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G-12-01-26-8A1 - 1/26/2012 ORDINANCE NO. AN ORDINANCE AMENDING CHAPTER 38, CODE OF ORDINANCES (2010 EDITION), CITY OF ROUND ROCK, TEXAS, BY ADDING A NEW ARTICLE REGARDING ADDITIONAL HOTEL OCCUPANCY TAX, AND PROVIDING FOR A SAVINGS CLAUSE AND REPEALING CONFLICTING ORDINANCES AND RESOLUTIONS. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK, TEXAS: I. That Chapter 38, Article V, Bingo Tax, of the Code of Ordinances, City of Round Rock, Texas, shall be renumbered and is hereby amended to read as follows: ARTICLE VI. -BINGO TAX Sec. 38-118. Imposition of tax. Pursuant to the Bingo Enabling Act, V.T.C.A., Occupations Code ch. 2001, there is hereby imposed the maximum tax permitted by state law on all taxable gross receipts from the conduct of bingo games held within the city limits. II. That Chapter 38 of the Code of Ordinances (2010 Edition), City of Round Rock, Texas, is hereby amended by adding an article and sections, to be designated Article V. "Additional Hotel Occupancy Tax", and numbered Section 38-100 et seq., which said article and sections shall read as follows: ARTICLE V. -ADDITIONAL HOTEL OCCUPANCY TAX Section 38.100. Definitions In this article, the following words, terms and phrases are defined as follows, except where the context clearly indicates a different meaning: "Act" means Chapter 334, Local Government Code, as amended. "Approved Venue Project' means the Sports and Community Venue Project that was approved by a majority of the voters voting at the election held in the City on November 8, 2011, in accordance with the Act. "City"shall mean the City of Round Rock, Texas. C:Zoamem ad SetdnVUwhheJ oW SeuingATempvuy Internet FIesT-onunLOudook\04E40FIZ10024OSS7 DOC(3).&dds "City Attorney"shall mean the City Attorney of the City of Round Rock or the designated representative. "Consideration" shall mean the price of, or value received for, the right to use a sleeping room, bed, or dormitory space or other sleeping facility in a hotel, and includes the price of conveniences customarily provided in connection with sleeping accommodations, including mattress, sheets, bedspreads, pillows, pillow cases, bed frames, air conditioning, electricity, lighting, water, soap, towels, wash cloths, toilet tissue, shower or bath facilities, lavatory, chairs, trash receptacles, plus any other goods or services which are not ordinarily subject to sales tax. The consideration paid for a sleeping room or facility shall not include the price of food served, nor the price of personal services rendered to the occupant which are unrelated to cleaning and readying a room for occupancy, nor any sales tax, nor occupancy tax assessed by other governmental agencies, provided that these charges are stated separately on the folio or invoice of the occupant. Charges not stated separately shall be presumed to be part of the consideration paid for occupancy of a sleeping room or sleeping facility, and shall be taxed under this article. "Director"shall mean the Director of Finance or the director's designated representative. "Hotel" shall mean any building or complex of buildings, trailer, converted railroad pullman car, or any other facility in which the public may,for a consideration, obtain sleeping accommodations. The term shall include hotels, motels, tourist homes, houses or courts, lodging houses, inns, rooming houses, trailer houses, trailer motels, parked railroad pullman cars used for sleeping accommodations and not involving the transportation of travelers, dormitory where bed space is rented, apartments not occupied by permanent residents, and all other facilities where rooms or sleeping facilities or space are furnished for consideration. The term does not include: (1) a hospital, sanitarium, or nursing home; (2) a dormitory or other housing facility owned or leased and operated by an institution of higher education or a private or independent institution of higher education, as those terms are defined by Section 61.003 of the Texas Education Code, as amended, that is used by the institution for the purpose of providing sleeping accommodations for persons engaged in an educational program or activity at the institution; or (3) an oilfield portable unit, as defined by Sec. 152.001, Tax Code. "Occupancy" shall mean the use or possession of, or the exclusive right to the use or possession of a sleeping room or sleeping facility in a hotel. "Occupant" shall mean any individual, corporation, governmental agency, partnership, or association that has paid a consideration for the exclusive right to use a sleeping room or sleeping facility in a hotel. "Permanent Resident" shall mean any occupant who has occupied or has paid for the exclusive right to occupy a particular sleeping room or rooms or sleeping facility in a hotel for at least thirty(30)consecutive days so long as there is no interruption of payment for the period. "Project Fund" means the fund entitled the "Sports and Community Venue Project Fund," created pursuant to the Resolution. "Quarter" shall mean the regular calendar quarters of the year, the first quarter being composed of the months of January, February and March, and the second quarter being the months of April, May and June, the third quarter being the months of July, August and September, and the fourth quarter being the months of October, November and December. The municipal fiscal quarters are composed of the same months, but the first quarter is composed of the months of October, November and December. "Resolution" means the Resolution adopted by the City Council establishing the Sports and Community Venue Project Fund. 2 "Tax" means the hotel occupancy tax levied in this article pursuant to Chapter 334 of the Texas Local Government Code, as amended. Section 38.101 Tax Authorized; Tax Rate; Exceptions to Tax. (a) In addition to the tax levied in Article IV, Section 38-77, of this Chapter, there is hereby levied a tax upon the cost of or consideration paid for a sleeping room or sleeping facility furnished by any hotel. (b) The tax shall be equal to two percent(2%)of the total price of a sleeping room or sleeping facility, said price to include all goods and services provided by the hotel which are not ordinarily subject to sales tax. (c) The following are exceptions to the tax: (1) There shall be no tax on the cost of or consideration paid for occupancy of a hotel sleeping room or sleeping facility priced at less than Two Dollars($2.00) per day. (2) The cost of or consideration paid for a hotel room or facility not ordinarily used for sleeping, such as a meeting room, is not subject to this tax. (3) The cost of or consideration paid for a sleeping room or facility occupied by a permanent resident is not subject to this tax. (d) The tax imposed under this section must be collected on every occupancy occurring on or after March 1, 2012, and must continue to be collected for so long as any bonds or other obligations that are issued by the City under Section 334.043 of the Act for the purpose of financing a portion of the costs of the approved venue project, and any bonds refunding or refinancing those bonds or other obligations, are outstanding and unpaid. Section 38.102. Use of Tax Revenue. The revenue derived from the two percent tax imposed under this article must be deposited in the Sports and Community Venue Project Tax Proceeds Account that is established within the Project Fund. Money in this account may be used as set forth in the Resolution. Section 38.103. Exemptions and Refunds. (a) A person described in Section 156.101, Section 156,103(a) or Section 156.1 03(d) of the Texas Tax Code, as amended, is exempt from the payment of the tax imposed under this article. (b) A governmental entity excepted from the tax imposed by Chapter 156 of the Texas Tax Code, as amended, under Section 156. 103(a)(1) or(a)(3) of that chapter shall pay the tax imposed by this article, but is entitled to a refund of the tax paid. (c) A person described in Section 156.103(c) of the Texas Tax Code, as amended, shall pay the tax imposed by this article, 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 tax paid under this article, the governmental entity entitled to the refund must file a refund claim with the Director on a form prescribed by the state comptroller and provided by the Director. A governmental entity may file a refund claim with the Director only for each calendar quarter for all reimbursements accrued during that quarter. 3 Section 38.104. Collection; Payment to City; Fee: Statement of Tax Purpose Required. (a) Every person owning, operating, managing or controlling any hotel shall collect the tax imposed under this article and pay same to the City with the report in accordance with all the requirements and procedures set forth in this article. (b) On or before the last day of each month, every person required to collect the tax imposed by this Article V shall pay the tax due on such occupancies for the preceding month. (c) Each bill or other receipt for a hotel charge subject to the tax imposed by this article must contain a statement in a conspicuous location stating: "The City of Round Rock requires that an additional tax of two percent (2%) be imposed on each hotel charge for the purpose of financing a venue project, consisting of the Sports and Community Venue Project approved by the voters of the City on November 8, 2011." Section 38.105. Reports. On or before the last day of each month, every person required to collect the tax imposed by this Article V shall file a report with the Director for the preceding month, showing the price paid for all room occupancies in the preceding month, the amount of tax collected on such occupancies, and any other information the Director may reasonably require. Such person shall pay the tax due on such occupancies at the time of filing such report. The report shall be in a form prescribed by the Director. The Director is hereby authorized and directed to do all such things necessary or convenient to carry out the terms of this Article V. The Director shall have the authority to request and receive within a reasonable time documentation of information contained in the Report. Section 38.106.Availability of Records. Each person required to collect the tax must make records available for inspection by the Director. The Director shall, upon seasonable notice, have access to books and records necessary to determine the correctness of a report filed under this article or the amount of taxes due under this article. The Director shall have authority to require additional information to determine the correctness of a report filed under this article or the amount of taxes due under this article. The Director shall report any amount of taxes, penalty and/or interest found due to the City Attorney for collection by the City. Section 38.107. Rules and Regulations. The Director shall have the power to make any rules and regulations necessary to effectively collect the tax, penalty, and/or interest levied herein. The Director is authorized to issue rules and regulations necessary to effectuate the full intent and purpose of this article concerning the information required on reports, the collection reporting periods, audits, the retention of records, the forcible seizure of records for auditing purposes, as allowed by law. Section 38.108. Penalties. (a) A person commits an offense if a person: (1) fails to collect the tax imposed by this article; (2) fails to file a report as required by this article; (3) fails to pay the tax when payment is due; (4) files a false report; or (5) fails to comply with this article when purchasing a hotel. 4 (b) An offense committed under Subsection (a) of this section is punishable by a fine not to exceed Five Hundred and No/100 Dollars ($500) for each offense. Each day that a violation is permitted to exist shall constitute a separate offense. (c) In addition to any criminal penalties imposed under Subsection (b) of this section, a person shall pay five percent(5%)of the tax due as a penalty if the person fails to pay the tax or file the report as required by this article by the due date. An additional penalty of five percent (5%) of the tax due shall be paid if the tax is not paid within thirty (30) days from the date the tax was due. Another penalty of five percent (5%) of the tax due shall be paid if the tax is not paid within sixty (60) days from the date the tax was due. The penalties provided by this subsection may never be less than Five Dollars ($5.00). Delinquent taxes shall draw interest at the rate of ten percent (10%) per annum beginning sixty(60)days from the date the tax was due. (d) In addition to the amount of any tax owed, a person is liable to the City for all reasonable attorney's fees incurred by the City in enforcing this article against the person and in collecting any tax owed by the person under this article. (e) The Director may release, relinquish, compromise and/or settle the penalty and/or interest due as a result of an act or omission of an employee or officer of the City. (f) This section shall not be construed to limit or restrict the City Council's powers to release, relinquish, compromise and/or settle the penalty and/or interest due for delinquent hotel occupancy taxes as provided by the Texas Constitution or other applicable laws. Section 38.109.Tax Collection Suit. (a) The City Attorney may bring suit against a person who is required to collect the tax imposed by this article and pay the collections over to the City 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 City until the tax is paid or the report filed, as applicable, as provided by the court's order. In addition to the amount of any tax owed under this article, the person is liable to the City for: (1) reasonable attorney's fees; (2) the costs of an audit conducted under Subsection (b), as determined by the City using a reasonable rate, but only if the tax has been delinquent for at least two complete municipal fiscal quarters at the time the audit is conducted; and (3) if the tax has been delinquent for at least one complete municipal fiscal quarter, an additional penalty equal to fifteen percent(15%)of the total amount of the tax owed; and (4) interest on the delinquent taxes at the rate of ten percent (10%) per annum, as provided in 38.108 above. (b) If a person required to file a tax report under this article does not file the report as required by this article, the City Attorney may determine the amount of tax due under this article by: (1) conducting an audit of each hotel in relation to which the person did not file the report as required by this article; or (2) using the tax report filed for the appropriate reporting period under Section 156.151 of the Texas Tax Code, as amended, in relation to that hotel. (c) If the person did not file a tax report under Section 156.1 51 of the Texas Tax Code, as amended, for that reporting period in relation to that hotel. the City Attorney may estimate the amount of tax due by using the tax reports in relation to that hotel filed during the previous calendar year under this article or Section 156.151 of the Texas Tax Code, as amended. An estimate made under this subsection is prima facie evidence of the amount of tax due for that period in relation to that hotel. 5 (d) The authority to conduct an audit under this section is in addition to any other audit authority provided by State law, charter or ordinance. (e) There is not a limitation period on the time allowed to assess taxes and bring a suit to collect taxes imposed under this article. (f) The remedies provided by this section are in addition to other available remedies. Section 38.110.Tax Collection on Purchase of a Hotel. (a) If a person who is liable for the payment of a tax under this article is the owner of the hotel and sells the hotel, the successor to the seller or the seller's assignee shall withhold an amount of the purchase price sufficient to pay the tax due until the seller provides a receipt from the Director showing that the amount has been paid or a certificate stating that no tax is due. (b) The purchaser of a hotel who fails to withhold an amount of the purchase price as required by this section is liable for the amount required to be withheld to the extent of the value of the purchase price. (c) The purchaser of a hotel may request that the Director issue a certificate stating that no tax is due or issue a statement of the amount required to be paid before a certificate may be issued. The Director shall issue the certificate or statement not later than sixty (60) days after receiving the request. (d) If the Director fails to issue the certificate or statement within the period provided by Subsection (c) of this section, the purchaser is released from the obligation to withhold the purchase price or pay the amount due. Section 38.111. Enforcement. The Director, or his/her designee, shall enforce the terms and conditions of this Chapter when violations occur. Secs. 38.112-117. Reserved. III. A. All ordinances, parts of ordinances, or resolutions in conflict herewith are expressly repealed. B. The invalidity of any section or provision of this ordinance shall not invalidate other sections or provisions thereof. C. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Ordinance was adopted was posted and that such meeting was open to the public as required by law at all times during which this Ordinance and the subject matter hereof were discussed, considered and 6 formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. READ and APPROVED on first reading this the 1z:6 day of , 2012. READ, APPROVED and ADOPTED on second reading this the day of 2012. 0 ol ALAN MCGRAW, Mayor City of Round Rock, Texas ATTEST: Qwt- Ktmr SARA L. WHITE, City Clerk 7 IrROUNDROCKTE s .City Council Agenda Summary Sheet PURPOSE.PMOR PRasP&M Agenda Item No. *8A1. Consider an ordinance amending Chapter 38, Code of Ordinances, (2010 Edition), by adding a new article regarding an Additional Hotel Occupancy Tax for the Sports and Agenda Caption: Community Venue Project. (Second Reading) Meeting Date: January 26,2012 Department: Finance Staff Person making presentation: Cheryl Delaney Finance Director Item Summary: In May 2011, City Council adopted a resolution designating the proposed Sports Complex as a Venue Project and the method of financing to be used to fund the project. A Special Election was called in November 2011 submitting to voters the proposal for the approval of a Sports and Community Venue Project and for an additional 2% hotel occupancy tax to fund the project. Voters approved the use of additional taxes to reimburse or pay the costs of planning, acquiring, establishing, developing, constructing, renovating, operating, or maintaining the project, or paying the principle and interest on,or other costs relating to bonds or obligations to finance the project. The Round Rock City Council will consider and vote on the proposed Ordinance that officially levies the Additional HOT at the rate of two (2) percent. In addition,the Ordinance will state that the Additional HOT will go into effect as of March 1,2012. A letter was sent in December 2011 to notify the Hotels of this new rate,as well as, a requirement that each bill or other receipt for a hotel charge subject to the tax imposed by the Ordinance must contain a statement in a conspicuous location stating: The City of Round Rock requires that an additional tax of two percent (2%) be imposed on each hotel charge for the purpose of financing a venue project, consisting of the Sports and Community Venue Project approved by the voters of the City on November 8, 2011. Cost: N/A Source of Funds: N/A Date of Public Hearing(if required): N/A Recommended Action: N/A