| TO: | Honorable Edmund Kuempel, Chair, House Committee on Licensing & Administrative Procedures |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | SB1013 by Hinojosa (Relating to the continuation and functions of the Texas Racing Commission, the abolishment of the Equine Research Account Advisory Committee, and the authority of Texas AgriLife Research; providing an administrative penalty.), As Engrossed |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2010 | $139,541 |
| 2011 | $139,541 |
| 2012 | $139,541 |
| 2013 | $139,541 |
| 2014 | $139,541 |
| Fiscal Year | Probable Revenue Gain from General Revenue Fund 1 |
Probable (Cost) from General Revenue Fund 1 |
Probable Revenue Gain from Texas Racing Comm Acct 597 |
Probable Revenue (Loss) from Texas Racing Comm Acct 597 |
|---|---|---|---|---|
| 2010 | $5,213,742 | ($5,074,201) | $6,842,493 | ($1,301,221) |
| 2011 | $5,213,742 | ($5,074,201) | $6,658,908 | ($1,223,470) |
| 2012 | $5,213,742 | ($5,074,201) | $6,588,697 | ($1,151,660) |
| 2013 | $5,213,742 | ($5,074,201) | $6,522,699 | ($1,084,112) |
| 2014 | $5,213,742 | ($5,074,201) | $6,460,660 | ($1,020,569) |
| Fiscal Year | Probable Savings from Texas Racing Comm Acct 597 |
Probable (Cost) from Texas Racing Comm Acct 597 |
Change in Number of State Employees from FY 2009 |
|---|---|---|---|
| 2010 | $56,282 | ($5,596,225) | 1.0 |
| 2011 | $55,822 | ($5,488,725) | 1.0 |
| 2012 | $55,384 | ($5,488,725) | 1.0 |
| 2013 | $54,958 | ($5,488,725) | 1.0 |
| 2014 | $55,546 | ($5,488,725) | 1.0 |
The bill would amend the Texas Racing Code to continue the Texas Racing Commission (the agency) for 6 years, amend the agency's operations, abolish the Equine Research Account Advisory Committee, and amend the authority of Texas AgriLife Research.
The bill would require the agency to review each racetrack license on a periodic basis and develop renewal criteria. The bill would eliminate uncashed winning tickets as a source of agency revenue and require the agency to only license individuals who can affect pari-mutuel racing. The bill would require the Sunset Advisory Commission to conduct a special-purpose review of the Texas Racing Commission as part of the review of agencies for the 82nd Legislature.
The bill would require an amount equal to one quarter of the agency’s biennial appropriation be transferred from General Revenue to the General Revenue-Dedicated Texas Racing Commission Account 597 at the beginning of each fiscal year. The bill would require the agency to repay that amount, with 2.75 percent interest, by the end of the same fiscal year. The bill would authorize the Legislature to make a specific appropriation, in times of fiscal emergency, to the Racing Commission and exempts such an appropriation from the requirement to reimburse General Revenue funds. The bill would authorize the agency to restructure racetrack fees.
The bill would take effect September 1, 2009.
Based on the analysis by the Sunset Advisory Commission (SAC) and the Texas Racing Commission (Commission), the bill would result in a decrease in revenue from the uncashed wagering tickets and increase in revenue from other sources by $1,246,268 in fiscal year 2010, $1,170,183 in fiscal year 2011, $1,099,972 in fiscal year 2012, $1,033,974 in fiscal year 2013, and $971,935 in fiscal year 2014.
Based on analysis provided by SAC, it is assumed that the racetrack license renewal process would require 2 FTEs each year, with a salary cost of $112,500, benefits cost of $32,141, travel costs of $8,500, and other operating expenses of $30,342 in each fiscal year of 2010-14. The Commission would have one-time costs of $7,500 in fiscal year 2010. Additionally, it is anticipated that the racetrack license renewal process will result in additional legal fees and professional fees paid to the State Office of Administrative Hearings. These costs are anticipated to be $200,000 in fiscal year 2010 due to reviewing all inactive racetrack licenses in the first fiscal year, and $100,000 in each fiscal year of 2011-14. These costs would be funded by assessing a renewal fee to each racetrack under review, generating revenue equal to the expenditures.
As a result of the bill reducing the number of occupations that the Commission licenses, it is anticipated that the Commission would realize both a reduction of 1.0 FTE each year and a savings of $56,282 in fiscal year 2010, $55,822 in fiscal year 2011, $55,384 in fiscal year 2012, $54,958 in fiscal year 2013, and $54,546 in fiscal year 2014.
Additionally, it is anticipated that, due to this reduced number of licensees, the agency will realize a reduction in revenue of $54,953 in fiscal year 2010, $53,287 in fiscal year 2011, $51,688 in fiscal year 2012, $50,138 in fiscal year 2013, and $48,634 in fiscal year 2014.
It is anticipated that the amount of the General Revenue transfer would be $5,074,201 in each fiscal year of 2010-11. The bill would require the Commission to repay General Revenue in an amount of $5,213,742 in each fiscal year.
The Commission is required to generate sufficient revenue to cover cost of operation, therefore it is assumed that any increased costs would be offset by an increase in fee-generated general revenue - dedicated funds.
Since fiscal emergencies cannot be predicted, the fiscal impact of the potential general revenue appropriations under this provision of the bill cannot be determined.
Based on the analysis by Texas AgriLife Research, it is anticipated that costs associated with implementing the provisions of the bill could be absorbed within existing agency resources.
| Source Agencies: | 116 Sunset Advisory Commission, 304 Comptroller of Public Accounts, 476 Racing Commission, 556 Texas AgriLife Research
|
| LBB Staff: | JOB, JRO, KK, MW, CH
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