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HomeMy WebLinkAboutOrdinance No. 2025-2631CITY OF THE COLONY, TEXAS ORDINANCE NO. 2025 - 2(v3 1 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS, AMENDING CHAPTER 8, ARTICLE III, ENTITLED "HOTEL OCCUPANCY TAX" BY AMENDING SECTIONS 8-75 TO 8-77, AND 8-84, AND ADDING SECTIONS 8-86 TO 8-88 TO ADDRESS SHORT- TERM RENTALS AND THE PAYMENT OF HOTEL OCCUPANCY TAX; PROVIDING A SEVERABILITY CLAUSE; PROVIDING A SAVINGS CLAUSE; PROVIDING A PENALTY OF A FINE NOT TO EXCEED TWO THOUSAND DOLLARS ($2,000) FOR EACH AND EVERY OFFENSE; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City Council of the City of The Colony, Texas, has discussed and considered such revisions and has determined that it is in the best interest of the City of The Colony, Texas, to amend and add various sections of Chapter 8, Article III, entitled "Hotel Occupancy Tax" to better address the payment of Hotel Occupancy Tax by short-term rentals consistent State law. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS: SECTION 1. The findings set forth above are incorporated into the body of this Ordinance as if fully set forth herein. SECTION 2. That the Code of Ordinances of the City of The Colony, Texas, is hereby amended by amending Chapter 8, Article III, entitled "Hotel Occupancy Tax," by amending sections 8-75 to 8-77, which shall read as follows: "ARTICLE III. - HOTEL OCCUPANCY TAX AND SHORT TERM RENTALS Sec. 8-75. - Definitions. In this article: (1) Consideration means the cost of a hotel or short-term rental room only if the room is ordinarily used for sleeping, and does not include the cost of any food served or personal services rendered to the room or a person in the room unless related to the cleaning and readying of the room for occupancy. (2) Designated operator shall mean the operator of a short-term rental facility who resides in Denton County, Texas, and will be present in Denton County and available at all times the rental is in use. (3) Hotel means a building in which members of the public may obtain sleeping accommodations for consideration. The term includes a hotel, motel, tourist home, tourist house, tourist court, lodging house, inn, rooming house, or other building where a room is furnished for a consideration, but does not include a hospital, sanitarium, or nursing home. (4) Licensee shall mean a person or legal entity issued a short-term rental facility license. (5) Owner shall mean an individual person, proprietorship, partnership, corporation, association, or other legal entity. (6) Short term rental shall mean a residential dwelling unit(s) that is rented out for compensation on a temporary basis for a period of less than 30 consecutive days. (7) Tourism means the guidance or management of tourists. (8) Tourist means an individual who travels from the individual's residence to a different municipality, county, state, or country for pleasure, recreation, education, or culture. Sec. 8-76. - Tax levied; exceptions. (a) A tax of seven percent of the consideration paid for a hotel or short-term rental room is levied, within the city limits, on a person who, under a lease, concession, permit, right of access, license, contract, or agreement, pays the consideration for the use or possession or for the right to the use or possession of a hotel or short-term rental room that costs $2.00 or more each day and is ordinarily used for sleeping. (b) This article does not impose a tax on: (1) A person who has the right to use or possess a hotel room for at least 30 consecutive days, so long as there is no interruption of payment for the period; or (2) The United States, a governmental entity of the United States, or an officer or employee of the United States. (c) Except as otherwise provided in V.T.C.A Tax Code, § 156.103, as amended, the state, or an agency, institution, board, or commission of the state other than an institution of higher education, as that term is defined by V.T.C.A. Education Code § 61.003, as amended, shall pay the tax imposed by this article and is entitled to a refund of the amount of tax paid. (d) A person entitled to a refund of tax paid under this section shall make an application for a refund in the form prescribed by the city. Sec. 8-77. - Collection of tax generally. (a) On behalf of the city, the City Manager is hereby authorized to engage and contract with a third party service to collect and remit the city's portion of hotel occupancy tax within the city limits, on a person who, under a lease, concession, permit, right of access, license, contract, or agreement, pays the consideration for the use or possession or for the right to the use or possession of a hotel or short-term rental room that costs $2.00 or more each day and is ordinarily used for sleeping. (b) A person who owns, operates, manages, or controls a hotel or short-term rental or collects payment for the use or possession or for the right to the use or possession of a room shall comply with the third -parry service contracted by the city to collect the tax levied by this article for the city. (c) A person who collects the tax shall deposit the tax proceeds into a separate liability account and may not use the tax proceeds for any purpose other than payment to the city. (d) Every person owning, operating, managing or controlling any hotel shall collect the tax levied by this article for the city. The hotel operator shall be entitled to one percent of the hotel occupancy tax revenues collected as reimbursement for the operator's administrative costs for collecting the tax. However, as further described in this article, this reimbursement may be forfeited at the discretion of the city if the hotel operator fails to timely pay over the tax or timely file a report as required by the city or files a false report with the city. (e) A person who owns, operates, manages, or controls a short-term rental or collects payment for the use or possession or for the right to the use or possession of a short-term rental room shall comply with the third -party service contracted by the city to collect the tax levied by this article for the city." SECTION 3. That the Code of Ordinances of the City of The Colony, Texas, is hereby amended by amending Chapter 8, Article III, Section 8-84, entitled "Additional enforcement authority," which shall read as follows: "Sec. 8-84. - Additional enforcement authority. The City may take the following actions against a person who has failed to file a required report, failed to collect the tax imposed, failed to pay the taxes over to the city when due, or filed a false report: (1) Bring suit to collect the unpaid tax or to enjoin the person from operating a hotel or short- term rental in the city until the tax is paid or the report filed, as applicable, as provided by the court's order; and (2) Any other remedy provided under state law or as provided in Section 8-88 of this code." SECTION 4. That the Code of Ordinances of the City of The Colony, Texas, is hereby amended by amending Chapter 8, Article III, by adding Sections 8-86 to 8-88, which shall read as follows: "Sec 8-86. - Short-term rental facility license required. (a) It shall be unlawful to operate a short-term rental facility without a short-term rental facility license in violation of any provision of a short-term rental facility license, this article, or any other applicable city ordinance or other law. (b) License application and review: (1) To obtain a license for a short-term rental facility, a person must submit an application on a form provided for that purpose to the city's third -parry collection service. The application must contain the following: (A) The name, street address, mailing address, email address, and telephone number of the applicant, the owner, and the designated operator of the short- term rental facility. The applicant must assign a "designated operator" who resides in Denton County, Texas and shall be present in Denton County and available at all times the rental is in use. (B) If the applicant or owner is a partnership, a corporation, or limited liability company, the application shall list the names of all partners, directors, members, and officers, as applicable, of the applicant and the owner. (C) A short-term rental facility license shall be valid from the date of issuance unless otherwise suspended or revoked in accordance with section 8-87. (c) Operation of a short-term rental facility. (1) The licensee shall comply with the noise requirements set forth in article IX of chapter 6 of this Code. (2) The licensee will comply with all building, electrical, and other codes and ordinances of the city. (3) Functions such as meetings, receptions, weddings and other social events provided for compensation or held by guests are not permitted as part of the short-term rental facility unless such facility is located in a commercial zoning district. (4) Lighting. If the property is residentially zoned, all lighting must be directed toward the establishment and not at adjacent properties. (5) Occupancy. The maximum number of adults allowed to reside in short-term rental facility is two (2) adults per bedroom plus two (2) additional adults per rental unit. (6) Signage. No on -premise signage shall be allowed advertising the property as a short-term rental consistent with the code and state law. (7) Annual inspection required. (A) Annual inspection and Fee. The licensee shall be required to have their short-term rental unit and the premises upon which the short-term rental unit is located inspected annually by The Colony Fire Department Fire Marshal's Office. The licensee shall be required to pay an annual inspection fee as adopted in the city's master fee schedule by the City. (B) Refusing Entry for Required Inspection. If entry is refused thus prohibiting inspection, the City shall have recourse to every remedy provided by law to secure entry. (i) A short-term rental unit shall be determined to have passed inspection when the short-term rental unit and the premises upon which the short-term rental unit is located are found to be in compliance with applicable ordinances, laws, and regulations. If deficiencies are found during the inspection, the owner shall be provided a written explanation of the deficiencies and the City Manager or designee shall not issue a short-term rental unit permit for the short-term rental unit until the short-term rental unit is brought into compliance. (ii) A licensee of a short-term rental unit may request a re -inspection following notification of deficiencies during an inspection. Such reinspection shall be made within two (2) working days after a request for reinspection, except as otherwise agreed to in writing by the City Manager or designee and the owner. Sec. 8-87. Revocation, suspension or denial of a license. The City Manager or designee may immediately revoke or suspend the license, or deny either the issuance or renewal thereof, if it is found that: (1) The licensee, designated operator, or guest has violated or failed to meet any of the provisions of this article or conditions of the license; (2) The licensee, designated operator, or guest has violated any federal, state, or city law, or regulation pertaining to the use of the property as a short-term rental facility; (3) The chief of the police department or the chief of the fire department has determined that the short-term rental facility would pose a serious threat to public health, safety, or welfare; or (4) The applicant has made a false statement of material fact on an application for a short-term rental facility license. Sec. 8-88. Notice to applicant/license; appeals. (a) Upon denial, suspension or revocation, the City Manager or designee shall notify the applicant or licensee in writing either in person or by certified mail to the address listed on the application of the action taken and the reasons therefore. A person may appeal a decision to deny, revoke, or suspend a license to the city council. Appeals shall be submitted to the city secretary in writing within fifteen (15) days following the date the applicant or licensee receives the decision. A hearing on the denial, suspension, or revocation will be scheduled for the next regular meeting of the city council that is more than six (6) days away. The council will render a decision on the appeal within ten (10) days of the hearing. A licensee shall not operate the short-term rental facility during the appeal process. (b) At the appeal hearing on a denial of an initial license application, the appealing party must present evidence clearly indicating that the City Manager or designee was incorrect in determining that the stated grounds for the license denial existed. (c) At the appeal hearing on a license suspension, revocation, or refusal to renew, the City Manager or designee must present evidence clearly indicating that the stated grounds for such action existed. Sec. 8-89. - Reserved." SECTION 5. If any section, article paragraph, sentence, clause, phrase or word in this Ordinance, or application thereto any persons or circumstances is held invalid or unconstitutional by a Court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this Ordinance; and the City Council hereby declares it would have passed such remaining portions of this Ordinance despite such invalidity, which remaining portions shall remain in full force and effect. SECTION 6. That all provisions of the Ordinances of the City of The Colony, Texas, in conflict with the provisions of this Ordinance be, and the same are hereby amended, repealed, and all other provisions of the Ordinances of the City not in conflict with the provisions of this Ordinance shall remain in full force and effect. SECTION 7. Any person, firm, or corporation violating any of the provisions of this Ordinance shall be deemed guilty of a misdemeanor and, upon conviction in the municipal court of the City of The Colony, Texas, shall be punished by a fine not to exceed the sum of Two Thousand Dollars ($2,000.00) for each offense. Every day a violation occurs shall constitute a separate offense. SECTION 8. This Ordinance shall become effective immediately upon its passage and publication as required by law. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS, THIS 181h DAY OF NOVEMBER 2025. ATTEST: � Qkami6- Ana Alvarado, Deputy City Secretary APPROVED AS TO Jeff Moore, jUity Attorney