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The House State Affairs Committee met on April 14 to discuss a number of bills. This report covers discussions concerning HB 3658 (Capriglione), HB 1656 (Murphy), HB 1810 (Capriglione), HB 3535 (Hunter), HB 2275 (Zwiener), HB 3015 (Hernandez), HB 2070 (Huberty), HJR 97 (Huberty), and

HJR 133 (Kuempel). A video of the meeting can be found here.

 

This report is intended to give you an overview and highlight of the discussions on the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Votes Outs Beginning of Hearing

CSHB 2667 (Smithee) (11-0-2 Absent)

SB 851 (Blanco) (11-0-2 Absent)

HB 391 (Israel) (10-1-2 Absent)

HB 633 (Morrison) (7-5-1 Absent)

HB 1173 (Noble) (8-4-1 Absent)

HB 1416 (Capriglione) (12-0-1 Absent)

HB 1477 (K. Bell) (13-0)

CSHB 1488 (Dean) (13-0)

CSHB 1501 (Dean) (12-1)

HB 3016 (Moody) (13-0)

HB 3627 (Paddie) (13-0)

CSHB 3669 (Dean) (13-0)

CSHB 4395 (Shaheen) (13-0)

 

Votes Outs Ending of Hearing

CSHB 4492 (Paddie) (11-0-2)

  • ERCOT uplift concern/Texas electric securitization corporation
  • Language is identical to what passed out of Senate B&C this week
  • Raymond – sense is bill still has a way to go?
  • Paddie – Not suggesting this is final language
  • Raymond – Who appoints?
    • Appointed by PUC
  • Raymond – Terms cannot exceed 15 years?
    • Does not think that, setting up longer more flexible terms
    • Later noted it is 30 years
  • Raymond – Do you have range?
    • Not a good number, depends on what you are talking about
  • Raymond – Will vote to move bill along now but will not vote it out on the floor without more details
  • Paddie – When you look at what came out of Senate B&C, their bill included $2-2.5 billion in short pay; however, there are other considerations that need to be talked about
  • Paddie – Will determine between now and floor what things bill should include
  • Raymond – Still $10-15 billion problem to solve
    • Paddie – Not necessarily in lieu of other bills passed

 

CSHB 2000 (Huberty) (10-1-2 Absent)

CSHJR 2 (Huberty) (10-1-2 Absent)

 

Testimony

HB 3658 (Capriglione) – Relating to state agency contracting and state employees, officers, contractors, and other persons involved with the contracting.

  • Bill laid out
  • Complex and questionable procurement process cause challenges
  • Seeks to improve front end procurement challenges and modernize state best value statute
  • Far too much reliance on cheapest price
  • Replace current best value criteria with outcome and performance criteria and consider total price of ownership
  • Closes loopholes on conflict of interest; prohibits those in scoring proposals from going immediately to that business; and those involved in scoring proposals have programmatic experience
  • No public testimony

HB 3658 left pending

 

HB 1656 (Murphy) – Relating to certain orders, proclamations, and regulations issued in response to a disaster by the governor or the presiding officer of the governing body of a political subdivision.

  • Narrow clarification to assist states
  • Executive discretion over local jurisdiction during emergency orders
  • Getting opinions and going to court creates confusion
  • Avoids local response that confuses state response, in conflict with the state
  • Raymond – This bill conforms the whole state?
    • Yes
  • Raymond – If you had a governor who acted like a Gavin Newsom, this would apply to the whole state?
    • Correct

 

Alexi Swersky, Self – Against

  • The citizens of Texas spoke out against HB 3
  • The orders by the governor were devastating, we are not communist
  • Laws need to be made by our whole government, not one person
  • Abbott’s orders were deadly, especially for the elderly
  • This bill is communist
  • Harless – The bill gives the authority to the governor over county officials
    • Yes
  • Harless – You would be ok with the county staying locked down
    • I want the whole body to overrule that
  • Smithee – Would be ok with the bill if the bill is a limited period?
    • I do not know why the legislative body cannot meet in a couple of days
  • Smithee – It would take several weeks due to public input, is there a concern
    • I would accept 7 days, things can move quickly when they want to
  • Raymond – I appreciate the witness, but last year I wrote a letter to the governor requesting a special session because one person isn’t sufficient to address the emergency issue, especially last March, would you take ten days?
    • Sure

 

Ellis Stanley, Self – For

  • Consistency is key during any emergency
  • Chaotic beginnings to Covid-19, there was a lot of infighting
  • Supreme Court ruled that the governor was the final say in regard to mask mandate
  • Mayor Adler ruled restaurants to close early on New Year’s, a knee jerk reaction for an industry that provides 51% of the food to our community
  • Raymond – Would be in support of a limited number of days mentioned in the last testimony or would you prefer leaving it up to the governor?
    • I have not had time to reflect on that, but I support the legislature’s decision

 

Rep. Murphy, Self – For

  • Modifying emergency powers
  • If the legislature wants to meet, sometimes we produce results and sometimes we do not
  • What if we cannot come to a resolution
  • King – The scope of emergencies is too wide, especially for a rogue mayor, judge, or governor. What if there is a “gun violence” emergency and the second amendment is restricted? We had a lot of places shut down in my area despite a low number of cases. Argument is beneficial to mitigate abuse of power by a leader. We need to identify what an emergency is.
    • We are talking about orders that prevail in an emergency
    • Bottom-up processes need to stay in place
    • This is not HB 3
  • Raymond – The examples you laid out during the pandemic could evolve into something else, we need to address this
  • Harless – The problem for me was business owners ordering food only to be struck down by the county
    • A bad couple of weeks for a small business could result in a lot of damage to their bottom line

HB 1656 left pending

 

HB 1810 (Capriglione) – Relating to maintenance and production of electronic public information under the public information law

  • A pdf is hard to correctly format and transfer in CSV format
  • Bill requires a searchable and sortable format to be provided
  • Format and accessibility needs to be correctly addressed
  • Transparency of processes in government is essential

 

Eva Ruth Moravec, Executive Director Texas Justice Initiative – For

  • Sole existence is to provide data as a resource
  • Gather data from various entities, most comes from Attorney General’s Office
  • Texas Commission on Jails is in pdf format, does not publish on serious incidents
  • Takes a lot of manipulation to get pdf in CSV format, hinders availability

 

Joe Ellis, Freedom of Information Foundation – For

  • Attorney General’s opinion and code to backup requested format
  • Officials think it is their right to render data useless
  • Should be able to analyze data to evaluate government
  • Unusable formats should not be allowed
  • ERCOT could not provide a list of all the generators that went offline, could not organize and digest data
  • Data dictionaries explain what the data is, supposed to be required in the administrative code

HB 1810 left pending

 

HB 3535 (Hunter) – Relating to the availability of dates of birth under the public information law

  • Date of birth bill
  • Our media sources could have wrong information if there are a number of the same names
  • Provides access so reporting is clear and accurate

 

Mary Ann Cavazos Beckett – Corpus Christi Caller-Times Journalist – For

  • Date of births on public records are crucial to do accurate stories
  • Allows us to validate elected officials history and government employees
  • Community awareness is crucial, leaves public in dark otherwise

 

Laura Prather, TAG Coalition – For

  • Open government laws need to be strengthened as a foundation of our democracy
  • 2015 Regional Court of Opinion has led to closure of information
  • 6 million Texans have one of ten surnames
  • Cutting off the availability of public records cuts off understanding of background checks on employees and applications
  • News outlets are not able to verify breaking stories
  • More than 12,000 rulings since this court of opinion, could reduce Attorney General workload

HB 3535 left pending

 

HB 2275 (Zwiener) – Relating to critical infrastructure resiliency and financing

  • Zwiener – Will have a CS later, but is presenting original bill
  • During the winter blackouts, lost lives, caused damage, and systems went down
  • Funding Smart Metering would enable demand response that targeted roll offs
  • Can create energy efficiency programs to respond on the demand side
  • Can incentivize small backups around the state
  • Can put a wellhouse over a well; can build out reserve supply to ensure water facilities continue pumping
  • Can help hospitals get backup generation, especially for rural hospitals; and ensure they have on-site water storage
  • Funnels dollars into grant programs into the WIRF and CIRF
  • Local communications infrastructure piece will likely be removed from this bill
  • Are in conversation which providers should
  • Does maintain a 10% match requirement for non-profit/munis and 50% for-profit; believe some federal dollars will cover the large fiscal note
  • Riders currently written to take $10 million from the IRF; federal dollars will probably impact that
  • Raymond – How does this compare to HB 2000?
    • Have not reviewed the CS, but understands key difference is this is a grant program and Huberty’s is a loan proposal
    • HB 2000 specifically talks about electric generation, this is specific to local providers and hospitals
    • Some money is funneled through TWDB are asking TDEM to funnel for hospitals and energy systems
    • This legislation is focused on the FIF, not the SWIFT
  • Howard – Is not a revolving fund?
    • Is a grant with a match, but those dollars can be put into it in the future
    • Do have significant federal funds coming down
  • Howard – What federal dollars?
    • Texas will get $16.7 billion in fiscal relief fund from the American Rescue Plan
    • In the proposed $2 trillion infrastructure plan, Texas could get an estimated $160 billion would be committed to infrastructure
  • Howard – Huberty’s is looking at the ESF? Already have grant funds for these, so this is another use of these one-time funds?
    • Yes; are confident the $16.7 billion could be used for this
    • Does not just apply to a freezing event, or a failure of generation

 

Julia Harvey, Texas Electric Cooperatives – For

  • Coops are in a good position to work with the proposed program
  • Legislation could be critical to maintain service for important systems

 

Tyler Hjorth, City of San Marcos – For

  • Overviews the power outage issues during the winter storm
  • City network infrastructure is essential for visibility and could have prevented lengthy outages
  • Is limited funding currently available to fund/install systems needed to prevent the things that happened in the winter storm

 

Cyrus Reed, Sierra Club Lonestar Chapter – On

  • Bill is a work in progress, but appreciate the intent of the bill
  • Concerned about language around the competitive market; are not talking about new generation
  • Is a lot to do on the demand side, could be automatic mechanisms to conserve energy
  • Guess we will support committee sub, but just have not seen it
  • Howard – Is this a vehicle for doing things in the homes?
    • Indirectly, through a government entity
  • Howard – A number died of carbon monoxide poisoning, could the community decide to invest in this?
    • Possibly, but are talking about a city revolving fund or Smart Meters to avoid emergency situations

 

Kenneth Flippin, – For

  • Did not testify

 

Zwiener, in closing

  • Bill, as written, is open language to allow cities to have the availability to tell us what their needs are
  • Could be energy efficient pass-through programs
  • Funneling monies through TDHCA has been an idea we have had
  • Are looking at if the for-profit providers that the pass-through is the only constitutional way for them to get money
  • Deshotel – Previously in the hearing talked about the need for redundancy in gas supply for backup generation; they should be able to qualify for this
    • Was not going to include this, HB 2000 is more targeted at the production side
  • Deshotel – Questions about if the government can give money to private companies? We do that all the time with tax credits
    • Will look into the best way to target these dollars

HB 2275 left pending

 

HB 3015 (Hernandez) – Relating to a governmental body’s response to a request for public information.

  • Bill laid out
  • Not all government bodies reply promptly, requires body to respond even if they do not have responsive documents

 

Laura Prather, Transparent and Accountable Government Coalition – For

  • Bill closes off loophole, promotes good customer service
  • Let requestor know if you do not have documents, do not leave requestor wondering
  • Provides guardrails, specify why not providing documents
  • Enforcement that treats offense with velvet glove rather than a hammer, requiring training
  • Example of News 8 Austin wanting information from APD, they were relying on previous determination but did not respond

 

Joshua Houston, Texas Impact – For

  • Experience where a county failed to respond to a request, tried to calculate mail in ballot rejection rate
  • Made a request on August 5th and many responded within 10 days, but final 1/3 had to be called and emailed so this bill would have been helpful and provided an enforcement mechanism

HB 3015 left pending

HB 2070 (Huberty) – Relating to the regulation of sports wagering; requiring an occupational permit; authorizing a fee; imposing a tax; creating criminal offenses; decriminalizing wagering on sports events.

  • Bill laid out
  • Billions of dollars flowing out of state right now, sportsbook gambling is subject not casino gambling
  • Since 2018; 26 states have legalized sports betting and Arizona just passed it yesterday and neighboring states have passed it
  • It is being legalized because it is a source of revenue
  • Need to find a way to continue to pay for education going forward (implies HB 3)
  • $5.6 billion is being bet offline right now and that does not include bookies
  • Warns opposition may be heard but points out it is a lot of money
  • A percentage of this money will go into special education and then the rest will go into GR
  • Currently this is an unregulated environment
  • Need a legal framework, so best provisions in other states is in bill language
  • Agreed upon language provides a competitive and safe environment and provides for oversight
  • Directs members to review package of materials, illustrates gambling happens in Texas
  • Why not create an opportunity to collect revenue and put it to good use for kids in special education?
  • Ultimately this is enabling legislation to go to voters and ask if they would like to legalize, already have information to say they will support
  • Raymond – asked about hometown; sounds like you want it to be a statewide deal
    • Humble, Texas
    • Yes
  • Raymond – Would like you to take into the consideration this could have on the Kickapoo and others
    • Will work with anyone on this; is about raising revenue streams for education/special education
  • Howard – Would like you to add the WMBA to the list of who can participate in this
    • Would accept an amendment for that
  • Hunter – How much would this bring into the state?
    • Estimate $80 million initially; could go even higher after implementation
    • Disagrees with the Comptroller’s low estimate of $38 million
    • Fee structure could be changed to raise revenue streams
  • Hunter – Agrees $38 million seems low; provide us with estimates of the ongoing revenue
  • Hunter – This requires 76 votes in the House?
    • Yes
  • Shaheen – Other states that legalized this had to make budget cuts like Colorado
    • Colorado has a smaller budget, while ours is one of the largest
    • What other legislation has been passed that would make new revenue streams?
    • This just allows for the people to choose
  • Shaheen – Revenues have grown despite not making new revenue streams; is a 10% sales tax?
    • Is a 10% operator’s fee
  • Harless – People are gambling right now despite it being illegal in the state?
    • Yes, and this could even be considered more of a game of skill

 

Neil Leibman, Texas Rangers – For

  • Professional sports industry supports this legislation
  • Sports betting is already happening illegally, this way the state/participants/sports teams would all benefit
  • Will provide additional revenues and regulation will protect participants

 

Eric Schippers, Penn National Gaming, Sam Houston Race Track, Retama – For

  • Operate Barstool books in three states that have legalized, plan to expand to more
  • Legalizing sports betting creates regulations and protections for the participant
  • Texas would join the 26 other states and D.C. who have considered such legislation
  • Would help renew horse racing in Texas as they have been moving to other states
  • Black market mobile wagering brings in at a minimum of $150 billion; if state limited to in-person bets, would be missing this revenue
    • 70-90% of bets are made online
  • 7% to 10% fee for operator strikes the right balance

 

Tad Brown, Houston Rockets and Tilman Fertitta – For

  • Bill is a win for the state, participants, and sports teams
  • Sports betting is already occurring right now
  • Would rather establish a regulated environment and keep revenues for the state
    • Will protect consumers
  • Revenues will only grow once it starts

 

Scott Ward, MGM, Draftkings, FanDuel – For

  • South Dakota, Louisiana, and Maryland’s voters fully supported legalizing sports betting
  • Bill provides critical consumer protections; already have robust identification software to ensure bets are made only by the one who owns the account
  • Betting on college games is already occurring and is a significant part of revenue; if left out, then could deter legal betting on pro games
  • Shaheen – Are there precautions to keep children from making a bet?
    • Bill provides must be 21 to bet, are significant barriers to get into an account
    • Is very rare this would happen
    • Parenting would have to be a part of this
  • Shaheen – Will there be reimbursements if a child did place a bet?
    • App is not based on credit, needs money to be deposited
    • If it did happen, would contact the company
  • Harless – Colorado started when?
    • May 2020; have exceeded expectations
    • Have seen increases of 15-20% month over month
  • Harless – Where their funds used for water projects?
    • Yes, and NJ brought in $3 million in 2020 and is expected to grow
  • Harless – Can already make a bet right now
    • Yes
  • Paddie – What percent bet online?
    • Some say 75%, I say 90%
    • States with limited mobile markets create artificial barriers
  • Paddie – Would have to have responsible gambling programs
    • Adds tech companies, racetracks, and sports teams support the bill
  • Paddie – Louisiana still needs to pass enabling legislation?
    • Yes
    • Paddie – Once that happens, people could just cross the border and place a mobile bet there?
    • Yes; apps use geolocation services
  • Harless – Do you advertise in states you operate in?
    • Yes; would be an estimated hundreds of millions to the state

 

Chris Gordon – For

  • Did not testify

 

Gary Zimmerman, Self – Against

  • Concerned about potential corruption/rigging of games
  • Concerned there is no plan to support those who lose everything to gambling
    • Oklahoma has one
  • Harless – Rigging of games could happen now
    • Do not see protections against that in the bill
    • Have sanctions within the game, should have sanctions for rigging

 

Rob Kohler, Christian Life Commission – Against

  • Do not be tricked
  • Teams like Dallas Cowboys, Dallas Mavericks, Texas Rangers what we are learning is they want to be the state online bookies
  • Sends bad message to youth of state
  • Supreme Court just acted this on 2018, this is real quick to be allowed to happen
  • Does some math, ask committee where do you think money will come from
  • If there were to pass the Class 2 tribe would have right to go straight to Governor’s office to negotiate a gaming compact
  • Shaeen – asks what would occur under his scenario?
    • They would get to do Class 3 games

 

Jennifer Hughes, Kickapoo Tribe – Against

  • Provides details on what Tribe does with funding, including taking care of Tribe and provide jobs
  • Bill is potential opportunity but only works if it adheres to Indian Gaming Regulatory Act, have provided clarification language
  • Have amendment language they have pulled from previous fantasy sports bills, would like to include tribe amendments in it
  • Raymond – don’t see why they can’t have that language in the bill
  • Hunter – if Huberty takes your language will you support the bill?
    • Think so if it has necessary language in it which include addressing graphics issue

 

Huberty – closes

  • Changing to a class 3 would only apply to sports betting; other states have worked with tribes on this, and legislation is based on those standards
  • Says to go back and look at who testifies, it is self-serving to protect Bingo, etc
  • Talks about money being dedicated to water projects in Colorado in response to Rep. Shaheen’s comments
  • This will only apply to sports gaming
  • Argument of Cowboys being relative to the bookie is completely false
  • To answer Rep. Shaheen question you can gamble on the lottery right now, can’t go into gambling site without thumbprint which is what is used right now
  • Shaheen – remarks about budget cuts, no reference to water so revenue had a shortfall, always promises of additional revenue so skeptical of promise of funds and impact
    • Reads article Colorado gets revenue from sports betting as sign of “regulated” marketplace and it was enough to fund water projects
    • States have seen increase in revenue who do this
  • Shaheen – says have list of states that have legalized gambling and cut education funding
    • That is because they are leaving the state and coming to Texas
  • Shaheen – says just be realistic about what has happened in other states
  • Raymond – has no doubt in his mind there will be an increase an revenue and if other states didn’t have what they have then they would have had to cut more
  • Raymond – have worked on budget long enough to say we better find revenue

HB 2070 left pending

 

HJR 97 (Huberty) Proposing a constitutional amendment authorizing the legislature to legalize sports wagering in this state.

 

Gary Zimmerman, Self – Against

  • Will be voting no in November
  • Do we really want to use taxpayer dollars to hold a vote on something that will lose; predicts it will lose
  • Raymond – Want to bet on that?
    • Will see in November
  • Seen so many lose life savings, do not like seeing that

 

Rob Kohler, Christian Life Commission – Against

  • Bingo does not have anything to do with what I say or do
  • Against the bill

 

Jennifer Hughes, Kickapoo Tribe – Against

  • Have amendment language
  • Must be subject to IGRA, so would make it so tribes could participate

 

Scott Ward, MGM, Draftkings, FanDuel – For

  • Refer to previous testimony

 

Tad Brown, Houston Rockets and Tilman Fertitta – For

  • Refer to previous testimony

 

Huberty – closes

  • Important to State of Texas, liberty and constituents to have right to vote

 

HJR 97 committee substitute and resolution left pending

 

HJR 133 (Kuempel) – Proposing a constitutional amendment to foster economic development and job growth and to provide tax relief and funding for education and public safety by creating the Texas Gaming Commission, authorizing and regulating casino gaming at a limited number of destination resorts and facilities licensed by the commission, authorizing sports wagering, requiring occupational licenses to conduct casino gaming, and requiring the imposition of a tax

  • HJR laid out by Geren
  • Allows people in State of Texas to vote on destination resorts, would authorize expanded gaming
  • Millions of dollars will be generated for state and hundred of millions for local governments
  • People in Texas are already gambling just not doing it here in the state, we are missing out on that revenue
  • Polls shows support for legislature to take to voters and allow them to vote
  • Proposing highly regulated option
  • Would create the Texas Gaming Commission to help regulate industry and provide resource for gaming addiction
  • Kickapoo not on board but will continue to work with them

 

Eric Schippers, Penn National Gaming – For

  • Part of expanded gaming discussion across nation and in Texas
  • Horse industry has abandoned state for Oklahoma, Louisiana and New Mexico and welcome opportunity to help level playing field

 

Andy Abboud, Las Vegas Sands – For

  • Know they made a bit of splash when they hired a small number of lobbyists
  • Want policy makers to be comfortable with proposed path forward and be available to answer questions
  • They are based on convention and trade resort model
  • Thinks Texas market is unique, don’t spoil opportunity to think small
  • Will never claim to be economic panacea, need permission to go to voters to approve
  • Destination resorts will be destination within destination
  • Minimum investment suggestions are $2 billion in some areas and $1 billion in others
  • Agrees this industry must be highly regulated and it brings best of the best
  • Cannot jeopardize license by not being in heavily regulated area
  • Create jobs; kept all employees through pandemic
  • Deshotel – what is philosophy to help state take care of individuals?
    • Important component of regulatory structure
    • Studies show 1-3 addictive rate of gaming, companies that bid on this would need to have a proven track records of identifying and funding
  • Raymond – familiar with Indian reservations and tribes in Texas, what other locations?
    • Have worked with three tribes here
    • There is a good size place over in Oklahoma, believe surrounded by tribal gaming
  • Raymond – looking at making major investment, maybe better than Indian reservations?
    • This would attract best of the best
    • Would save parimutuel industry
  • Raymond – you would expect to make back your investment
    • Agree, that’s the plan
  • Raymond – doubt support would have grown to this place without the Indian reservations, would like to encourage support of those tribes to the extent possible
    • Working diligently with everyone trying to get them to row in the same direction
    • Committed to his sentiment
  • Harless – do you see joint resolution as legislature doing it or constituents
    • You will give people the right to vote
    • But if you are going to give people of Texas something to vote on it needs to be something proud of and comfortable putting forward to the people
  • Harless – in addition to influx of jobs would there also be other support areas?
    • Yes, it will increase visitation
    • They hire and source locally
    • Tremendous ancillary multiplier
  • Hunter – this is not legalizing casino gambling everywhere, and it is destination resorts
    • Yes and yes
    • Hunter – they are mixed use development
  • Hunter – asked about population?
    • Didn’t just pick a city but looked at MSA
    • Not designating a community, designed so multiple bids in multiple municipalities within each MSA
    • Hunter – also have coastal factor
    • Hunter – would also like data on impact to air travel and air ports
    • Air lift will increase and it will be significantly impacted
    • Greatest concern in pandemic is impact to trade show and convention
    • Demand to return to market place is strong and reason why they think they can add value to State of Texas
  • Smithee – mentioned HJR is very specific and all that text would be added to Constitution, part of reason not to raise rate after it is built, actual tax rate is written into the Constitution
    • It is in HJR and willing to discuss as they go forward
  • Smithee – 10% from table games and 25% from machines, how does that compare with other states? Any state higher? Lower?
    • No one higher, there is one lower
    • Provisions are definable
    • Discussion on gross gaming revenue with Smithee
    • Defers to next witness to answer
  • Paddie – can you speak to mix, gaming versus other revenues?
    • Before pandemic included rooms
  • Paddie – wife likes to shop and see entertainment, so more than gambling
    • Questions gets when night life will open and when can they get a reservation at restaurant
  • Shaheen – page 5 talks about Texas Gaming Commission and investments being made, seems favorable to Las Vegas and not really hotels
    • There will be companies from all over to bid and language does not prohibit Texas partnership
    • Commitment to hire local
    • All part of bidding processing, gaming commission can have criteria to bid
    • Quality of bid would be based on how much you embrace local area
  • Shaheen – proposal in Texas Constitution so it eliminates number of those who want to open up and gaming commission cannot override Constitution
    • Disagrees with his reading of language
    • Desire is to have seasoned operators
    • Working closely with Tillman Fritta and a lot of Texans
    • Believes he is reading it the wrong way, does not preclude any Texas company from partnering
  • Shaheen – tax rate question, why so low and in Constitution?
    • The lower the tax rate the better the amenities

 

Michael Soll, Innovation Group which represents Las Vegas Sands – For

  • Spent a number of years on gaming industry in Texas
  • Represented several states and investors and numerous Indian Tribes
  • Primary job is to look at draft legislation and revenue potential and possible economic impacts
  • Primary deliverables are revenue side of equation and economic impacts
  • Reviews handouts with committee
  • Construction phase is first area of impacts for 3 yrs, 185k jobs and $13-15 billion of capital spending
  • Ongoing operations annually about $4-5 billion in labor income and $12-13 billion is multiplier effect which adds to GDP
  • Tax revenue comes off top line
  • Includes revenue from tourist and multipliers
  • States have had mixed results but believes this is structured for best results
  • Shaheen – ask why in other areas development not around properties?
    • There are some developments
  • Shaheen – Drive by a place that has been around 2006, but don’t think it is developed like promised?
    • Every market is not the same particularly tribal casinos in rural areas
  • Shaheen – model presented about ancillary development
    • The jobs are within casino
    • Didn’t want details on impacts overtime, focus is on deliverables
    • 4 core resorts should life businesses that are already in the area, going into major MSA
    • Tribal will leverage infrastructure and horse tracks will stimulate development
    • Ones on coast will create additive on tourism
  • Shaheen – asked for assumptions on community impacts?
    • Yes and has one on public health
  • Shaheen and witness discuss ancestral trust, could Indian Tribes expand?
    • This legislation does not do that
  • Shaheen – page 4 lines 8-11, had to be on ancestral trust land?
    • Correct
  • Smithee – are you familiar with JR, how would state terminate license once it is granted?
    • Will defer to next witness

 

Gary Zimmerman, self – Against

  • No objection about Vegas style resorts
  • Concerned about employee side of it
  • History of his experience as a chef at his workplace at tribal resort
  • Opposed to Indian gaming because of their sovereignty
  • Make sure as opportunities are expanded that there is some type of protection for employees

 

Will Martin, District 9 American Legion – On

  • Also director on charitable bingo
  • Without HJR 133 receiving language that includes charitable bingo, it will die
  • Without charitable bingo items they support and veteran organization will die
  • Bill author has already reached out to work with them
  • In favor of expansion of opportunities as long as charitable bingo is addressed

 

Tom Stewart, Texas Charity Advocates – On

  • As currently written the bill does not include charity bingo
  • Have shared language with bill author and hopeful tweaks can be made to legislation

 

Steve Bresnan, Bingo Interest Group – On

  • Bingo will go down the tubes depending on location
  • In 4 MSA that would have major casinos half have charitable bingo that would be wiped out
  • No way to compete with major prize offerings in the casino
  • Given language to help address, 75 mile from casino limit

 

Rob Kohler, Christian Life – Against

  • Provides some history on Hard Rock
  • Dollars taken in vs those paid out in prices
  • Recognize what is taxed in dollar wagered
  • Compare it as a revenue generator to the lottery
  • To generate $1.6 billion as in lottery, would need $95 billion into slot machines

 

Rodger Weems, Texans Against Gambling – Against

  • False promise of expanding gambling
  • Texas economy remains strong, not in financial crisis and not in need of this imaginary revenue
  • Tax revenues are not there
  • Adelson statement on casino revenue was lower than expected
  • Notes recent sporting event, some people lost rent money and/or abused family so social consequences are real reality

 

Jennifer Hughes, Kickapoo Tribe – Against

  • Bill allows for full scale casinos, major expansion of gambling which would devastate tribe as it is currently drafted
  • Provides draft language suggestions to address concerns
  • Also needs to accommodate tribe in remote geographic location, inferior location and have an amendment for that as well
  • Paddie – thanks them for being there today, how long have they been opened
    • Think it was in 1994
  • Paddie – how many machines are in facility? Members served?
    • Approximately 3k and poker position as well
    • Does not know daily take
    • Approximately 1100-1200 members of the tribe
  • Paddie – how have they helped other tribes?
    • Not aware but recently just contributed trucks to sheriff
  • Paddie – trying to equate for devastation for other two tribes? Wouldn’t they like the same benefits?
    • See how they want to enjoy
    • But doesn’t see how bill would be supported by their tribe at this time
    • They are opposed to it because it would put economic ruin on the Kickapoo tribe
    • Exposed to expansion of gambling in their customer base
  • Raymond – asked about 8 liners
    • 8 liners not addressing laws should be addressed and would like to talk to him about it
    • Raymond notes they were living without support and shelter for sometime so understands and respects position on this bill

 

Mitch Fuller, Texas VFW – On

  • 100 years old and premier veteran service organization
  • Thanks authors for working with them and notes they are largest bingo license holder in Texas
  • Discusses donations and programs they support with revenue from bingo
  • Wish they had been contacted before lobbyists came in from out of state, it would impact a 100 year old organization
  • Lucio – family was very involved in VFW and spent a ton of time there

 

Golden Nugget Fertitta Entertainment,(Jerry) representing– For

  • Own and operate casino in Louisiana
  • $300 million in gross gaming revenue and paid state about $76 million in tax last year strictly gaming tax in Louisiana
  • Lake Charles also has good percentage of non-casino revenue
  • Lots of opportunity besides gaming revenue
  • Deshotel – have gone through there several times, is it true whole area is floating
    • Type 2 sitting on concrete basin
    • Now they allow land base gaming but there is water under barge part
  • Paddie – appreciates mention of youth baseball, lots of reason for attraction

 

Steve Scheinthal, Fertitta Entertainment – For

  • In favor of destination resort casinos, biggest area for trickle down effects
  • True casino destination resort opportunity will spur business activity to great state
  • Requires $2 billion investment in some areas and $1 billion in other
  • Reason for slightly lower tax revenue on table games because they cost more to operate and not very profitable
  • Enormous investment required so there needs to be return capability
  • They would submit application for license
  • Need to select someone who cares about Texans and way to guarantee is when selection committee reviews application is to look at who is part of proposal and history of doing business in Texas, history in charity, history in assisting minority communities, history for giving back to the state
    • Believes legislation allows selection committee to take these factors into account and best possible candidates will be rewarded with license
  • Raymond – have you seen the committee substitute?
    • Yes
  • Raymond – who decides who gets contract?
    • Selection committee, Governor would appoint gaming commission and then selection committee would make ultimate decision based on constitutional language adopted that has criteria

 

Chris Hughes, Las Vegas Sands – For

  • Agree horse tracks would have to remain horse tracks, but certain ones could build a small resort
  • There is a requirement that applicant show gaming and resort experience but #5 is extent applicant will use entities of state and legislature can add considerations
  • A lot of these questions could be taken care of in enabling legislation
  • Tax rates are selected based on investment being requested, licenses are assumed to be 30-50 years

 

Geren – close

  • This is an HJR, enabling legislation will get in details
  • This allows citizens of Texans to decide if they want destination resorts
  • We want conventions here in Texas, right now competition is between Orlando and Las Vegas
  • Argues Texans are going to other states to play and they come back to Texas including bringing their issues and we have to pay for it
  • Raymond – 8 liners are a big deal
    • This is a way to remove them
  • Have not hidden his propensity for gambling, a revenue producer for them, it polls well
  • Lucio – agree that it polls well

HJR 133 left pending