More oversight demanded in 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 to Texas, including Super Bowl XLV, held in Arlington two years ago.

Several legislators called for more oversight Wednesday of the Major Events Trust Fund, as well as formal state audits and a limit on the number of funding requests that a community can submit 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 prepared for NBA All-Star Game activities.

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

The fund is among the primary incentive programs managed by the comptroller's office to help the state and its cities attract or keep high-profile events ranging from football bowl games to auto races.

The Legislature created the fund in 1999 in an effort to draw the Olympics to Texas.

State records show that more than $200 million has been paid out to communities statewide 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 Cowboys Stadium in 2011.

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

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 structural improvements made to lure big events.

"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 the tax dollars and outlining that events not specifically listed for the funding are ineligible.

The measure would also limit state reimbursement for permanent structural improvements to 5 percent of the cost and would create an oversight process to review events and determine that applications meet the criteria.

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

Davis' bill calls for more oversight, asking for an audit to ensure the money is spent properly. There has never been a state audit of these funds, she said, and her bill calls for one by Jan. 1, 2015.

Deuell's bill includes eliminating prepayments of trust fund money, limiting reimbursements for permanent structural improvements to 5 percent and restricting funding requests for communities to one event per year, except for additional events that could bring an extra $375,000 in tax gains or draw at least 25,000 out-of-state visitors.

More transparency

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

But he said the one-request-per-year limit could be challenging for communities trying to draw multiple events.

"We are pursuing two to three events at the same time," he said.

And limiting permanent structural improvements to 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.

Numerous officials testified that the fund is a great tool in helping communities attract events.

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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