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The goal of the Major Events Trust Fund is to attract to Texas major events that could have been hosted elsewhere, as well as the tourist activity that comes with them. The fund helps defray the cost of hosting the events thanks to the incremental revenues in local and state sales and use, auto rental, hotel, and alcoholic beverages taxes generated by these events.
The incremental tax revenues must be equal to or over $1 million over a period of one year starting two months before the date of the event.
The Major Events Trust Fund is made up of the incremental increase in receipts from the local sales and use, mixed beverages, and hotel occupancy taxes, and an amount in state sales and use, car rental, hotel occupancy and mixed beverages taxes equal to 6.25 times the amount of local incremental tax revenues, not to exceed the state incremental increase in tax receipts estimated to be generated by the qualifying event.
Funds can be used to pay for the principal or interest on notes that an endorsing municipality or county might have issued to meet their obligations under a game or event support contract; and to pay for costs associated with the preparation or the conduct of the event, including improvements and renovations of existing facilities or acquisitions or construction of new facilities.
Low and limited taxation is the best incentive to attract out-of-state events and visitors, and to encourage economic development. Instead, the Major Events Trust Fund is counting on an array of taxes, that impact Texans as well as visitors, to subsidize municipalities and counties to host certain events at the expense of other and possibly better events. Additionally, the higher and more numerous the taxes, the less money will be left for visitors to spend in the local economy hosting the events, having an effect counterproductive to the goal of hosting a major event.
For an event to qualify for participation in the Major Events Trust Fund, the site selection organization selecting the site for the event must be listed in statute along with the kind of event it organizes. Consequently, Senate Bill 293 would do more than simply clarify the law, it would concretely add to the list of potential favored events for special tax treatments, increasing the role of government and hindering free markets in the process. The role of a limited government does not include deciding which events should get preferential treatments. Consequently, we oppose Senate Bill 293.