August 7,2015 Phillip Oldham Thompson and Knight 98San Jacinto Blvd. Suite1900 Austin, TX 78701 Re:Simulcasting Signals Dear Mr.Oldham: TEXAS RACING COMMISSION p.o. BOX 12080 AUSTIN, TEXAS 78711-2080 (512)833-6699 FAX (512)833-6907 You asked for an explanation of my decision to approve current simulcasting requests only through August 31, 2015.I hope you find this infonnation responsive. Rider7totheTexasRacingCommission's(TRC's)appropriationsunderHBl,theGeneral Appropriations Act, provides: Approvalof CentralAdministration&OtherSupportServices.Noneof the appropriations aboveinStrategy D.1.l, CentralAdmin &Other Support Services maybeexpendeduntiltheTexasRacingCommissionreceiveswrittenapproval from the Legislative Budget Board. I have written to theLegislative Budget Board (LBB) toask for clarification of the criteria it will useindetenniningwhethertoapprovetheStrategyD.l.1appropriations,butIhavenotyet received an answer, nor have I received any instructions astothefonnat theCommission should use in requesting approval. Strategy D.l.1appropriations areessentialto the continued operations of theCommission.They includeauthorizationtoexpendfundsforexecutivemanagementandadministrativesupport services.Centraladministrativestaffhandlebudgetandfinance(includingpayrolland accounting),purchasing,humanresources,publicinfonnationrequestsandfulfillmentof state reporting requirements.Strategy D.l.1alsoincludes authorization topay the rent andelectricity for the state headquarters. All Equal OppOr/lIllily Emplover Phillip Oldham August 7,2015 Page 2 Without approval of these appropriations, staff cannot expend any funds for these purposes, even if sufficient fundsareavailable in other strategies.Directingsuch a payment willberejected by the Comptroller's Office, and attempting to circumvent the restriction by falsely stating the purpose of thepaymentwouldbeacriminalviolationunderGovernmentCode403.071.Therefore, absentthenecessaryapprovalsfromtheLBB,theagencywillnolongerbeabletopayits employees or its rent and will close at the end of the day on August 31, 2015. If the agency closes, all racing will also stop, including both live and simulcast racing.Live racing must stop since the Act requires that three stewards or judges, as wellasatleast one veterinarian, must be present to supervise each meeting, and the Commission will nolonger be able to pay the wages of those employees.Regarding simulcasting, it is not in the public interest for me to approve simulcastingbeyondAugust31,2015,whileknowingthatsuchsimulcastingmightnotbe regulatedandoverseenbyCommissionstaff.Further,if theCommissionhasnotreceived approval of the Strategy D.l.1appropriations by August 31, 2015, I will rescind any simulcasting approvalsalreadygivenforSeptember1 andbeyond.On theother hand,if theLBBgivesthe necessary approvalon or before August 31,2015, I will promptly approve futuresimulcasting as appropriate. I hope this information answers your questions.If you have any other questions, please let me or GeneralCounsel Mark Fenner know. Sincerely, c ; 2 J ~Chuck Trout Executive Director CT:MF:mw ---