Colorado Legislative Council Staff

STATE

FISCAL NOTEGeneral Fund Revenue and Expenditure Impact


Drafting Number:

Prime Sponsor(s):

LLS 98-122

Sen. Chlouber

Date:

Bill Status:

Fiscal Analyst:

January 11, 1998

Senate Agr.

Harry Zeid (866-4753)

 

TITLE:            CONCERNING EXTENDING THE REPEAL DATES FOR CERTAIN HORSE RACING REGULATIONS.



Summary of Legislation


            Under current law, a “class B track” is a Colorado horse racetrack at which 30 or more race days have been conducted in the immediately preceding twelve months. However, current law requires that beginning April 20, 1998, a class B track must have 60 or more race days in order to maintain its track license. A racetrack that qualified as a class B track in 1997 would maintain its class B status for calendar year 1998 if it applies for a license to conduct 60 or more race days during 1998. This bill would extend the repeal date for certain horse racing regulations affecting class B race tracks through April 20, 2003, thereby delaying the requirement to increase the number of annual race days from 30 to 60 until 2003. The repeal date for the number of days of simulcast horse races from an out-of-state host track that are authorized to be received at an in-state simulcast facility which is located on the premises of a class B track would be extended from April 20, 1998 to April 20, 2003.


            Since the number of race days for a class B track authorized by the bill is less than the number of race days authorized for a class B track under current law, the bill will affect state General Fund revenues and expenditures from live and simulcast racing at Arapahoe Park, the state’s only class B track. The bill would become effective upon signature of the Governor.


STATE FISCAL IMPACT SUMMARY

FY 1998/99

FY 1999/2000

State Revenues

General Fund

Other Fund


*


*

State Expenditures

General Fund

Other Fund


*


*

FTE Position Change

 

 

Local Government Impact — None

             *Please see the State Revenue and State Expenditure sections for an explanation of the impact of maintaining the minimum number of annual race days to 30.


State Revenues


            The license fee for the privilege of conducting racing under a “Class B track” license is the actual cost of regulation of the race meet by the Racing Commission up to a maximum of $2,500 per race day, or 0.75 percent of the gross receipts of the pari-mutuel wagering at the meet, whichever is greater. The license fee for operating an in-state simulcast facility is 0.75 percent of the gross receipts of the pari-mutuel wagering at the race meet or placed on the simulcast races.


            During 1997, a total of $96,701 in license fees for live horse racing was paid to the state General Fund for the 38 day season. This represents an average license fee of $2,545 per day. Simulcast races paid $338,372 to the state General Fund in license fees during 1995 for 222 race days, an average of $1,524 per simulcast race day. In addition, license revenue from horse owners related to horse racing during 1997 was $26,480. The total combined license fees paid in 1997 were $461,553.


            Arapahoe Park officials have indicated that they will not conduct live racing in 1998 unless the minimum number of race days for 1998 is reduced by law from 60 race days to 30 race days. If Arapahoe Park does not conduct a live race season, then no simulcasting would be allowed in the state after April 20, 1998, and license fee revenues after that date would cease. If the bill becomes law, it is assumed that the 1998 race season will be similar to the 1997 season, including 38 days of live racing and 222 days of simulcast racing. Under this scenario, projected state General Fund revenues from live racing, simulcast racing receipts, and race horse fees are projected to be $461,553, equal to the license fees paid to the General Fund in 1997.


            In addition to the General Fund impact, the Department of Revenue pays Colorado State University, for allocation to its school of veterinary medicine, one-quarter of one percent of the gross receipts of all pari-mutuel wagering (except on win, place, or show) at meets and simulcast races, to be used for racing-related equine research. In 1997, this amounted to $97,211.


            The Horse Breeders’ and Owners’ Awards and Supplemental Purse Fund is comprised of one-half of one percent of the gross receipts of pari-mutuel wagering on win, place, and show, 1.5 percent of the gross receipts from all other pari-mutuel wagering, and five percent of the total moneys generated by the unclaimed pari-mutuel tickets. During 1997, a total of $882,911 was credited to this fund.



State Expenditures


            The total General Fund expenditures related to regulation of “class B track” horse racing and simulcast racing, as part of the current year budget request of the Department of Revenue’s Division of Racing is projected to be $95,706 and 2.25 FTE. If live horse racing is not conducted at Arapahoe Park this year, this expenditure and the related FTE would not be required by the Department.




Spending Authority


            The General Fund expenditure identified for FY 1998-99 is contained within the Department of Revenue’s current year budget request as a continuation of these functions based on the assumption that there will be a live horse racing season during 1998. Therefore, separate spending authority is not required in the bill. If a live horse racing season is not conducted at Arapahoe Park in 1998, the budget request and related FTE would not be required by the Department.



Departments Contacted


            Revenue