Texas Governor Signs Legislation To Benefit State Racing Industry

JUNE 14, 2019—Texas Governor Greg Abbott signed a piece of legislation  that will benefit the Texas racing industry.

House Bill 2463/Senate Bill 1991 is a purse matching bill that would take a portion of the money collected by the state on the taxable sale of horse products, to create an incentive fund that would increase purses to bring quality race horses and breeding operations back to Texas.

Proponents of the bill, which creates no new taxes, say it will make Texas racing regionally competitive again.

According to a study prepared for racing industry consultants by TXP Inc. in Austin, in the early 2000 bettors in Texas wagered $900 million and horse breeders and owners enjoyed $32.5 million in purse money. Last year those number had dropped to $340 million wagered at Texas tracks and the owners took home purses of $16.8 million.

The study contends that a state contribution of up to $25 million a year in purse money would not only boost tracks revenue but would, by 2022, double the current direct impact on the overall Texas economy to $154.6 million.

Unlike in past sessions, the horse track bills this time drew almost no editorial or political attention.

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Summary of Bills passed this legislative session:

House Bill 2463 (HB2463), filed by Rep. Tracy King, is a purse matching bill that would take money from General Revenue funds collected by the State Comptroller on the taxable sale of horse feed, supplement and tack to create a $25 million annual incentive fund that would increase purses to bring quality race horses and breeding operations back to Texas. The bill, which creates no new taxes, would make Texas racing regionally competitive again. (The bill is similar to a Texas Parks and Wildlife program that uses a portion of the tax collected from the sale of sporting goods and directs it to programs that promote outdoor activities.)  Economist Jon Hockenyos estimates that by the third year of implementation, the state will more than recover the annual investment based on the increased economic spending spurred by higher purses. In other words, taxes collected on horse industry activity would be put back into the industry to grow it for the benefit of the horsemen and women and the state’s economy.

An economic impact study recently completed by TXP, Inc. demonstrates the positive impact implementation of the bill could have both on the racing industry and the State of Texas. To read the report, click here

House Bill 1995 (HB1995), also filed by Rep. Tracy King, would redirect tax on interstate simulcast wagers in Texas from the General Revenue to the Texas Racing Commission’s funding. This would stabilize funding for the agency responsible for enforcing the Texas Racing Act and regulating the pari-mutuel industry. It would also protect against another “shut down” of the Texas Racing Commission, which in the past has jeopardized the operation of the entire horse racing industry and has threatened thousands of jobs. 

House Bill 3366 (HB3366) would take the Accredited Texas-Bred (ATB) funds out of the Texas Racing Commission budget and establish an escrow account for that money. This would ensure that the incentive fund is protected and delivered to the audience targeted by the Legislature. It would also provide a more accurate reflection of the Texas Racing Commission’s actual budget.

Both HB1995 and HB3366 would reduce both costs to the Texas Racing Commission and the fees it assesses to the Texas racing industry stakeholders it licenses.

If you have questions about these bills, please feel free to contact the TQHA office at (512) 458-5202.

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Why the horse industry should be engaged with legislative issues:

There are state laws that have a major impact on agriculture, including the Texas horse industry. Our legisture determines tax policy on sales, property, and franchise taxes. And, they can affect our access to water and the use of our land. These are issues that are important to everyone in the agriculture industry. And, of course, there are issues specific to the horse and livestock industry, such as Texas racing, animal welfare, and animal health. It takes active participation of all the independent organizations representing agriculture to be effective at the Capitol.

The 86th legislative session began on January 8, 2019 and ended May 27th.