Bee Cave council asks state to allow hotel tax for sporting events, approves resolution

The Bee Cave City Council on Feb. 26 voted unanimously to ask the Texas Legislature to amend Chapter 351 of the Texas Tax Code so the city can spend municipal hotel occupancy tax (HOT) revenue on certain sporting-event costs and on constructing or expanding sports facilities.

City Manager Oakley told the council that because Bee Cave lies in Travis County (a county with population greater than 1 million), state law currently bars the city from using its HOT revenue for sporting events or the construction of sports facilities. Oakley said the resolution would ask the Legislature to add Bee Cave to language already being proposed by Representative Shelby or Representative Troxclair (the packet included a draft of the bill the city is seeking to join).

Council members discussed whether the enabling legislation should allow Bee Cave to use HOT funds only for city-owned facilities or to extend that authority to nonprofits, county partnerships, or private entities. Oakley cautioned the council that the current statute historically had been used largely for city‑owned facilities but that the language before the Legislature could be drafted broadly.

Council members expressed concern about using public hotel-tax dollars to improve privately owned facilities that could later be sold or conveyed without the city retaining ownership or contractual controls. The discussion focused on policy safeguards such as contractual clawback language and reserve terms that the city could adopt if the Legislature grants broader authority.

After discussion, the council voted to approve Resolution No. 2025-09 directing staff to request legislative changes to Chapter 351 of the Texas Tax Code to permit the city to use municipal hotel occupancy tax revenue for certain sporting-related event costs and for the construction or expansion of sports facilities. The motion carried unanimously.

Councilmembers and staff said that if the Legislature acts, the council will return to set a local policy — including eligibility, ownership limits, and contractual protections — before awarding HOT funds for facilities.

Why it matters: HOT revenue is legally restricted to items that primarily benefit tourism and the hotel industry. Allowing Bee Cave to use HOT revenue for sporting events or facilities could expand the city’s ability to recruit tournaments and other events that bring visitors and overnight stays — but it also raises questions about when and how taxpayer-supported funds should be applied to privately owned assets.

What’s next: Staff will return with draft policy language for council review that would set local limits and contractual terms if legislative permission is secured.