EC November/December, 2009

“I am already seeing positive signs of people wanting to move back to Texas due to the passage of this bill (HB1881),” Texas House of Representative Sid Miller said. Research has shown that the equine industry in Texas has dropped from a 1998 high of 11 billion dollar contribution to the Texas economy to the current 5 billion. Texas is home to about 900,000 horses. More than 450,000 people are employed by or involved in the industry. More than 101,000 service providers jobs are affected including veterinarians, veterinary support staff, real estate agents, trainers, farriers, horse trailer dealerships, truck dealerships, fertilizer dealers, feed stores, saddle and tack makers, western apparel stores, hay growers, hotels and restaurants.  But Texas is no longer an equine destination.

Due to the increased exodus of equine related businesses in Texas to states with greater purses and incentives, Rep. Miller saw the urgency to get this bill passed to bring equine related jobs back to Texas. It also didn’t hurt that Miller was a horseman himself. Miller was the 2006 and 2007 Amateur Tie-down Roping World Champion, the 2007 Reserve World Champion in Amateur Breakaway Roping at the AQHA World Championship Show, and the Reserve World Champion in Breakaway Roping at AQHA’s 2008 Bayer Select World Championship Show.

With the backing of Rep. Miller and Senator Craig Estes, the bill passed the Texas House (144-1) and Senate (30-0) and was signed into law on June 19, 2009 by Governor Rick Perry. It came into effect September 1, 2009. After signing this bill, Gov. Perry also signed an official declaration making the American Quarter Horse the official horse of Texas.

House bill HB1881 provides for the creation of a Texas Equine Incentive Fund.  The fund will be administered by the Texas Department of Agriculture under the direction of Commissioner Todd Staples.  The fund will benefit Texas-bred American Quarter Horses, Paints and Appaloosas. The rules of the bill will be determined by an industry panel from the three breeds.  The intent of the bill was that each association determine its own rules to better suit their needs. The new Texas Equine Incentive Fund website is http://www.texasagriculture.gov/EquineIncentive where the new rules will be posted soon. Texas residents will have 30 days to make comments and suggestions regarding the new program, and the new rules will be finalized thereafter.  As with any program, there are plans for the rules to evolve and grow to suit the needs of the industry.

The stallion will be required to live in Texas and the mare bred and foaled in Texas.  The bill is very similar to the one passed in 2004 in Kentucky except this is not a tax.  Texas-bred mare, stallion, and show horse owners will be required to be a member of the state association as well as the national associations in order to nominate foals or receive funds.  The fund will initially be funded by stallion and mare owners contributing into the fund. The minimum amount each in-state bred mare owner will contribute is $30 with the total amount still to be determined by each breed.  Stallions and mares can opt out, but their request must be in writing and sent to the Department of Agriculture 30 days before the owner’s annual breeding report is due to the applicable breeders’ association. This is a contribution made into a fund similar to the American Quarter Horse Association Incentive Fund, American Paint Horse Association Breeders Trust or Appaloosa Horse Club of America Breeders Trust.

Payouts will occur for foals of nominated stallions and mares when they show or race in Texas equine events and gain points.  This will require more horses to come to Texas for events thereby increasing their state participation. The fact people have to come to the state to earn points also differs from the Kentucky program. The first breeding reports will be due by stallion owners on November 30th, 2009. The first payout will be in 2012 where all AQHA, APHA, and ApHC 2 year-old performance, halter and racing horses will have a chance to earn points equally and at the same time. It is estimated that in just the first year alone (the 2009 breeding season), Quarter Horses in Texas could raise over $800,000 to go toward this fund.

Diane Chilton, owner of AQHA World Champion Pleasure Stallion, RADICAL RODDER, was the driving force behind getting this bill passed. This bill is the start of widespread legislation to retain horses in the state of Texas. The program in Kentucky started with only 8 AQHA stallions in 2006 and moved to over 200 stallions in 2009.   It has become an exciting program for horse owners. “I think Kentucky hit a home run,” Chilton remarked. “I started thinking that we should get the ball rolling and pass a bill in Texas.”

During the same session, the national breed associations were trying to join together to pass another bill for horses sponsored by Texas HORSE allowing Video Lottery Terminals (VLT) to be in the Texas race tracks.  Racing enthusiasts have tried to pass a VLT bill since 1989. A VLT is similar to a slot machine, except that it is connected to a centralized computer system that determines the outcome of each wager using a random number generator. VLT’s can be thought of as computerized scratch-off lottery tickets.  The bill for VLT’s unfortunately died in the House of Representatives Calendars Committee. Texas Thoroughbreds opted out of the Equine Incentive bill and Representative Sid Miller decided to add Appaloosas.  Due to Texas’s current conservative Texas State Representatives and Senators, Chilton believes it is unlikely that gaming will pass anytime soon, especially with the pending Texas Governor’s race between Gov. Perry and Sen. Kay Bailey Hutchinson.

Leigh Ann Schroeder, who is married to Robbie Schroeder’s older brother, R.D., helped Diane get through the Texas political quagmire. Leigh Ann worked on the White House Staff during the Reagan and Bush (41st president) Administrations and has also worked on several political campaigns. “Diane asked for some advice on presenting legislation and navigating through the legislative process.  In ’08, we met with Rep. Sid Miller who was the 2007-2008 Chairman of the Agriculture and Livestock Committee in the Texas House of Representatives, and I advised her to let him guide and take the lead. While Mr. Miller began quietly moving through the halls of the capitol with his idea, we began compiling data that would catch the attention of the individual legislators,” Schroeder explained. “For example we tracked and put together graphs that showed how many horses, shows and races were in each Senate and Representatives’ district and the economic impact each one of those horses had on the local economy. We invited Sen. Estes (2007 to 2011 Chairman of Senate Agriculture and Rural Affairs Committee) to tour the Schroeder Ranch and learn from Joan and Robbie what a ranch of that size adds to the economy. The staff was overwhelmed at that point, which was 9 months into the year, that over 1 million dollars was already spent that contributed to the local economy.”

Schroeder adds that some of the challenges included “educating members of the Texas legislature what horses really mean to their local economy. Most were totally unaware and only familiar with the racehorse arguments for incentives.  For example, feed, hay, salaries, construction, materials, Federal Express, etc. That caught Sen. Estes’s attention, and he and Representative Miller began exchanging ideas on how to get this issue heard.  We continued to research the statistics on livestock in each Senate district and eventually put together a compelling argument and powerpoint presentation that the equine industry was a strong part of the Texas economy, and it had dropped from 11 billion to 5 billion in the past 11 years.”

“Money was by far the biggest challenge in getting this bill passed,” Schroeder said. Texas HORSE and Texans for Economic Development, a coalition of the Texas horse industry, “raised and spent over 4 million for their lobbying efforts to get VLT’s passed in the Texas Legislature which resulted in no legislation. We did all the work as volunteers and incurred the expenses ourselves because we believed in the cause and knew that the focus was to educate and bring the legislatures and their staffs up to date on the lagging equine economy. We focused only on legislators and not the general public. It is hard to get the general public to engage in a cause they know nothing about. It would be like me joining an effort to make Skateboarding the state pastime. I know nothing about it, but in a time crunch, like the short session of the Texas legislature (that meets only on odd numbered years) you have to educate and get your message across to the members that are going to vote on your legislation. That in the end is all that matters.”

Future challenges involve getting breeders to take the time to understand and use the program and also to educate the Texas Department of Agriculture about the program. The department has never had to implement an equine related program. “I am anxious to get this program started and see how successful this program will be,” Miller said.

Schroeder adds, “With our western heritage and ranch style living combined with this new fund, Texas will have the opportunity to once again be the ultimate horse breeding and showing destination.”

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