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Senate Backs Limits on Subsidies for Event Trust Funds

Promoters say tax subsidies are needed to lure events that otherwise wouldn't be held in Texas. Critics say the practice is corporate welfare. The Texas Senate on Thursday backed legislation that keeps the subsidies going but with new restrictions and oversight.

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Taxpayer-funded programs used to lure sporting events and conferences to Texas would face new restrictions and oversight under legislation approved Thursday by the state Senate.

Senate Bill 1678 is aimed at quelling complaints about runaway spending on minor conferences and events that critics say don’t bring in many people or generate much revenue. It’s also designed to curb spending on permanent assets for event promoters, such as scoreboards or giant TV screens that sports teams have bought in the past. 

“We think the money should be used for the expenses to put on the events,” said Sen. Bob Deuell, R-Greenville, the sponsor of the legislation, which will now go to the House. 

The bill impacts the Major Events Trust Fund and Events Trust Fund, which are administered by the state comptroller. More than $250 million has been spent out of event trust funds since 2004.

According to a Senate bill analysis, the legislation would limit spending on structural improvements to 5 percent of the total. The bill would also limit the number of events eligible for funding.

For the Major Events Fund — reserved for one-of-a-kind events like Formula One racing or an NFL Super Bowl — the legislation would bar subsidies from going to any event that generated less than $1 million in increased tax revenue.

And large cities and counties or their host committees could not get funding for more than 10 events each year — seven of which would have to be sporting events — unless they generated $200,000 or more.

The bill also has a first-ever “clawback provision” that allows the comptroller to reduce the amount promoters get if their event doesn’t live up to the estimates turned in during the application process. And Sen. Wendy Davis, D-Fort Worth, won approval of an amendment requiring the state auditor’s office to conduct an audit of the programs.

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