Relating to the use of hotel occupancy tax revenue by certain municipalities and the authority of certain counties to impose a hotel occupancy tax; authorizing the imposition of a tax.

HB 1039 repeals Section 351.1035 of the Texas Tax Code, which previously restricted how certain municipalities could use hotel occupancy tax revenue. This change allows those municipalities greater flexibility in allocating hotel tax funds for local purposes. The repeal applies only to revenue collected on or after the bill's effective date (September 1, 2025, unless passed with a two-thirds vote), with pre-effective-date revenue still governed by prior law. The bill does not create new taxes but removes a specific limitation on existing municipal tax revenue use.