LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 1, 2001 TO: Honorable Ron Wilson, Chair, House Committee on Licensing & Administrative Procedures FROM: John Keel, Director, Legislative Budget Board IN RE: HB1923 by Brimer (Relating to economic incentives to attract horse racing events of national significance.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB1923, As Introduced: positive impact of $0 through the biennium * * ending August 31, 2003. * * * * The bill would make no appropriation but could provide the legal * * basis for an appropriation of funds to implement the provisions of * * the bill. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $0 * * 2003 0 * * 2004 (2,000,000) * * 2005 0 * * 2006 0 * **************************************************** All Funds, Five-Year Impact: ************************************************************************** *Fiscal Probable Revenue Probable Revenue Probable * * Year Gain/(Loss) from Gain/(Loss) from New Savings/(Cost) from * * General Revenue Fund General Revenue New General Revenue * * 0001 Dedicated Dedicated * * 2002 $0 $0 $0 * * 2003 0 0 0 * * 2004 (2,000,000) 2,000,000 (2,000,000) * * 2005 0 0 0 * * 2006 0 0 0 * ************************************************************************** Fiscal Analysis The bill would establish a "special account" for the payment or reimbursement of a racing association's costs during the year in which it hosts the Breeders' Cup. The bill would allow payment or reimbursement of a racing association's costs for the Breeders' Cup, but the bill would not provide a state agency with the appropriations authority to make the payments or reimbursements. If enacted, the bill would take effect September 1, 2001. Methodology The first year that a racing association in Texas could host the Breeders' Cup is 2004. The venues for Breeders' Cup races through 2003 have already been selected. If a Texas race track were chosen for the Breeders' Cup race in 2004, a Texas race track could not host the Breeders' Cup for approximately another five years because the race currently rotates among five race tracks nationally. It is estimated that up to a $2,000,000 loss to the General Revenue Fund would occur in fiscal year 2004, or any fiscal year thereafter in which a Texas racing association were chosen to host the Breeders' Cup, due to the diversion of pari-mutuel taxes from the General Revenue Fund to a new "special account". The new special account is assumed to be a General Revenue-Dedicated account by the Comptroller for the purposes of the fiscal estimate. Because no state agency would be provided with appropriations authority for the new special account, it is unclear how the payments or reimbursements to a racing association for its Breeders' Cup costs would be made. For the purposes of the fiscal note, it is assumed that the payments or reimbursements could be made. Local Government Impact The Texas Association of Counties and the Texas Municipal League provided information regarding the fiscal impact to units of local government. No significant fiscal implication to units of local government is anticipated. Source Agencies: 476 Texas Racing Commission, 480 Department of Economic Development, 304 Comptroller of Public Accounts LBB Staff: JK, JO, RT, HL, DB