does not have the required ROI in hotel activity.
South Padre Island. Use of Hotel Tax for EcoTourism Activities and Viewing Facilities for SpaceX. HB 1717 allows the City of South Padre Island to use a limited amount of hotel tax revenue for the promotional and event expenses for an ecological tourism event if the majority of the event’s participants are tourists, and if the event substantially increases economic activity at area hotels. The bill also allows South Padre Island to expend local hotel tax on expenses related to the improvement of sites for hotel guests to observe spacecraft launches. Both of these uses are capped to a combined total of no more than 15% of the hotel tax collected by the municipality. THLA worked cooperatively with the City of South Padre to secure passage of this bill. HB 1717 has been signed by the Governor.
Convention Center Hotel Bills: El Paso, Frisco, McKinney, Nacogdoches, Odessa, Round Rock, and Tyler. A number of bills were filed to allow the following cities to use hotel tax revenue to construct a convention center hotel: El Paso, Frisco, McKinney, Nacogdoches, Odessa, Round Rock, and Tyler. These bills add these cities to existing authority held by other communities to use hotel occupancy tax revenue for the construction of a convention center hotel project. Referred to as “qualified hotel projects,” only the hotel tax revenue generated by the particular convention center hotel can be used to pay for the project. Additionally, those cities are entitled to receive a rebate of state hotel occupancy taxes, state sales taxes, and state alcoholic beverage taxes from the eligible project for the first 10 years after the project opens for occupancy. THLA requested and received vital language in these bills to protect the continued funding for the area CVB at historic levels. HB 1964 has been signed by the Governor.
Sporting Facility Funding Bills: Victoria; San Marcos and Bastrop; Bryan and College Station; Pecos, Pleasanton, and Dilley.
Victoria: Use of Hotel Tax for Sports Facilities Generating Hotel Activity: HB 3595 will allow the City of Victoria to use a portion of its hotel tax revenue to construct new sports facilities. THLA worked closely with Victoria before the session to create language that will ensure the sports facility will greatly impact lodging activity, and also to ensure the City continues to fully fund advertising and promotion of the hotels in the area. HB 3595 has been signed by the Governor.
San Marcos and Bastrop: Use of Hotel Tax for Sports Structures Including Rodeo Facilities that Generate Hotel Activity. HB 3615 will add the City of San Marcos and Bastrop to a list of cities that can use hotel tax revenues to improve certain sports facilities. Existing law includes strict requirements for return-on-investment for the hotel industry from these facilities. This expansion of eligible cities for this purpose was supported by THLA. Additionally, the type of eligible sports facilities has been expanded to include rodeo facilities. HB 3615 has been signed by the Governor.
Bryan and College Station: Use of Hotel Tax for Sporting Related Facilities or Fields. HB 3629 provides authority for Bryan and College Station to use hotel tax revenue for new sporting facilities or fields. The bill imposes the following requirements on such expenditures:
1.The facilities and/or fields must be owned by the municipality.
2.A majority of the events at the facility or field must be directly related to a sporting event that substantially increases hotel activity.
3.The city may not use hotel tax for the acquisition of the land.
4.The facilities must meet strict requirements for return on investment for the hotel industry.
5.The city may not spend more on the facility or field than will be generated in hotel revenue from sporting events held at that facility over the next five years.
6.The city must publish an annual report of the actual room night and economic impact of events held at the facility or field.
7.The city must reimburse the hotel tax fund for any deficit between the amount spent on the facility from hotel tax and the amount of hotel revenue generated from events at the facility over the subsequent five years.
THLA and the Brazos Valley hotel community worked closely with the two cities to ensure the new authority will benefit all parties. HB 3692 has been signed by the Governor.
Pecos, Pleasanton, and Dilley: Criteria for Bonds to Build Sporting Facilities with Hotel Tax. HB 3772 provides authority for Pecos, Pleasanton, Jourdanton, and Dilley to issue bonds payable with hotel tax revenue for certain limited sporting facilities. THLA negotiated with these cities to ensure:
1.The sporting facilities will have the requisite amount of hotel impact before they are funded
2.The cities must annually report the room night and economic impact of events held at the facility.
3.The cities may not expend more hotel tax on the facility improvements than will be generated in room night revenue from events held at the facility over a set number of years.
HB 3772 has been signed by the Governor.
Midland County Technical Correction: HB 2019 recodifies existing law to clarify Midland County’s hotel tax authority. This bill does not provide a substantive law change; rather it merely corrects a technical issue in the Tax Code. HB 2019 has been signed by the Governor.
New Two Percent County Hotel Occupancy Tax for Bell County (HB 4037)
This legislative change arose from a last minute committee substitute that included a new two percent county hotel tax for Bell County that would be used to fund an Expo Center. There was a split among area hoteliers with certain Belton hoteliers favorable to the Expo Center tax and hoteliers in other cities within the county in opposition. However, all of the involved cities passed resolutions in favor of the new Expo Center proposal and the bill including this amendment passed the Legislature. THLA was able to negotiate a commitment by Bell County to use a portion of the county hotel tax for additional marketing of the area hotels. The bill has been signed by the Governor.
Franchisor Not Considered the Employer of Franchisee Employees. SB 652 affirms existing state caselaw by providing that a franchisor is not considered to be the employer of a franchisee’s employees. This legislation is in response to a troubling federal NLRB ruling on this issue that is on appeal right now. SB 652 has been signed by the Governor.
Voluntary Hiring Preference for Veterans. HB 3547 allows private employers to adopt a policy giving a preference in employment decisions regarding hiring, promotion, or retention to a veteran over another qualified applicant or employee. The bill provides that granting such a preference does not violate existing employment discrimination laws. HB 3547 has been signed by the Governor.
Workers Comp Maximum Wage Thresholds for Injured Employees. SB 901 amends the Labor Code to raise from $8.50 an hour to $10 an hour the maximum wage threshold under which an injured employee is entitled to a temporary income benefit under the Texas Workers' Compensation Act. This amount is calculated for the first 26 weeks after the injury, in an amount equal to 75 percent of the amount computed by subtracting the employee's weekly earnings after the injury from the employee's average weekly wage. SB 901 is supported by the Texas business community, and has been signed by the Governor.
Food Service Bills
Food handler training programs (SB 582)
THLA partnered with the restaurant industry on SB 582 to make it less costly and burdensome for employees to obtain food handler training and certification. Currently, most local jurisdictions require employees who work in the F&B department of a hotel to obtain a certification for food handling. This is usually a responsibility of the employee (or the job applicant) to complete an online course, and then print out a paper certificate. However, many cities require the food service worker to also secure a stamp on the certificate by a city employee, and the food service worker must pay an additional fee for this stamp. This fee is usually in the $10 to $15 range.
The legislative change eliminates the requirement for the food service worker to take the certificate to the city and pay an additional fee for this stamp. In exchange, SB 582 requires the employee be certified through one of the American National Standards Institute (ANSI) approved food handler courses. These ANSI approved courses are offered online. Many hotel brands already require an ANSI certified course. SB 582 has been signed by the Governor.
Clarification on Allowance of Food and Beverages in Swimming Pools.
THLA partnered with the attractions industry on HB 2430, a bill that clarifies that it does not violate state law for food and beverages to be consumed in swimming pools and swimming pool areas. Antiquated state agency rules prohibited food and beverages in swimming pools. This state rule had gone virtually unenforced. THLA and the tourism attractions industry worked with the state agency on a state law that formally repeals the state agency rule prohibiting consumption of food and drinks in swimming pools. HB 2430 has been signed by the Governor.
Food Donations Must Meet Apparently Wholesome Standard
HB 1050 requires all food donated to a charity to be “apparently wholesome” at the time of donation. THLA worked with the hotel brands and the restaurant industry to ensure this bill would not negatively affect our industry. The goal of this legislation was to clarify that a donor such as a hotel must ensure that the food was “apparently wholesome” at the time it was donated and the donor is not responsible for any changes to the food later when it is being handled by other operators. “Apparently wholesome food” is defined as: “[F]ood meet[ing] all quality standards of local, county, state, and federal agricultural and health laws and rules, even though the food is not readily marketable due to appearance, age, freshness, grade, size, surplus, or other condition.” HB 1050 has been signed by the Governor.
General Hotel Administration Bills
Independent Hair Stylist Services at Hotels for Special Events
HB 104 allows for licensed or permitted hair stylists to provide their services on-site at hotels for special events, such as weddings. Such actions would not be considered a violation of the terms of their cosmetology license. HB 104 has been signed by the Governor.
Designating an “Out of Use” Status for Escalators to Avoid Inspection Enforcement Issues
HB 3741 provides the Texas Department of Licensing and Regulation (TDLR) with authority to allow designation of “out of use” status for elevators, escalators, and related equipment when the equipment is not in compliance with safety code provisions. The bill allows building owners to take their equipment out of use and then postpone its annual inspection until such time as the equipment is brought into compliance. This change helps to protect building owners from potential enforcement proceedings for failure to have annual inspections completed on equipment that is out of service. HB 3741 has been signed by the Governor.
Reaffirming Prohibition against Assessing Surcharges on Credit Card, Gift Card, or Debit Card Transactions. SB 641 reaffirms existing law prohibiting a merchant from assessing a surcharge to accept a gift card, credit card, or debit card. Also, SB 641 provides for a new warning process from the Texas Attorney General for a merchant violating this provision whereby, a merchant is given the opportunity to correct its behavior prior to prosecution. SB 641 has been signed by the Governor.
Gift Cards with Very Low Balances to Be Refunded With Cash. HB 2391 provides that if a gift card (a “stored value card”) is redeemed in person to make a purchase, and the card’s balance is less than $2.50 following the purchase, at the consumer's request, the retailer shall refund the balance of the card to the consumer in cash. HB 2391 has been signed by the Governor.
No Exemption from State/Local Taxes for Out of State Disaster Response Companies
HB 2358 clarifies that out-of-state businesses responding to Texas disasters are not exempt from taxes, including hotel occupancy taxes. HB 2358 has been signed by the Governor.
Concealed Handgun ID as Valid Identification
HB 2739 provides that the holder of a concealed handgun license may not be denied access to goods, services, or facilities because the holder has or presents a concealed handgun license rather than a driver’s license or other acceptable form of personal identification. HB 2739 has been signed by the Governor.
Leasing to Tenants with Felony Convictions. HB 1510 releases a landlord from liability for leasing to a tenant convicted of a felony. HB 1510 has been signed by the Governor.
Housing Vouchers. SB 293 prohibits a city or county from adopting an ordinance that prohibits a landlord from considering a potential tenant’s source of income when determining whether to lease the unit (i.e. the bill allows landlords to consider housing vouchers as a factor in determining whether to lease to that applicant).