Bill putting more restrictions on special events fund heads to governor

Posted Tuesday, May. 28, 2013  comments  Print Reprints

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Waiting on Gov. Rick Perry’s desk is a bill geared toward tightening restrictions on state tax incentive programs that help draw marquee events to Texas, such as Super Bowl XLV, held in Arlington two years ago.

Lawmakers including Sen. Wendy Davis, D-Fort Worth, worked during the regular session to increase oversight of the Major Events Trust Fund and Events Trust Fund, both designed to give extra tax dollars generated by special events to communities that host those events.

Davis is disappointed that a key piece of the bill — requiring state audits of the funds — died but said the measure still adds improvements.

“The funds themselves certainly serve a valid purpose,” she said. “The problem is we know there is a lot of pork that’s been given through that venue.

“The bill definitely helps in terms of oversight … and limits on the number of awards,” she said. “But I think the taxpayers deserve to have an audit of the past activities.”

She said she hopes that an interim study of the funds will include a request for an audit.

The issue has been in the spotlight since reports showed that millions of dollars from the funds were used to buy video scoreboards and screens at the American Airlines Center in Dallas and the Toyota Center in Houston in preparation for NBA All-Star Game events.

The funds are among the incentive programs managed by the comptroller’s office to help Texas and its cities attract or keep high-profile events, from football bowl games to auto races.

The Legislature created the Major Events Trust Fund in 1999 to try to draw the Olympics to Texas. Since then, it has been used to help communities lure unique events to Texas.

State records show that more than $200 million in extra tax dollars have 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.

Through the fund, cities are reimbursed from increases in revenue from hotel and sales taxes that can be tracked to special events.

Supporters say new reporting requirements would make public key information about events that receive funding. Opponents say this fund has helped draw numerous events to Texas and doesn’t need revision.

New changes

Senate Bill 1678 makes several changes, such as preventing the state comptroller from prepaying for events and requiring that major events receiving money from the trust add at least $1 million in new taxes for Texas.

It also limits the number of events eligible for reimbursement and prevents funds from being used for routine maintenance or stadium construction.

And it places a cap of 5 percent of total costs on reimbursements for structural improvements to a private facility. That cap does not apply to public facilities, such as those that professional sporting teams lease.

Rep. Jason Isaac, R-Dripping Springs, has said the House opposed requiring a state audit because it would just be an added cost. And he said the venues receiving funds are posted online, opening the process to public scrutiny.

“Our constituents can see this stuff online,” he has told the media. “They are going to be much harder … than the state auditor is going to be.”

Davis said she isn’t giving up on an audit.

Sen. Robert Deuell, R-Greenville, has said he will continue to look into ways to audit the fund, potentially through an interim study by the Senate Committee on Economic Development.

Davis said: “There are some communities reaping huge windfalls from that fund. I would remind everyone that all of the CPRIT awards were always posted online.

“Simply to put online an award that’s given — without any examination of the decision-making as to whether the award was valid — that’s no comfort to taxpayers that wise decisions are being made.”

Anna M. Tinsley, 817-390-7610 Twitter: @annatinsley

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