LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 4, 1997
TO: Honorable Ron Wilson, Chair IN RE: House Bill No. 1445, Committee Report 1st House, Substituted
Committee on Licensing & Administrative Procedures By: Gray
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB1445 ( Relating
to the continuation and functions of the Texas Racing Commission
and to the transfer of certain commission functions to the Texas
Department of Commerce; providing penalties.) this office has
detemined the following:
Biennial Net Impact to General Revenue Funds by HB1445-Committee Report 1st House, Substituted
Implementing the provisions of the bill would result in a net
positive impact of $460,824 to General Revenue Related Funds
through the biennium ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
HB 1445 would continue the Texas Racing Commission through August
31, 2005 and make several changes to the enabling statute.
The Texas Racing Commission is subject to the provisions of
the Texas Sunset Act, and unless continued by the 75th Legislature,
will be abolished September 1,1997.
The amount set forth
for funding the Texas Racing Commission in the General Appropriations
Act, as introduced, is $9,430,711 in fiscal year 1998 and $9,374,318
in fiscal year 1999, and would be contingent upon the passage
of HB 1445 or similar legislation. The appropriations would
be financed from a dedicated account (0597) within General Revenue
and would provide for 74 employees.
Sections 1 through 12
of the bill relate to definitions, commission membership, regulatory
authority, and operational practices of the commission and other
law enforcement personnel. No fiscal impact is anticipated
from the implementation of these sections.
Section 13 of
the bill would require the Texas Racing Commission to employ
all racetrack stewards and judges. This section would result
in increased cost to the state as specified below.
Section
14 of the bill concerns recognizing racing organizations, licensing
requirements, including the posting of security to ensure payment
of fees and charges to the state or commission related to pari-mutuel
racing. This section also expands the regulatory and investigative
authority of the executive secretary and authorizes the commission
to assess an administrative penalties for violations of cease
and desist orders. Gains to general revenue could result from
such penalties, but neither the frequency nor the amount of
the penalties can be estimated.
Sections 15 and 16 concern
certificates of licensure and qualifications for licensure including
fingerprinting for conducting a criminal background check.
Section
17 of the bill authorizes the commission to set fees to cover
the cost of conducting a criminal background check and would
require the commission to reimburse the Department of Public
Safety for such costs. Section 28 of the bill authorizes the
commission to recoup these costs.
Sections 18 through 22
concern commission oversight of racing related activities. Section
21 would authorize the commission to suspend a racetrack license
if the commission determines that the track is being operated
in a manner that is a threat to public health, safety or welfare.
No fiscal impact is anticipated from implementation of these
sections.
Section 23 of the bill would change the distribution
of the simulcast pari-mutuel pool by setting aside 0.25, or
an estimated $900,000 per year, for the Racing Commission instead
of the Texas Commission on Alcohol and Drug Abuse to be used
for the repayment of the Racing Commission's loan from general
revenue. These funds are currently being collected and certified
and would not constitute a gain to state revenue. No fiscal
impact is anticipated from implementation of this section.
Sections
24 through 27 would provide the commission with additional authority
to oversee the Texas Bred Incentive Program, licensing requirements
and examination requirements for licensure. No fiscal impact
is anticipated from implementation of these sections.
Section
28 of the bill would authorize the commission to recoup the
cost of license fees, including criminal background checks.
Sections 29 to 30 of the bill concern the terms of licensure,
reciprocity with other states. No fiscal impact is anticipated
from implementation of these sections.
Sections 31 and 32
of the bill relate to the adoption of regulations for the Texas
Bred Incentive program. No fiscal impact is anticipated from
implementation of these sections.
Section 33 of the bill
would permit cross-species simulcast wagering, subject to agreements
between certain racetracks. The potential exists for increased
revenue should such agreements occur; however, neither the Racing
Commission nor the Comptroller of Public Accounts can estimate
the amounts of revenue at the present time.
Section 34 of
the bill relates to the prohibition of wagering by minors.
No fiscal impact is anticipated from implementation of this
section.
Section 35 of the bill relates to payment of money
not claimed to the commission. No fiscal impact is anticipated
from implementation of this section.
Sections 36 to 39 relate
to liabilities and defense to prosecution, definitions of criminal
activity and penalties. No fiscal impact is anticipated from
implementation of these sections of the bill.
Section 40
of the bill would continue the commission until September 1,
2005. The fiscal impact of this section is detailed below.
Section
41 of the bill would amend Section 481.172, Government Code,
to enable the Texas Department of Commerce to promote and encourage
the horse racing and greyhound racing industry.
Section 42
of the bill would repeal Sections 2.07, 3.01, 11.04(d), 15.02,
and 18.02, Texas Racing Act (Article 179e, Vernon's Texas Civil
Statutes) in conformance with other provisions of the bill.
The repealed sections are as follows:
Section 2.07 concerns
prohibited conduct by commission members.
Section 3.01 concerns
commission sections and divided jurisdiction of commission members
Section
11.04 defines violations under this Section 11.04 as an offense.
Section 15.02 defines person as the meaning assigned by the
Penal Code.
Section 18.02 concerns Application of Administrative
Procedure and Texas Register Act.
No fiscal impact is anticipated
from implementation of these sections.
Section 43 and 44
of the bill concern effective dates for qualifications of commission
members and criminal offenses. No fiscal impact is anticipated
from implementation of these sections.
Section 45 of the
bill suspends the rule requiring bills to be read on three separate
days.
Methodolgy
Section 13 of the bill would require that the Racing Commission
employ all racetrack stewards and judges. Currently, only one
of the three top regulatory officials is employed by the commission.
The other two are employed by the racetrack. The Racing Commission
estimates that this would increase the number of FTEs by 11
in fiscal year 1998 and 10 in fiscal year 1999, with 10 each
year thereafter. The Racing Commission estimates that the addition
of this number of FTEs and related operating costs would result
in an increase of $794,402 in fiscal year 1998 and $764,452
in fiscal year 1999 and each year thereafter. These costs would
be offset by additional fees collected from the racetrack.
Section
28 of the bill would require the Racing Commission to collect
licensing fees to cover the costs of criminal history checks
conducted by the Department of Public Safety, where the costs
are incurred. The cost is $15 per card and the cost of a federal
criminal history check is $24, for a total of $39 per new license
application. Every five years a federal criminal history check
is conducted, but not a state criminal history check. Based
on projected numbers of new licensees and renewing licensees,
the Racing Commission estimates that it will collect $229,392
in fiscal year 1998 and $231,432 in fiscal years 1999 - 2002.
Currently, the Department of Public Safety absorbs some of
the cost, and bills the Racing Commission for a portion of the
cost. However, the Racing Commission is not currently collecting
fees for the full amount, thus the net impact to the state would
be a gain to General Revenue Dedicated Fund Account 099 of approximately
$230,000 per year.
The probable fiscal implications of Implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Probable Revenue Probable Revenue Change in Number
Savings/(Cost) Gain/(Loss) from Gain/(Loss) from of State
from Texas Texas Racing Operators and Employees from
Racing Commission Chauffeurs FY 1997
Commission Account/ License Account/
Account/ GR-Dedicated GR-Dedicated
GR-Dedicated Fund 099
0597 0597 0001
1998 ($794,402) $794,402 $229,392 11.0
1998 (764,451) 764,451 231,432 10.0
2000 (764,451) 764,451 231,432 10.0
2001 (764,451) 764,451 231,432 10.0
2002 (764,451) 764,451 231,432 10.0
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $229,392
1999 231,432
2000 231,432
2001 231,432
2002 231,432
Similar annual fiscal implications These impacts would continue
as long as the provisions of the bill are in effect.
No fiscal implication to units of local government is anticipated.
Source: Agencies: 405 Department of Public Safety
304 Comptroller of Public Accounts
476 Racing Commission
116 Sunset Advisory Commission
465 Department of Commerce
LBB Staff: JK ,TH ,JA