DALLAS - Proposals to build three major horse racing tracks around Texas could require more than $300 million in tax-exempt financing in what would be the largest-ever use of bonds for such a purpose, market sources said.

Local officials, investment bankers, and bond lawyers say that proposed tracks near Houston and San Antonio could be entirely financed with tax-exempt bonds that would be sold by locally created sports authorities. Because there would be no private investment, the debt could be issued as governmental-purpose bonds under the tax code.

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