LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
May 18, 1997
TO: Honorable Kenneth Armbrister, Chair IN RE: House Bill No. 1445, Committee Report 2nd House, Substituted
Committee on State Affairs By: Gray
Senate
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 2nd House, Substituted
Implementing the provisions of the bill would result in a net
positive impact of $1,679,000 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
House Bill 1445 as substituted, 2nd house 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 following sections of the bill would have a fiscal
impact:
Section 14 would require the agency to employ all
racetrack stewards and judges, with costs paid by the tracks
through track officials fees. Section 19 would authorize the
agency to set occupational license fees to cover the costs of
conducting a criminal history check on the applicants for licenses
and would require the agency to reimburse the Department of
Public Safety, and Section 32 of the bill would authorize the
agency to recoup these costs.
Section 27 of the bill, and
committee amendment number 1, would change the tax structure
of simulcast wagering. An additional tax of .25 percent of
all simulcast wagers would be created until the earlier of the
date the debt and interest thereon are paid in full, or January
1, 1999, and would be set aside for reimbursement of the agency's
debt. A tax rate of 1.25 percent would be established on all
cross-species simulcast wagers. An amount of .25 percent of
each simulcast pool would be set aside for the reimbursement
of the agency's debt to general revenue until that debt is repaid.
Section
28 of the bill would change the tax structure of live racing
and applies part of the live tax to the agency's debt to general
revenue. The pari-mutuel tax on live racing will remain unchanged
through the earlier of January 1, 1999 or the date that the
amount owed to the general revenue fund is repaid in full with
interest thereon, and will drop by 1 percent on each $100 million
on total wagers at horse tracks and by 2 percent on each $100
million on total wagers at greyhound tracks thereafter. The
amount of live pari-mutuel tax paid through January 1, 1999
will be applied to the debt balance.
Section 38 of the
bill would provide for the use of automatic banking machines
at racetracks. The racetrack association would collect a fee
of $1 for each transaction at the automatic banking machines
and would forward the fee to the agency for deposit to the general
revenue fund. The fiscal impact is noted below.
Committee
Amendment #2 would allow for a simulcasting facility located
outside the enclosure of a racetrack. The program would operate
within a 50 mile radius of a licensed greyhound racetrack that
has ceased operations for a period of more than two years.
The commission could not register more than two facilities.
This section is to be repealed on September 1, 2001.
Methodolgy
Increased revenues to GR-dedicated account 0597 would result
from the collection of additional track officials fees, increased
occupational license fees and race day fees from the opening
of Valley Greyhound Park, increased race day fees from cross-species
simulcasting, increase in outstanding ticket revenue from the
increase in pari-mutuel handle, and increased fees from the
simulcast facilities located near Valley Greyhound Park. The
cost to GR-dedicated account 0597 would result from the addition
of the track officials at the racetracks, the addition of an
auditor and a programmer, the cost of criminal history checks,
travel costs, the costs of computer phone lines and hardware
for regulating cross-species simulcasting, and the re-opening
of Valley Greyhound Park and its simulcast facilities. Estimates
from the Racing Commission indicate a positive impact on account
0597.
Increased revenues to the General Revenue Fund would
include increases in tax revenue from cross-species simulcasting,
a temporary increase in the simulcast tax, an increase in revenue
from automatic banking machines at the racetracks, and an increase
to GR-dedicated account 099 because of fees collected for criminal
history checks at the Department of Public Safety. The loss
to general revenue would include the reduction of the pari-mutuel
tax on live racing, and the repeal of a .25 percent collected
from simulcast pools currently transferred to Texas Commission
on Alcohol and Drug Abuse. The Comptroller's estimates of the
impact on the General Revenue would be positive in the first
year and negative thereafter.
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 General Revenue Employees from
Racing Commission Fund FY 1997
Commission Account/
Account/ GR-Dedicated
GR-Dedicated
0597 0597 0001
1998 ($964,974) $1,671,692 $1,882,000 13.0
1998 (895,023) 1,651,641 (203,000) 12.0
2000 (828,762) 1,661,739 (2,676,000) 12.0
2001 (828,762) 1,672,039 (2,683,000) 12.0
2002 (828,762) 1,533,505 (3,283,000) 12.0
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 $1,882,000
1999 (203,000)
2000 (2,676,000)
2001 (2,683,000)
2002 (3,283,000)
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: 304 Comptroller of Public Accounts
476 Racing Commission
LBB Staff: JK ,JD ,JA