Bill > HB5124

This bill provides a mechanism for municipalities to convert sales and use taxes originally adopted for sports and community venues to economic development purposes under specific conditions. Municipalities that have outstanding bonded indebtedness for venue projects as of September 1, 2025, can hold an election to convert all or part of their existing sales tax to either a tax for promoting business development or economic development projects. The conversion requires voter approval through a specific ballot proposition that clearly describes the tax's new purpose and rate. The conversion can only take effect after existing venue-related bonds are fully paid or funds are set aside in a dedicated trust account. The bill ensures that the total combined tax rate remains unchanged and allows municipalities to maintain a portion of the original tax if only partial conversion is approved. Municipalities must notify the state comptroller at least 60 days before the conversion takes effect. The legislation provides flexibility for cities with existing venue-related sales taxes to redirect those funds toward economic growth, while protecting existing bond obligations and maintaining transparency through a voter approval process.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB5124