[Congressional Record Volume 143, Number 13 (Wednesday, February 5, 1997)]
[Senate]
[Page S994]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 THE TAX-EXEMPT ARENA DEBT ISSUANCE ACT

  Mr. BYRD. Madam President, I strongly support S. 122, the Stop Tax-
exempt Arena Debt Issuance Act--let me say that again--the Stop Tax-
Exempt Arena Debt Insurance Act--a measure that has been introduced by 
Senator Moynihan. This bill would amend title I, section 141, of the 
Internal Revenue Code by closing a tax loophole that has been 
beneficial to a select few individuals: owners of professional sports 
teams. For the average taxpayer, however, it is nothing more than 
professional sports welfare.
  Provisions of the 1986 Tax Reform Act were supposed to prevent 
professional sports teams from building sports facilities with tax-
exempt bonds. Under the law, professional sports teams are categorized 
as a private entity, and, as such, the issuing of private activity 
bonds is taxed. However, due to clever maneuvering, professional sports 
teams have circumvented the intent of the law by encouraging State 
governments to issue governmental bonds, which are exempted from 
Federal taxes, for the purpose of constructing large sports facilities. 
While such a tactic is technically legal, professional sports teams 
owners have manipulated the law for their own personal gain.
  Many large metropolitan areas have attempted to lure professional 
sports teams to relocate by offering generous incentive packages, 
including the construction of new stadia. Many of the proposed 
facilities cost in excess of $225 million. The Congressional Research 
Service has reported that the Federal share for a $225 million stadium 
could be as high as 34 percent. In plain monetary figures, that is $75 
million over the lifetime of the stadium--$75 million that might better 
be spent and more usefully spent on benefits for the Nation, like books 
for our schools, safer roads and bridges for commuters, and more police 
to keep our streets safer. Madam President, the list is endless. 
Instead, the Federal Government receives no tax revenue, and money that 
could have been spent on these other, more deserving programs, is 
wasted, in my opinion.
  I commend my colleague, Senator Moynihan, for offering S. 122. I 
agree with his desire to close this tax loophole that is mainly 
beneficial to a few select and wealthy individuals. In this time of 
fiscal austerity, the Federal Government cannot afford to subsidize 
such programs. S. 122 seeks to preserve the intentions of the 1986 Tax 
Reform Act by ensuring that professional sports teams do not use--
directly, or indirectly--Federal funds for the construction of their 
sports facilities. I have nothing in particular against sports or 
sports teams.
  I just think America has its values standing on their heads when it 
puts sports ahead of the development of the minds, the intellects of 
young people. But that is a discussion for another day. Professional 
sports in the United States is a lucrative and financially healthy 
private industry. It does not need this kind of public Federal subsidy 
while so many other pressing needs are feeling the slash of the budget-
cutter's pencil.
  S. 122 is equally important for another reason. By seeking to prevent 
professional sports teams and localities from circumventing the obvious 
intentions of the 1986 tax law, S. 122 illustrates how complex our Tax 
Code has become. For far too long, tax loopholes, such as those 
contained in Section 141 of the code, have reduced the fairness and 
efficiency of our Tax Code. They are as leeches draining the health and 
equity of the U.S. tax code. These tax expenditures--that portion of 
our budget that proceeds for the most part on automatic pilot--have not 
been subject to the same level of scrutiny as have other forms of 
federal spending. This must change.
  Madam President, in fiscal year 1995, total tax expenditures--or 
loopholes--reduced Federal revenues by approximately $500 billion, an 
amount equal to nearly one-third of the entire Federal budget. Clearly, 
tax expenditures need further scrutiny, and, where they are deemed to 
be outdated or unnecessary--or unnecessary--they need to be repealed. 
By identifying and correcting one of these wasteful tax loopholes, 
Senator Moynihan has introduced S. 122. It represents a step in the 
right direction.
  Madam President, I thank my colleague, Senator Moynihan, for his 
leadership. And I thank Senator Hatch for allowing me the privilege of 
going forward at this time. Madam President, I yield the floor.

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