Individual State Agency Fiscal Note — 1327 HB: Horse racing (Horse Racing Commission)

Summary

Individual State Agency Fiscal Note for Bill Number 1327 HB (Horse racing), from Agency 185, the Horse Racing Commission, with agency preparation dated January 22, 2025. Part I states non-zero but indeterminate cost and/or savings for estimated cash receipts and operating expenditures. The narrative describes Section 8 lowering a threshold of in-state pari-mutuel receipts from $50 million to $20 million, and Section 15 increasing the amount the Commission may grant out for developing the horse racing industry from $300,000 to $500,000. It states that the actual fiscal impact of the legislation is difficult to determine.

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Full text

                            Individual State Agency Fiscal Note

Bill Number:      1327 HB                Title:     Horse racing                                              Agency: 185-Horse Racing
                                                                                                                      Commission

Part I: Estimates
      No Fiscal Impact

Estimated Cash Receipts to:
                             Non-zero but indeterminate cost and/or savings. Please see discussion.


Estimated Operating Expenditures from:
                             Non-zero but indeterminate cost and/or savings. Please see discussion.



Estimated Capital Budget Impact:

    NONE




   The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,
   and alternate ranges (if appropriate), are explained in Part II.

  Check applicable boxes and follow corresponding instructions:
      If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
      form Parts I-V.
  X   If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).

      Capital budget impact, complete Part IV.

      Requires new rule making, complete Part V.


   Legislative Contact:     Connor Schiff                                                   Phone: 360-786-7093              Date: 01/20/2025
   Agency Preparation:      Seth Flory                                                      Phone: (360) 407-8165            Date: 01/22/2025
   Agency Approval:         Seth Flory                                                      Phone: (360) 407-8165            Date: 01/22/2025
  OFM Review:               Marie Davis                                                     Phone: (360) 890-1163            Date: 01/22/2025

Form FN (Rev 1/00) 197,941.00                                                                                                   Request # 1327HB-1
FNS063 Individual State Agency Fiscal Note                             1                                                              Bill # 1327 HB
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Significant provisions of the bill and any related workload or policy assumptions that have revenue or expenditure impact on the responding agency by
section number.

 House Bill 1327 seeks to amend various sections of the Horse Racing Commissions governing RCWs.

 Of financial consequence to the Washington Horse Racing Commission (WHRC) are:
 - Section 3 amends RCW 67.16.050 removing the variable rate on licenses to hold live race meets, fixing the amount at
 $500per day. The variable rate made licensing revenues inconsistent year-over-year, ranging from $9,000 to $22,500
 depending on the state of the horse racing industry. Passage of this legislation would fix the Commission's live race
 licensing revenue expectations at the $22,500 amount.

 - Sections 8(1)(a) and 8(1)(b) lowers the threshold of total in-state pari-mutuel receipts at which WHRC's entitlement to
 1.8% of parimutuel collections becomes 1.3%. Threshold is currently set at $50 million in a calendar year, this legislation
 would lower the threshold to $20 million. In recent years, the industry has oscillated between being over and under the
 threshold. Lowering the threshold would effectively fix the Commission's share of parimutuel at 1.3%, making revenue
 expectations for both the industry and the Commission more predictable.

 - Section 8(4)(b) authorizes WHRC to shift balances in excess of $180,000 from the Horse Racing Class C Purse Fund to
 the Commission's Operating Account in years without non-profit (class C) race meets. This would likely allow the
 Commission to shift $130,000 to the Operating account in the first year after legislation goes into effect. Further transfers
 are likely, but amounts are indeterminate.

 - Section 15 increases the amount WHRC is allowed to grant out to private entities for the purpose of developing the horse
 racing industry and assisting equine health/safety projects from $300,000 to $500,000. The Commission only awards grants
 when the Commission has excess revenues, or the State has provided funding for industry grants. For this reason, this
 Section will not directly increase the Commission's expenditures, simply allow it to grant more when conditions allow it.

 In total, the actual fiscal impact of this legislation is difficult to determine. The proposed updates to WHRC's RCWs would
 make the Commission's revenues more predictable and consistent, but don't directly increase or decrease receipts.
 Whether the Commission see increased or decreased revenues during any given year depends on the state of the industry
 at that time.
II. B - Cash receipts Impact
Cash receipts impact of the legislation on the responding agency with the cash receipts provisions identified by section number and when appropriate, the
detail of the revenue sources. Description of the factual basis of the assumptions and the method by which the cash receipts impact is derived. Explanation
of how workload assumptions translate into estimates. Distinguished between one time and ongoing functions.

II. C - Expenditures
Agency expenditures necessary to implement this legislation (or savings resulting from this legislation), with the provisions of the legislation that result in
the expenditures (or savings) identified by section number. Description of the factual basis of the assumptions and the method by which the expenditure
impact is derived. Explanation of how workload assumptions translate into cost estimates. Distinguished between one time and ongoing functions.


 Per Section 15 which increase the Commission's granting authority from $300,000 to $500,000 could result in great
 expenditures under certain conditions. The Commission only awards grants when the Commission has excess revenues, or
 the State has provided funding for industry grants. For this reason, Section 15 will not directly increase the Commission's
 expenditures, simply allow it to grant more when conditions allow it.

Part III: Expenditure Detail
III. A - Operating Budget Expenditures



Horse racing                                                                                                              185-Horse Racing Commission
Form FN (Rev 1/00) 197,941.00                                                                                                     Request # 1327HB-1
FNS063 Individual State Agency Fiscal Note                                2                                                             Bill # 1327 HB
                                  Non-zero but indeterminate cost and/or savings. Please see discussion.
III. B - Expenditures by Object Or Purpose
                            Non-zero but indeterminate cost and/or savings. Please see discussion.


 III. C - Operating FTE Detail: FTEs listed by classification and corresponding annual compensation. Totals agree with total FTEs in Part I
and Part IIIA.
 NONE



III. D - Expenditures By Program (optional)
 NONE


 Part IV: Capital Budget Impact
 IV. A - Capital Budget Expenditures
      NONE

 IV. B - Expenditures by Object Or Purpose
        NONE

IV. C - Capital Budget Breakout
 Acquisition and construction costs not reflected elsewhere on the fiscal note and description of potential financing methods.
       NONE

 IV. D - Capital FTE Detail: FTEs listed by classification and corresponding annual compensation. Totals agree with total FTEs in Part IVB.


      NONE

Part V: New Rule Making Required
Provisions of the bill that require the agency to adopt new administrative rules or repeal/revise existing rules.




Horse racing                                                                                                           185-Horse Racing Commission
Form FN (Rev 1/00) 197,941.00                                                                                                  Request # 1327HB-1
FNS063 Individual State Agency Fiscal Note                               3                                                           Bill # 1327 HB


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