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Bill

HB 2974

Relating to municipal and county hotel occupancy taxes and the authority of certain municipalities to receive certain tax revenue derived from a hotel and convention center project and to pledge certain tax revenue for the payment of obligations related to the project; authorizing the imposition of taxes.

89th Legislature (2025) Introduced by Tom Craddick and 2 co-sponsors

Bill authorizes select Texas municipalities and counties to collect hotel occupancy taxes and dedicate that revenue to finance hotel and convention center development projects.

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Bill Summary · HB 2974

Legislative bill overview

HB 2974 modifies Texas law to allow specific municipalities and counties to collect and use hotel occupancy tax revenue for hotel and convention center development projects. The bill grants these local governments authority to impose taxes and pledge the resulting revenue to pay obligations related to these hospitality infrastructure projects.

Why is this important

Hotel occupancy taxes are a significant revenue source for local governments, typically used for tourism promotion and economic development. This bill creates new flexibility for how certain municipalities can allocate these funds, potentially allowing communities to finance convention center construction or renovation through dedicated tax revenue rather than general bonds or appropriations. This affects both the fiscal capacity of local governments and how tourism-related tax dollars are deployed.

Potential points of contention

  • Revenue allocation disagreement: Debate over whether hotel occupancy taxes should fund specific infrastructure projects versus general tourism promotion and city services, as traditionally used
  • Municipal versus county authority: Potential conflicts over which governmental entities control the tax revenue and how it's distributed when both municipalities and counties are involved
  • Project selection and oversight: Questions about which projects qualify, who decides funding priorities, and mechanisms to prevent misuse or politically-favored projects without competitive bidding requirements

Compiled from official sources — confirm details with the bill’s official record.

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