Relating to the eligibility of the American Performance Horseman and the American Rodeo for funding under the major events reimbursement program.
LowStandard timeline
Low Cost
Effective:2025-06-20
Enforcing Agencies
Office of the Governor (Trusteed Programs) • Texas Economic Development & Tourism Office
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: June 20, 2025
Compliance Deadline:Event-Dependent. Applications for funding must be submitted to the Texas Economic Development & Tourism Office (TEDTO) no later than 45 days prior to the first day of the event.
Agency Rulemaking: The Office of the Governor (Trusteed Programs) will not issue new general rules, but will immediately apply existing MERP administrative codes (10 TAC § 184) to these specific events. Expect strict scrutiny on the definition of "market area" during the initial application phase.
Immediate Action Plan
1.Calculate Deadlines: If the next event is within 60 days, immediately file the MERP application to meet the 45-day statutory window.
2.Audit the MSA: Review the Master Services Agreement with Teton Ridge to confirm the "highly competitive site selection" language is present and legally sufficient.
3.Isolate Finances: Establish a segregated bank account immediately for all event-specific transactions.
4.Update Invoicing: Instruct finance teams to tag all event-related expenses with specific project codes to facilitate the post-event state audit.
Operational Changes Required
Contracts
Site Selection Contingency: Host cities must ensure the binding agreement with Teton Ridge explicitly states that the site selection organization considered a site outside of Texas before selecting the Texas venue. Without this clause, MERP eligibility is void.
Vendor Payment Terms: General Contractors and service providers should review "pay-when-paid" clauses. If the LOC intends to use MERP funds to pay vendors, contracts must reflect the delay inherent in the state’s post-event audit process (typically 60-90 days post-event).
Hiring/Training
Data Collection Staffing: Event staff and ticketing personnel must be trained on zip-code capture protocols. The reimbursement amount is mathematically tied to the number of out-of-state visitors; failure to capture this data at the point of sale or entry results in lost revenue.
Reporting & Record-Keeping
Fund Segregation: The LOC or host municipality must open a dedicated, separate bank account for event revenue and disbursements. Commingling MERP-related funds with general operating funds is a primary cause for audit failure and clawback.
Economic Impact Study: An independent economic impact study must be commissioned immediately to establish the projected tax revenue, which sets the cap for potential reimbursement.
Fees & Costs
Upfront Capital: While the program reimburses costs, the LOC must front the cost of the Economic Impact Study and all event operations. There are no new state fees, but cash-flow modeling must account for the reimbursement lag.
Strategic Ambiguities & Considerations
Scope of "Related Activities": The law defines the event to include activities "related to or associated with" the rodeo. It is currently unclear if the Governor's Office will approve tax reimbursement for ancillary events such as concerts, trade shows, or fan festivals held at separate venues.
Guidance: Do not assume ancillary revenue streams are eligible. Request a pre-event determination letter from TEDTO regarding specific peripheral events to avoid a funding gap after the audit.
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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.
Under current law, the major events reimbursement program offers financial incentives to attract large-scale events, aiming to boost local economies through tourism and spending. The law authorizes the reimbursement of certain event-related costs and expenses and is periodically updated to expand eligible events and clarify qualification criteria based on economic impact and recognized site selection organizations. C.S.H.B. 4396 seeks to expand the list of events and site selection organizations eligible for funding under the program to ensure that Texas remains a competitive and attractive location for hosting major events that drive significant economic impact by adding the American Rodeo, the American Performance Horseman, Teton Ridge Live Productions, and Teton Ridge The American, LLC, to the respective lists.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
C.S.H.B. 4396 amends the Government Code to make the American Performance Horseman and the American Rodeo eligible for funding under the major events reimbursement program. The bill accordingly includes Teton Ridge Live Productions and Teton Ridge The American, LLC, among the entities designated as site selection organizations for purposes of the program.
EFFECTIVE DATE
September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE
C.S.H.B. 4396 differs from the introduced in minor or nonsubstantive ways by conforming to certain bill drafting conventions.
Honorable Will Metcalf, Chair, House Committee on Culture, Recreation & Tourism
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB4396 by King (Relating to the major events reimbursement program, including event funding eligibility, site selection organizations, and single event and single year classifications.), As Introduced
No significant fiscal implication to the State is anticipated.
It is assumed that any costs associated with the bill could be absorbed within existing resources.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
300 Trusteed Programs Within the Office of the Governor
LBB Staff:
JMc, TUf, KCu
Related Legislation
Explore more bills from this author and on related topics
HB4396 immediately amends the Texas Government Code to designate The American Performance Horseman and The American Rodeo as eligible events under the Major Events Reimbursement Program (MERP). This legislation allows host municipalities and Local Organizing Committees (LOCs) to access state funds to offset event costs, provided they contract with Teton Ridge entities and adhere to strict state audit and procurement protocols. Implementation Timeline Effective Date: June 20, 2025 Compliance Deadline: Event-Dependent.
Q
Who authored HB4396?
HB4396 was authored by Texas Representative Ken King during the Regular Session.
Q
When was HB4396 signed into law?
HB4396 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce HB4396?
HB4396 is enforced by Office of the Governor (Trusteed Programs) and Texas Economic Development & Tourism Office.
Q
How urgent is compliance with HB4396?
The compliance urgency for HB4396 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB4396?
The cost impact of HB4396 is estimated as "low". This may vary based on industry and implementation requirements.
Q
What topics does HB4396 address?
HB4396 addresses topics including amusements, games, sports.
Legislative data provided by LegiScanLast updated: November 25, 2025
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