More oversight demanded over tax incentives for sports, entertainment events

Posted Wednesday, Apr. 03, 2013  comments  Print Reprints
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AUSTIN - Texas lawmakers want to crack down on the tax incentive program that has helped bring marquee events into Texas, including the Super Bowl XLV that was held in Arlington two years ago.

Several lawmakers said Wednesday that they want to see more oversight of the Major Events Trust Fund - and formal state audits to make sure money in the fund is being spent the right way - in addition to potentially limiting the number of funding requests each community can submit for these funds each year.

The issue has been in the spotlight since reports showed that millions of dollars from the fund were used to buy video scoreboards and screens at the American Airlines Center in Dallas and the Toyota Center in Houston, as officials readied the facilities for NBA All-Star Games.

"I think anyone who looked at this would feel we are handing these things out like candy," said state Sen. Wendy Davis, D-Fort Worth, who has proposed one of the measures.

The fund is among the primary incentive programs managed by the comptroller's office to help Texas and communities throughout the state attract or keep high-profile events ranging from football bowl games to auto races. It was created by the legislature in 1999, in an effort to draw the Olympics to Texas, and has been used since to help communities lure unique events to Texas.

State records show that more than $200 million in extra tax dollars has been paid out to communities across the state through this fund, as well as the Special Events Trust Fund and the Events Trust Fund. The Major Events Trust Fund provided $31.1 million for Super Bowl XLV at the Dallas Cowboys stadium in 2011.

On Wednesday, Davis and fellow Sens. Kirk Watson, D-Austin, and Robert Deuell, R-Greenville, presented bills designed to make sure the fund is operating properly and productively to the Senate Economic Development Committee.

Some concerns were raised about limiting communities to seeking funds for just one event per year - and limiting the state's contribution to 5 percent of any permanent structure improvements being made to lure big events to Texas

"While we are in favor of improvements, we want to stay competitive," Arlington Deputy City Manager Theron Bowman told the committee.

The committee left the three bills pending, so that members could work with officials throughout the state about their concerns.

Watson's bill seeks to boost accountability and transparency for the Major Events Trust Fund by making sure that only improvements "necessary for the event" are eligible for these tax dollars and outlining that events not specifically listed for this funding are ineligible for money. The measure also limits state reimbursement for permanent structural improvements for events to no more than 5 percent of the overall cost of those improvements and creates an overall oversight process to review events and determine that applications meet all the criteria.

The measure also requires a more comprehensive review of the economic impact of an event 18 months after it is held and requires that all the data on that review be posted on the comptroller's website.

Davis' bill calls for more oversight, asking for a state audit to make sure the money in the fund is being spent properly.

She said there has never been a state audit of these events funds in Texas to make sure that the money is being spent properly and her bill calls for audits to be performed by Jan. 1, 2015.

Deuell's bill includes eliminating pre-payments of trust fund money, limiting reimbursements for permanent structural improvements to no more than 5 percent and limiting funding requests for communities to one event per year except for additional events that could bring an extra $375,000 in extra tax gains or draw at least 25,000 out-of-state visitors to an event.

More transparency

Bowman said the measures are geared to "create more transparency and accountability - we are in support of that."

But he said the limit of one request per year could be challenging for communities trying to draw multiple events to their community. "We are pursuing two to three events at the same time," he said.

And limiting permanent structure improvements to just 5 percent of the cost "seems small since any subsequent use of the improvement is likely to generate state revenue as well as local revenue," he told committee members.

Officials from throughout Texas weighed in on these bills Wednesday, stressing how this fund is a great tool in helping communities throughout the state.

But some requirements, such as limiting requests essentially to one a year per community, could ultimately hurt communities.

"If Texas does not get a convention (or event), there is no economic impact for the state," said John Rolfe, chief operating officer for the Greater Houston Convention and Visitors Bureau.

Texas Land Commissioner Jerry Patterson also spoke, echoing the need for an audit.

"We're spending money for questionable purposes," he said. "There needs to be an immediate audit."

Anna M. Tinsley, (817) 390-7610

Twitter: @annatinsley

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