City opens application window for Hotel Occupancy Tax grants

Palestine Herald-Press
By Jason Jones 
jjones@palestineherald.com
May 27, 2023

The City of Palestine is accepting applications for Hotel Occupancy Tax grants from qualified applicants until June 16 for the Fiscal Year 2023-2024.

The Palestine City Council annually allocates Hotel Occupancy Tax funds for which local organizations and individuals can apply. The event or attraction must meet the “Texas Two Step” criteria in order to qualify.

“To put it plainly, every expenditure should result in ‘heads in beds’ or an overnight stay in order to meet the first criteria to qualify for funds," said Katie Beth Henry, Tourism Marketing Manager for the City of Palestine. "Once an event or attraction has met that qualification, then the expenditure needs to fit into the second part of the test, meeting one of the nine categories authorized by statute.”

The Hotel Occupancy Tax is collected by the city of Palestine from hotels, bed and breakfasts and other lodging facilities in accordance with state law. The revenue from the tax may be used only to directly promote tourism and the hotel and convention industry.

In the proposed budget, staff has requested an allocation of up to $100,000. The final approved budgeted amount will be available for the public to apply for related to activities that will directly promote tourism and the hotel and convention industry.

This year, the Palestine Tourism Advisory Board is seeking qualified applications that fall within seven of the nine categories and the funds are restricted to being allocated or applied to uses as follows:

1) Registration of convention delegates: The furnishing of facilities, personnel and materials for the registration of convention delegates or registrants.

2) Advertising, solicitations and promotions that directly promote tourism and the hotel and convention industry: Advertising and conducting solicitations and promotional programs to attract tourists and convention delegates or registrants to the municipality or its vicinity.

3) Promotions of the Arts that directly promote tourism and the hotel and convention industry: The encouragement, promotion, improvement and application of the arts that can be shown to have some direct impact on tourism and the hotel/convention industry. The impact may be that the art facility or event can show hotel nights that are booked due to their events or that guests at hotels attend the arts event. Eligible forms of art include instrumental and vocal music, dance, drama, folk art, creative writing, architecture, design and allied fields, painting, sculpture photography, graphic and craft arts, motion picture, radio, television, tape and sound recording, and other arts related to the presentation, performance, execution and exhibition of these major art forms.

4) Historical restoration and preservation activities that directly promote tourism and the hotel and convention industry: Historical restoration and preservation projects or activities or advertising and conducting solicitation and promotional programs to encourage tourists and convention delegates to visit preserved historic sites or museums.

5) Sporting event expenses that substantially increase economic activity at hotels: Expenses including promotional expenses, directly related to a sporting event in which the majority of participants are tourists. The event must substantially increase economic activity at hotels within the city or its vicinity.

6) Funding transportation systems for transporting tourists from hotels to and near the city to any of the following destinations: The law specifically prohibits the use of the local hotel tax to cover the costs for general city transit costs to transport the general public.

Approved examples include transportation systems to:

• the commercial center of the city,

• a convention center in the city,

• other hotels in or near the city,

• and tourist attractions in or near the city.

7) Signage directing tourists to sights and attractions that are visited frequently by hotel guests in the municipality.

Applicants wishing to be considered will have until June 16 to submit an application for funding for the city fiscal year effective Oct. 1 through Sept. 30, 2024.

“This year, we are hosting a call for applications to allow the Tourism Advisory Board to review all applications and consider the best fit for the funds to be used throughout the year," Henry said. "We will consider them against the goals set forth in our strategic plan and how they may fit into the city-wide goals for the Tourism Department for the City of Palestine.”

Applicants may pick up an application at the Palestine Visitor Center located at 825 W. Spring Street Monday through Friday between 10 a.m. and 5 p.m. or by emailing tourism@palestine-tx.org. The guidelines, application and post event recap form are also available for immediate download in the City’s website at www.cityofpalestinetx.com/government/city-council/boards-commissions/tourism-advisory-board/