Bill Text: TX SB1678 | 2013-2014 | 83rd Legislature | Engrossed

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Bill Title: Relating to the events and expenses eligible for, reporting requirements concerning disbursements from, and a study by the comptroller of the Major Events trust fund and the Events trust fund.

Spectrum: Bipartisan Bill

Status: (Passed) 2013-06-14 - Effective on 9/1/13 [SB1678 Detail]

Download: Texas-2013-SB1678-Engrossed.html

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By: Deuell, Davis S.B. No. 1678
Patrick

A BILL TO BE ENTITLED
relating to the events and expenses eligible for, reporting
requirements concerning disbursements from, an audit by the state
auditor of, and a study by the comptroller of the Major Events trust
fund and the Events trust fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 5A, Chapter 1507 (S.B. 456), Acts of the
76th Legislature, Regular Session, 1999 (Article 5190.14, Vernon's
Texas Civil Statutes), is amended by amending Subsections (a-1),
(b-1), (h), (i), (k), (p), and (w) and adding Subsections (x) and
(y) to read as follows:
(a-1) An event not listed [included] in Subsection (a)(4) of
this section is ineligible [eligible] for funding under this
section. A listed event may receive funding under this section only
if:
(1) a site selection organization selects a site
located in this state for the event to be held one time or, for an
event scheduled to be held each year for a period of years under an
event contract, one time each year for the period of years, after
considering, through a highly competitive selection process, one or
more sites that are not located in this state;
(2) a site selection organization selects a site in
this state as:
(A) the sole site for the event; or
(B) the sole site for the event in a region
composed of this state and one or more adjoining states; [and]
(3) the event is held not more than one time in any
year; and
(4) the amount of the incremental increase in tax
receipts determined by the comptroller under Subsection (b) of this
section equals or exceeds $1 million.
(b-1) A request for a determination of the amount of
incremental increase in tax receipts specified by Subsection (b) of
this section must be submitted to the comptroller not earlier than
one year and not later than 45 days [three months] before the date
the event begins. The comptroller shall base the determination
specified by Subsection (b) of this section on information
submitted by the local organizing committee, endorsing
municipality, or endorsing county, and must make the determination
not later than the 30th day after the date the comptroller receives
the request and related information.
(h) The funds in the Major Events trust fund may be used to
pay the principal of and interest on notes issued by an endorsing
municipality or endorsing county under Subsection (g) of this
section and to fulfill obligations of the state or an endorsing
municipality or endorsing county to a site selection organization
under a game support contract or event support contract. Subject to
Subsection (k) of this section, the[, which] obligations may
include the payment of costs relating to the preparations necessary
[or desirable] for the conduct of the event and the payment of costs
of conducting the event, including improvements or renovations to
existing facilities or other facilities and costs of acquisition or
construction of new facilities or other facilities.
(i) A local organizing committee, endorsing municipality,
or endorsing county shall provide information required by the
comptroller to enable the comptroller to fulfill the comptroller's
duties under this section, including annual audited statements of
any financial records required by a site selection organization and
data obtained by the local organizing committee, an endorsing
municipality, or an endorsing county relating to attendance at the
event, including an estimate of the number of people expected to
attend the event who are not residents of this state, and to the
economic impact of the event. A local organizing committee,
endorsing municipality, or endorsing county must provide an annual
audited financial statement required by the comptroller, if any,
not later than the end of the fourth month after the date the period
covered by the financial statement ends. After the conclusion of an
event and on the comptroller's request, a local organizing
committee, endorsing municipality, or endorsing county must
provide information relating to the event, such as attendance
figures, including an estimate of the number of attendees at the
event who are not residents of this state, financial information,
or other public information held by the local organizing committee,
endorsing municipality, or endorsing county that the comptroller
considers necessary.
(k) The comptroller may make a disbursement from the Major
Events trust fund on the prior approval of each contributing
endorsing municipality or endorsing county for a purpose for which
a local organizing committee, an endorsing municipality, or an
endorsing county or the state is obligated under a game support
contract or event support contract. If an obligation is incurred
under a games support contract or event support contract to make a
structural improvement to the site or to add a fixture to the site
for purposes of an event and that improvement or fixture is expected
to derive most of its value in subsequent uses of the site for
future events, a disbursement from the trust fund made for purposes
of that obligation is limited to five percent of the cost of the
improvement or fixture and the remainder of the obligation is not
eligible for a disbursement from the trust fund. In considering
whether to make a disbursement from the trust fund, the comptroller
may not consider a contingency clause in an event support contract
as relieving a local organizing committee's, endorsing
municipality's, or endorsing county's obligation to pay a cost
under the contract. A disbursement may not be made from the trust
fund that the comptroller determines would be used for the purpose
of soliciting the relocation of a professional sports franchise
located in this state.
(p) The comptroller may not undertake any of the
responsibilities or duties set forth in this section unless:
(1) a request is submitted by the municipality or the
county in which the event will be located;
(2) the event meets all the requirements for funding
under this section, including Subsection (a-1) of this section; and
(3) the request is[. The request must be] accompanied
by documentation from a site selection organization selecting the
site for the event.
(w) Not later than 10 [18] months after the last day of an
event eligible for disbursements from the Major Events trust fund
for costs associated with the event, the comptroller using existing
resources shall[:
[(1)] complete a study in the market area of the event
on the measurable economic impact directly attributable to the
preparation for and presentation of the event and related
activities. The comptroller shall[; and
[(2)] post on the comptroller's Internet website:
(1) the results of the study conducted under this
subsection, including any source documentation or other
information relied on by the comptroller for the study;
(2) the amount of incremental increase in tax receipts
for the event determined under Subsection (b) of this section;
(3) the site selection organization documentation
described in Subsection (p)(3) of this section;
(4) any source documentation or information described
under Subsection (i) of this section that was relied on by the
comptroller in making the determination of the amount of
incremental increase in tax receipts under Subsection (b) of this
section; and
(5) documentation verifying that:
(A) a request submitted by a local organizing
committee, endorsing municipality, or endorsing county under
Subsection (p) of this section is complete and certified as such by
the comptroller;
(B) the determination on the amount of
incremental increases in tax receipts under Subsection (b) of this
section considered the information submitted by a local organizing
committee, endorsing municipality, or endorsing county as required
under Subsection (b-1) of this section; and
(C) each deadline established under this section
was timely met [Subdivision (1) of this subsection].
(x) Subsection (w) of this section does not require
disclosure of information that is confidential under Chapter 552,
Government Code, or confidential or privileged under other law.
(y) After the conclusion of an event, the comptroller shall
compare information on the actual attendance figures provided to
the comptroller under Subsection (i) of this section with the
estimated attendance numbers used to determine the incremental
increase in tax receipts under Subsection (b) of this section. If
the actual attendance figures are significantly lower than the
estimated attendance numbers, the comptroller may reduce the amount
of a disbursement for an endorsing entity under the Major Events
trust fund in proportion to the discrepancy between the actual and
estimated attendance and in proportion to the amount contributed to
the fund by the entity. The comptroller by rule shall define
"significantly lower" for purposes of this subsection and provide
the manner in which a disbursement may be proportionately reduced.
This subsection does not affect the remittance of any money
remaining in the fund in accordance with Subsection (m) of this
section.
SECTION 2. Section 5C, Chapter 1507 (S.B. 456), Acts of the
76th Legislature, Regular Session, 1999 (Article 5190.14, Vernon's
Texas Civil Statutes), is amended by adding Subsections (b-1),
(b-2), (k-1), (r), (s), and (t) and amending Subsections (h), (i),
and (k) to read as follows:
(b-1) An endorsing county or endorsing municipality may,
during any 12-month period, request funding under this section for
not more than 10 events, only three of which may be nonsporting
events.
(b-2) An endorsing county may not submit a request for
funding under this section for an event held at a location wholly
within the corporate boundaries of a municipality.
(h) The money in the Events trust fund may be used to pay the
principal of and interest on notes issued by an endorsing
municipality or endorsing county under Subsection (g) of this
section and to fulfill obligations of this state or an endorsing
municipality or endorsing county to a site selection organization
under an event support contract. Subject to Subsection (k) of this
section, the[, which] obligations may include the payment of costs
relating to the preparations necessary [or desirable] for the
conduct of the event and the payment of costs of conducting the
event, including improvements or renovations to existing
facilities or other facilities and costs of acquisition or
construction of new facilities or other facilities.
(i) A local organizing committee, endorsing municipality,
or endorsing county shall provide information required by the
comptroller to enable the comptroller to fulfill the comptroller's
duties under this section, including annual audited statements of
any financial records required by a site selection organization and
data obtained by the local organizing committee, an endorsing
municipality, or an endorsing county relating to attendance at the
event, including an estimate of the number of people expected to
attend the event who are not residents of this state, and to the
economic impact of the event. A local organizing committee,
endorsing municipality, or endorsing county must provide an annual
audited financial statement required by the comptroller, if any,
not later than the end of the fourth month after the date the period
covered by the financial statement ends. After the conclusion of an
event and on the comptroller's request, a local organizing
committee, endorsing municipality, or endorsing county must
provide information relating to the event, such as attendance
figures, including an estimate of the number of people who are not
residents of this state who attended the event, financial
information, or other public information held by the local
organizing committee, endorsing municipality, or endorsing county
that the comptroller considers necessary.
(k) The comptroller may make a disbursement from the Events
trust fund on the prior approval of each contributing endorsing
municipality or endorsing county for a purpose for which a local
organizing committee, an endorsing municipality, or an endorsing
county or this state is obligated under an event support contract,
including an obligation to pay costs incurred in the conduct of the
event and costs incurred in making preparations necessary for the
event. If an obligation is incurred under an event support contract
to make a structural improvement to the site or to add a fixture to
the site for purposes of an event and that improvement or fixture is
expected to derive most of its value in subsequent uses of the site
for future events, a disbursement from the trust fund made for
purposes of that obligation is limited to five percent of the cost
of the improvement or fixture and the remainder of the obligation is
not eligible for a disbursement from the trust fund. In considering
whether to make a disbursement from the trust fund, the comptroller
may not consider a contingency clause in an event support contract
as relieving a local organizing committee's, endorsing
municipality's, or endorsing county's obligation to pay a cost
under the contract.
(k-1) A disbursement may not be made from the trust fund
that the comptroller determines would be used for the purpose of:
(1) soliciting the relocation of a professional sports
franchise located in this state;
(2) constructing an arena, stadium, or convention
center;
(3) conducting usual and customary maintenance of a
facility; or
(4) making major renovations to a facility.
(r) The comptroller may adopt a model event support contract
and make the contract available on the comptroller's Internet
website.
(s) The comptroller may adopt rules necessary to implement
this section.
(t) After the conclusion of an event, the comptroller shall
compare information on the actual attendance figures provided to
the comptroller under Subsection (i) of this section with the
estimated attendance numbers used to determine the incremental
increase in tax receipts under Subsection (b) of this section. If
the actual attendance figures are significantly lower than the
estimated attendance numbers, the comptroller may reduce the amount
of a disbursement for an endorsing entity under the Events trust
fund in proportion to the discrepancy between the actual and
estimated attendance and in proportion to the amount contributed to
the fund by the entity. The comptroller by rule shall define
"significantly lower" for purposes of this subsection and provide
the manner in which a disbursement may be proportionately reduced.
This subsection does not affect the remittance of any money
remaining in the fund in accordance with Subsection (m) of this
section.
SECTION 3. Subsections (r), (s), (t), and (u), Section 5A,
Chapter 1507 (Senate Bill No. 456), Acts of the 76th Legislature,
Regular Session, 1999 (Article 5190.14, Vernon's Texas Civil
Statutes), are repealed.
SECTION 4. (a) The state auditor shall conduct an audit to
determine the efficiency and effectiveness of funding events
through an events trust fund authorized under Section 5, 5A, 5B, or
5C, Chapter 1507 (Senate Bill No. 456), Acts of the 76th
Legislature, Regular Session, 1999 (Article 5190.14, Vernon's
Texas Civil Statutes).
(b) The audit, at a minimum, must determine whether money
from an events trust fund is efficiently and effectively:
(1) disbursed in compliance with Section 5, 5A, 5B, or
5C, Chapter 1507 (Senate Bill No. 456), Acts of the 76th
Legislature, Regular Session, 1999 (Article 5190.14, Vernon's
Texas Civil Statutes), as applicable, the Government Code, and
other relevant laws or standards;
(2) monitored so that the event and the persons and
entities that receive money from the fund comply with the terms of
applicable agreements and with the applicable sections of Chapter
1507 (Senate Bill No. 456), Acts of the 76th Legislature, Regular
Session, 1999 (Article 5190.14, Vernon's Texas Civil Statutes), the
Government Code, and other relevant laws or standards; and
(3) maintained to provide adequate financial control
systems and to ensure accountability for use of the money.
(c) The state auditor shall prepare a report of the audit
conducted under Subsection (a) of this section. Not later than
January 1, 2015, the state auditor shall electronically file a copy
of the report with the lieutenant governor, the speaker of the house
of representatives, and the presiding officer of each standing
committee of the senate and house of representatives having primary
jurisdiction over fiscal matters or matters related to tourism or
recreation. The report must include details on:
(1) the process for approving the disbursement of
money through an events trust fund; and
(2) the degree to which past and present recipients of
money from a fund have complied with the terms of event agreements
and with the applicable sections of Chapter 1507 (Senate Bill No.
456), Acts of the 76th Legislature, Regular Session, 1999 (Article
5190.14, Vernon's Texas Civil Statutes), the Government Code, and
other relevant laws or standards.
(d) The comptroller of public accounts shall conduct a study
to determine:
(1) the economic impact of the events that qualify for
funding through an events trust fund; and
(2) whether the events would likely be held in this
state in the absence of the incentives provided through the fund.
(e) The comptroller of public accounts shall prepare a
report of the findings from the study conducted under Subsection
(d) of this section. Not later than January 1, 2015, the
comptroller shall electronically file a copy of the report with the
lieutenant governor, the speaker of the house of representatives,
and the presiding officer of each standing committee of the senate
and house of representatives having primary jurisdiction over
fiscal matters or matters related to tourism or recreation.
(f) Notwithstanding any other law, the comptroller of
public accounts shall reimburse the state auditor for the cost of
the audit conducted by the state auditor under Subsection (a) of
this section using any balances available in the 2014 state fiscal
year from the events trust funds established under Section 5, 5A,
5B, or 5C, Chapter 1507 (Senate Bill No. 456), Acts of the 76th
Legislature, Regular Session, 1999 (Article 5190.14, Vernon's
Texas Civil Statutes). The comptroller shall pay the audit cost
proportionally from the established funds based on the maximum
balances in the funds during the 2014 state fiscal year.
(g) This section expires September 1, 2015.
SECTION 5. The changes in law made by this Act apply only to
a request submitted to the comptroller of public accounts by an
endorsing municipality or endorsing county under Section 5A or 5C,
Chapter 1507 (Senate Bill No. 456), Acts of the 76th Legislature,
Regular Session, 1999 (Article 5190.14, Vernon's Texas Civil
Statutes), on or after the effective date of this Act. A request
submitted under Section 5A or 5C before that date is governed by the
law in effect on the date the request is submitted, and that law is
continued in effect for that purpose.
SECTION 6. 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, 2013.