Under the laws of the State of Texas, the City of Cameron collects a Hotel Occupancy Tax (HOT) from hotels, motels, and bed and breakfast inns. The law requires that every expenditure of the HOT revenue must directly enhance and promote tourism and the convention and hotel industry.

The law does not provide for general allocations for events or projects. Funds can only be used for the six particular purposes listed below. All uses must promote tourism and the convention and hotel industry. If the event or project is not reasonably likely to have such an effect, local hotel occupancy tax revenues cannot legally fund it. If an entity does not market its events outside of Cameron or in some other way provide notice of the events to guests and potential guest of hotels, it will be difficult to argue that the event will promote tourism and hotel activity. If the entity does not find the need to reserve a hotel block or negotiate a special hotel rate, it is probably not arguable that the organization anticipates that the event will have any reasonable impact on hotel activity. If the event does not generate HOT revenue for the city it is unlikely it will be funded.

The city municipal government does not retain the funds for other uses. The city can only utilize the funds for the same purposes and under the same conditions as any organization, business or individual. The Cameron Tourism Board has a fiduciary responsibility to assure that the funds are used only for purposes authorized under the law.

Cameron falls under certain state mandated categories which establish limits on how the HOT proceeds can be used. No more than 50% of the proceeds can be used for historical restoration and preservation projects, and if used for that purpose state law requires that the historical related expenditure also must be likely to directly promote tourism and the hotel and convention industry. At least one-seventh of the hotel tax proceeds must be spent on advertising and promoting the city to directly impact tourism and the hotel and convention industry. No more than 15% of Cameron’s HOT proceeds can be spent on promotion of the arts.

State law also provides that the hotel occupancy tax may not in any circumstance be used for purposes for which the city usually expends it general revenues (e.g. police, parks, recreation, streets, sidewalks, decorative improvements). The Texas Attorney General has ruled that the local hotel occupancy tax may not be used for advertising or other economic development initiatives or improvements to attract new businesses or permanent residents to a city.

State law specifies that for a facility to be funded as a convention center it must be one that is primarily used to host conventions and meetings. “Primarily used” in this context would arguably mean that at least 51% of the bookings for the facility are to host conventions or meetings that directly promote tourism and the hotel and convention industry. A visitor center must spend 51% of its time and revenue promoting tourism and the hotel industry. Simply naming a facility a convention center or visitor information center does not bring it under this section.

Cameron HOT Funds

Now accepting applications for HOT funds until July 31, 2024.