89R14373 JBD-D     By: Zaffirini S.B. No. 2588       A BILL TO BE ENTITLED   AN ACT   relating to the conversion of all or a portion of a municipal sales   and use tax originally adopted for the purpose of sports and   community venues to a municipal sales and use tax for economic   development purposes.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 334.089(a), Local Government Code, is   amended to read as follows:          (a)  Except as provided by Section 334.090, a [A] sales and   use tax imposed under this subchapter may not be collected after the   last day of the first calendar quarter occurring after notification   to the comptroller by the municipality or county that the   municipality or county has abolished the tax or that all bonds or   other obligations of the municipality or county that are payable in   whole or in part from money in the venue project fund, including any   refunding bonds or other obligations, have been paid in full or the   full amount of money, exclusive of guaranteed interest, necessary   to pay in full the bonds and other obligations has been set aside in   a trust account dedicated to the payment of the bonds and other   obligations.          SECTION 2.  Subchapter D, Chapter 334, Local Government   Code, is amended by adding Section 334.090 to read as follows:          Sec. 334.090.  CONVERSION OF TAX. (a) A sales and use tax   imposed under this subchapter is abolished or the rate of the tax is   reduced, as applicable, on the date a conversion of all or a portion   of the tax under Section 504.263 or 505.260 takes effect.          (b)  A municipality shall notify the comptroller of a   conversion described by Subsection (a) not later than the 60th day   before the date the conversion takes effect.          SECTION 3.  Subchapter F, Chapter 504, Local Government   Code, is amended by adding Section 504.263 to read as follows:          Sec. 504.263.  ELECTION TO CONVERT CERTAIN SALES AND USE TAX   AUTHORITY. (a)  This section applies only to a municipality that:                (1)  has adopted a sales and use tax under Subchapter D,   Chapter 334; and                (2)  on September 1, 2025, has or will have outstanding   bonded indebtedness for bonds issued under Section 334.043 that are   payable wholly or partly from the sales and use tax.          (b)  A municipality may convert all or a portion of a sales   and use tax originally adopted under Subchapter D, Chapter 334, to a   sales and use tax under this subchapter if the conversion is   approved by a majority of the voters of the municipality voting at   an election held for that purpose.          (c)  In an election to convert all or a portion of a sales and   use tax as provided by this section, the ballot shall be printed to   provide for voting for or against the proposition: "The conversion   of (insert "the" or "a portion of the," as applicable) sales and use   tax originally adopted for the purpose of financing a sports and   community venue project to a (insert the appropriate tax rate that   is an increment of one-eighth of one percent) sales and use tax for   the promotion and development of new and expanded business   enterprises."          (d)  For purposes of Chapter 321, Tax Code, an election under   this section is an election to adopt a sales and use tax under this   subchapter and, as applicable, to abolish or reduce the rate of the   tax under Subchapter D, Chapter 334.          (e)  Notwithstanding Section 321.102, Tax Code, a conversion   under this section takes effect on the first day after the date all   bonds described by Subsection (a)(2), including any refunding   bonds, have been paid in full or the full amount of money, exclusive   of guaranteed interest, necessary to pay the bonds in full has been   set aside in a trust account dedicated to the payment of the bonds.          (f)  Notwithstanding Section 321.405(a), Tax Code, a   municipality that converts all or a portion of a tax under this   section shall comply with Section 321.405, Tax Code, not later than   the 60th day before the date the conversion takes effect.          (g)  The conversion of all or a portion of a sales and use tax   under this section:                (1)  abolishes or reduces the rate of a tax adopted   under Subchapter D, Chapter 334, as applicable;                (2)  imposes a sales and use tax under this subchapter:                      (A)  at the same rate as the tax under Subchapter   D, Chapter 334, was imposed, if that tax is abolished; or                      (B)  at a rate equal to the reduction in the rate   of the tax under Subchapter D, Chapter 334, if that rate is reduced;   and                (3)  may not affect the combined rate of all sales and   use taxes imposed by political subdivisions of this state in any   territory in which the tax is imposed.          (h)  If a sales and use tax conversion under this section is   not approved, the election does not affect the municipality's   authority to impose the sales and use tax adopted under Chapter 334,   or the rate of that tax, as provided by that chapter.          (i)  If conversion of a portion of a sales and use tax is   approved under this section, the municipality may continue to   impose the portion of the tax under Subchapter D, Chapter 334, that   was not converted as provided by that chapter.          (j)  For a tax converted under this subchapter, the election   requirement under Subsection (b) is satisfied and another election   is not required if the voters of the authorizing municipality   approved the conversion at an election called or held before the   effective date of the Act enacting this section under an ordinance   calling the election that:                (1)  was published in a newspaper of general   circulation in the municipality at least 14 days before the date of   the election; and                (2)  expressly stated that the election was being   called or held in anticipation of the enactment of enabling and   implementing legislation without further elections.          SECTION 4.  Subchapter F, Chapter 505, Local Government   Code, is amended by adding Section 505.260 to read as follows:          Sec. 505.260.  ELECTION TO CONVERT CERTAIN SALES AND USE TAX   AUTHORITY. (a) This section applies only to a municipality that:                (1)  has adopted a sales and use tax under Subchapter D,   Chapter 334; and                (2)  on September 1, 2025, has or will have outstanding   bonded indebtedness for bonds issued under Section 334.043 that are   payable wholly or partly from the sales and use tax.          (b)  A municipality may convert all or a portion of a sales   and use tax originally adopted under Subchapter D, Chapter 334, to a   sales and use tax under this subchapter if the conversion is   approved by a majority of the voters of the municipality voting at   an election held for that purpose.          (c)  In an election to convert all or a portion of a sales and   use tax as provided by this section, the ballot shall be printed to   provide for voting for or against the proposition: "The conversion   of (insert "the" or "a portion of the," as applicable) sales and use   tax originally adopted for the purpose of financing a sports and   community venue project to a (insert the appropriate tax rate that   is an increment of one-eighth of one percent) sales and use tax for   economic development projects described by Chapter 505, Local   Government Code."          (d)  For purposes of Chapter 321, Tax Code, an election under   this section is an election to adopt a sales and use tax under this   subchapter and, as applicable, to abolish or reduce the rate of the   tax under Subchapter D, Chapter 334.          (e)  Notwithstanding Section 321.102, Tax Code, a conversion   under this section takes effect on the first day after the date all   bonds described by Subsection (a)(2), including any refunding   bonds, have been paid in full or the full amount of money, exclusive   of guaranteed interest, necessary to pay the bonds in full has been   set aside in a trust account dedicated to the payment of the bonds.          (f)  Notwithstanding Section 321.405(a), Tax Code, a   municipality that converts all or a portion of a tax under this   section shall comply with Section 321.405, Tax Code, not later than   the 60th day before the date the conversion takes effect.          (g)  The conversion of all or a portion of a sales and use tax   under this section:                (1)  abolishes or reduces the rate of a tax adopted   under Subchapter D, Chapter 334, as applicable;                (2)  imposes a sales and use tax under this subchapter:                      (A)  at the same rate as the tax under Subchapter   D, Chapter 334, was imposed, if that tax is abolished; or                      (B)  at a rate equal to the reduction in the rate   of the tax under Subchapter D, Chapter 334, if that rate is reduced;   and                (3)  may not affect the combined rate of all sales and   use taxes imposed by political subdivisions of this state in any   territory in which the tax is imposed.          (h)  If a sales and use tax conversion under this section is   not approved, the election does not affect the municipality's   authority to impose the sales and use tax adopted under Chapter 334,   or the rate of that tax, as provided by that chapter.          (i)  If conversion of a portion of a sales and use tax is   approved under this section, the municipality may continue to   impose the portion of the tax under Subchapter D, Chapter 334, that   was not converted as provided by that chapter.          (j)  For a tax converted under this subchapter, the election   requirement under Subsection (b) is satisfied and another election   is not required if the voters of the authorizing municipality   approved the conversion at an election called or held before the   effective date of the Act enacting this section under an ordinance   calling the election that:                (1)  was published in a newspaper of general   circulation in the municipality at least 14 days before the date of   the election; and                (2)  expressly stated that the election was being   called or held in anticipation of the enactment of enabling and   implementing legislation without further elections.          SECTION 5.  This Act takes effect immediately if it receives   a vote of two-thirds of all the members elected to each house, as   provided by Section 39, Article III, Texas Constitution.  If this   Act does not receive the vote necessary for immediate effect, this   Act takes effect September 1, 2025.