City of Lake Jackson staff told the City Council that existing hotel occupancy tax collection provisions do not include language allowing the council to waive penalty and interest for lodging providers. Council discussed whether to add such authority to the municipal ordinance and directed staff to draft a possible ordinance if the council wishes to consider it at a future meeting.

City Manager James (identified in the meeting) explained that HDL, the company that handles the city's hotel occupancy tax collection and audits, had audited three hotels this audit cycle and one vendor requested the city consider waiving penalty and interest owed on assessments. Legal counsel Sherry told the council there is currently no ordinance provision to permit such a waiver; adding the authority would require an ordinance amendment.

Staff described the specific amounts in the audit example: the underlying unpaid taxes were about $9,000, with penalty of roughly $1,800 and interest of about $1,100, producing close to $3,000 in penalty and interest in that instance. Staff and council discussed that the PEG-like restriction analogy does not apply here; instead they focused on whether any waiver policy should be written with objective parameters (for example, a one-time waiver per business) to limit inconsistent treatment. Council members raised concerns about precedent and disparate treatment if a subjective "reasonableness" standard were used.

Council did not introduce or adopt an ordinance at the meeting. Staff said if council is interested in giving itself waiver authority, Sherry would draft ordinance language for council review and the matter would return on a future agenda. Council members suggested options to limit exposure, including drafting a one-time waiver provision or established parameters for eligibility.