What must the Texas Comptroller do before spending Major Events Trust Fund money?

Plain-English summary

Jerry Patterson, then the Commissioner of the Texas General Land Office, asked the Attorney General about the Comptroller of Public Accounts and the Major Events Trust Fund (METF). The METF is a state mechanism that helps fund large events by capturing the extra tax revenue an event is expected to generate. The dispute behind the request concerned the Formula One United States Grand Prix that came to Texas in 2012.

The opinion walked through what section 5A of article 5190.14 requires. The process is started by a county, municipality, or local organizing committee that is party to an "event support contract" with a "site selection organization" (for Formula One, an organization recognized by Formula One Management Limited). When such a local entity requests it, the Comptroller must determine, for a one-year period that begins two months before the event, the incremental increase in certain tax receipts, using procedures the Comptroller develops and based on information the local entity submits. That request must be submitted no earlier than one year and no later than three months before the event, and the Comptroller must make the determination within 30 days of receiving the request. Critically, the statute says the Comptroller "may not undertake any of the responsibilities or duties" in section 5A unless the municipality or county where the event will be located submits a request, accompanied by documentation from a site selection organization.

Commissioner Patterson's letter pointed to a May 10, 2010 letter the Comptroller had sent to Formula One World Championship Limited, which he read as committing funds (full funding for 2012, plus $25 million a year for years two through ten) before any local entity had requested the tax-increment determination, before that determination was completed, and before the affected market area was established. The Comptroller's office disputed that, arguing the May 10 letter was "merely an effort to indicate broad support" and that all actions complied with the statutes and METF rules.

The opinion stated the legal rule clearly: the Comptroller is required to follow the precise procedures in section 5A before undertaking any of its responsibilities or duties. But it then stopped. Whether the Comptroller actually undertook any of those duties, and whether the May 10 letter improperly committed funds, was a genuine factual dispute between the two offices. Because contested issues of fact cannot be resolved through the Attorney General opinion process, the opinion declined to decide whether the Comptroller had complied.

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 Commissioner (as the opinion described it): The opinion gave the Commissioner the legal standard, that the Comptroller must follow section 5A's precise procedures before undertaking any METF duties, but declined to resolve his factual contention that the May 10, 2010 letter improperly committed funds, because that fact dispute was outside the opinion process.

The Comptroller of Public Accounts (as the opinion described it): The opinion restated the statutory obligation to follow section 5A's procedures and did not make any finding that the Comptroller had or had not complied, leaving that factual question unresolved.

Anyone following the METF/Formula One funding question (as the opinion described it): The opinion identified the required statutory steps but expressly declined to determine, on the disputed facts, whether those steps were followed in this instance.

Common questions

What does the law require before METF money is spent?
According to the opinion, the Comptroller must follow the precise procedures in section 5A of article 5190.14, including a local request, site-selection documentation, and a determination of the incremental increase in tax receipts within the statute's timing rules.

Can the Comptroller commit funds before a local entity asks for the determination?
The opinion emphasized that the statute bars the Comptroller from undertaking any of the section 5A duties unless the municipality or county where the event will be located submits a request with the required documentation.

Did the opinion decide whether the Comptroller broke the rules with the Formula One letter?
No. The opinion treated that as a disputed factual question, and it explained that contested issues of fact are not amenable to the Attorney General opinion process.

Why wouldn't the Attorney General just resolve the dispute?
Because the two offices disagreed about what the May 10, 2010 letter actually did, and resolving that kind of factual disagreement is for fact-finding (such as a court), not an AG opinion.

Background and statutory framework

Section 5A of article 5190.14 of the Revised Civil Statutes governs the Major Events Trust Fund. It defines an "event" to include a Formula One automobile race, Tex. Rev. Civ. Stat. Ann. art. 5190.14, § 5A(a)(4) (West Supp. 2011), and sets out the roles of local organizing committees, endorsing municipalities or counties, and site selection organizations, along with the Comptroller's duty to determine the incremental increase in tax receipts within specified timing windows. The statute bars the Comptroller from undertaking any section 5A responsibility or duty unless the municipality or county where the event will be located submits a request accompanied by site-selection documentation. Id. § 5A(p).

Reading the statute by its words, Wind Mountain Ranch, LLC v. City of Temple, 333 S.W.3d 580, 581 (Tex. 2010), the opinion concluded the Comptroller must follow the precise procedures before acting. It then declined to resolve the parties' factual dispute over whether she had done so, consistent with the rule that contested issues of fact are not amenable to the opinion process, citing Tex. Att'y Gen. Op. No. GA-0750 (2009).

Citations

Cases:

• Wind Mountain Ranch, LLC v. City of Temple, 333 S.W.3d 580, 581 (Tex. 2010)

Statutes:

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

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0931
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2012/ga0931.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

May 18, 2012

The Honorable Jerry Patterson Opinion No. GA-0931
Commissioner
Texas General Land Office Re: Authority of the Comptroller of Public
Post Office Box 12873 Accounts to commit the expenditure of funds from
Austin, Texas 78711-2873 the Major Events Trust Fund (RQ-1019-GA)

Dear Commissioner Patterson:

You ask about the authority of the Comptroller of Public Accounts (the "Comptroller") to expend funds from the Major Events Trust Funds (the "METF").[1]

Section 5A of article 5190.14 describes the process by which the Comptroller may expend funds for an "event," which is defined to include "a Formula One automobile race." TEX. REV. CIV. STAT. ANN. art. 5190.14, § 5A(a)(4) (West Supp. 2011). The process must be initiated by either a county, a municipality, or a local organizing committee that "is a party to an event support contract," defined as "a joinder undertaking, joinder agreement, or a similar contract executed by a local organizing committee, an endorsing municipality, or an endorsing county, and a site selection organization." Id. § 5A(a)(1)-(3), (b). A "site selection organization" includes "the national governing body of a sport that is recognized by," inter alia, "Formula One Management Limited." Id. § 5A(a)(5)(B).

A site selection organization selects a site for an event in the state "pursuant to an application by a local organizing committee, endorsing municipality, or endorsing county." Id. § 5A(b). "[U]pon 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 receipts from certain taxes. Id. § 5A(b)(1-5). Under section 5A(b-1), a "request for a determination of the amount of incremental increase in tax receipts specified by Subsection (b) ... must be submitted to the comptroller not earlier than one year and not later than three months before the date the event begins." Id. § 5A(b-1). The Comptroller is required to base the determination of the incremental increase in tax receipts "on information submitted by the local organizing committee, the 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." Id. Thus, the statute requires the Comptroller to perform a substantial economic analysis before funds from the METF may be committed to an event. See id. § 5A(a-1). However, "[t]he comptroller may not undertake any of the responsibilities or duties set forth in [section 5A] unless a request is submitted by the municipality or the county in which the event will be located." Id. § 5A(p). "The request must be accompanied by documentation from a site selection organization selecting the site for the event." Id.

Your request letter indicates that the Comptroller sent a letter to Formula One World Championship Limited ("FOWC") on May 10, 2010, certifying that, "[w]ith the understanding that the first Formula [One] United States Grand Prix race will be held in Texas in 2012, full funding of the entire sanction for 2012 will be paid ... no later than July 31st, 2011," and that, in years two through ten, "we will be sending $25 million dollars ... to FOWC by the end of July 31st of each year preceding the actual race event." Request Letter at 1-2. You contend that as of the date of the letter, "no local organizing committee, endorsing municipality, or endorsing county had submitted a request to determine the incremental tax increase that would result from the event"; that "no determination of the incremental tax increase had been completed"; and that "the market area that is likely to experience measurable economic impact had not been established." Id. at 2. A brief received from the Comptroller's office disputes your allegations and contends that "every action taken to date by the Comptroller and her staff has been fully compliant both with the statutes and the METF rules."[2]

Section 5A of article 5190.14 sets out in plain language the steps that must be taken before the Comptroller may "undertake any of the responsibilities or duties set forth" in subsection (p) of section 5A. TEX. REV. CIV. STAT. ANN. art. 5190.14, § 5A(p) (West Supp. 2011). See Wind Mountain Ranch, LLC v. City of Temple, 333 S.W.3d 580, 581 (Tex. 2010) (observing that "the words the Legislature uses are the clearest guide to its intent"). The Comptroller is required to follow the precise procedures described in the statute before undertaking any of the responsibilities or duties set forth in section 5A. Whether the Comptroller undertook any of the responsibilities or duties set forth in section 5A is the subject of a factual dispute. Briefing submitted to this office argues that the Comptroller's May 10, 2010 letter was "merely an effort to indicate broad support." Brief at 3. In contrast, your request letter suggests that the Comptroller's letter improperly committed funds to the event. Request Letter at 3. Consequently, the facts upon which this office has been asked to opine are disputed, and contested issues of fact are not amenable to the opinion process. See Tex. Att'y Gen. Op. No. GA-0750 (2009) at 2.

SUMMARY

Before undertaking any of the responsibilities or duties set forth in section 5A of article 5190.14 of the Texas Revised Civil Statutes regarding the expenditure of funds from the Major Events Trust Fund, the Comptroller of Public Accounts is required to follow the precise procedures described in section 5A. Whether she in fact did so requires a resolution of facts not amenable to 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. at 1-2 (Nov. 22, 2011), http://www.texasattorneygeneral.gov/opin ("Request Letter").

[2] Brief from Ashley Harden, Gen. Counsel, Comptroller of Pub. Accounts, to Tex. Att'y Gen. at 3 (Dec. 22, 2011) (on file with the Op. Comm.) ("Brief").