Proposed Rules Title 10

TITLE 10. COMMUNITY DEVELOPMENT

PART 5. OFFICE OF THE GOVERNOR, ECONOMIC DEVELOPMENT AND TOURISM OFFICE

CHAPTER 184. SPORTS AND EVENTS TRUST FUND

The Office of the Governor, Economic Development and Tourism Office ("Office") proposes the repeal of 10 Texas Administrative Code ("TAC"), Chapter 184, concerning the Sports and Events Trust Fund. The Office determined the repeal was necessary during its review of the chapter under Section 2001.039, Texas Government Code. Elsewhere in this issue, the Office is proposing a new Chapter 184 to replace the repealed provisions.

REASONED JUSTIFICATION

As part of its review under Section 2001.039, Texas Government Code, the Office determined Chapter 184 should be repealed and replaced in its entirety with new rules that are substantially similar, but that have been reorganized to enhance readability, and from which unnecessary or outdated language has been removed. The proposed new rules also provide additional guidance and clarity about the types of expenditures that may be reimbursed, the documentation required to support reimbursement requests, and implement other changes to promote efficiency and ensure consistency in the application of program rules.

FISCAL NOTE

Adriana Cruz, Executive Director of Texas Economic Development & Tourism, Office of the Governor, has determined that the first five-year period the proposed repeal is in effect, there will be no additional estimated cost, reduction of costs, or loss or increase in revenue to the state or local governments as a result of enforcing or administering the repeal. Additionally, Ms. Cruz has determined that enforcing or administering the repeal does not have foreseeable implications relating to the costs or revenues of state or local government.

PUBLIC BENEFIT

Ms. Cruz has determined for the first five-year period the proposed repeal is in effect there will be a benefit to applicants and the general public because the proposed repeal and replace of the rules related to the Events Trust Fund and the Major Events Reimbursement Program (collectively referred to as the "Program") will provide greater clarity and ensure consistency in the rules. Ms. Cruz has also determined that for each year of the first five years the repeal is in effect, the public benefit anticipated as a result of enforcing the repeal will be to offer clarity to applicants and help the Office better administer the rules.

PROBABLE ECONOMIC COSTS

Ms. Cruz has determined for the first five-year period the proposed repeal is in effect, there will be no additional economic costs to persons required to comply with this repeal.

REGULATORY FLEXIBILITY ANALYSIS FOR SMALL AND MICRO-BUSINESSES AND RURAL COMMUNITIES.

Ms. Cruz has determined that the proposed rules will have no adverse economic effect on small businesses, micro-businesses, or rural communities. Thus, the Office is not required to prepare a regulatory flexibility analysis pursuant to §2006.002 of the Tex. Gov't Code.

GOVERNMENT GROWTH IMPACT STATEMENT

Ms. Cruz has determined that during each year of the first five years in which the proposed repealed and new rules are in effect, the repeals and new rules:

1) will not create or eliminate a government program;

2) will not require the creation of new employee positions or the elimination of existing employee positions;

3) will not require an increase or decrease in future legislative appropriations to the OOG;

4) will not require an increase or decrease in fees paid to the OOG;

5) do not create new regulations;

6) will expand certain existing regulations, limit certain existing regulations, and repeal existing regulations;

7) will not increase or decrease the number of individuals subject to the applicability of the rules; and

8) will not positively or adversely affect the Texas economy.

TAKINGS IMPACT ASSESSMENT

Ms. Cruz has determined that there are no private real property interests affected by the proposed repeal. Thus, the Office is not required to prepare a takings impact assessment pursuant to Section 2007.043, Texas Government Code.

REQUEST FOR PUBLIC COMMENTS

Comments on the proposed repeals may be submitted to Gene Cervenka, Office of the Governor, Economic Development and Tourism Office, P.O. Box 12428, Austin, Texas 78701, or by email to eventsfund@gov.texas.gov with the subject line "Events Rules." The deadline for receipt of comments is 5:00 p.m., Central Time, on August 4, 2024, which is at least 30 days from the date of publication in the Texas Register.

SUBCHAPTER A. AUTHORITY AND APPLICABILITY, PURPOSE, CONSTRUCTION OF RULES AND GENERAL DEFINITIONS

10 TAC §§184.1 - 184.4

STATUTORY AUTHORITY.

The repeal is proposed under Sections 478.0002 and 480.0002, Texas Government Code, which authorize the Office to make rules necessary to implement Chapter 478 and 480, Texas Government Code, respectively. The repeal is also proposed pursuant to section 475.0004, which directs the Office to adopt rules to ensure efficient administration of trust fund programs, including rules related to application and receipt requirements. The Office also proposes this repeal under Section 2001.004, Texas Government Code, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures.

CROSS REFERENCE TO STATUTE

Chapter 184, Subchapter A. No other statutes, articles, or codes are affected by the proposed repeals.

§184.1.Authority and Applicability.

§184.2.Purpose.

§184.3.Construction of Rules.

§184.4.General Definitions.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 21, 2024.

TRD-202402728

Gene Cervenka

Senior Finance Program Specialist

Office of the Governor, Economic Development and Tourism Office

Earliest possible date of adoption: August 4, 2024

For further information, please call: (512) 936-0100

SUBCHAPTER B. MAJOR EVENTS REIMBURSEMENT PROGRAM DEFINITIONS, ELIGIBILITY, PARTICIPATION AND DEADLINES

10 TAC §§184.10 - 184.13

STATUTORY AUTHORITY.

CROSS REFERENCE TO STATUTE

Chapter 184, Subchapter B. No other statutes, articles, or codes are affected by the proposed repeals.

§184.10.Definitions.

§184.11.Eligibility.

§184.12.Request to Participate in the Major Events Reimbursement Program.

§184.13.Major Events Reimbursement Program Deadlines.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 21, 2024.

TRD-202402729

Gene Cervenka

Senior Finance Program Specialist

Office of the Governor, Economic Development and Tourism Office

Earliest possible date of adoption: August 4, 2024

For further information, please call: (512) 936-0100

SUBCHAPTER C. EVENTS TRUST FUND PROGRAM DEFINITIONS, ELIGIBILITY, PARTICIPATION AND DEADLINES

10 TAC §§184.20 - 184.23

STATUTORY AUTHORITY.

CROSS REFERENCE TO STATUTE

Chapter 184, Subchapter C. No other statutes, articles, or codes are affected by the proposed repeals.

§184.20.Definitions.

§184.21.Eligibility.

§184.22.Request to Establish a Trust Fund.

§184.23.Events Trust Fund Program Deadlines.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 21, 2024.

TRD-202402730

Gene Cervenka

Senior Finance Program Specialist

Office of the Governor, Economic Development and Tourism Office

Earliest possible date of adoption: August 4, 2024

For further information, please call: (512) 936-0100

SUBCHAPTER D. REQUIRED REPORTS

10 TAC §§184.30 - 184.33

STATUTORY AUTHORITY.

CROSS REFERENCE TO STATUTE

Chapter 184, Subchapter D. No other statutes, articles, or codes are affected by the proposed repeals.

§184.30.Attendance Certification.

§184.31.Submission of Event Support Contract.

§184.32.Other Information Required by the Office.

§184.33.Post Event Report Information for Major Events Reimbursement Program.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 21, 2024.

TRD-202402731

Gene Cervenka

Senior Finance Program Specialist

Office of the Governor, Economic Development and Tourism Office

Earliest possible date of adoption: August 4, 2024

For further information, please call: (512) 936-0100

SUBCHAPTER E. DISBURSEMENT PROCESS

10 TAC §§184.40 - 184.45

STATUTORY AUTHORITY.

CROSS REFERENCE TO STATUTE

Chapter 184, Subchapter E. No other statutes, articles, or codes are affected by the proposed repeals.

§184.40.Disbursements for Event Costs.

§184.41.Documentation Required to Initiate Disbursement Process.

§184.42.Extension of Time to Submit Disbursement Documentation.

§184.43.Disbursement of Trust Funds.

§184.44.Allowable Costs.

§184.45.Unallowable Costs.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 21, 2024.

TRD-202402732

Gene Cervenka

Senior Finance Program Specialist

Office of the Governor, Economic Development and Tourism Office

Earliest possible date of adoption: August 4, 2024

For further information, please call: (512) 936-0100

SUBCHAPTER F. EVENT SUPPORT CONTRACTS

10 TAC §184.50, §184.51

STATUTORY AUTHORITY.

CROSS REFERENCE TO STATUTE

Chapter 184, Subchapter F. No other statutes, articles, or codes are affected by the proposed repeals.

§184.50.Requirements for Event Support Contracts.

§184.51.Contract Guidelines.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 21, 2024.

TRD-202402733

Gene Cervenka

Senior Finance Program Specialist

Office of the Governor, Economic Development and Tourism Office

Earliest possible date of adoption: August 4, 2024

For further information, please call: (512) 936-0100

CHAPTER 184. SPORTS AND EVENTS TRUST FUND

The Office of the Governor, Texas Economic Development and Tourism Office ("Office") proposes new 10 TAC §§184.1 - 184.3, 184.10 - 184.13, 184.20 - 184.22, 184.30, 184.31, 184.40 - 184.45, 184.50, and 184.51, concerning the Sports and Events Trust Fund. During its review of Chapter 184 pursuant to Section 2001.039, Texas Government Code, the Office determined current Chapter 184 should be repealed in its entirety and replaced by a new Chapter 184. The Office is proposing the repeal of the current Chapter 184 elsewhere in this issue.

EXPLANATION AND JUSTIFICATION OF THE RULES

As part of its review under Section 2001.039, Texas Government Code, the Office determined Chapter 184, concerning Sports and Events Trust Fund (the "Program"), should be repealed and replaced in its entirety with new rules that are substantially similar, but that have been reorganized for comprehensibility and readability, and from which unnecessary or outdated language has been removed. The proposed new rules also provide additional guidance, simplicity, and clarity about the types of expenditures that may be reimbursed, the documentation required to support reimbursement requests, remove references to a program that has not been utilized, and implement other changes to promote efficiency and ensure consistency in the application of program rules.

RULE REVIEW CHANGES

The Office, under its rulemaking authority in Sections 475.0005, 478.0002, and 480.0002, Texas Government Code, and as part of its review of existing rules, initiated a rule review under Section 2001.039, Texas Government Code, to promote clarity and administrative efficiency, aid applicants in the use of the Program, simplify rule language, and enhance the usability and comprehensibility of the rules by eliminating surplus language, clarifying provisions, restructuring complicated rules, and updating Program requirements.

SECTION BY SECTION SUMMARY

Proposed new §184.1 is substantially similar to current §184.3 and clarifies that, if adopted, the rules applied to a request are the rules in effect at the time of a request to participate in the Major Events Reimbursement Program or the Events Trust Fund Program. Proposed new §184.1(b) also establishes the Chief of Staff of the Office of the Governor or the Chief of Staff's designees have the authority to waive any rules not statutorily imposed upon a showing that the action is appropriate. The proposed new rule also removes references to the Motor Sports Racing Trust Fund, which is a program that has not been used by the public and the Texas Legislature has not specifically directed this office to adopt rules related to that program.

Proposed new §184.2 is substantially similar to current §184.4 and updates definitions for the Events Trust Fund and the Major Events Trust Fund and relocates all definitions from the chapter to a single rule for ease of reference and clarity. The proposal establishes a new definition, "event participant," which clarifies that costs related travel, per diems, and certain other costs are limited to expenditures that directly relate to individuals whose participation is integral to the event. The proposed new §184.2 also does not include definitions from the current rule that were 1) exact or near-exact copies of definitions that exist in statute, 2) prescriptive and, therefore, better located in prescriptive rules rather than in a descriptive definitions rule, or 3) not used in any rules and do not appear in any statutes.

Proposed new §184.3 introduces a "Buy Texas" requirement that encourages applicants to utilize products or services located in Texas for items for which it will seek reimbursement when such products or services are available under comparable conditions to those offered outside of the state. The legislature found in Section 475.0003(3), Texas Government Code, that eligible events conducted in this state will provide opportunities for local and Texas businesses to create jobs that pay a living wage. New §184.3 is proposed in accordance with that legislative finding to help facilitate Texas business growth and local job creation through this Buy Texas provision.

Proposed new §184.10, which is substantially similar to current §184.11, updates and clarifies eligibility requirements for the Major Events Reimbursement Program. The proposed new rule also makes technical changes and updates statutory citations to reflect current law. Proposed new §184.10(a)(5) underscores a requirement in statute that a site selection organization must submit a human trafficking plan to the Office for an event to be eligible under the Major Events Reimbursement Program.

Proposed new §184.11 is substantially similar to current §184.12 and makes technical changes and clarifies the information and documentation required to be submitted to the Office in a request to participate in the Major Events Reimbursement Program. To better assist the Office in ensuring compliance with Section 478.0051(b), Texas Government Code, proposed new §184.11(a)(4) implements a new requirement that an applicant submit documentation to the Office that clearly demonstrates a site selection organization undertook a highly competitive selection process to select the applicable event site.

Proposed new §184.12 makes technical and clarifying edits to the Major Events Reimbursement Program deadlines and updates statutory and regulatory citations.

Proposed new §184.13 relocates current §184.33 to Subchapter B. This action consolidates all regulations that apply solely to the Major Events Reimbursement Program into a single subchapter.

Proposed new §184.20, which is substantially similar to current §184.21, updates and clarifies eligibility requirements for the Events Trust Fund Program. Proposed new §184.20(b) clarifies that an applicant may not submit more than ten events during any twelve-month period-rather than during a state fiscal year-to better align with Section 480.0051, Texas Government Code.

Proposed new §184.21 is substantially similar to current §184.22 and makes technical changes and clarifies the information and documentation applicants are required to submit to the Office in a request to establish a trust fund for the Events Trust Fund Program. To better assist the Office in ensuring compliance with Section 480.0051(1), Texas Government Code, proposed new §184.21(a)(4) implements a new requirement that an applicant submit documentation to the Office that clearly demonstrates a site selection organization undertook a highly competitive selection process to select the applicable event site.

Proposed new §184.22 makes technical and clarifying edits to the Events Trust Fund Program deadlines and updates statutory and regulatory citations.

Proposed new §184.30 is substantially similar to current §184.30 and updates requirements for the calculation and submission of attendance certification information for the Program. Specifically, proposed new §184.30(b)(1) - (5) require applicants to submit available information to the Office that reflects the total amount of individuals in attendance at the applicable event-rather than general sales information or registration lists-to better reflect actual event attendance. The proposed rule clarifies that surveys may be used to assist with determining the estimated number of event attendees who are not residents of Texas, but may not be used to determine actual event attendance, unless submitted with additional data or documentation that better reflects actual event attendance. Proposed new §184.30(c) clarifies that multi-day events shall have actual attendance reported per day, as opposed to reporting the average attendance at the event, and in must be in accordance with the categories and estimated numbers of attendees upon which the economic impact study was based. Proposed new §184.30(d) updates the threshold at which the Office will reduce the amount of a disbursement if an event's actual attendance figures are significantly lower than the estimated attendance figures.

Proposed new §184.31, which is substantially similar to current §184.32, establishes that the Office may request information necessary to administer the Program and makes technical and clarifying edits.

Proposed new §184.40, which is substantially similar to current §184.40, establishes that the Office may make a disbursement from an applicable trust fund for expenditures that are obligated by an event support contract and directly attributable to the preparation for or the presentation of an event. Proposed new §184.40 also makes technical and clarifying changes to better aid applicants and the Office in its administration of the Program.

Proposed new §184.41 is substantially similar to current §184.41 and updates and clarifies the documentation applicants must submit to initiate the disbursement process for event-related expenditures. The Office routinely receives disbursement requests that lack sufficient supporting documentation, which hinders the timely administration of the Program and requires the Office to seek additional documentation or to deny requests for reimbursement that may have otherwise been approved if appropriate documentation was submitted.

Proposed new §184.42 is similar to current §184.42, but more clearly establishes the method by which applicants may request an extension of time to submit disbursement documentations and clarifies that the Office may grant such an extension upon an Applicant's showing of good cause.

Proposed new §184.43 is substantially similar to current §184.34 and makes technical changes regarding the disbursement of trust funds.

Proposed new §184.44, which is similar in substance to current §184.44, establishes that reimbursable costs must be supported by an event support contract, be directly attributable to the preparation for or presentation of the event, meet all documentation requirements, and not be a disallowed cost. Proposed new §184.44(b)(3) allows a limited reimbursement for purchased items or equipment that are retained by the applicant, and that will continue to derive value after an event. Proposed new §184.44(b)(8) no longer provides for applicants to be able to seek reimbursement for offering event facilities to site selection organizations at no cost. To better aid applicants in identifying other allowable costs, the Office proposes to expand general terms, such as costs for "barriers," and "medical services." The proposed new rule also clarifies that hourly pay or overtime compensation for certain non-health and safety personnel is an allowable cost for disbursement. The proposed rule also updates allowable expenses for rental vehicles to reflect current market rates and clarifies the types of expenses related to meals, mileage, rental cars, parking, and other travel-related expenses that are allowable expenses. Lastly, the proposed rule no longer provides for the reimbursement of hotels and lodging, flights, and awards, as the current rules allow. Proposed new §184.44(b)(21) updates the circumstances under which the Office may reimburse host fees, participation fees, sanction fees, or other similar fees, and specifies that the reimbursement of such fees is only available to applicants under the Major Events Reimbursement Program, not the Events Trust Fund.

Proposed new §184.45 is substantially similar to current §184.45 and updates the list of costs that are not reimbursable. The new provision provides technical edits to ensure consistency with the applicable rules and statutes. The proposed rule establishes that no taxes-including those imposed by other states, local governments, and the federal government, as well as fees related to the environment, heavy equipment usage, or fuel surcharges-that the applicant paid may be reimbursed. To ensure consistency with current rules relating to the purchase of personal items or services, the rule prohibits reimbursement for items that will derive future value at separate events and that are retained by individuals or entities other than the applicant. The proposed rule clarifies the circumstances under which the Office will not reimburse host fees, participation fees, sanction fees, or other similar fees. The proposal clarifies what the Office considers to be "hospitality" expenditures.

Proposed new §184.50, which is substantially similar to current §184.50, implements technical edits and updates that simplify the requirements for an Event Support Contract.

Proposed new §184.51, which is substantially similar to current §184.51, implements technical edits and updates to clarify and simplify event support contract guidelines. Proposed new §184.51(c)(4) requires applicants to clearly detail event-related expenditures in an event support contract.

FISCAL NOTE

Adriana Cruz, Executive Director of Texas Economic Development and Tourism Office, Office of the Governor, has determined that the first five-year period the proposed rules are in effect, there will be no additional estimated cost, reduction of costs, or loss or increase in revenue to the state or local governments as a result of enforcing or administering the rules. Additionally, Ms. Cruz has determined that enforcing or administering the rules does not have foreseeable implications relating to the costs or revenues of state or local government.

PUBLIC BENEFIT

Ms. Cruz has determined for the first five-year period the proposed rules are in effect there will be a benefit to applicants and the general public because the proposed rules replace the repeal of the current rules related to the Events Trust Fund and the Major Events Reimbursement Program (collectively referred to as the "Program") and will provide greater clarity and consistency within the rules. Ms. Cruz has also determined that for each year of the first five years the rules are in effect, the public benefit anticipated as a result of enforcing the rules will be to offer clarity to applicants and help the Office better administer the Program.

PROBABLE ECONOMIC COSTS

Ms. Cruz has determined for the first five-year period the proposed rules are in effect, there will be no additional economic costs to persons required to comply with the proposed rules.

REGULATORY FLEXIBILITY ANALYSIS FOR SMALL AND MICRO-BUSINESSES AND RURAL COMMUNITIES.

LOCAL EMPLOYMENT IMPACT STATEMENT

Ms. Cruz has determined that the proposed rules will have no impact on local employment or a local economy. Thus, the Office is not required to prepare a local employment impact statement pursuant to §2001.022 of the Tex. Gov't Code.

GOVERNMENT GROWTH IMPACT STATEMENT

Ms. Cruz has determined that during each year of the first five years in which the proposed rules are in effect, the rules:

1) will not create or eliminate a government program;

2) will not require the creation of new employee positions or the elimination of existing employee positions;

3) will not require an increase or decrease in future legislative appropriations to the OOG;

4) will not require an increase or decrease in fees paid to the OOG;

5) will create new regulations;

6) will expand certain existing regulations, limit certain existing regulations, and repeal existing regulations;

7) will not increase or decrease the number of individuals subject to the applicability of the rules; and

8) will not positively or adversely affect the Texas economy.

TAKINGS IMPACT ASSESSMENT

Ms. Cruz has determined that there are no private real property interests affected by the proposed rules. Thus, the Office is not required to prepare a takings impact assessment pursuant to Section 2007.043, Texas Government Code.

REQUEST FOR PUBLIC COMMENTS

Comments on the proposed rules may be submitted to Gene Cervenka, Office of the Governor, Economic Development and Tourism Office, P.O. Box 12428, Austin, Texas 78701, or by email to eventsfund@gov.texas.gov with the subject line "Events Rules." The deadline for receipt of comments is 5:00 p.m., Central Time, on June 21, 2024, which is at least 30 days from the date of publication in the Texas Register.

SUBCHAPTER A. APPLICABILITY AND CONSTRUCTION OF RULES, GENERAL DEFINITIONS AND REQUIREMENTS

10 TAC §§184.1 - 184.3

STATUTORY AUTHORITY.

The rules are proposed under Sections 478.0002 and 480.0002, Texas Government Code, which authorize the Office to make rules necessary to implement Chapter 478 and 480, Texas Government Code, respectively. The rules are also proposed pursuant to Section 475.0004, Texas Government Code, which directs the Office to adopt rules to ensure efficient administration of trust fund programs, including rules related to application and receipt requirements. The Office also proposes these rules under Section 2001.004, Texas Government Code, which requires state agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. Finally, the rules are proposed in accordance with the Office's review of this chapter under Section 2001.039, Texas Government Code.

CROSS REFERENCE TO STATUTE

Chapter 184, Subchapter A. No other statutes, articles, or codes are affected by the proposed rules.

§184.1.Construction of Rules.

(a) The Office of the Governor will apply the rules in effect at the time of a request to participate in the Major Events Reimbursement Program or Events Trust Fund Program.

(b) The Chief of Staff or designee may suspend or waive any provision not statutorily imposed, in whole or in part, when, at the discretion of the Chief of Staff or designee, the particular facts or circumstances render such waiver of the Section appropriate in a given instance.

§184.2.General Definitions.

The words and terms used in this Chapter have the meanings ascribed to them in the statutes governing the programs established in Title 4, Subtitle E-1, Texas Government Code, or as defined in this Section:

(1) Applicant--A local government corporation that meets the requirements of Section 475.0151, Texas Government Code; an endorsing municipality; an endorsing county; or a local organizing committee, that submits to the Office an application to participate in the Major Events Reimbursement Program or Events Trust Fund Program.

(2) Day--A calendar day.

(3) Direct cost--Any cost that is directly attributable to the preparation for or presentation of an event and:

(A) for purposes of Major Events Reimbursement Program events, are necessary or desirable for the preparation for or presentation of an event;

(B) for purposes of Events Trust Fund events, are necessary for the preparation for or presentation of an event; and

(i) any expense that the Office, in its sole discretion, determines is an indirect, administrative, or overhead cost;

(ii) any discount or concession amounts related to venue rental; or

(ii) any expense that is recouped or refunded by other parties relating to the same expense or obligation.

(4) Direct spending--The amount of incremental increase in tax receipts for the 30-day period that ends one day after the last day of the event that are directly attributable to spending related to the preparation for or presentation of an event.

(5) Estimate--The Office's determination of the incremental increase in tax receipts that are directly attributable to the preparation for or presentation of an event eligible to be deposited in the trust fund for an eligible event.

(6) Event participant--An individual whose participation is integral to the presentation of an event, such as an event competitor, judge, timekeeper, scorekeeper, referee, or other similar person.

(7) Events Trust Fund--The fund established by the Office for the event pursuant to Section 478.0152, Texas Government Code.

(8) Local organizing committee--A nonprofit corporation or its successor in interest that:

(A) has been authorized by an endorsing municipality, endorsing county, or more than one endorsing municipality or county acting collectively to pursue an application and bid with a site selection organization for selection as the site of an event; or

(B) with the authorization of an endorsing municipality, endorsing county, or more than one endorsing municipality or county acting collectively, has executed an agreement with a site selection organization regarding a bid to host an event.

(9) Local share--The contribution to the fund made by or on behalf of an applicant pursuant to Texas Government Code Sections 478.0152, 478.0153, 480.0152, or 480.0153.

(10) Major Events Reimbursement Program Trust Fund--The trust fund established by the Office for the event pursuant to Texas Government Code Section 478.0152.

(11) Market area--The geographic area within which the Office determines there is a reasonable likelihood of measurable economic impact directly attributable to the preparation for or presentation of the event and related activities.

(12) Office--The Texas Economic Development and Tourism Office within the Office of the Governor.

(13) Publicly owned property--Any property that is owned by a governmental unit as defined by Texas Civil Practices and Remedies Code, Section 101.001(3).

(14) Trust fund--The fund created by the Texas Comptroller of Public Accounts, at the direction of the Office and designated as either the Major Events Reimbursement Program Fund or Events Trust Fund for the event.

§184.3.Buy Texas.

Applicants shall utilize products or services located in Texas for items for which it will seek reimbursement from a trust fund when such products or services are available at a comparable price and in a comparable period of time to products produced or for services offered outside this state. When requested by the Office, the applicant shall furnish documentation of direct costs or a description of good faith efforts to do so.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 21, 2024.

TRD-202402734

Gene Cervenka

Senior Finance Program Specialist

Office of the Governor, Economic Development and Tourism Office

Earliest possible date of adoption: August 4, 2024

For further information, please call: (512) 936-0100

SUBCHAPTER B. GENERAL REQUIREMENTS: MAJOR EVENTS REIMBURSEMENT PROGRAM

10 TAC §§184.10 - 184.13

STATUTORY AUTHORITY.

CROSS REFERENCE TO STATUTE

Chapter 184, Subchapter B. No other statutes, articles, or codes are affected by the proposed rules.

§184.10.Eligibility.

(a) An event is eligible for participation in the Major Events Reimbursement Program if:

(1) the event and the site selection organization for the event are identified in Sections 478.0001(3) and (7), Texas Government Code;

(2) a site selection organization selects a site in Texas after conducting a highly competitive selection process, and:

(A) the site selection organization considered one or more sites that are not located in this state; and

(B) the event will be held:

(i) no more than one time in a calendar year; or

(ii) each year for a period of years under an event support contract, but no more than one time each calendar year for the term of the event support contract; and

(3) the site selected in this state is:

(A) the sole site for the event; or

(B) the sole site for the event in a region composed of this state and one or more adjoining states;

(4) the Office determines that the incremental increase in tax receipts equals or exceeds $1 million per year for the event; and

(5) not later than the 30th day before the first day of the event, the site selection organization submits a plan to prevent the trafficking of persons in accordance with Section 478.0051(b)(5), Texas Government Code.

(b) For a multi-year event described in Subsection (a)(2)(B)(ii) of this Section, the Office shall calculate the incremental increase in tax receipts as if the event did not occur in a prior year for purposes of Subsection (a)(4) of this Section.

(c) The requirements of Subsection (a)(2) of this Section do not apply to an event described by Section 478.0053, Texas Government Code.

(d) An applicant is prohibited from receiving disbursements for the same event under more than one type of program authorized in Title 4, Subtitle E-1, Texas Government Code, but qualified applicants that were denied participation in the Major Events Reimbursement Program may apply for the Events Trust Fund Program.

§184.11.Request to Participate in the Major Events Reimbursement Program.

(a) An applicant seeking the establishment of a trust fund for the Major Events Reimbursement Program must submit:

(1) a completed and signed application;

(2) a communication from the municipality or county in which the event will be held, signed by a person with authority to bind the municipality or county, in which the municipality or county requests to participate in the trust fund program;

(3) a signed letter from the site selection organization selecting the site in Texas that includes information necessary to establish that the site was selected through a highly competitive selection process, including, but not limited to, all locations that submitted bids to host the event;

(4) documents that reflect the site selection organization engaged in a highly competitive selection process and considered at least one location outside of Texas to host the event as detailed in §184.41(b)(3) of this Chapter, concerning Documentation Required to Initiate Disbursement Process;

(5) the economic impact study specified in Subsection (b) of this Section, and any other data specified by the Office; and

(6) unless excepted under §184.10(c) of this Chapter, concerning Eligibility, documentation sufficient to establish that, prior to selecting the applicant's location as the site of the event, the site selection organization considered one or more sites not in this state to locate and conduct the event, including:

(A) the bid documentation the applicant submitted to the site selection organization as part of the highly competitive selection process to demonstrate the applicant's suitability and desirability as the location to host the event; and

(B) other documentation that indicates a highly competitive selection process occurred, such as:

(i) communications made by or on behalf of the applicant to the site selection organization;

(ii) documents from reputable third-party sources, such as news articles, public postings, or notices; and

(iii) communications between the site selection organization and all non-Texas sites.

(b) The economic impact study referenced in Subsection (a)(5) of this Section must:

(1) include sufficient data for the Office to determine the estimated incremental increase in tax revenue directly attributable to the preparation for or presentation of the event or activities directly related to the event, including:

(A) detailed information about the event-related expenditures of attendees, including an estimate of the spending of people expected to attend the event who are not residents of this state:

(i) during a reasonable time prior to and after the event and during the event; and

(ii) in the market area of the event;

(B) if available, information about event expenditures incurred or to be incurred by the event organizers; and

(C) if the applicant requests the Office to consider secondary impacts of the event, any other data or information addressing the secondary economic impact of the event in the requested market area during the ten months immediately following the last day of the event must be provided separately and in an easily distinguishable manner from data listed in Subparagraph (A) of this Paragraph;

(2) address only the incremental increase in tax receipts for the tax types identified in Section 478.0102(1)‑(5), Texas Government Code; and

(3) include a certification from the persons who prepared the study, attesting to the accuracy of the information provided.

(c) The request for participation and the economic impact report shall propose and provide information supporting the applicant's desired market area. The Office, in its sole discretion, shall make the final determination of the market area. The applicant must include in the market area an endorsing municipality or endorsing county that has been selected as the site for the event.

(d) The request for participation and the economic impact report shall include a list of all event activities proposed to be included in the estimate, and must include data for each activity, including, at a minimum:

(1) projected attendance figures;

(2) the methodology from §184.30 of this Chapter, concerning Attendance Certification, that will be used for determining the total actual attendance at the event;

(3) the projected spending of attendees, including an estimate of the spending of people expected to attend the event who are not residents of this state; and

(4) any anticipated expenditure information related to the activity.

(e) The request for participation must be accompanied by a certification provided by an authorized representative from any participating endorsing municipality, endorsing county, and local organizing committee attesting to the accuracy of the information provided.

(f) A request for participation must be submitted not earlier than one year and not later than 45 days before the day the event begins. Requests submitted outside this time frame shall not be reviewed.

(g) All requests and required documentation shall be submitted electronically to: eventsfund@gov.texas.gov.

(h) The Office shall determine the amount of incremental increase in tax receipts not later than the 30th day after the day the Office receives the completed request for participation and all related information required by this Chapter.

(i) The Office may reject a request for participation that does not meet the requirements established by this Section. The Office may also seek clarification or supplementation of information submitted under this Section if the information sought would not, in the Office's sole discretion, materially change the request for participation.

§184.12.Major Events Reimbursement Program Deadlines.

(a) Application Deadline. Applications for participation in the Major Events Reimbursement Program must be submitted not earlier than one year and not later than 45 days before the first day of the event.

(b) Determination Deadline. Not later than the 30th day after the day the Office receives a completed request for participation and all required information, the Office will determine:

(1) whether the event meets the eligibility requirements of Chapter 478, Texas Government Code, for the establishment of a Major Events Reimbursement Program Fund; and

(2) the amount of incremental increase in tax receipts that is directly attributable to the preparation for or presentation of the event.

(c) Event Support Contract Submission. Before the first day of the event, the applicant shall submit an event support contract compliant with Subchapter F of this Chapter, concerning Event Support Contracts, and any other documentation required by this Chapter. If the event support contract is not timely submitted, the Office shall disqualify the applicant from participation in the program for that event, thereby rendering the applicant ineligible for reimbursements from the trust fund established for the event.

(d) Attendance Certification Deadline. The applicant shall submit the attendance certification and supporting documentation required by §184.30 of this Chapter, concerning Attendance Certification, not later than 45 days after the last day of the event. If the attendance documentation for the event is not timely submitted, the Office shall disqualify the applicant from participation in the program, thereby rendering the applicant ineligible for reimbursements from the trust fund established for the event.

(e) Local Share Submission. Not later than 90 days after the last day of the event, the applicant shall remit to the Office the local share contribution to the fund made by or on behalf of an applicant pursuant to Sections 478.0152 and 478.0153, Texas Government Code. The applicant shall not submit the local share on a weekend or state holiday. If the local share is not timely submitted, the Office shall close the trust fund established for the event.

(f) Disbursement Request Submission. The applicant shall submit all requests for disbursements from the trust fund and supporting documentation no later than 180 days after the last day of the event. The Office shall disqualify any disbursement requests that are not timely submitted, thereby making any untimely requests ineligible for reimbursement. Notwithstanding anything in this Section to the contrary, the Office may request and consider additional supporting documentation related to timely submitted disbursement requests at any time, regardless of whether the Office receives such information after the deadline established by this Subsection.

(g) An applicant must provide an annual audited financial statement required by the Office no later than the end of the fourth month after the date the period covered by the financial statement ends.

§184.13.Post-Event Report Information for Major Events Reimbursement Program.

Upon request by the Office, an applicant to the Major Events Reimbursement Program must provide to the Office any information the Office determines is necessary to comply with its post-event reporting requirements in Section 478.0107, Texas Government Code.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 21, 2024.

TRD-202402735

Gene Cervenka

Senior Finance Program Specialist

Office of the Governor, Economic Development and Tourism Office

Earliest possible date of adoption: August 4, 2024

For further information, please call: (512) 936-0100

SUBCHAPTER C. GENERAL REQUIREMENTS: EVENTS TRUST FUND PROGRAM

10 TAC §§184.20 - 184.22

STATUTORY AUTHORITY.

CROSS REFERENCE TO STATUTE

Chapter 184, Subchapter C. No other statutes, articles, or codes are affected by the proposed rules.

§184.20.Eligibility.

(a) An event is eligible for participation in the Events Trust Fund Program if:

(1) a site selection organization selects a site in Texas after conducting a highly competitive selection process:

(A) the site selection organization considered one or more sites that are not located in this state; and

(B) the event will be held:

(i) no more than one time in a calendar year; or

(ii) each year for a period of years under an event support contract, but no more than one time each calendar year for the term of the event support contract; and

(2) the site selected in this state is:

(A) the sole site for the event; or

(B) the sole site for the event in a region composed of this state and one or more adjoining states.

(b) During any twelve-month period, an applicant may not submit more than 10 events--only three of which may be non-sporting events--for reimbursement under the Events Trust Fund Program for which the Office determines that the amount of the incremental increase in tax receipts is less than $200,000. For purposes of this Subsection, a "sporting event" is an event that has the primary purpose of conducting recreational or competitive athletic or physical activities, including individual, team, equestrian, or automotive competitions.

(c) An applicant is prohibited from receiving disbursements for the same event under more than one type of program authorized in Title 4, Subtitle E-1, Texas Government Code, but qualified applicants that that were denied participation in the Events Trust Fund Program may apply for the Major Events Reimbursement Program.

§184.21.Request to Establish a Trust Fund.

(a) An applicant seeking the establishment of a trust fund for the Events Trust Fund Program must submit:

(1) a completed and signed application;

(5) the economic impact study or other data specified in Subsection (b) of this Section; and

(6) documentation sufficient to establish that, prior to selecting the applicant's location as the site of the event, the site selection organization considered one or more sites not in this state to locate and conduct the event, including:

(B) other documentation that indicates a highly competitive selection process occurred, such as:

(i) communications made by or on behalf of the applicant to the site selection organization;

(ii) documents from reputable third-party sources, such as news articles, public postings, or notices; and

(iii) communications between the site selection organization and all non-Texas sites.

(b) The economic impact study referenced in Subsection (a)(5) of this Section must:

(A) detailed information about the event-related expenditures of attendees, including an estimate of the spending of people expected to attend the event who are not residents of this state:

(i) during a reasonable time prior to and after the event and during the event; and

(ii) in the market area of the event; and

(B) if available, information about event expenditures incurred or to be incurred by the event organizers;

(2) address only the incremental increase in tax receipts for the tax types identified in Section 480.0102 (1)‑(5), Texas Government Code; and

(3) include a certification from the persons who prepared the study, attesting to the accuracy of the information provided.

(c) The request for participation and the economic impact report shall propose and provide information supporting the applicant's desired market area. The Office, in its sole discretion shall make the final determination of the market area. The applicant must include in the market area an endorsing municipality or endorsing county that has been selected as the site for the event.

(1) projected attendance figures;

(2) the methodology that will be used for determining the total actual attendance at the event;

(3) the projected spending of attendees, including an estimate of the spending of people expected to attend the event who are not residents of this state; and

(4) any anticipated expenditure information related to the activity.

(e) The request for participation must be accompanied by a certification provided by an authorized representative from each endorsing municipality, endorsing county, and local organizing committee, if applicable, attesting to the accuracy of the information provided.

(f) A request for participation must be submitted not later than 120 days before the day the event begins. The Office will disqualify and not consider requests submitted later than this deadline.

(g) All requests and required documentation shall be submitted electronically to: eventsfund@gov.texas.gov.

(h) The Office shall determine the amount of incremental increase in tax receipts not later than the earlier of:

(1) the 30th day after the day the Office receives the completed request for participation and all related information required by this Section; and

(2) three months before the day of the event.

§184.22.Events Trust Fund Program Deadlines.

(a) Application Deadline. Applications for participation in the Events Trust Fund Program must be submitted no later than 120 days before the first day of the event.

(b) Determination Deadline. Not later than the earlier of the 30th day after the day the Office receives a completed request for participation and all required information and three months before the day of the event, the Office will determine:

(1) whether the event meets the eligibility requirements of Chapter 480, Texas Government Code, for the establishment of an Events Trust Fund; and

(2) the amount of incremental increase in tax receipts that is directly attributable to the preparation for or presentation of the event.

(e) Local Share Submission. Not later than 90 days after the last day of the event, the applicant shall remit to the Office the local share contribution to the fund made by or on behalf of an endorsing municipality or endorsing county pursuant to Sections 480.0152 and 480.0153, Texas Government Code. The applicant shall not submit the local share on a weekend or state holiday. If the local share is not timely submitted, the Office shall close the trust fund established for the event.

(f) Disbursement Request Submission. The applicant shall submit all requests for disbursements from the trust fund and supporting documentation by not later than 180 days after the last day of the event. The Office shall disqualify any disbursement requests that are not timely submitted, thereby making those untimely requests ineligible for reimbursement. Notwithstanding the anything in this Section to the contrary, the Office may request and consider additional supporting documentation related to timely submitted disbursement requests at any time, regardless of whether the Office receives such information after the deadline established by this Subsection.

(g) An applicant must provide an annual audited financial statement required by the Office no later than the end of the fourth month after the date the period covered by the financial statement ends.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 21, 2024.

TRD-202402736

Gene Cervenka

Senior Finance Program Specialist

Office of the Governor, Economic Development and Tourism Office

Earliest possible date of adoption: August 4, 2024

For further information, please call: (512) 936-0100

SUBCHAPTER D. REQUIRED REPORTS

10 TAC §184.30, §184.31

STATUTORY AUTHORITY.

CROSS REFERENCE TO STATUTE

Chapter 184, Subchapter D. No other statutes, articles, or codes are affected by the proposed rules.

§184.30.Attendance Certification.

(a) Not later than 45 days after the last day of the approved event, the applicant shall submit an attendance certification based upon a methodology approved by the Office. The certification must be signed by the person who signed the original request for participation or that person's successor, and must include:

(1) total actual attendance;

(2) the estimated number of attendees at the approved event that are not residents of Texas; and

(3) the verifiable source for such numbers.

(b) Approved attendance methodologies are:

(1) ticket scan counts;

(2) turnstile counts;

(3) registration totals;

(4) event participant totals; and

(5) another methodology that is approved by the Office, in its sole discretion, prior to the first day of the event. Surveys shall only be used to assist with determining the estimated number of attendees who are not residents of Texas, and not for actual attendance counts, unless submitted with additional data or documentation that the Office, in its sole discretion, approves.

(1) if the event lasts for more than one day, as actual, not average, attendance per day; and

(2) in accordance with the categories and estimated numbers of attendees upon which the economic impact study was based.

(d) If the actual attendance figures are significantly lower than the estimated attendance numbers, the Office may reduce the amount of a disbursement for an applicant under the trust fund in proportion to the difference and in proportion to the amount contributed to the fund by the entity. Actual attendance at an event is considered significantly lower than estimated attendance when the difference is 15% or greater.

§184.31.Other Information Required by the Office.

(a) Upon request of the Office, the applicant must provide to the Office any additional information, including financial information, that the Office determines is necessary to verify event-related expenditures or to administer the program.

(b) If the applicant fails or refuses to timely provide any information required by statute or this Section, the Office may disqualify the applicant from receiving disbursements from the trust fund established for the event.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 21, 2024.

TRD-202402737

Gene Cervenka

Senior Finance Program Specialist

Office of the Governor, Economic Development and Tourism Office

Earliest possible date of adoption: August 4, 2024

For further information, please call: (512) 936-0100

SUBCHAPTER E. DISBURSEMENT PROCESS

10 TAC §§184.40 - 184.45

STATUTORY AUTHORITY.

CROSS REFERENCE TO STATUTE

Chapter 184, Subchapter E. No other statutes, articles, or codes are affected by the proposed rules.

§184.40.Disbursements for Direct Costs.

(a) Disbursements from the trust fund established for the event shall be issued by the Office to reimburse only allowable direct costs that are directly attributable to the preparation for, or presentation of, the approved event related to:

(1) preparing for and presentation of an event in this state in accordance with the event support contract;

(2) the construction, improvement, or renovation of facilities necessary to conduct the event and that are directly attributable to fulfilling obligations of the event support contract, to the extent such expenditures are authorized by law, including Sections 478.0204(b) or 480.0204(b), Texas Government Code, as applicable, and to the extent such expenditures are required by the site selection organization; and

(3) paying the principal of and interest on notes issued by an endorsing municipality or endorsing county in accordance with Sections 478.0204(a) or 480.0204(a), Texas Government Code, as applicable.

(b) Disbursements from the trust fund may not be used to make payments to an applicant or any other entity in relation to expenditures that are not directly attributable to allowable direct costs as set forth in §184.44 of this Chapter, concerning Allowable Direct Costs. Disbursements are subject to verification or audit prior to or after payment by the Office.

§184.41.Documentation Required to Initiate Disbursement Process.

(a) To initiate the disbursement process, the applicant must electronically submit to the Office, no later than 180 days after the last day of the event, the following documentation in a format required by the Office:

(1) a signed disbursement request in the form prescribed by the Office;

(2) an explanation of the expenditures for which the applicant seeks reimbursement in a form prescribed by the Office and with sufficient detail to enable the Office to determine the nature and specifics of the expenditures; and

(3) verifiable source documentation, as detailed in Subsection (b) of this Section, labeled to correspond to the explanation provided in the form required in Paragraph (2) of this Subsection, and that supports the calculation and payment of each expenditure for which the applicant seeks reimbursement.

(b) Unless otherwise approved by the Office before submission, all verifiable source documentation must meet the standards established in this Subsection.

(1) Invoice. A copy of an original invoice or similar documentation that provides a sufficiently detailed, itemized description of the goods or services purchased, including the following:

(A) the date of the invoice or similar documentation;

(B) the name of the entity or individual requesting payment;

(D) the price of the goods or services;

(E) the dates on which the goods or services were delivered or provided;

(F) the location to which the goods or services were delivered or provided; and

(G) the terms of sale, if any.

(2) Proof of Payment. Documentation that provides sufficient evidence of the transmission, transfer, or payment of the expenditure, including:

(A) front and back copy of a cleared check;

(B) bank statement reflecting the transaction;

(D) $0.00 invoice or vendor statement reflecting an invoice was paid in full; or

(E) electronic funds transfer or automated clearing house report accompanied by a bank statement.

(3) Internal billing. If applicable, documentation providing justification for expenditures incurred under an event support contract by an applicant for charges for services or facilities provided by a municipality or county for an event, including facility rentals and charges for police, fire, or emergency medical services. The documentation must also detail the direct correlation between the internal billing expenditure and the event.

(4) Advertising, publications, and signage. If applicable, copies of advertising, publications, physical promotional materials, or signage specific to the event. An applicant may submit photographs of advertising, physical promotional materials, and signage in lieu of providing a sample of the actual advertisement or sign.

(5) Staffing costs. If applicable, documentation with clear, verifiable data that details the titles of individuals who worked to prepare for or present the event, the hours they worked, and the description of work they performed, including:

(A) detailed timesheets; and

(B) agreements and payment information to contract labor for the event.

(6) Expenses of a local organizing committee. If applicable, documentation that reflects prior approval of the disbursement request by each contributing endorsing municipality and endorsing county.

(c) An applicant shall retain all records related to an event for at least seven years following the last day of the event and must make such records available to the Office upon request.

(d) An applicant may redact information not related to the event from any documentation submitted under this Section.

(e) If an applicant, site selection organization, or other third party considers information submitted to the Office to be confidential or excepted from disclosure, the information must be clearly marked as confidential or as excepted from disclosure.

§184.42.Extension of Time to Submit Disbursement Documentation.

(a) The Office may, in its sole discretion, grant an extension to an applicant to submit information required for a completed disbursement request after the 180th day after the last day of the event if the applicant timely submits a request for an extension in accordance with Subsection (b) of this Section and the Office determines the applicant showed good cause or when the particular facts or circumstances render an extension appropriate in a given instance.

(b) The applicant must submit an extension request in a form required by the Office before the 180th day after the last day of the event and must include its justification for the proposed extension of time.

§184.43.Disbursement of Trust Funds.

(a) The Office will only consider a disbursement request that:

(1) is supported by an event support contract;

(2) requests reimbursement for payments or obligations for allowable direct costs; and

(3) is complete, supported by proof of payment or internal billing documentation, and includes all event reimbursements being sought by the applicant for disbursement.

(b) The Office may request additional supporting documentation or justification regarding any costs submitted for a disbursement. The Office, at its sole discretion, may withhold disbursements pending the receipt of any information the Office determines is necessary to appropriately document and support the eligibility of items related to the reimbursement. The Office may deem requests for reimbursement ineligible if the applicant fails to provide the information requested by the Office.

(c) The Office shall not make any disbursements for direct costs until the applicant satisfies all reporting requirements under Subchapter D of this Chapter, concerning Required Reports.

(d) After disbursing all approved reimbursement payments, the Office will return any unexpended balance remaining in the trust fund to each endorsing entity in proportion to the local share contributed by the entity. Any unexpended state share shall be returned to the Comptroller of Public Accounts.

(e) A disbursement made from the trust fund by the Office in satisfaction of an applicant's obligation shall be satisfied proportionately from the state and local share in the trust fund in the proportion of 6.25:1 of state funds to local share, notwithstanding any agreements to the contrary made by an applicant.

(f) If the Office determines, based on information obtained from verifiable sources, including any monitoring, inspection, review or audit conducted by the Office or its authorized representatives, that the applicant received a disbursement in excess of the amount to which the applicant is entitled under applicable law and regulations, or that the applicant provided erroneous information that resulted in an overstatement of the estimated incremental tax receipt increase for an event, then the Office may withhold, offset, recoup, or otherwise require the return of any excess disbursement amounts.

§184.44.Allowable Direct Costs.

(a) The Office may only reimburse costs that:

(1) are required by or provided for under the event support contract;

(2) are not otherwise unallowable by federal or state laws or regulations, including §184.45 of this Chapter, concerning Unallowable Costs;

(3) the Office, in its sole discretion, determines are directly attributable to the preparation for or presentation of the event; and

(4) meet the documentation and other requirements established in statute and this Chapter.

(b) Subject to the requirements of Subsection (a) of this Section, the Office may reimburse the following:

(1) preparation for or presentation of the event in accordance with the event support contract;

(2) structural improvements or fixtures for an event authorized by Sections 478.0205 or 480.0205, Texas Government Code;

(3) any purchased items or equipment, that are otherwise acceptable under this Section, which will continue to derive value after the event and are retained only by the applicant, but reimbursement for such items or equipment is limited to five percent of the cost of the item or equipment;

(4) financing event sites in accordance with Sections 480.0204(a)(1) and 478.0204(a)(1), Texas Government Code;

(5) performance bonds or insurance required for hosting the event;

(6) temporary maintenance to property impacted by the conduct of the event that is directly related to the preparation for or presentation of the event;

(7) expenditures for the public health or safety of people or animals involved in hosting, attending, or participating in the event, including:

(A) water;

(B) security;

(C) professional fire marshal or engineer requirements for event facilities and other event related property or equipment;

(D) portable restrooms, trash receptacles, and other types of sanitation necessities;

(E) shade;

(F) lighting and sound equipment required for security or public safety;

(G) traffic planning and management;

(H) severe weather planning and mitigation;

(I) way-finding signage or staff;

(J) barriers needed for traffic control, crowd control, or similar functions;

(K) required permits and professional or consulting services engaged to acquire permits;

(L) stand-by services, such as medical services, including medical trainers and veterinarians;

(M) accommodations required by and goods or services necessary to remain in compliance with the Americans with Disabilities Act;

(N) public health or safety command center expenses;

(O) credentials; and

(P) costs needed for police, fire, and other emergency operations staff.

(8) event facility costs, including:

(A) cost to rent an event facility, including any internal billing, if the terms of the event support contract require the applicant to reimburse the site selection organization for the cost to rent a facility; and

(B) rental of seating or other furnishings, supplies, or equipment;

(9) labor and other expenditures for staffing services directly attributable to the preparation for or presentation of the event that are performed during the event and within a reasonable time prior to and after the event, including:

(A) hourly pay or overtime for personnel engaged to promote the public health or safety of the event;

(B) hourly pay or overtime for non-health and safety personnel who are hired or contracted specifically to meet objectives of an event; or

(C) compensation for referees, score keepers, timers, and other similar officials required to meet the objectives of an approved event;

(10) market-area transportation and/or parking services, not including personal travel, that are used during the event or within a reasonable time prior to or after the event and are not otherwise compensated or recovered;

(11) temporary signs and banners created specifically for the event;

(12) advertising that:

(A) occurs prior to or during the event; and

(B) includes the event name, date, and location of the event;

(13) promotional items that are nominal in value and created specifically to promote the event;

(14) production costs associated with the production of the event, including staging, rigging, sound and lighting systems;

(15) uniforms created specifically for the event for the use by staff or volunteers;

(16) goods or services necessary to address, prepare for, or remediate the effects of inclement weather that occurs during or immediately before or after the event;

(17) services necessary for the performance of the national anthem of the United States or a foreign nation at the event;

(18) photography or videography services engaged to document the event;

(19) food, the provision of which is directly related to the presentation of the event, is provided on-site to event participants and volunteers, and the value of which does not exceed the CPA's Current Travel Reimbursement Rates;

(20) meals, automobile mileage, rental car, parking fees, and toll fares that meet the following requirements:

(A) the expenditure directly relates to an event participant's participation in the event;

(B) the expenditure is directly related to the preparation for or presentation of the event;

(D) for automobile mileage, the expenditure does not exceed the allowable rates for state employees, as specified by the CPA's Current Travel Reimbursement Rates; and

(E) for vehicle rentals, the expenditure does not exceed the regular rates for a standard vehicle of the type rented; and

(21) if the event is eligible for the Major Events Reimbursement Program under §184.10 of this Chapter, concerning Eligibility, fees that are payable by the applicant for the right to present or host the event--including hosting fees, sanction fees, participation fees, or other fees the Office, in its sole discretion, determines are similar to such fees--that:

(A) are clearly stated in the application for participation in the trust fund program;

(B) are paid to the site selection organization or entity designated as the recipient of the fees in the event support contract; and

§184.45.Unallowable Costs.

(a) Disbursements for the following costs are prohibited, regardless of their inclusion in an event support contract:

(1) any tax the Office, in its sole discretion, determines is a contribution imposed by a local, state, or federal government or other taxing entity upon an individual or business entity, whether under the name of a charge, surcharge, toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, environmental charge, heavy equipment tax, fuel surcharge, or other name;

(2) gifts of any kind, including tips, gratuities, or honoraria;

(3) grants to any person, entity, or organization;

(4) alcoholic beverages;

(5) food not specifically authorized in §184.44(b)(20) or (22) of this Chapter, concerning Allowable Direct Costs;

(6) travel not specifically authorized in §184.44(22) of this Chapter;

(7) costs related to an applicant's application or participation in the trust fund program, including, but not limited to:

(A) representing any entity, including an applicant or related party, in front of the legislature for any reason;

(B) representing any entity, including an applicant or related party, in front of the Office for the purpose of applying to or seeking reimbursement from the trust fund;

(D) preparing a pre-event or post-event economic impact study;

(E) preparing a pre-event attendance estimate or post-event attendance verification;

(F) conducting any pre-event or post-event survey; or

(G) costs associated with responding to requests for information relating to participation in the program, including requests for information from the Office, the Texas State Auditor's Office, or pursuant to the requirements of the Texas Public Information Act, Chapter 552, Texas Government Code.

(8) expenses related to:

(A) monetary compensation to individuals for participation or competitive performance in an event, including, but not limited to, cash, gift cards, or pre-paid service certificates;

(B) gaming;

(D) giveaways that do not meet the requirements of §184.44(14) of this Chapter;

(9) costs for any personal items or services;

(10) equipment, items, or supplies that will derive future value separate from the event, and are retained by individuals or entities other than the applicant;

(11) hospitality items not available to the general public, appearance or talent fees, and any expenditures related to "VIP" expenses except as permitted under §184.44(18) of this Chapter;

(12) reimbursement of any cost not incurred, such as for lost profit or for an exchange-in-kind or product;

(13) damages of any kind, including damages or lost revenue resulting from inclement weather, notwithstanding §184.44(17) of this Chapter;

(14) any cost or expense of, or related to, constructing an arena, stadium, or convention center;

(15) any cost or expense related to conducting usual and customary maintenance of a facility;

(16) any amount in excess of 5.0% of the cost of any structural improvement made or fixture for an event that is added to a site that is privately owned property where the improvement or fixture is expected to derive most of its value in subsequent uses of the site for future events;

(17) costs that are not direct costs;

(18) any costs, the reimbursement of which the Office determines, in its sole discretion, could result in a payment to or from a party with an inappropriate conflict of interest;

(19) if the event is an Events Trust Fund event described in subchapter C of this chapter, fees that are payable by the applicant for the right to present or host the event--including hosting fees, sanction fees, participation fees, or other fees the Office, in its sole discretion, determines are similar to such fees; and

(20) any expense or obligation that was recouped, refunded, or otherwise recovered, or that will be recouped, refunded, or otherwise recovered from another entity under the event support contract relating to the same expense or obligation, the reimbursement of which could result a net surplus to the applicant.

(b) The Office may deny a disbursement for any event, cost, expense, or obligation the Office deems fiscally irresponsible or not supportive of program objectives.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 21, 2024.

TRD-202402738

Gene Cervenka

Senior Finance Program Specialist

Office of the Governor, Economic Development and Tourism Office

Earliest possible date of adoption: August 4, 2024

For further information, please call: (512) 936-0100

SUBCHAPTER F. EVENT SUPPORT CONTRACTS

10 TAC §184.50, §184.51

STATUTORY AUTHORITY.

CROSS REFERENCE TO STATUTE

Chapter 184, Subchapter F. No other statutes, articles, or codes are affected by the proposed rules.

§184.50.Requirements for Event Support Contracts.

(a) An event support contract is required for any event that is participating in the Major Events Reimbursement Program or Events Trust Fund Program. The parties to an event support contract shall include, at a minimum, the site selection organization and the applicant.

(b) The event support contract must:

(1) establish the applicant's roles and obligations in the preparation for or presentation of the event;

(2) establish the roles and obligations the site selection organization will undertake to prepare for or present the event;

(3) set out the representations and assurances of the parties with respect to the selection of a site in this state for the location of an event; and

(4) detail the requirements and costs necessary-or in the case of Major Events Trust Fund Program Events, necessary or desirable-for the preparation for or presentation of an event.

(c) Any costs included in the event support contract that are anticipated to be paid, recovered, refunded, or offset from other parties must be clearly identified.

(d) The event support contract must clearly identify any costs that the contract parties intend to be reimbursed from the event trust fund for structural improvements or fixtures for an event site where the improvement or fixture is expected to derive most of its value in subsequent uses of the site for future events.

§184.51.Contract Guidelines.

(a) In considering whether to make a disbursement from the trust fund, the Office will not consider a contingency clause in an event support contract as relieving an applicant's obligation to pay a cost under the contract, as mandated by Sections 478.0202(b) or 480.0202(b), Texas Government Code.

(b) The event support contract must not create or shift obligations or liabilities from the endorsing municipality, endorsing county, local organizing committee, or another party to the Office.

(c) The Office shall not consider for reimbursement any cost that is identified in an event support contract in terms the Office, in its sole discretion, determines are overly broad or too general in nature, such terms include:

(1) blanket "catch-all" terms, such as "any necessary fixtures or improvements;"

(2) references in terms such as "etc." or "miscellaneous" or "as needed," or "other;"

(3) terms that reference the Office's decision-making authority, such as "any expense allowed by Office" or "any expense allowed by statute;" or

(4) any expense that merely references or generally recites the Texas Administrative Code to replace a clear and concise description of the expense.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on June 21, 2024.

TRD-202402739

Gene Cervenka

Senior Finance Program Specialist

Office of the Governor, Economic Development and Tourism Office

Earliest possible date of adoption: August 4, 2024

For further information, please call: (512) 936-0100