LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session Revision 1 March 8, 1999 TO: Honorable Troy Fraser, Chair, Senate Committee on Business & Technology Growth FROM: John Keel, Director, Legislative Budget Board IN RE: SB 456 by Madla (Relating to facilitating and supporting cooperative efforts of municipalities and counties to promote economic development by hosting the Pan American Games and the Olympic Games), As Introduced ************************************************************************** * The bill would make no appropriation but could provide the legal * * basis for an appropriation of funds to implement the provisions of * * the bill. * ************************************************************************** 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 0 0 * * 2003 0 0 * * 2004 0 0 * *************************************************************************** *************************************************************************** *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 was 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 of Economic Development 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 also 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 Any administrative duties required of the Department of Economic Development could be completed with current appropriations and within existing agency staffing levels. Under scenario one, no Texas city would be selected to host either the Pan American or Olympic Games and no significant fiscal implication to the state is anticipated. According to the United States Olympic Committee, San Antonio is the only city in Texas under consideration for the Pan American Games. Under scenario two, 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 due to the games. 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: LBB Staff: JK, TH, TL, BB, RT, DP, HL