LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 27, 1999 TO: Honorable Steven Wolens, Chair, House Committee on State Affairs FROM: John Keel, Director, Legislative Budget Board IN RE: SB456 by Madla (relating to facilitating and supporting efforts of certain municipalities to promote economic development by hosting the Pan American Games and the Olympic Games), As Engrossed ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Fundsfor * * SB456, As Engrossed: impact of $0 through the biennium ending * * August 31, 2001. * ************************************************************************** General Revenue-Related Funds, Five-Year Net Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $0 * * 2001 0 * * 2002 0 * * 2003 0 * * 2004 0 * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Savings/(Cost) from Probable Revenue Gain/(Loss) * * Year New - GR Dedicated from New - GR Dedicated * * 2000 $0 $0 * * 2001 0 0 * * 2002 (4,100,000) 4,100,000 * * 2003 (4,100,000) 4,100,000 * * 2004 (4,100,000) 4,100,000 * *************************************************************************** Fiscal Analysis The bill would provide a method of financing to certain local entities to assist in the designation, preparation, and production of either the 2007 Pan American Games or the XXX Olympiad in 2012. If a Texas city were selected to host one of the two games, the Comptroller would be required to determine the incremental increase in the state sales and use tax receipts reasonably attributable to all phases of the games within that city's market area for each calendar month. This responsibility would begin on the first day of the first state fiscal year that began after the selection date. The Comptroller would be required to deposit the estimated amount of increased revenue into a new, special account in the Texas Department of Economic Development's (department's) treasury account, to be called the GR-Account Olympics and Pan American Games Support. The deposits would cease three months following the closing event of the games. The department could use the account to provide assurances to a site selection organization, or to assist with costs of presenting the games. The bill would also require the department to review requests from qualified applicants for support of local efforts to host the Pan American Games and/or Olympic Games within 30 days based on the reasonableness of the plan and the applicant's ability to reimburse the Department for its costs. The bill would allow the Department of Transportation, Department of Public Safety, and Department of Housing and Community Affairs to assist qualified applicants in developing applications for the games and/or hosting the games. Methodology This estimate assumes that administrative duties required of the Department of Economic Development could be completed with current appropriations and within existing agency staffing levels. According to the United States Olympic Committee, San Antonio is the only city in Texas under consideration for the Pan American Games. This estimate assumes that San Antonio would be chosen to host the Pan American Games in 2007. Indianapolis hosted the games in 1987 and experienced an estimated four-tenths of 1 percent increase in local sales tax revenue; a similar increase in San Antonio would generate an additional $4.1 million. Local Government Impact Local governments creating a regional games authority could incur administrative and operational expenses. The cost to each local government would depend on the terms of the resolution creating the authority. Source Agencies: 405 Department of Public Safety, 601 Department of Transportation, 480 Department of Economic Development, 304 Comptroller of Public Accounts LBB Staff: JK, BB, TH, TL, RT, DP, HL