Hearing held on Austin tax deal with MLS team

AUSTIN, Texas - A hearing was held at the State Capitol on a bill that could take a bite out of the deal to bring Major League Soccer to Austin.

Senate Bill 1771, if approved, would allow Travis County, Austin ISD and other taxing bodies to get money from the new stadium.

Members of the Texas Senate Property Tax Committee took up SB 1771 Tuesday evening. It was drafted in response to the deal between the City of Austin and Precourt Sports Ventures.

A key part of the deal is the 20,000 seat stadium to be built on a vacant city-owned plot of land called McKalla Place, near The Domain. It will be home to the MLS team Austin FC. The city spent more than a year trying to get in the league, which included the failed re-location of the Columbus Crew. In crafting the deal for a MLS expansion team, the city decided to make the stadium property tax-exempt, which angered some on the Travis County Commissioners Court.

SB 1771, sponsored by state Sen. Paul Bettencourt, R-Houston, would allow taxing districts to get around the city property tax exemption deal.

“I’m trying to reward good behavior, if there is a good structure they like it, great. They can come in, but what I know is bad public policy, is having one taxing unit decide for everybody else what they’re going to do,” said Bettencourt. "And a future version of this bill might be just a public referendum, because that settles a lot of things."

It’s possible, if SB 1771 is made law, the value of a structure located on a tax-exempt property, like grandstands for a stadium, could be taxed. Supporters argue the legislation is needed to make sure every governmental body gets a say on economic recruitment deals. Bettencourt also said he is not trying to kill soccer in Austin, but essentially wants all the players in economic recruitment to get in the game.

“You just can’t set a practice to where one city can make a decision for a county or for schools or special districts, that’s not how the property tax system is supposed to work,” said Bettencourt. "Individual decisions have to be accountable to their governing bodies, you can’t cross the streams and have one taxing unit tell the other taxing unit what to do."

Officials at the Mayor’s office have indicated that they do not believe SB 1771 will prevent Austin FC from operating in Austin.

A big supporter of SB 1771 is a group called Fair Play Austin, which has launched campaigns against the MLS deal. A major financial backer of the group is the owner of the USL Soccer team, the Austin Bold, which started play this year.

It’s not known when a committee vote on the bill will take place.