Texas Senate’s interim charge on HOT-related legislation

Interim Charge

We want to make sure you are aware that Lt. Governor Dan Patrick (President of the Texas Senate) recently released his interim charges for Texas Senate committees prior to the 2025 session. Interim charges often play an important part in forming legislation that will be filed and considered in the upcoming legislative session. You can view the full list of charges here.
We met with the staff of the Senate Committee on Natural Resources and Economic Development to discuss what they anticipate will be considered when they take up this charge. We were told that the charge appears to be driven by legislative staff members and not necessarily by a particular legislator. The committee staff anticipate that the final report on this charge will consider the following potential items and possibly others that could be raised in outside testimony to the committee.

Potential Items

1. Best practices for legislative consideration of new potential uses of the local hotel tax.

The Committee will likely refine a template for consideration of proposed new local hotel tax legislation offered each session by Texas cities and counties. As you may recall, THLA provided a template for new local hotel tax bills to this committee in the prior interim report on this issue. We will refine and update this protocol for the Committee’s consideration.

2. Potential analyses of the data collected by the Texas Comptroller’s office each year from Texas cities and counties on expenditures of the local hotel occupancy tax.

As you may recall, THLA worked with Texans for the Arts to draft and pass a bill last session requiring every Texas city and county to report how much and what percentage of their total local hotel tax revenues collected are spent on each of the statutory categories for local hotel tax expenditures. The Comptroller’s report also requires cities and counties to indicate any annual and cumulative surplus in local hotel tax funds.

Our Next Steps

Once this information is available, THLA staff will analyze the expenditures of hotel tax for each of the local hotel tax use categories and how expenditures vary by city size and geographic regions. We will also partner with cities and counties with a surplus of HOT revenues to consider potential uses under existing law for their surplus funds to directly impact local tourism and hotel activity. Through this analysis and partnerships with our local governments, we hope to promote enhanced transparency and accountability in the use of local hotel tax revenue, which are the two goals cited in this interim committee charge.
The Senate Committee will meet at the Texas Capitol for a public hearing on this charge on June 13th, 2024. THLA will testify on the resources we will provide to help further their goals. We will also provide in advance to the committee a draft template and recommendations on the above-noted items the Committee staff can consider incorporating into the final committee report. If you would like to visit with us as we prepare our comments and template, please do not hesitate to get in touch with us. 
Please let us know if you have any questions or if there is further information that we can provide.

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