COMMISSIONERS' COURT AGENDA REQUEST
MADE BY: William H. Williams~_ OFFICE: Commissioners Court
~z'r . ~-3
MEETING DATE: Segt3 2000 TIME PREFERRED:
SUBJECT: (PLEASE BE SPECIFIC)
Consider and discuss various funding methods available to finance construction and
furnishing Hill Count, Youth Exhibition Center Master Plan for renovation and
expansion.
EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON)
NAME OF PERSON ADDRESSING THE COURT:
ESTIMATED LENGTH OF PRESENTATION:
IF PERSONNEL MATTER -NAME OF EMPLOYEE:
Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter
551 and 552, Government Code, is as follows:
Meeting scheduled for Mondays:
THIS REQUEST RECEIVED BY:
THIS REQUEST RECEIVED ON:
Commissioner Pct. #2/Pct. #3
5:00 P.M. previous Tuesday.

All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been
prepared for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be
appreciated and contribute towazds you request being addressed at the earliest opportunity. See Agenda Request Rules
Adopted by Commissioners' Court.
10-'lo 'f:C 16::i
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ROBERT ~'. HE!vDER50:ti
ManaLinq 1)irectar
Phone: (210} 805.1115
Fu: (21Uj M115'1119
!X'YF>IMFYI' FNYICLK
M V[l'IMEFI aAR KIN.:
!)ctober 18, 2001;
Honorable County Judge &:
Members of the Comrnissioue.-'s Court
ken County
700 Main St.
Kelrvilie, Texas '1802&
Re' Public Events Facility
Dear Judge and 1'vtembers of t}te Coun:
Last Tuesday I met ~~nth Commasioners VVillauns and Letz to discuss funding options for the
proposed 1'ublec Events Facility. Ai this meeting, they asked ate to memorialize our conversation in the
:o~m of a wnuen repots, have it verified with bond counsel and submit to the Court for disaussior, at its
regular c;wrt tnettine on Monday. October 22. I am happy to respond to this request.
Backeroand
Tne Public Evcnts s'arlity Kerr County is currently contempiatiag cap be nuanced in a number
of ways including a lease revenue bm/d issue, debt secured by ad valorem taxes (either voted General
Obligation bonds or Ccnificates of Obligation), Economic Development Corporation Sales Tax
Revenue Bonds or through what is known as a '`Venue" financing under Chapter 334 of the Texas
Lora! Gove.*nment Cnde ("Chapter 334"}.
The Facility is currently estimated to coz approximately 38.0 million although. it is believed that
it could b2 pY:ased in 6y separating the second arena ffom initial construction. This wotild save
approximately 31.0 million ir. initial costs.
Estimates pra~~ded in regards to the IiotellMotel tax receipts indicate that a 5% levy by the
County would produce a total of $656,b30. At ttte maximum allowed rate of 7°10, the County could
raise 3933,283. The current level of Htl/A4tl taxes is 6% for the State and 6°.o for the City of Kerrville
For a total of 12%. A 5% increase would take it to 13%, a 7% increase would take it to 1S%. The.
maximum under col rent state cap for "regular" HtL^Atl taxes is 20°io. 'Ihe difference lies in the City not
maximizing its levy at 7%.
Information provided by bond counsel indicates that under Chapter 334, Texas Local
Goverunem Code, regarding i'erue taxes, it may be possible to raise the Htllhltl taxes another Z°io
above the general State cap. Based on the above estimates, it is possible to project this Z% to produce
another $2155,652 in such taxes bringing the total to 31, i 19,935 with a total tax rate of 21°~6
1 i3 T:ce]v-.e F:v~., sane 1CK: (710' 855-1 t(Kt Dw~ Rau.,.Lu iuccrpi:rated
Sam Antoniu,'rh 7".?C`' i8"i3 N.,x f11G) 805-i i45 MenSer NYSE.'4?C
]g rs~,ro ;n.zc~ .~27o soy 7_ ~, nv:~, ea-;~s<~:~tz w~.,~.
Hc~rcat:e : rmm~ ]udge
ant C'~aunsni;per's Covet
Octcuer Ia. 2tiU0
Fags 2
Financing Alternatives
'Ihe first altcrnarve mentioned above rs a lease revenge bond issue. This would involve the
County setting up a wfiotly owned wlrsidiary ton-profit "pubhc fadlities corporation" which would act
as the issuer of debt to finance the protect. This corporation would build the facility and lease it to the
Crn~nty uruier an annual appropriation, lease. This lease would be the secr:rity for repayment on the
wrporation's deb*.. The lease would be payable from any lawful funds of the County and therefore,
typically carry a rating of ! ; of a scale lower than tae County's General Obligation debt. This iiabi&ty
would be rc4larted on tae County's fi*rancial stateme its a3 a long-tern[ capital lease. Beoacse this wculd
ce a lease revenue bond issue, the Financing wuu!d require the utilizati•_n of a debt service coverage
ratio ccvenaut
Tne second option mentioned is debt secured by ad valorem Woes. This can occur through
eith~• voted Genetat Obligation Bards or Certi&oafes of Ubligatior:. The most practical method would
be to slue Certificates of Obligation which would carry a combination pledge of revenues including
i-itLTvSiI taxes levied Ly the County and possibly certain venie taxes (if appro~red by the voters -see
below fig further explanation with respect to venue taxes). To the eaetit that such revenues aze
sutticient to meet deb' service, there would be no requirement to aettielly lery a ta+i. tinder this option,
there would be no coverage ratio c:zvenarts.
Tile third option tnentioned is asking the voters to approve the Fublic Events Facility as a
"venue project" and appzve one or [Hare "venue taaes'' under Chapter 334 to E~tarice the venue
project. A "venr:e project" under Chapter 334 inciedes "art arena, coltse:rrn, stadium ur other type of
arena ~r atilt shut is used ur is_,.l:urute~or ore for one or more professional or amateur .goerrts
e:'tarts, ~ommunrt~event~ or others evetKs,~~:judittr rodeos livesta:k ,chrnvs, agricultural
exnusitio~, promotional events,_catd other civic or chariduhte events (andJ or wh,'cft a fee for
~ssirn: to the events is charged or is planned to be charged. " Chapter 334 would permit Kerr
County to impose up m Sve types of venue taxes, if approved by the voters, to finance the Public
Events Facility as a venue project, which are as follows:
Sales tend Use Tav: Additional sales and use tax in li8th¢ increments up to i/2¢ - brt
imposition of the adtiitiaial tax cannot cause total sales and use tax anywhere in the
County to exceed 8.25°!°. Sfnee the total sales tax rate in the City of Kerrvr7le is already
at 8.25%, additional sales taxes to ficanee the Public Events Facility essentially is not
available (although Section 334.085 provides that a sstes tax levied by certain other
"taxing authorities".. which include industrial development corporations created under
Section 4A or 4B - i.e. the Kerrville Economic Improvement Corporation, would
automatically be reduced to srconvnudate the Chapter 334 sales tax within the 3.25%
limit if approved by datersl-
to is no ae za ~zte, scs r~u' U~,i~~ a:av5~t.cs
. ?3xorsble Courryludg~:
and Cornntisxicner's Ccu~s
(.lc.+n5er aR. 7CNin
Page 3
2. Shorn.-Term iv[otor Vehicle Rental Tax: additional ta,: en mo*.or vehi^le rerttais in
i/5'th°'° increments up to 5% of the grass rental cost on rental vehicles.
3. Ai1113ieFisrns :'fie e~Jax: Tax on tickets for slants at venue project in an atnount nut to
ex:xed 10°~i, of pri;:e ..f ticket.
a Paatcv~ ~• Tax on parking at venue project up to ~; per vel-~icle.
5 No?e1-Motel Tax: additions! hotel-m,~tel tax ttp to i% of p*icn paid for a hotelJmatel
mom within County.
As mertlarred shoos, increasing the hotel-motel tax by an additional :'% is estimated to produce
approximately $266,652. I `eve no estimate at this time as to the amount of revenues which could be
generated avth the Motor Vehicle Rerttal Tax, the AdmJssians 'Cat or the Packing Tax.
T'ne fouiZh option mentioned was funding from an Economic l)evelopnteot Sales 'fez under
the Developmentl'orr~aration Act cf 1979 Oniy certain municipalities are authorized to levy an
acuromic dev~npment salt; tax c approved by the voters. A, you know, in 1995 the voters of the City
o£ Kerrville approved a ~':¢ "economic development sales tax which i5 used by the City_ of Kerrville
Economic Improvement Corporation (the "Kerrville EIC"j to fund ceataia economic development
protects. 'The KemiLe Ei~ has pledged those taxes to support a series of revenue bonds issued in 1994
to finance various projects. Although the Development Corporation Act does not soecifically state that
projects funded with the City's Erononcc Development Sales Yax must hr. l-.hated witlur the City limits,
Bond Caunsel for the County doa; not believe that the .4ttorna}r Cienersl would pertnlt the Kerrnlle
EiC to issue bonds to finance tiro Coumy's Public Events Facility if it is not located within the Cit<~
limits, On the other h;md. Bond Counsel has indicated that there is language in 4he Development
Corporation Act •,vl»ch would support a decision of the Kerrville ESC Beard o.° D~redors to make a
monetary contribution to the Public Events Facility whether or trot it is located within the City limits.
:'he Atwmay General's office, which tends to take a moro restrictive view regarding use of econorrac
development sales taxes„ would not be required to renew chat decision. O: course, general counsel ror
the Kerrville E1C would most likely oe asked by his Board to separately advise the Board as to the
legality of such actron,
Analysis
As a practice! master, a g7.0 million project financed over 20 years would require (assuming an
insured issue at 5.75%j approximately $590,000 in annual debt service pagrcnents.
1GilA G9 ].C: [i '$_"1C 9C3 1115 UdIN Ndl;SGHGx
Hanorable Cour~h~ 7udKe
and Commissioner's Court
Oc+.nber 18, 2000
Pa~c 4

If a struettrre were utilized which required a debt service coverage ratio. the rnirimal practical
ratio would be LSx coverage. 'Ilus translates into a required revenue stream of $3RS,000. With the
implementation of the full 7"/" HtUMtI tax available (with legislaWrc's approval to thr County) thin
mould be a viable option.
A more pracrticai and wst-effective manner to h.~utdle this transaction would be for the County to
issue a Curnbination Tax anA Revenue CertLScates of Obligation pledging the Geunty's ; ItIlIYIt] taxes (at
5° q $Sti6,ti30). Itl this manner the County will have achieved the financing at the lowest costs possible,
avoided a venue tax eiekion and not exceed l7°~ on total HtU'hftl taz levies. The County could finance
the full $Y 0 million utilizing Certificates of Obligation and a 6% H_I/Mtl tax levy. To &nan[ang the Fall
$8.0 without utilizing Certificates would require both the maximum 7°% rate and the additioeal 7%
undtr Chapter 334. TLus wouiJ bring the total Ht'JMtI tax rate to 21° ~.
if there is x.nyti:ing else l cal[ do to assist you, please do not hesitate to call on me.
i ~j~ ~~
iJ ~/ `
Robert V. Henderson
Managin& DIrCGt07
RVH/mjs
MEMORANDUM
To: Jonathan Letz, Commissioner Pct. 3
From Bill Williams, Commissioner,Pct. 2
Jonathan:
Attached hereto is a copy of the 1999 Hotel/Motel gross bed receipts
for properties within the city limits of Kerrville as prepared by the Kerrville
Convention and Visitors Bureau. Gross receipts upon which taxes were
levied were $9,690,829.
Also attached is a listing of all the properties within the county's
jurisdiction, outside the city's jurisdiction upon which we could levy a
hotel/motel tax if given authority by the Texas Legislature. The gross
receipts upon which a tax could be levied last year totaled $3,632,753.
If Kerr County were permitted to levy a 4% tax on all properties within
the Kerrville city limits, the annual revenue generated for us would be
approximately x$,7.633.
If Kerr County were to levy a 7% bed tax on properties outside
Kerrville city limits, the amount that could be raised is approximately
$254.925.
The combined bed tax that could be raised annually is ~641.Q~,.
This could go a long way toward servicing our debt for a HCYEC expansion
and improvement project.
1 firmly believe Commissioners Court should approve a resolution
requesting State Rep. Hilderbran to author local legislation that would
enable us to levy up to 5% on city properties and up to 8% on county
properties. We should also propose to Rep. Hilderbran that this taxing
authority be removed 3 years after the debt on the property is retired. This
extra time would enable us to build up a reasonable capital improvement
fund far future use.
If we can successfully gamer Kerrville EIG participation of $1 Million
or more, and obtain other funding, this could be a done deal WITHOUT
having to ask our taxpayers to assume any of the debt. There may be other
grant monies available, and we should pursue these vigorously. For
example, I have learned that Texas Parks and Wildlife ham grants
available for purposes such as this, and there may be others.
Given that we already fund the expenses over revenue generated at
HCYEC as a budgetary line item, we can assume that this practice will
continue into the future. However our goal, at the very least, should be to
arrive at an operational break-even point. Attached for your information is
a printout from CVB of potential business that could be attracted to our new
facility. This list was compiled by CVB from their knowledge of business
fumed away due to lack of adequate facilities. Again, I believe we would be
wise to contract with CVB to be our agent--for promotion and bookings.
Finally, attached is a copy of Chapter 352, County Hotel Occupancy
Taxes, Subchapter A., Imposition and collection of tax. This, too, was
provided to us by Sudie Burditt, who has been very helpful to date and
supportive of our efforts.
With this information now available, and whatever we learn from a
meeting with Bob Henderson, if you concur, this matter should be put
before our colleagues--the sooner the better--like the meeting of Sept. 25.
If the Court likes this approach, we can then seriously begin to obtain the
required resolutions of support from other jurisdictions that will be required
to accompany our resolution asking for taxing authority.
c. Judge Henneke
HOTEUMOTEL GROSS RECEIPTS
KERRVILLE, TEXAS
1999
	1st Qtr	2nd OV	3rd Otr	4th Otr	TOTAL
BUDGET INN	71,416	108,645	124,657	101,155	405,873
CLUBHILL	3,845	11,194	9,401	9,666	34,106
COTTAGE BR RIVER	1,292	0	0	3,088	4,380
D. SMITH	3,845	11,194	9,401	9,666	34,106
DAYS INN	77,798	119,001	112,348	91,40	309,147
ECONO LODGE	113,532	204,129	192,530	153,677	663,868
EXECUTIVE INN	70,957	64,368	0	43,782	179,107
FLAGSTAFF	44,248	53,163	59,844	50,083	207,338
GUADALUPE RV	8,960	27,770	37,436	19,019	93,185
HILLCREST INN	40,612	60,482	22,307	41,037	164,438
HOLIDAY INN YO	492,556	810,624	762,923	560,464	2,626,567
INN O/T HILLS	493,414	755,749	690,764	576,147	2,516,074
KARTEX CORP.	126,875	189,756	171,783	157,784	646,198
KERRVILLE B&B	0	110	0	0	110
MORNING GLORY	200	1,147	1,679	560	3,586
MOTEL 6	83,161	119,986	124,649	109,873	437,669
QUALITY INN	39,944	0	0	0	34,427
RIVER RUN BB	16,838	20,772	13,839	15,244	66,693
SANDS	42,818	55,289	53,269	48,390	199,766
SUNDAY HOUSE	170,561	276,376	276,636	217,298	940,871
T. WARREN	3,845	11,194	9,401	9,666	34,106
W. RECTOR	3,845	11,194	9,401	9,666	34,106
WITTLINGER	1,725	6,635	9,989	6,162	24,511
YO RANCH RESORT	0	0	0	30,589	30,376
ZIMMER FRIE	0	0	220	0	220
TOTAL	1,912,288	2,918,778	2,692,477	2,173 016	9,690,829
TAXABLE RECEIPTS for COUNTY PROPERTIES
KERB COUNTY, TEXAS 1999
	1st Otr	2nd Otr	3rd Qtr	4th Qtr	TOTAL
CENTER POINT					
MARIANNE'S	485	885	515	340	2,225
LA LUNA LINDA	670	830	1,053	546	3,099
					
INGRAM					
AL LADO DEL RIO ~	5,433	5,125	5,810	2,050	18,418
HUNTER HOUSE INN	55,114	64,524	77,472	58,758	255,868
LAZY HILLS GUEST RANCH	45,640	146,974	124,906	36,848	354,368
RIVER OAKS	920	6,030	17,090	5,095	29,135
RODDY TREE RANCH	9,353	43,372	41,928	18,515	113,168
SLIM'S PLACE	0	0	0	695	695
TOP OF THE HILL	860	2,159	2,365	1,220	6,604
WALTONIA	9,535	40,438	51,153	13,929	115,055
					
HUNT					
WALDEMAR	120,881	68,746	49,839	84,279	323,745
CASA BONITA	10,430	49,813	82,670	28,970	171,883
CASA DE LAS ESTRELLAS	7,215	720	640	700	9,275
CASA DEL RIO	885	2,490	3,911	1,140	8,426
CEDARSTONE B&B	3,236	5,542	8,295	692	17,765
HEART OF THE HILLS	21,931	17,631	27,238	34,107	100,907
JOY SPRING RANCH B&B	1,335	1,165	375	830	3,705
LYNXHAVEN LODGE	3,200	13,750	16,850	2,940	36,740
PATIO RANCH	250	2,238	1,484	2,600	6,572
MO RANCH	284,471	495,662	503,298	261,272	1,544,703
RIVER BEND	2,130	1,794	0	0	3,924
RIVER ROAD B&B	1,040	1,875	4,455	3,090	10,460
SARAH BUSINESS ENT.	890	919	3,555	0	5,364
SUNDOWN CARRIAGE	3,712	6,150	9,718	2,920	22,500
THE RIVER INN	30,721	138,913	220,745	45,021	435,400
					
KERB COUNTY/KERRVI	LLE				
ARABIAN HORSE B&B	0	0	0	0	0
BONNERS PAINTED HORSE	2,468	4,285	1,657	1,763	10,173
LA REATA	905	2,580	1,035	755	5,275
LAMB CREEK	1,581	6,743	6,743	1,654	16,721
NOPALITOS	580	0	0	0	580
					
TOTAL	625,871	1,131,353	1,264 800	670 729	3,632,753
Kerr County Potential Business*
Agriculture Retailers Assn. Convention & Expo
All Breeds Horse Show
All Police Rodeo
America's Brangus Expo & Futurity Jr. Show
American Assn. Of Bovine Practitioners
American Belgium Blue Asan.
American Brahman Breeders Assn.
American Bralers Assn.
American Cowboy Team Roping Assn.
American Dairy Goat Assn.
American Donkey & Mule Society
American Fire Sprinkler Assn.
American Goat Society
American Hereford Assn.
American Indian Horse Registery
American Jr. Paint Horse Assn.
American Jr. Rodeo National Trials
American Miniature Horse Assn.
American Painted Horse Assn.
American Quarter Horse Show
American Rabbit Breeders Assn.
American Society of Agronomy
American West Cutting
Antique Shows
Antique Tractor & Engine Show
Appaloosa Horse Club
Arabian Horse Asan.
Assn. Of Progressive Rental Organizations
Austin Kennel Club
Automotive Oil Change Assn.
BBRA Jackpot
Beefmaster Breeders Universal
Beverly Manroe Hunter/Jumper
Big Country Quarter Horse Winter Circuit
Biggest Little Horse Show
Booger Barter Team Roping
Bud Light Team Roping
Buttons Howard Productions
Capitol Area Quarter Horse Assn.
Centex Hunter/Jumpers
Central Texas Arabian Horse Club
Char-Swiss Breeders Assn.
Charreada -Equestrian Event
City Farm -Farmer Stockman Show
Commodity Classic
Construction Safety and Health
Continental Antiques
Country Peddler Show
Dodge Circuit Finals Rodeo
Egyptian Horse Club
Farm Equipment Mfg. Assn.
Farm Equipment Wholesale Assn.
Farm Toy Show
Farmfest
Fear Not Productions
Food Safety Summit & Expo
Foundation Seed Service
Gem & Mineral Show
Grain Elevator & Processing Assn.
Guadalupe Valley Quarter Horse Breeders Show
High Plains Extravaganza Mini Horse show
Horns and Hooves Bull Riding
Hunter-Jumper Spectacular
Independent Electrical Contractors of Texas
International Arabian Horse Show
International Assn. Of Brangus Breeders
International Braford Assn.
International Food & Agribusiness Mgmt Assn.
International Texas Longhorns Assn.
Lester Meier Youth Rodeo Final
Lions Club Jr. Rodeo
Lone Star Corn Growers
Lone Star Peruvian Classic
Longhorn Breeders Assn.
Longhorn Region #9
Megabucks Main Attraction Bull Riding
Military Rodeo
Milking Systems & Parlors
Model Aircraft Show
Model Train Show
MS All-Star Rodeo
National Agri Marketing Conference & Expo
National Barrel Horse Assn.
National Beefmaster Assn.
National Cutting Horse Assn.
National Cutting Horse Futurity
National Cutting Horse Summer Show
National Grain Sorghum Producers Assn.
National Pet Products Controlled Marketing
National Reining Horse Assn.
National Show Peruvian
National Tractor Parts Dealer Assn.
North Texas Antique Tractor & Engines Club
Original Coors Team Roping World Finals
Original Team Roping
Paint Horse Club
Paintorama Labor Day Classic
Palamino Horse Breeders of America
'Pawnee Bill Traveling Wild West Show
Peruvian Horse Assn.
Pinto Horse Assn. Of America
PRCA Dodge Series Rodeo
PRCA Rodeos
Pro-Youth National Rodeo Finals
Quarter Horse Breeders Show
Quilting Club Shows
Red Angus Assn. Of America
Regional Jr. College Rodeo
Rope America
Royal Lipizzaner Stallion Show
San Antonio Horse Show Open
San Antonio Kennel Club
San Antonio Livestock Show Culling
Santa Gertudis Breeders International
Sheriffs Posse Rodeo
South Texas Barrel Racing
South Texas Pintos Horse Show
Southwest Championship Foxtrot
Southwest Team Penning Assn.
Sussex Cattle Asen. Of America
SW Championship Show
SW Miniature Horse Show
TABSRIA, All Breed Horse Show
TCI Expo
Texas Ag Industries Assn.
Texas Aggregate and Concrete Assn.
Texas Agricultural Aviation Assn.
Texas American Saddle Horse Assn.
Texas Angus Assn.
Texas Antique Tractor Pullers Assn.
Texas Appaloosa Horse Club
Texas Arabian Horse Club
Texas Assn. Of Landscape Contractors
Texas Assn. Of Rental Agencies
Texas Beef Council
Texas Bowling Centers
Texas Brangus Breeders Assn.
Texas Chefs Assn.
Texas Citrus Mutual
Texas Cotton Ginners' Assn.
Texas Cotton Growers Cooperative Assn.
Texas Cotton Producer Assn.
Texas Cowboy Reunion
Texas Cushman
Texas Draft Horse and Mule Assn.
Texas Electric Cooperatives
Texas Firefighters Rodeo
Texas Food Processors Asan.
Texas Fruit Growers Assn.
Texas Goat Ropers
Texas Grain Sorghum Producers Asan.
Texas Grape & Wine Growers Assn.
Texas Hereford Asan.
Texas Limousin Assn.
Texas Longhorn Breeders Assn. Of America
Texas Milk Producers Assn.
Texas Paint Horse Club
Texas Palomino Exhibitors
Texas Pecan Growers Assn.
Texas Polled Hereford Assn.
Texas Ponies of America
Texas Poultry Federation and Afilliates
Texas Quarter Horse Assn.
Texas Red Poll Assn.
Texas Reining Horse Assn.
Texas Rose Research Foundation
Texas Safety Assn.
Texas Senior Rodeo
Texas Shorthorn Assn.
Texas SimmentaUSimbrah Asan.
Texas Six Man Coaches Assn.
Texas State Horticultural Society
Texas Taxidermists Competition
Texas Team Roping
Texas Thoroughbred Breeders Assn.
Texas Turfgrass Assn.
Texas Vegetable Assn.
Texas Youth Rodeo State Finals
Travis County Kennel Club
U.S. Custom Harvesters, Inc.
United States Dressage Federation
United States Team Penning
United States Team Roping
US Team Roping Lone Star Regional Finals
US Team Roping South Texas Championships
X-Treme Bull Riding
*Events needing climate-controlled arena
or more than 10,000 square feet of exhibit
space.
Texas High School Rodeo
CHAPTER 352. COUNTY HOTEL OCCUPANCY TAXES
SUBCHAPTER A. IMPOSITION AND COLLECTION OF TAX
Sec. 352.001. Definitions.
In this chapter:
(1) "Hotel" has the meaning assigned by Section 156.001(1).
(2) "Convention center facilities" or "convention center complex" means civic centers,
civic center buildings, auditoriums, exhibition halls, and coliseums that are owned by the
county or that are managed in whole or part by the county. The term includes parking
areas or facilities that are for the parking or storage of conveyances and that are located
at or in the immediate vicinity of other convention center facilities.
(3) "Tourism" means the guidance or management of tourists.
(4) "Tourist" means an individual who travels from the individual's residence to a
different municipality, county, state, or country for pleasure, recreation, education, or
culture.
(5) '~/isitor information center" or "tourism information center" means a building or
portion of a building used to distribute or disseminate information to tourists.
Added by Acts 1987, 70th Leg., ch. 191, Sec_ 1, eff. Sept. 1, 1987.
Amended by Acts 1993, 73rd Leg., ch. 643, Sec. 1, eff. Sept. 1, 1993.
Sec. 352.002. Tax Authorized.
(a) The commissioners courts of the following counties by the adoptwn of an order
or resolution may impose a tax on a person who, under a lease, concession, permit,
right of access, license, contract, or agreement, pays for the use or possession or for
the right to the use or possession of a room that is in a hotel, costs $2 or more each
day, and is ordinarily used for sleeping:
(1) a county that has a population of more than two million;
(2) a county that has a population of 90,000 or more, borders the
Republic of Mexico, and does not have three or more cities that each have a population
of more than 17,500;
(3) a county in which there is no municipality;
(4) a county in which there is located an Indian reservation under the
jurisdiction of the United States government;
(5) a county that has a population of 17,500 or less, that has no more
than one municipality with a population of less than 2,500, and that borders two
counties located wholly in the Edwards Aquifer Authority established by Chapter 626,
Acts of the 73rd Legislature, Regular Session, 1993;
(6} a county that borders the Gulf of Mexico;
(7) a county that has a population of less than 5,000, that borders the
Republic of Mexico, and in which there is located a major observatory;
(8) a county that has a population of 10,000 or less and borders the
Toledo Bend Reservoir;
(9) a county that has a population of less than 10,000 and an area of less
than 275 square miles;
(10) a county that has a population of 30,000 or less and borders Possum
Kingdom Lake;
(11} a county that borders the Republic of Mexico and has a population of
more than 250,000 and less than 500,000;
Text of subd. (12) as added by Acts 1997, 75th Leg., ch. 117, Sec. 1
(12) a county that has a population of 29,000 or more and borders or
contains a portion of Lake Fork Reservoir.
Text of subd. (12) as added by Acts 1997, 75th Leg., ch. 417, Sec, 1
(12) a county that borders the Republic of Mexico and in which there is
located a national recreation area.
Text of subd. (i2) as added by Ads 1997, 75th Leg., ch. 418, Sec. 1
(12) a county that borders the Republic of Mexico and in which there is
located a national park of more than 400,000 acres.
Text of subd. (12) as added by Acis 1997, 75th Leg., ch. 469, Sec. 1
2
(12) a county that has a population of 25,000 or less, that has no more
than four municipalities, and that is located wholly in the Edwards Aquifer Authority
established by Chapter 626, Acts of the 73rd Legislature, Regular Session, 1993; and
(13) a county that has a population of 25,000 or less, whose territory is
less than 750 square miles, and that has two incorporated municipalities, each with a
population of 800 or less, located on the Frio River.
(b) The price of a room in a hotel does not include the cost of food served by the
hotel and the cost of personal services performed by the hotel for the person except for
those services related to cleaning and readying the room for use or possession.
(c) The tax does not apply to a person who is a permanent resident under Section
156.101 of this code,
(d) The tax imposed by a county authorized by Subsection (a)(4), (6), (8), (10),
(11), or (f2) to impose fhe tax does not apply to a hotel located in a municipality that
imposes a tax under Chapter 351 applicable to the hotel.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987. Amended by Acts
1988, 71`` Leg., ch. 2, Sec. 14.26(e), eff. Aug. 28, 1989; Acts 1989, 71st Leg., ch. 695,
Sec, 1, eff. June 14, 1889; Acts 1989, 71st Leg., ch. 1110, Sec. 10, eff. Oct. 1, 1989;
Acts 1991, 72nd Leg., ch. 328, Sec. 6, eff. Aug. 26, 1991; Acts 1991, 72nd Leg., ch.
597, Sec. 108, eff. Sept. 1, 1991; Acts 1991, 72nd Leg., ch. 866, Sec. 1, eff. Sept. 1,
1991; Acts 1991, 72nd Leg., 1st C.S., ch. 3, Secs. 7.02, 7,03, eff. Sept. 1, 1991.
Amended by Acts 1993, 73rd Leg., ch. t8, Secs. 1, 2, eff. April 6, 1993: Acts 1995, 74th
leg., ch. 673, Sec. 1, eff. June 15, 1995; Acts 1997, 75th Leg., ch. 117, Sec. 1, eff. May
19, 1997; Acts 1997, 75th Leg., ch. 417, Sec. 1, eff. May 28, 1997; Acts 1997, 75th
Leg,, Ch. 4t8, Sec. 1, eff. May 28, 1997; Acis 1997, 75th Leg., ch. 469, Sec. 1, eff. Sept.
1, 1997.
Sec. 352.003. Tax Rates
(a) t=xoept as provided by this section the tax authorized by this chapter may be
imposed at any rate not to exceed seven percent of the price paid for a room in a hotel
or, until January 1, 2001, eight percent of the price paid for a room in a hotel in a county
with a paputatlon of more than two minion.
(b) The county tax rate in a municipality that has a population of 1,200,000 or
more may not exceed two percent of the price paid for a room in a hotel.
(c) The rate in a county that does na! have a municipality may not exceed four
percent of the price paid for a room in a hotel.
3
(d) The tax rate in a county authorized to impose the tax under Section
352.002(a)(12) may not exceed three percen! of the price paid for a room in a hotel.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987. Amended by Acts
1989, 71~ Leg., ch. 2, Sec. 14.25(a), eff. Aug. 28, 1989.
Amended by Acts 1995, 74th Leg., ch. 591, Sec, 1, eft. Sept. 1, 1995; Acts 1997, 75th
Leg., ch. 418, Sec. 2, eff. May 28, 1997.
Sec 352.0031. Preexisting Contracts.
If a county increases the rate of the tax authorized by this Chapter, the increased
tax rate does not apply to the tax imposed on the use or possession of a room under a
contract executed before October 1,1989, that provides for the payment of the tax at
the rate in effect when the contract was executed, unless the contract is subject to
change or mod cation by reason of the tax rate increase. The Nax rate applicable to the
use or possession of a room under the contract is the rate in effect when the contract
was executed.
Added by Acts 1989, 71st Leg., ch. 1110, Sec. 12, eff. Oct. 1, 1989.
Sec. 352.004. Tax Collection: Penalty.
(a) The owner or operator of a hotel shall report and send the taxes collected
under this chapter to the county as provided by the resolution or order imposing the tax.
(b} If the owner fails to report when required or pay the tax when due, the owner
shall pay a penalty of five percent of the amount of the tax due. If the owner fails to file
the report or pay the tax before the 31 st day after the date that the report or tax
payment was due, he shall pay an additional penalty of five percent of the amount of the
tax due.
(c) Delinquent taxes and accrued penalties draw interest at the rate of 10 percent
a year beginning 60 days after the date on which the lax was due.
(d) The county attorney may bring suit against a person who is required to collect
the tax imposed by this chapter and pay the collections over to the county and who has
failed to file a tax report or pay the tax when due to collect the tax not paid or to enjoin
the person from operating a hotel in the county until the tax is paid or the report filed, as
applicable, as provided by the court's order. The remedy provided by this subsection is
in add'Rion to other available remedies.
Added by Acts 1987, 70th Leg., ch. 181, Sec. 1, eff. Sept. 1, 1987. Amended by Acts
1989, 71~' Leg„ ch. 1110, Sec. 11, eff. Oct. 1, 1889.
4
Sec. 352.OOa, collection Procedur_e_s on Purchase of Hotel
(a) if a Ferson who is liable for the payment of a tax under this chapter is the
owner of a irarei and sells the hotel, the successor to the seller or the sellers assignee
shall withhold ar. amount of the purchase price sufficient to pay the amount due until the
seller provroes a receipt by a person designated by the county to provide the receipt
showing that tnr amount has been paid or a cert~cate showing that no taxis due.
(b) The c.r;r~haser of a hotel who fails to withhold an amount of the purchase price
as required by tars section is liable for the amount required to be withheld to the extent
of the value of the purchase price.
(c) T he purchaser of a hotel may request that the person designated by the county
to provide a receipt under Subsection (a) issue a certificate stating that no tax is due or
issue a staremerrt of the amount required to be paid before a certificate may be issued.
The person cies,gnated by the county shat) issue the certificate or statement not later
than the 6Ltr, ;lay after the date that the person receives the request.
(d) If the person designated by the county to provide a receipt under Subsection
(a) fails to ,55,+e' the certificate or statement within the period provided by Subsection
(c), the purchaser is released from the obligation to withhold the purchase price or pay
the amount di+~
Added by Acts ;991, 72nd Leg., ch. 328, Sec. 2, eff. Aug. 26, 1991.
Sec. 352 Oc?_~. f~eimbursement for lax Collection Expenses.
A county may permit a person who is required to collect and pay over to the
county the rax authorized by this chapter not more than one percent of the amount
collected and required to be reported as reimbursement to the person for the costs in
collecting the tax.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
Amended cy Acts 1993, 73rd Leg., ch. 643, Sec. 2, eff. Sept. f, 1993.
Sec. 352 QJ_ Exemption.
(a) A novemmentat entity excepted from the tax imposed by Chapter 156 under
Section t 5~~ t 03(a)(1) or (a)(3) shalt pay the tax imposed by this chapter but is entitled
to a refund ct the tax paid.
(bl A person who is described by Section 156.103(d) is exempt from the payment
of the tax authorized by this chapter.
(c) A person who is described by Section 156.103(c) shall pay the tax imposed by
this chapter but the state governmental entity with whom the person is associated is
entitled to a refund of the tax paid.
(d) To receive a refund of a tax paid under this chapter, the governmental entity
entitled to fhe refund must fife a refund claim on a form provided by the county and
containing the information required by the county. The comptroller by rule shall
prescribe the form that must be used and the information that must be provided.
(e) A governmental entity may file a refund claim with the county under this
chapter only for each calendar quarter for all reimbursements accrued during that
quarter. The county may adopt a resolution to enforce this section.
Added by Acts 1989, 71st Leg., ch. 504, Sec. 3, eff. Sept. 1, 1989. Renumbered from
Sec. 352.006 by Acts 1990, 71st Leg., 6th C.S., ch. 12, Sec. 2(33), eff. Sept. 6, 1990.
Amended by Acts 1995, 74th Leg., ch. 454, Sec. 8, eff. Sept. 1, 1995
SUBCHAPTER 13. USE AND ALLOCATION OF REVENUE
Sec. 352.101 Use of Revenue: Counties of More Than Two Million Persons.
{a) The revenue from a tax imposed under this chapter by a county having a population
of more than two million may be used only for:
(1) the acquisition of sites for and the construction, improvement, enlarging, equipping,
repairing, operation, and maintenance of public improvements such as civic centers,
civic center buildings, auditoriums, exhibition halls, Coliseums, and stadiums, including
sports and other facilities that serve the purpose of attracting visitors and tourists to the
county, and parking areas or facilities for the parking or storage of motor vehicles or
other conveyances, hotels owned by a municipality or a nonprofd municipally sponsored
local government corporation created under Chapter 431, Transportation Code, within
1,000 feet of a convention center owned by a munlClpality with a population of
1,500,000 or more, or a historic hotel owned by a municipality or a nonprofit
municipally sponsored local government corporation created under Chapter 431,
Transportation Gode, within one mile of a convention center owned by a municipality
with a population of 1,500,000 or more;
(2) the furnishing of facilities, personnel, and materials for the registration of convention
delegates or registrants; and
(3) general promotion and tourist advertising of the county and its vicinity and
conducting a solicitation program to attract conventions and visitors, any of which may
be conducted by the county or through contracts wtth persons or organizations selected
by the county.
s
with the city having the largest popu anon m e coun .
(c) A county to which this section applies may delegate the authority to spend the
county's hotel occupancy tax revenue to a private organization only through a contract.
The contract must require the organization to select a new governing body as soon as
practicable after the contract takes effect and to limit the composition of its governing
body to not more than 54 members, and provide that the appointment, election, or other
designation of each member of the governing body be submitted to and approved by
the governing body of the county as long as the contract is in effect. The contract is not
valid unless before the contract is executed the private organization amends its charter,
bylaws, or ether governing rules to conform to the requirements of this subsection.
(d) Subsection (c) does not apply to any private entity, person, or organization that
receives tax revenue under Section 351.101(x} and makes expenditures pursuant to
Section 351.101(x)(4).
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987. Amended by Acts
1989, 71°` Leg., ch. 2, Sec. 14.26(x), eff_ Aug. 28, 1989; Acts 1989, 71st Leg., ch. 1110,
Sec. 14, eff. Oct. 1, 1989.
Amended by Acts 1993, 73rd Leg., ch. 231, Sec. 2, eff. Aug. 30, 1993; Acts 1997, 75th
Leg., ch. 165, Sec. 30.275, eff. Sept. 1, 1997.
Sec. 352.1015. Use of Revenue: General Provisions.
(a) The commissioners court of a county by contract may delegate to a person,
including another governmental entity or a private organization, the management or
supervision of programs and activities funded with revenue from the tax authorized by
this chapter. The commissioners court in writing shall approve in advance the annual
budget of the person to which it delegates those functions and shat) require the person
to make periodic reports to the commissioners court at (east quarterly listing the
expenditures made by the person with revenue derived from the tax authorized by this
chapter. The person must maintain revenue provided from the tax authorized by this
chapter in a separate account established for that purpose and may not commingle that
revenue with any other money. The commissioners court may not delegate to any
person the management or supervision of its tourist and convention programs and
activities funded wifh revenue from the tax authorized by this chapter other than by
contract as provided by this subsection. The approval by the commissioners court of
the county of the annual budget of the person to whom the commissioners court
delegates those functions creates a fiduciary duty in the person with respect to
the revenue provided by the tax authorized under the contract.
7
(b) A person with whom a county contracts under this section shall maintain
complete and accurate financial records of each expenditure of hotel occupancy tax
revenue made by the person and, on request of the commissioners court of the county
or other person, shall make the records available for inspection and review to the
commissioners court or other person.
(c) Hotel occupancy tax revenue spent for a purpose authorized by this section
may be spent for day-to-day operations, supplies, salaries, office rental, travel
expenses, and other administrative costs only if those administrative costs are incurred
directly in the promotion and servicing expenditures authorized by the applicable
provisions of this subchapter governing the use of revenue by that particular county. If
a county or other public or private entity that conducts an activity authorized by the
applicable provisions of this subchapter governing the use of revenue by that particular
county conducts other activities that are not authorized, the portion of the total
administrative costs of the entity for which hotel occupancy tax revenue may be used
may not exceed the portion of those administrative costs actually incurred in conducting
the authorized activities.
(d) County hotel occupancy tax revenue may not be spent for travel for a person
to attend an event or conduct an activity the primary purpose of which is not directly
related to the promotion of tourism and the convention and hotel industry or the
performance of the person's job in an efficient and professional manner.
(e) Revenue derived from the tax authorized by this chapter is to be expended in a
manner directly enhancing and promoting tourism and the convention and hotel industry
as permitted by the applicable provisions of this subchapter governing the use of
revenue by that particular county. That revenue may not be used for the general
revenue purposes or general governmental operations of a county.
Added by Acts 1993, 73rd Leg., ch. 643, Sec. 3, eff. Sept. 1, 1993.
Sec. 352.102. Use of Revenue- Counties Borderino Mexico
(a) Except as provided by Subsection (b), the revenue from a tax imposed under
this chapter by a county that borders the Republic of Mexico and that is further
described by Section 352.002{a)(2} may only be used for:
(1) the purposes provided by Sections 351.101(a)(1) and (2);
(2) general promotion and tourist advertising of the county and its vicinity
and conducting a solicitation program to attract conventions and visitors, any of which
may be conducted by the county or through contracts with persons or organizations
selected by the county; or
(3) the encouragement, promotion, improvement, or application of
historical preservation and restoration either by the county or through contracts with
persons or organizations selected by the county.
(b) A county that borders the Republic of Mexico and that is further described by
Section 352.002(a)(2] may use 15 percent or fess of the revenue collected each f+scat
year from the tax imposed under this chapter for the purposes provided by Section
351.101(a)(4).
(c) A county that borders the Republic of Mexico and that is further described by
Section 352.002(a}(12) shall use at least one-third of the revenue collected each fiscal
year from the tax imposed under this chapter for the purposes authorized by this
chapter in unincorporated areas of the county.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987. Amended by Acts
1989, 71"r Leg., ch. 2, Sec. 14.26(b), eff. Aug. 28, 1989; Acts 1989, 71st Leg., ch. 1110,
Sec. 15, eff. Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 273, Sec. 1, eff. Aug. 26, 1991.
Amended by Acts 1993, 73rd Leg., ch. 843, Sec. 4, eff. Sept. 1, 1993; Acts 1997, 75th
Leg., ch. A18, Sec. 3, eff. May 28. 1997.
Sec. 352.103. Use of Revenue Counties With No Municipality.
The revenue from a tax imposed under this chapter by a county that has no
municipality may be used only for:
(1) the purposes provided by Sections 351.101(a)(1), (2), and (4);
(2} advertising for general promotional and tourist advertising of the
county and conducting a solicitation program to attract conventions and visitors either
by the county or through contracts with persons or organizations selected by the
commissioners court; and
(3) historical preservation and restoration.
Added by Acts 1987, 70th Leg-, ch. 191, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 1993, 73rd Leg., ch. 643, Sec. 4, eff. Sept. 1, 1993..
Sec. 352.1031. Gener~I Limitations on Use of Revenue.
(a) F~ccept as otherwise explicitly provided, revenue derived from the tax
authorized by this chapter may be used only for the purposes stated in Section 351.101.
9
FROM +TFI&FIF7 TO +18307923230 2000.07-06 0B+2BFiM k153 P.01/03
(b) Revenue derived from fhe tex authorized by this chapter may not be used for
the general revenue purposes or general governmental operations of a county.
Added by Acts 1989, 71st Leg., ch. 1110, Sec. 9, eff. Oct. 1, 1989. Amended by Acts
1991, 72rd Leg., 1st C.S., ch. 3, Sec. 7.04, eff. Sept. 1, 1991.
Sec. 352.1032. Use of Revenue: Counties Bordering Edwards Aoulfer Authority
The revenue from a tax imposed under this chapter by a county authorized to
impose the tax by Section 352.002(a)(5) may be used only for general promotional and
tourist advertising of the county and its vicinity and for conducting a solicitation program
to attract conventions and visitors, eny of which may be conducted by the county or
through contracts with persons or organizations selected by the county,
Added by ACfs 1989, 71st Leg., ch. 1110, Sec. 16, eff. Oct. 1, 1989. Renumbered from
Sec. 352.1031 by Acts 1990, 71st Leg., 6th C.S., ch. 12, Sec. 2(34), eff. Sept. 6, 1990.
Amended by Acts 1995, 74th Leg., ch. 873. Sec. 2, eff. June 15, 1995.
Sec. 352.1033. Use of Revenue: Counties 13orderinca the Gulf of Mexico.
(a} The revenue from a tax Imposed under this chapter by a county that borders
the Gulf of Mexico authorized to Impose the tex by Section 352.002(a)(6} may be used
only to:
(1) clean public beaches;
(2) acquire, furnish, or maintain facllities, Including parks, that enhance
public access to beaches;
(3) provide and maintain public restrooms on or adjacent to beaches or
beach access facilities;
(4) provide and maintain litter containers on or adjacent to beaches or
beach access facilities;
(5) create, renovate, promote, and maintain parks adjacent to bays,
rivers, and other navigable watennrays if the r;ounty does not operate a public beach on
the Gulf of Mexico; end
(6) advertise and conduct solicitations and promotional programs to
attract tourists and convention delegates or registrants to the county or its vicinity, any
of which may be conducted by the county or through contracts with persons or
organizations selected by fhe county.
10
FROM +TFI~dMi TO +1H307923230 2000.07'06 0H+29FMa N353 P.02/03
(b) A county that borders the Gulf of Mexico and that is authorized to impose the
tax by Section 352.002(a)(8) may use 50 percent or less of the revenue from the tax for
the promotion of tourism.
Added by Acts 1991, 72nd Leg., 1st C.S., ch. 3, Sec. 7.05, eff. Sept. 1, 1991.
Amended by Acts 1993, 73rd Leg., ch. 503, Sec. 1, eff. Aug. 30, 1993; Acts 1993, 73rd
Leg., ch. 643, Sec. 4, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 185, Sec. 29.11, eff.
Sept. 1, 1997; Acta 1897, 75th Lag., ch. 284, Sec. 1, eff. May 26, 1987.
Sec. 352.104. Pledge for Bonds.
A county may pledge the revenue derived from the tax imposed under this chapter
for the payment of bonds that are issued by the county under Section 3, Article I,
Chapter 798, Acts of the 67th Legislature, Regular Session, 1981 (Article 2372d-8,
Vemon's Texas Civil Statutes), for one or more of the purposes provided by Section
352.101.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
Sec. 52.105. Allocation of Revenue: Counties of More Than Two Million.
In each county fiscal year, a county with a population of more than two million that
levies a tax under this chapter must spend for the purposes provided by Section
352.101(a)(3) an amount that is not less than 15 percent of the amount of revenue
derived from the application of the tax at a rate of one percent.
Added by Acts 1989, 71st Leg., ch, 2, Sec. 14.26(c), eff. Aug. 28, 1989.
Sec. 352.108. Use of Revenue: Certain Counties Bordering Mexico.
The revenue from a tax imposed under this chapter by a county authorized to
impose the tax by Section 352.002(a)(11) may be used for the bond debt service,
construction, maintenance, or operation of a special events facility with a seating
capacity of at least 8,000.
Added by Acts 1995, 74th Leg., ch. 873, Sec. 3, eff. June 15, 1995.
Sec. 352.107, Hotel Tax Authorized for County Development Districts.
Notwithstanding any other provision of this chapter to the contrary, a
wmmissioners court of a county with a population of less than 400,000 may impose a
hotel occupancy tax not to exceed seven percent on a person who pays for the use or
possession or for the right to the use or possession of a room in a hotel ordinarily used
11
FROM tT1~6Tf'i TO +16307923230 2000.07-06 0H+29Rfa p153 P.03/03
for sleeping that is located within the boundaries of the county development district
created under Subchapter D, Chapter 312, and that Is not located within the
corporate limits of a municipality, subject to the limitations set forth in Sections
352.002(b) and (c). Taxes collected by a county under this section shall be remitted to
the county development district not later than the 10th day aker the date the county
receives such funds and may be used by the district for the purposes for which sales
and use tax proceeds may be used by the district.
Added by Acts 1995, 74th Leg., ch. 995, Sec. 6, eff. Sept. 1, 1995.
National Recreation
A county authorized to impose a tax under this chapter by Section 352.002(a)(12)
may use the revenue from the tax only as follows:
(1) 75 percent of the revenue for the promotion of tourism; and
(2) notwithstanding Section 352.1015, 25 percent of the revenue for the
general revenue purposes or general governmental operations of the county.
Added by Acts 1997, 75th Leg., ch. 417, Sec. 2, eff. May 28, 1987. ACTS 1979--66th
LEGISLATURE
CHAPTER 841
S.B. N0.621
ACTS 1981-67th LEGISLATURE
CHAPTER 389
H.B. NO. 1708
12
.
~. ~.,
0
~~..
cy
:?~
y:rsx s:
THE ATTORNEY GENERAL
OF TERAB
~~~~ n-•'t"i'~ July 31, 1990
.;7TUN~~:1" 47EV6'R AL
Honorable Charles S, Hrack opinion Ho. JM-1I99
Chambers County Attorney
P. O. Box 1200 Re: Authority of county to
Anahuac, Texas 7751a donate money, property, or
services to nonprofit corpora-
tions that conduct local
festivals (RQ-1911)
Dear Mr, Brack:
You ask whether Chambers County may donate money,
property, or services to local, nonprofit corporations that
conduct annual festivals in the county. The Texas Rice
Festival and the Texas Salt Dome Festival promote local
products and businesses. They .each conduct an annual
festival that includes concerts, carnivals for children,
food booths, and other exhibits and programs. The Anahuac
Area Chamber o£ Commerce, which promotes Anahuac and
surrounding areas, also holds a similar festival. From time
to time, these entities have asked the county for donations
of money, property, and services provided through county-
paid employees.
Article III, section 52, and article XT, section 3, of
the Texas Constitution prohibit a county from dvnatinq
money or any other thing of value to a corporation. fey vi
Commissioners Court of_11-ar on County, 727 S,W.2d 667 (Tex.
App. - Texarkana 1987, no writ); Xordus v._City of Garland,
561 S.W.2d 260 (Tex. Civ.~App• -Tyler 1978', writ ref'd
n.r.e.), Public funds may be spent only for a'~~-public_.-
purpose. Youno v. City of Houston, 756 S.W.2d 813 (Tex.
App. - Houston [1st Dist.] 1988, writ denied); pae generally
State v, City of Austin, 331 S.W.2d 737 (Tex. 1960).
Adequate Controls, Contractual or otherwise, must govern a
transaction between a county and a private entity to insure
that the public purpose is accomplished. Xey v.
Commissioners ourt of Marion County, supra, at 669.
In Kordus v Ci v of Garland, the court held that a
taxpayer could enjoin a city's illegal donation of public
funds to a chamber of commerce. The decision cited Attorney
General Opinion H-397 (1974), which held that article iII,
section 52, of the Taxas Constitution prohibited the legis-
lature from authorizing a county to become a dues-paying
p. 6338
Honorable Charles S. Brack - Paqe 2 (JM-1199)
member of a chamber of commerce. Based on these author-
ities, we conclude that you may not make unconditional
grants of money, property, or any "thing of value" to the
entities in question.
You suggest that the county Could provide fencing,
portable toilets, police protection and other things
necessary for the health and safety of the people who attend
the festivals. 'You state that supplying such services and
things of value would not be contributions by the county to
the corporations, but would Pall within the police powers of
the county.
The commissioners court of a county has no general
police power, such as that possessed by the state and many
municipalities. Travis County v. Colunca, 753 S.W.2d 716
(TOx. App. - Austin 1988, writ denied); Commissioners' Court
of Harris County v. Raiser, 23 S.W.2d 840 (Tex. Civ. App. -
Galveston 1929, writ ref'd). The commissioners court has
the powers expressly conferred upon it by the constitution
and the legislature, as well as the implied powers necessary
to exercise powers expressly conferred. Canalas v.
I.auahlin, 21a S.W.2d 451. (Tex. 1948). Any expenditures of
county funds made in connection with the festivals must be
based on statutory or constitutional authority.
Section 122.bo1 of the Health and safety Code provides
that the commissioners court of a county may appropriate and
spend money from the county general revenues for public
health and sanitation in the county. Thus, the county has
discretion to make expenditures for public health and
sanitation needs that arise in connection with the proposed
festivals. Whether an expenditure for a particular purpose
is within the authority granted by section 122.001 depends
on the surrounding facts and circumstances. You have
provided no facts, such as whether this event will be
held in a county park. The commissioners court may make
reasonable decisions under section 122.001 to spend county
funds to protect the public health, subject to judicial
review far abuse of discretion.
Sheriffs and their deputies are peace officers, and it
is their duty to preserve the peace within their jurisdic-
tion. Code Crim. Proc. arts. 2.12, 2.13. The sheriff's
decisions as to the deployment of law enforcement officers
within the county are left to his discretion and judgment,
since this matter is not specifically prescribed by law.
Weber v. City of 5achse, 591 S.W.2d 563, 567 (Tex. Civ. App.
- Dallas 1979, no writ). The decision to assign a number of
law enforcement officers to an area where a large number of
persons are gathered for a festival is a matter !or the
sheriff's discretion, subject to judicial review for abuse
p. 6339
Honorable Charles S. Brack - Page 3 (JM-1199)
of discretion. ~d._j see generally Local Gov't Code ¢ 85.004
(appointment of reserve deputies to serve when additional
officers needed)t Attorney General Opinion H-1002 (1977).
You next ask whether Chambers County may participate
with the Texas A 6 H Agricultural Extension Service by
providing money, property, or services in sponsoring a youth
program called "Chambers County Youth Project Show," which
is similar to a livestock show. Chambers County sponsors
the show and budgets the expenditures. The extension
service handles the operation of the show through volunteer
committees of parents and other interested persons.
Section 319.001 of the Local Government Code authorizes
the commissioners court of a county to provide for annual
exhibits of "horticultural, agricultural, livestock,
mineral, and other products" that are of interest to the
community. Section 332.002 of the code authorizes a county
to establish and supervise recreational facilities and
programs. These statutes authorize a county to provide
recreational programs for youth, including a livestock show.
In Attorney General Opinion H-127 (1973) this office
determined that a county could use federal revenue sharing
funds to contract with a nonprofit corporation to provide a
recreation facility for the aged. In our opinion, Chambers
County may cooperate with and receive voluntary services
from the Agricultural Extension Service of Texas A & M
University to assist it in operating the show, but it must
retaitt sufficient control of the project to ensure that
funds budgeted by the county are used for the legislatively
authorized purposes.
S U M M A R Y
A county may not donate money to a chamber
of commerce or a similar private corpora-
tion to fund festivals that promote local
businesses and products. Where a county has
statutory authority to spend county funds to
protect public health, sanitation, and
safety, it may do so when the need for such
protection arises out of a festival held by a
private corporation. A county has statutory
authority to hold livestock shows and provide
for recreation for youth.
Very truly you
~\
J I M M A T T O X
Attorney General of Texas
n_ 6390
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The Attorney General of Texas
JlM MATTOX
Attorney General
July 26, 1984
Suorama Court Building Honorable Gary ihotttpsoa
P. 0. Box {25x8 Chairman
Aua:in, TX 787{1.2548 County Affairs Co®ti.ttee
stZruS-25ot Texas House of Representatives
Telex 9[01874.1387 P,; 0. BOX 2410
Telecopler 51214754266
Austin, Texas 78769
Opinion No. JM-184
Re: Whether revenues received
froth a hotel occupancy tax may
be used [o make improvement9
to a county golf course
714 uackaon, Suite 700 Dear Representative Thompson:
Oat:as, TX. 75202-4506
2141742.8944 You have asked whether article 1269]-4.1, V, T. C. S_, authorizes E1
Paso Couaty to use revenues from a hotel occupancy tax to purchase
4824 Alberta Ave., SuRe tso golf carts or to finance general improvements for a county-operated
EtPaaa.TX7990s-279a golf course. We first conclude that, because it is a city cox, the
9t51533J494 hotel occupancy tax authorized by article 1269]-4.1 does not apply to
E1 Paso County; moreover, ve conclude that, although there is a county
toot Texas, Suite 700 hotel, occupancy tax Chae does apply to EI Paso County, it does not
Houston, iX. 77002atit authorize [he county to use revenues from the tax to purchase golf
Tt31z23-Sa86 carte or to finance general improvements for its golf course.
eYe Broadway, Suite 31z	The legislature has ettaeted several hotel occupancy taxes.
LYDbocK TX 79401.3x79	Section 156.OSI of the Tax Code vas enacted in 1959; it provides for a
806{747.5238 ~	state hotel occupancy tax. See Acta 1959, 56th Leg., 3rd C.S., ch. 1,
	at 187, All revenues from this tax are deposited in the state
	treasury to the credit of the general revenue fund. Tax Code
4309 N. Tenth, suns 8	§ 156.251. The remaining hotel occupancy taxes are levied by local
McAtten. TX. 79601.1685
StNa82-45x7	
goveraments: some by counties and some by cities. Each of these
	ideal tax lays authorizes the local government to use the revenues
	from the tax to finance certain specified county or city projects.
200 Maln %aza. Suite 400	
San Antonly, TX. 78205.2797	The county hotel occupancy tax is authorized by article 23724-8,
5t2R2s4t9t	V. T. C. S. Section 1 of article 2372d-8 defines the 'counties to which
	the article applies:
An Eauat ODPartunilyl	
Allirmathra Acllon Employer	Section 1. This article applies only to
	counties with a population of more Chan 2,000,000,
	according to the most recent federal census and to
	counties that border the Republic of Hexlce vieh a
	population of more chaa 90,000, according to the
	tttost recent federal census, excluding counties
	which contain three or more cities with
	populations of more than 17,500, according to the
	moat recene federal census.
p, 806 _
~ ........~,. _._ .~.n~
E1 Paso is such a county and it is, therefore, authorized to levy a
hotel occupancy tax.
This office has previously discussed the proper disposition of
revenues from a City'9 hotel occupancy tax. In Attorney General
Opinion K-209 (1974), the city of Temple asked whether it could use
revenues collected under article I269j-4.I to contract With the Temple
Cultural Activities Cencei for the provision bf cultural services to
the Community. The opinion deemed the use to be outside of those
specifically permitted by the statute:
Iiovever, ve do not believe the permissible uses
of occupancy tax revenues include geaeral efforts
to support the arts. It may 6e that the programs
you describe, in certain situations, could have
the ancillaxq effect of contributing to a
"aolieication and operating program to attract
conventions aad visitors," but as you state in
your inquiry, their main purpose is the
development of programs in the arts for the
geaeral public of central Texas. Before Hotel
Occupancy Tax funds could be used to purchase
services, activities or programs for the
development of the arts, ve believe they would
need to be directly related to _the attraction of
conventions or tourists.
Attorney General Opinion A-209 (1974). The county hotel occupancy tax
vat intended to raise revenues to support projects that encourage
eoaverttions aad tourism. Section 2 of article 2372d-8 is, is fact,
titled "Improvemeata to Aetraet visitors and Tourists." Section 6 of
article 2312d-8 specifies how revenues from the county hotel occupancy
tax may be used. The specification is section 6(a) of article 2372d-8
is exclusive:
Sec. 6. (a) The revenue derived from anq
occupancy tax authorized or validated by this
article may oulY be used for:
(i) the acquisition of sites for and the
Construction, improvement, enlarging, equipping,
repairing. operation, and maintenance of public
improvements such as civic centers, civic center
buildings, auditoriums. exhibition halls,
coliseums, and stadiums, including sports and
other facilities (either or all) that serve the
purpose of attracting visitors and tovzists to the
county (Emphasis added).
p. 807
...
Honorable Gary Thompson - Page 3 (.7t~1-184)
According to section 6(a), the county's dispo4ition of bocci
occupancy tax revenues will be authorized by the statute only if both
of the fallowing are true: (1) the revenues will be spent for a
"public improvement" such as those listed in section 6{a){1); and (2)
ehis improvemene will serve ehe purpose of attracting conventions and
tourists to the county. In deciding wheeher general improvements to a
county golf course may be classified as "public improvements," we must
invoke standard rules of 9catutory construction. The rule"of a usdam
eg nezls applies to enumeYatians -- lists of specific Germs which are
preceded or followed by a more general term associated with the list
of specifies. The scope aF the general term, "public improvements,"
is therefore defined by the non-exhaustive though limiting list of
terms which follow ie. See pmplifone Corporation v. 'Cameron County,
577 S.W.2d S67 (Tex. Civ. App. - Corpus Christi 1979, no writ).
We note that each of the public improvements listed in section
6(a)(1) is a building. The only phrase in the Iist which could
Conceivably embrace a county golf course is "stadiums, including
sports and other facilities." However, "the cardinal rule of
statutory construction is co ascertain the legislative intent in
enacting the statute." Faulk v. State, 608 S.W.2d 625 (Tex. Grim.
App. 1980}, The clear intent of article 23724-8 is to raise local
revenues for projects which will attract visitors and tourists. 'The
list of suggested projects is section 6(a)(i) of article 23724-8
contemplates "sports and other facilities" which will draw large
numbers of ticket- buying spectators to the county, e.g. arenas or
pavilions where speaeator events such ae races or other competitive
games could ba held. A county golf course is not ouch a place. We
conclude; therefore, that a county could not use revenues from a hotel
occupancy tax to build a county golf course; accordingly, we conclude
that the county may sot use these revenues to finance general
improvements to as existing county golf course.
S U M M A R Y
The county of E1 Paso may not use revenues from
a eouaCy hotel occupancy tax collected pursuant Co
article 2372-8, V.T.C.S., to purchase golf carts _
or finance general Improvements for a county=
operated golf course.
very truly yours .
~/W1
J I M M A T T O X
Attorney General of Texas
TOM GREEN.
First Assistant Attorney General
p. 808