HomeMy WebLinkAboutR90-189176
HOTEL/MOTEL TAX - RESERVE FUND
RESOLUTION NO. R90-189
A RESOLUTION OF THE CITY OF PLAINVIEW, TEXAS, ACTING
ON A REQUEST OF THE PLAINVIEW CHAMBER OF COMMERCE TO
EXPEND HOTEL/MOTEL TAX RESERVE FUNDS FOR REMODELING
THE CHAMBER OF COMMERCE MEETING ROOM, TWO RESTROOMS,
HALL AND KITCHEN.
WHEREAS, the Chamber of Commerce, in accordance with City
policy for utilizing the Hotel/Motel Tax Reserve Funds, has
requested $17,440 in order to complete the remodeling of the
Chamber of Commerce Meeting Room, two restooms, hall and kitchen;
and
WHEREAS, the Chamber of Commerce has pledged to remodel the
front portion of the Chamber of Commerce building for an
approximate cost of $14,000, within one year of this Resolution;
and
WHEREAS, the Chamber of Commerce has agreed to participate in
the formation of a study co~,ittee to identify additional
facilities which can be utilized as offices for the Chamber of
Commerce, Plainview/Hale County Industrial Foundation and others,
and provide larger meeting facilities.
NOW, THEREFORE, BE IT RESOLVED by the City of Plainview, Texas,
that the City, through its Hotel/Motel Tax Reserve Funds, will
allocate up to $17,440 for the remodeling of the Chamber of
Commerce Meeting Room, two restrooms, hall and kitchen.
Passed and Approved this 23rd day of OCtober, 1990.
ATTEST:
Carla Reese, City Secretary
E.V. Ridl'e~ub~r ," Mayor
APPROVED AS TO CONTENT:
ames P~/Jeffe~,~y~ager
APPROVED AS TO FORM:
David Blackburn, City Attorney
MEMO
TO:
FROM:
DATE:
RE:
Jim Jeffers, City Manager
D. Blackburn, City Attorney
July 6, 1990
Legality of Certain Proposed Hotel/Motel Tax Revenue
Expenditures
CA-OP-90-03
BACKGROUND:
This office has been requested to provide an
opinion in regard to the appropriateness of
an expenditure from the Hotel/Motel Occupancy
Tax (HMT) revenue fund. Specifically,
whether "making some improvements to the
Chamber of Commerce offices" would constitute
appropriate usage of HMT revenue.
RESEARCH:
The pertinent state statute on this matter is now codified as
Tex. Tax Code Anno. ~351.101 (Vernon's 1990). Section 351.101
lists five exclusive purposes for which an expenditure may be
made. Those five purposes are:
1. The acquisition of sites for and the
construction, improvement, enlarging,
equipping, repairing, operation, and
maintenance of convention center facilities;
2. Refurnishing of facilities, personnel,
materials for the registration of convention
delegates or registrants;
3. Advertising and conducting solicitations
and promotional programs to attract tourists
and convention delegates or registrants to
the municipality or its vicinity;
4. The encouragement, promotion,
improvement, and application of the arts,
including instrumental and vocal music,
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dance, drama, folk art, creative writing,
architecture, design in 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;
5. Historical restoration and preservation
projects or activities or advertising and
conducting solicitations and promotional
programs to encourage tourists and convention
delegates to visit preserved historic sites
or museums:
(a) at or in the immediate
vicinity of the convention
facilities; or
(b) located elsewhere in the
municipality or its vicinity
that would be frequented by
tourists, convention delegates,
or other visitors to the
municipality,x
Another portion of ~351.101 bears mentiOning. Subparagraph (b)
states that "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 subsection (a)".2
Since the inception of the law authorizing cities to adopt the
HMT, there has been considerable question in regard to the
specific application of the five enumerated purposes for which an
expenditure may be made.
The Attorney General's office has issued several opinions
addressing specific questions raised by municipalities and
various other entities regarding certain specific fact situations
and whether a particular expenditure would be appropriate.
Rarely has the Attorney General's office directly answered any
of the inquiries. This is especially so when it comes to
XTex. Tax Code Anno. ~351.101(a) (Vernon's 1990) (unless
otherwise indicated, all subsequent cites are to the Tax Code)
2~351.101(b)
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Subsection (3), the advertising and promotional programs to
attract tourists and convention delegates purpose.
In fact, this section is frequently the source of considerable
debate regarding the appropriateness of a particular expenditure.
The provision is strictly limited to expenditures for
solicitations and promOtional programs or advertising which are
directly related to attracting conventio-~ ~nd tourists.
Indeed, the preamble of ~351.101 emphasizes that revenue from the
municipal hotel occupancy tax may be used only to promote tourism
and the convention and hotel industry.~ Thus, each expenditure
must be intended to bring visitors from outside of the city into
the city or its vicinity. If the expenditure is not reasonably
likely to accomplish this result, the expenditure, from HMT
revenue may be inappropriate. The HMT may not be used for
general revenue purposes or to pay for a governmental expense
which is not directly related to increasing tourism.4
Using a portion of the HMT revenue for a city recreational
facility has been held by the Attorney General to violate the
intent of the-HMT law.~
The most recent Attorney General opinion addressing ~351.101 is
Attorney General Opinion JM-965. In that opinion, the question
was posed as to whether a municipality may utilize a portion of
the HMT for supplementing the operations budget for certain
recreational facilities at a beach.6 The Attorney General's
office concluded:
~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.TM
The Attorney General's office reached such a conclusion with very
little discussion.
~351.101(a)
4Id.
~See A.G. Opinion No. JM-184 - (1984)
6See A.G. Opinion No. JM-965 - (1988)
Vid.
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Perhaps the best recitation of the Attorney General's position,
and probably the law in regard to whether certain expenditures
are appropriate, is found in a 1987 Attorney General opinion,s
Attorney General Opinion No. JM-690 addressed the question of
whether certain expenditures for advertising to attract new
businesses and permanent residents to a city was an appropriate
expenditure.9 The Attorney General's office stated:
Whether certain activities hold a direct
relationship to attracting conventions, visitors,
or touriSts is a fact question. The Article 4399,
V.T.C.S., opinion process was not intended to
resolve factual disputes,x°
COMMENTS AND DISCUSSION:
As is usually the case, neither the statute, the courts, or the
Attorney General's office provide clear guidance in regard to the
factual situation at hand. It must be restated again that the
primary and foremost qualification for the use of HMT revenues is
that the expenditure is spent in a manner which directly enhances
and promotes tourism in the convention and hotel industry.
If the proposed expenditure can be justified in terms of the
ability to directly increase tourism, half the test is met. The
second threshold requirement is that the expenditure must clearly
fit into one of the five enumerated purposes of ~351.101. The
enumerated purposes for improvement of the Chamber of Commerce
offices would not clearly fit into any of the enumerated purposes
listed in ~351.101. However, administrative needs directly
associated with the provision of enhancing and promoting tourism
should be a justifiable expenditure under the law.
This office would suggest that the remodeling of those offices
directly associated with the "Civic Center" activities may be an
appropriate expenditure. Since we have designated the Chamber
building asa Civic Center facility, the meeting room and related
facilities could justifiably be appropriate items for expenditure
of HMT revenue. However, this office would stress the fact that
the HMT revenue should be directly expended for "Civic Center"
purposes. As noted above, using even a portion of the HMT
revenue for an inappropriate purpose, has been found in violation
of the law. Thus, remodeling of the entire Chamber of Commerce
SSee A.G. Opinion No. JM-690 - (1987)
9Id.
~Oid.
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offices, while utilizing only one portion of those offices as
"Civic Center facilities", could well be deemed an inappropriate
expenditure of HMT revenue. In other words, whatever the HMT
revenues expended in regard to the Chamber remodeling project,
such expenditures should be directly related to the Civic Center
function or that portion(s) of the facility.
SUMMARY
Expenditure of HMT revenue for the remodeling
of Chamber of Commerce offices may be an
appropriate expenditure under certain
circumstances. Any expenditure of BMT
revenue should be directly related to
attracting convention delegates, tourists,
and other visitors to the City and be
expressly authorized under S351.101. The
remodeling of the Chamber offices may comply
with the law given sufficient factual
justifications.
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CHAMBER OF COMMERCE
September 18, 1990
To: Mayor & Members of the Plainview City Council
Our Board of Directors voted unanimously last week to pursue plans to
remodel a portion of the Chamber of Commerce office.
The Convention & Visitors Committee has recommended to us that we
approach the City of Plainview in asking for financial assistance for
remodeling. On behalf of the Board of Directors, we would like to
request funds from the reserve account for the Hotel/Motel tax be used
for the remodeling project. We would like to request $17,500. which
will be used to remodel the meeting room, two restrooms, hall, and
kitchen. A list outlining the cost is enclosed.
The Chamber Board also voted to spend some funds on remodeling in
order to have the building completely recarpeted. The Chamber
appreciates the City's generosity in furnishing this building to us
as we could not operate without it. As you know, the building is used
by many organizations and groups throughout the year.
If you would like more detailed information concerning these prices,
please do not hesitate to give the Chamber office a call.
Sincerely,
Don A. Williams
P re s ident
DAW/fr
Enci.
710 West 5th Plainview, Texas 79072-6234 (806) 296-7431
PLAINVIEW
CHAMBER OF COMMERCE
MEETING ROOM REMODELING
Re-Upholstery of 18 Chairs
$ 1,426.00
Carpet
Carpet
Floor Prep
Congoleum (Kitchen)
Rubber Base
$1,120.69
250.00
90.00
350.00
1,810.69
Electrical:
2 Restrooms Lighting $245.00
Meeting Room Lighting 825.00
OUtside Fixture 280.00
Hall Fixture 105.00
Kitchen Overhead Light 95.00
1,550.00
Re-Construction:
Remove Paneling
Sheetrock Exterior Walls
Wall Covering(Meeting Room)
Wall Covering(Border)
Wall Covering(2 Restrooms)
Wall Covering(Hallway)
Wall Covering(Kitchen)
Wall Covering(World Map)
World Map - Cornice & Trim
Wall Covering(Labor Cost)
Formica Top (Kitchen)
Extension of Duct Work
New Ceiling(Tiles & Grid)
Painting(Back Entrance)
Painting & Tape(Meeting Room)
Painting & Tape(Hallway)
Painting & Tape(2 Restrooms)
Labor Cost - Clean up, remove
fixtures, trim
Microwave
Projection Screen
Chairs (50 new @ $50.)
Adjustment for overage - 10%
Total
95.00
683.00
650.00
200.00
306.00
234.00
170.00
175.00
148.00
1,075.00
275.00
468.00
1,400.00
292.00
8.70.00
261.00
347.00
343.00
325.00
250.00
2,500.00
11,067.00
1,585.40
17,439.09
710 West 5th Plainview, Texas 79072-6234 (806) 296-7431