BILL ANALYSIS
C.S.S.B. 1346
By: West
State Affairs
04-26-95
Committee Report (Substituted)
BACKGROUND
The economics of professional sports teams has been changing
rapidly as players' salaries and other costs rise faster than
revenues. While ticket price increases were once the answer to
offsetting rising costs, this revenue source no longer is seen as
a solution as team owners attempt to keep tickets affordable for
the average Texas sports fan.
The proliferation of new professional sports stadiums and arenas
across the United States is testimony to the changing economics of
professional sports. Public financing of these facilities has
become the key to enabling franchises to remain as economic engines
generating jobs and revenues for the communities where the teams
reside. If Texas cities were allowed to offer incentives such as
rebates, they would be more successful in their attempts to improve
their economy through revitalization and tourism revenue.
PURPOSE
As proposed, C.S.S.B. 1346 allows municipalities to offer
incentives such as rebates in order to designate certain areas as
sports facility enterprise zones, which would improve their economy
through revitalization and tourism revenue.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Chapter 2303, Government Code, by adding
Subchapter H, as follows:
SUBCHAPTER H. QUALIFIED SPORTS FACILITY PROJECTS
Sec. 2303.601. Defines "local government," "qualified sports
facility project," "sports authority," "sports facility," and
"sports facility enterprise zone."
Sec. 2303.602. DESIGNATION OF SPORTS FACILITY ENTERPRISE
ZONE. (a) Provides that a sports facility enterprise zone
(zone) is an enterprise zone entitled to the benefits of this
chapter applicable to enterprise zones.
(b) Provides that if a local government designates an area
as a reinvestment zone and as a zone in the same ordinance
or order, the area is designated as a zone without further
hearing or procedural requirement other than as required by
Chapter 311, Tax Code.
(c) Authorizes the governing body of a zone in which a
qualified sports facility project (project) is located to
apply to the Texas Department of Commerce (department) for
designation as a zone for the purpose of state benefits.
Requires the department to designate the zone if the
department or the governing body of the local government
certifies that the zone was created in accordance with this
subchapter and Chapter 311, Tax Code.
(d) Provides that designation of a zone does not reduce the
number of zones the department may designate.
Sec. 2303.603. QUALIFIED SPORTS FACILITY PROJECT. (a)
Provides that a person is a qualified business, an enterprise
project, and a project if the department, for the purpose of
state benefits, or the governing body of a local government,
for the purpose of local benefits, certifies that the person
is a project that is owned by a sports authority (authority).
(b) Provides that a project, for purposes of Subsection (a),
meets the employment, income, and other criteria of a
qualified business and enterprise project under this
subchapter.
(c) Provides that a zone in which a project is located, for
purposes of Subsection (a), meets the requirements of this
chapter.
(d) Prohibits the department from considering new permanent
or retained jobs created by a project in determining the
number of enterprise projects that the department may
approve.
Sec. 2303.604. REFUND, REBATE, OR PAYMENT OF TAX PROCEEDS TO
CERTAIN SPORTS AUTHORITIES. (a) Authorizes the governing body
of a municipality or county to establish a program by which it
reduces or eliminates any fees or taxes that it imposes on a
project in order to promote the public health, safety, or
welfare.
(b) Authorizes a governmental body, including a
municipality, county, or political subdivision, to agree to
rebate, refund, or pay certain tax proceeds for a period
prescribed by the agreement to an authority that owns or is
rehabilitating or remodeling a project.
(c) Authorizes a local government to agree to guarantee,
from revenue from hotel occupancy taxes or sales and use
taxes, the bonds or other obligations of an authority that
were issued or incurred to pay the cost of construction,
remodeling, or rehabilitation of a project owned by the
authority or local government.
(d) Requires an agreement to be in writing, containing an
expiration date, and requiring the beneficiary to provide
documentation to support the claim.
(e) Requires a governmental body that makes an agreement to
make the rebate, refund, or payment directly to the
beneficiary.
(f) Defines "eligible tax proceeds" and "incremental
increase in tax proceeds."
SECTION 2. Amends Chapter 111C, Tax Code, by adding Section
111.110, as follows:
Sec. 111.110. REBATE, REFUND, OR PAYMENT OF TAX PROCEEDS TO
CERTAIN SPORTS AUTHORITIES. (a) Requires an authority that
owns or is assisting a municipality, county, or other
political subdivision in rehabilitating or remodeling a
project located in a zone to receive from the state a rebate,
refund, or payment of 80 percent of the sales and use taxes
and 80 percent of the mixed beverage taxes retained by the
state and generated, paid, or collected by the qualified
sports facility or events at the project and 80 percent of the
incremental increase in state sales and use taxes and mixed
beverage taxes retained by the state.
(b) Requires the authority to receive the rebate, refund, or
payment for the term of the bonds or other obligations
issued or incurred by the authority to construct, remodel,
or rehabilitate the project. Prohibits the authority from
receiving a rebate, refund, or payment before September 1,
1998, regardless of the date on which the bonds or other
obligations are issued or incurred.
(c) Provides that an authority is not entitled to a rebate,
refund, or payment unless each local government that agrees
to rebate, refund, or pay to the authority eligible tax
proceeds and incremental increase in tax proceeds in
accordance with Section 2303.604, Government Code, during
the period in which the authority receives funds.
(d) Defines "incremental increase," "local government,"
"qualified sports facility project," "sports authority," and
"sports facility enterprise zone."
SECTION 3. Amends Section 311.002, Tax Code, by adding Subdivisions
(5) and (6), to define "qualified sports facility project," "sports
authority," "sports facility enterprise zone," "eligible tax
proceeds," and "incremental increase in tax proceeds."
SECTION 4. Amends Section 311.005(a), Tax Code, to require an area,
among other qualifications, to be an area that a local government
determines should be designated as a zone under Chapter 2303G,
Government Code, to be designated as a reinvestment zone.
SECTION 5. Amends Section 311.015, Tax Code, by adding Subsection
(m), to require tax increment bonds or notes issued to finance a
project to mature by the 30th anniversary after the date of
issuance. Authorizes a local government to pledge eligible tax
proceeds and incremental tax proceeds to pay bonds or notes issued
to pay the costs of a project under terms the local government
considers appropriate.
SECTION 6. Amends Chapter 311, Tax Code, by adding Section
311.0032, as follows:
Sec. 311.0032. SPORTS FACILITY ENTERPRISE ZONE. (a)
Authorizes a local government to designate an area as a zone
in the ordinance or order designating that area as a
reinvestment zone.
(b) Prohibits a local government from designating an area as
a zone unless the zone contains or will contain a project;
and the local government agrees to rebate, refund, or pay to
the authority that owns, proposes to own, or is assisting a
county, municipality, or other political subdivision in
rehabilitating or remodelling the project eligible tax
proceeds and incremental increase in tax proceeds.
(c) Requires the local government to agree to provide the
rebate, refunding, or payment for the period during which
the authority receives funding.
SECTION 7. Amends Section 4A, Article 1528l, V.T.C.S. (Texas
Transportation Corporation Act), by amending Subsections (a)-(c),
(e), and (f), and adding Subsection (j), as follows:
(a) Authorizes a local government corporation to be created to
aid, act on behalf of one or more local governments to
accomplish any governmental purpose, including a project or
activity permitted by its articles of incorporation. Provides
that the State Highway and Public Transportation Commission
(commission) approval is not required for the articles of
incorporation, articles of dissolution, or bylaws of a local
government corporation. Provides that a member of the board
of directors of a corporation is required to be a resident of
a local government creating the corporation.
(b) Requires a local government corporation to have all the
powers, including those of a corporation approved for creation
by the commission to accomplish any purpose for which the
corporation was created as prescribed by its articles of
incorporation; and an industrial development corporation
created under Section 4B, Article 5190.6, V.T.C.S.
(Development Corporation Act of 1979), and may perform certain
acts.
(c) Makes a conforming change.
(e) Requires the commission, state agencies, local
governments, road districts, road utility districts, and other
political subdivisions to have the power to implement an
authorized project or activity of the local government
corporation, if it is also an authorized purpose of the
contracting commission, state agency, road district, road
utility district, or other political subdivision, among other
powers. Provides that a local government has authority to
implement an authorized project or activity of the
corporation.
(f) Requires the corporation, its property, and any
transaction in which the property is acquired, to have the
same tax exemption as a corporation created pursuant to
Chapter 394, Local Government Code, or Section 4B, Article
51.90.6, V.T.C.S., including exemption from paying a sales and
use tax.
(j) Authorizes a municipality to create a local government
corporation that is an authority. Requires the articles of
incorporation of an authority to provide that an authority
have a seven-member board with two members appointed by the
lieutenant governor and two appointed by the comptroller.
Sets forth the terms of the directors. Requires an authority
to make an effort to provide that at least 30 percent of the
construction, procurement, and service contracts for the
project and any business operating in the facility are with
minority- or women-owned enterprises.
SECTION 8. Amends Chapter 302, Tax Code, by adding Subchapter C,
as follows:
SUBCHAPTER C. SPORTS FACILITY ENTERPRISE ZONE EXCISE TAX
Sec. 302.201. DEFINITIONS. Defines "admissions tax," "event
parking tax," and "qualified sports facility project," "sports
authority," "sports facility," and "sports facility enterprise
zone."
Sec. 302.202. EVENT PARKING TAX. (a) Authorizes a
municipality, by ordinance, to impose a tax on each motor
vehicle (vehicle) parking in a parking facility located inside
or within a reasonable distance adjacent to the zone.
Prohibits the municipality from imposing a tax in certain
areas or for certain events.
(b) Authorizes the municipality to impose the tax during a
period beginning not more than two hours before and ending
not more than two hours after the time an event in a project
is scheduled to begin. Prohibits the municipality from
imposing the tax during any other time.
(c) Authorizes the municipality, by ordinance, to provide
that the tax is imposed at a flat amount on each parked
vehicle or as a percentage of the amount charged for event
parking by the owner of the parking facility. Prohibits the
amount of tax from exceeding $2.50 per vehicle. Authorizes
the municipality, by ordinance, to repeal or increase or
decrease the rate of tax.
(d) Authorizes the municipality, by ordinance, to require
the owner of a parking facility to collect the tax for the
benefit of the municipality. Requires the owner required to
collect the tax to add the tax to the parking charge.
Provides that the tax is a part of the parking charge, debt
owed to the parking facility owner by the person parking,
and recoverable at law in the same manner as the parking
charge. Provides that the tax is not an occupation tax
imposed on the owner of the parking facility.
Sec. 302.203. ADMISSION TAX. (a) Authorizes a municipality,
by ordinance, to impose a tax on each person admitted to an
event at a project. Prohibits the municipality from imposing
the tax for admission to an event at a facility that is not a
project.
(b) Authorizes the municipality, by ordinance, to provide
that the tax is imposed at a flat amount on each person
admitted or as a percentage of the amount charged for
admission. Prohibits the amount of tax from exceeding two
dollars per person, regardless of the method of imposition.
Authorizes the municipality, by ordinance, to repeal,
increase, or decrease the tax.
(c) Authorizes the municipality, by ordinance, to require
the owner of a project to collect the tax for the
municipality. Requires an owner required to collect the tax
to add the tax to the admission price. Provides that the
tax is part of the admission price, a debt owed to the
project owner by the person admitted, and recoverable at law
in the same manner as the admission charge. Provides that
the tax is not an occupation tax imposed on the owner of the
project.
Sec. 302.204. EFFECTIVE DATE AND ENDING DATE OF TAX.
(a)Provides that a tax takes imposed under this subchapter
takes effect on the date prescribed by the ordinance imposing
the tax.
(b) Authorizes a municipality to impose a tax only if the
municipality or the authority issues bonds under Section
302.208. Authorizes the municipality to impose the tax only
while the municipality's or authority's bonds issued to pay
the costs of constructing, remodeling, or rehabilitating a
project are outstanding and unpaid.
Sec. 302.205. COLLECTION OF TAX. (a) Requires a person
required to collect a tax to report and send the taxes to the
municipality as provided by the municipality imposing the tax.
(b) Authorizes the municipality, by ordinance, to prescribe
penalties for failure to keep records required by the
municipality, to report when required, or to pay the tax
when due. Authorizing the municipality's attorney to bring
suit against a person who fails to collect the tax and to
pay it over to the municipality as required.
(c) Authorizes the municipality, by ordinance, to permit a
person who is required to collect a tax to retain a
percentage of the collected amount to be reported as
reimbursement for the costs of collection. Authorizes the
municipality to provide that the person may retain the
amount only if the person complies with the municipality's
requirements.
Sec. 302.206. USE OF TAX REVENUE. Authorizes revenue from
a tax to be used only to acquire sites for and acquire,
improve, rehabilitate, remodel, enlarge, equip, or repair a
project.
Sec. 302.207. PLEDGE FOR BONDS. Requires the municipality to
pledge the revenue derived from a tax for the payment of any
bonds issued for certain purposes by the municipality or the
authority.
SECTION 9. Provides that an enactment of the 74th Legislature that
imposes a restriction or limitation on a rebate, refund, or payment
of state or local taxes to an enterprise zone or qualified project
does not apply to a zone or project created under this Act.
SECTION 10. Effective date: September 1, 1995.
SECTION 11. Emergency clause.