Does a Texas event have to apply first before it can get Major Events Trust Fund money?

Plain-English summary

Texas uses a pot of money called the Major Events Trust Fund (METF) to help land and pay for big sporting and entertainment events. The rules for that fund are in section 5A of article 5190.14 of the Texas Revised Civil Statutes. The Commissioner of the General Land Office asked the Attorney General about the proper sequence for tapping the fund, with the 2012 Formula One United States Grand Prix in Austin as the backdrop.

The first question was whether an event becomes ineligible for METF money if a "site selection organization" (for Formula One, that role belongs to Formula One Management Limited) picks the Texas site before any local entity has applied. The opinion walked through the statute. Subsection (a-1) lists three eligibility conditions for this kind of event: the site selection organization picks a Texas site after a highly competitive process that considered out-of-state sites; it picks that Texas site as the sole site; and the event is held no more than once a year. Nothing in subsection (a-1) itself mentions an application. But subsection (a-1) is not the whole story. Subsection (b) describes what triggers the Comptroller's role, and it assumes that a site was selected "pursuant to an application by a local organizing committee, endorsing municipality, or endorsing county." Subsection (p) reinforces this, barring the Comptroller from acting unless a municipality or county submits a request accompanied by documentation from a site selection organization. Reading those provisions together, the opinion concluded that one of those local entities must submit an application to the site selection organization before an event is eligible for METF funds. Without that application, the event is ineligible. (The opinion added that the statute does not prescribe any particular form for the application, so it did not opine on form.)

The second question was specific: did the selection of Austin for the F1 race, allegedly made by Formula One Management Limited before any local application, make the 2012 United States Grand Prix ineligible? The Commissioner said he had filed public-records requests with the City of Austin, Travis County, and the Comptroller and had not received any application, leading him to conclude none existed. The Comptroller's office disputed that account, pointing to a May 11, 2011 letter signed by Formula One's chief executive stating that Austin had been selected "based on an application" to Formula One Management Limited. Because the parties disagreed on the facts, and because contested fact questions cannot be resolved through the opinion process, the Attorney General declined to answer the second question.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later Attorney General opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant for those who asked

The General Land Office and state officials (as the opinion described it): The opinion read section 5A to require a local application to a site selection organization as a prerequisite to METF eligibility, with the Comptroller's economic analysis triggered only after a local entity both applies and then requests the determination.

Local organizing committees, municipalities, and counties (as the opinion described it): The opinion treated the application by one of these local entities to the site selection organization as the step that opens the door to METF funding. It did not prescribe a form for the application.

On the specific F1 dispute (as the opinion described it): The opinion expressly did not decide whether the 2012 United States Grand Prix had a qualifying application, because the existence of that application was a contested fact outside the opinion process.

Common questions

Can an event get Major Events Trust Fund money without a local application?
No, as the opinion read the statute. A local organizing committee, endorsing municipality, or endorsing county must submit an application to the site selection organization first; without it, the event is ineligible.

Who actually applies, the event or the city?
One of the local entities named in the statute: a local organizing committee, an endorsing municipality, or an endorsing county. The site selection organization (such as Formula One Management Limited) is the body that selects the site in response to that application.

Did the Attorney General decide the F1 race was ineligible?
No. Whether the 2012 United States Grand Prix had a qualifying application was a disputed fact. The opinion said contested facts cannot be resolved in an AG opinion, so it did not answer that question.

What does the Comptroller do in this process?
After a local entity applies and then requests it, the Comptroller performs an economic analysis of the incremental increase in certain tax receipts. Subsection (p) bars the Comptroller from acting without a request from the municipality or county, accompanied by documentation from a site selection organization.

Background and statutory framework

The Major Events Trust Fund is governed by section 5A of article 5190.14 of the Texas Revised Civil Statutes. A Formula One race is an "event" under section 5A(a)(4), and a "site selection organization" under section 5A(a)(5)(B) includes the national governing body of a sport recognized by Formula One Management Limited. Section 5A(a-1) sets three eligibility conditions (a competitive, multi-state selection process; selection of the Texas site as the sole site; and no more than one event per year). Section 5A(b) describes the Comptroller's determination of incremental tax increases once a site is selected pursuant to a local application and a request is made, and section 5A(p) bars the Comptroller from acting without a request from the municipality or county accompanied by site-selection documentation.

For the limit on resolving disputed facts, the opinion relied on its own prior opinion GA-0750 (2009).

Citations

Statutes:

• Tex. Rev. Civ. Stat. Ann. art. 5190.14, § 5A(a)(4), (a)(5)(B), (a-1), (b), (p) (West Supp. 2011)

Prior Attorney General opinion referenced:

• Tex. Att'y Gen. Op. No. GA-0750 (2009)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0963
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2012/ga0963.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT

August 17, 2012

The Honorable Jerry Patterson Opinion No. GA-0963
Commissioner
Texas General Land Office Re: Whether an application by a local organizing
Post Office Box 12873 committee, endorsing municipality, or endorsing
Austin, Texas 78711-2873 county to a site selection organization is a prerequisite
to the expenditure of funds from the Major Events
Trust Fund pursuant to section 5A, article 5190.14,
Revised Civil Statutes (RQ-1043-GA)

Dear Commissioner Patterson:

You pose two questions about the proper process for release of funds from the Major Events Trust Fund (the "METF"), a process governed by article 5190.14 of the Texas Revised Civil Statutes. Specifically, you ask about the expenditure of funds from the METF for a Formula One automobile race, which constitutes an "event" described by the statute.[1] See TEX. REV. CIV. STAT. ANN. art. 5190.14, § 5A(a)(4) (West Supp. 2011). You first ask:

Does the selection of a site for an event by a Site Selection Organization prior to and without an application by a local organizing committee, endorsing municipality, or endorsing county preclude the subsequent event from eligibility for METF funds?

Request Letter at 3.

A "site selection organization" includes "the national governing body of a sport that is recognized by," inter alia, "Formula One Management Limited." TEX. REV. CIV. STAT. ANN. art. 5190.14 § 5A(a)(5)(B) (West Supp. 2011). Subsection (a-1) of section 5A expressly states three conditions for funding eligibility under section 5A:

(a-1) An event included in subsection (a)(4) of this section is eligible for funding under this section only if:

(1) a site selection organization selects a site located in this state for the event 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 the sole site for the event; and

(3) the event is held not more than one time in any year.

Id. § 5A(a-1) (emphasis added).

Nothing in subsection (a-1) requires that, in order for an event to be eligible for funding, an application must be filed with either a site selection organization or with the Comptroller. Subsection (a-1), however, does not provide an exhaustive list of the prerequisites for the release of funds from the METF. Subsection (b) of section 5A provides, in relevant part:

(b) If a site selection organization selects a site for an event in this state pursuant to an application by a local organizing committee, endorsing municipality, or endorsing county, upon request of a local organizing committee, endorsing municipality, or endorsing county, the comptroller shall determine for a one-year period that begins two months before the date on which the event will begin, in accordance with procedures developed by the comptroller: ... the incremental increase" [in receipt from certain taxes].

Id. § 5A(b) (emphasis added). The italicized portion of subsection (b) provides that a series of events must transpire before the Comptroller's role in the METF funding process is triggered. First, one of the local entities, whether a local organizing committee, endorsing municipality, or endorsing county, must submit an application to the relevant site selection organization. Next, one of those local entities must submit a request to the Comptroller for a determination of incremental increases in tax revenue. Under section 5A, the Comptroller is required to perform a substantial economic analysis before any METF funds may be committed to an event. See id. § 5A(b).[2] Thus, section 5A requires that a local organizing committee, endorsing municipality, or endorsing county submit an application to a site selection organization before an event is eligible for METF funds.[3]

Your second question asks whether "the selection of the Austin area for an F1 race by Formula One Management Limited prior to and without an application by a local organizing committee, endorsing municipality, or endorsing county precludes the 2012 United States Grand Prix from eligibility for METF funds." Request Letter at 3. You contend that you have submitted several requests under the Texas Public Information Act to the City of Austin, to Travis County, and to the Office of the Comptroller of Public Accounts for release of documentation that would confirm the existence of the application required under subsection (b). Id. at 2-3. You state that you did not receive the requested application from any of the three governmental bodies. You further state that you did not receive any other document that would indicate that an application was ever submitted to Formula One Management Limited. Id. at 3. You have concluded from that fact that "no application, as contemplated by the statute, was ever submitted as a basis for locating the event in Texas." Id. A brief received from the Comptroller's office disputes the facts as you describe them and contends that you do "not know and cannot supply the facts the [Attorney General] would need to specifically address the eligibility of the 2012 United States Grand Prix."[4] The Comptroller's brief also declares that correspondence sent to Austin Mayor Lee Leffingwell, and dated May 11, 2011, "which was signed by Chief Executive Officer Bernie Ecclestone, clearly stated that the Austin area had been selected as the location for the 2012 United States Grand Prix 'based on an application' submitted to Formula One Management Limited." Id. at 2.

Based upon the divergent recitations of the facts contained in briefings submitted to this office, your conclusion regarding the existence of an application to Formula One is the subject of a factual dispute. Because the facts upon which this office has been asked to opine are disputed, and because contested issues of fact are not amenable to the opinion process, we cannot answer your second question. See Tex. Att'y Gen. Op. No. GA-0750 (2009) at 2.

SUMMARY

Section 5A, article 5190.14 of the Texas Revised Civil Statutes requires that a local organizing committee, an endorsing municipality, or an endorsing county submit an application to a site selection organization in order to initiate the process that governs the distribution of funds for an "event" from the Major Events Trust Fund (the "METF"). Unless an application for an event as defined in the statute is submitted to a site selection organization, that event is ineligible for METF funding. Whether such an application was actually submitted in this case is a matter of factual dispute that cannot be resolved through the opinion process.

Very truly yours,

DANIEL T. HODGE
First Assistant Attorney General

JAMES D. BLACKLOCK
Deputy Attorney General for Legal Counsel

JASON BOATRIGHT
Chair, Opinion Committee

Rick Gilpin
Assistant Attorney General, Opinion Committee

[1] Letter from Honorable Jerry Patterson, Comm'r, Tex. Gen. Land Office, to Honorable Greg Abbott, Tex. Att'y Gen. (Mar. 1, 2012), http://texasattorneygeneral.gov/opin ("Request Letter").

[2] Subsection (p) of section 5A reinforces this reading of the statute: (p) The comptroller may not undertake any of the responsibilities or duties set forth in this section unless a request is submitted by the municipality or the county in which the event will be located. The request must be accompanied by documentation from a site selection organization selecting the site for the event. TEX. REV. CIV. STAT. ANN. art. 5190.14, § 5A(p) (West Supp. 2011).

[3] The statute does not require that the application take any particular form, and therefore we do not opine as to the form of application.

[4] Brief from Ashley Harden, Gen. Counsel, Comptroller of Pub. Accounts, to Greg Abbott, Tex. Att'y Gen. at 3 (Apr. 17, 2012) (on file with the Op. Comm.).