NDT C.S.H.B. 1445 75(R)BILL ANALYSIS LICENSING & ADMINISTRATIVE PROCEDURES C.S.H.B. 1445 By: Gray 3-24-97 Committee Report (Substituted) BACKGROUND The Texas Racing Commission was created in 1987 by the 70th Legislature. The Texas Racing Commission is responsible for ensuring fair wagering and safe racing and to help the racing industry grow as an asset to the state's economy. The Texas Racing Commission carries out its programs and functions through an eight-member board with six of the members appointed by the Governor with the consent of the Senate and two ex officio members, the State Comptroller and the chair of the Texas Public Safety Commission. To carry out these programs, the Texas Racing Commission had a budget of $7,959,129 and 69 employees for fiscal year 1996. The Texas Racing Commission is subject to the Sunset Act and will be abolished September 1, 1997 unless continued by the Legislature. As a result of its review of the Texas Racing Commission, the Sunset Advisory Commission recommended continuation of the Texas Racing Commission and several statutory modifications that are contained in this legislation. PURPOSE The purpose of this bill is to continue the Texas Racing Commission for an eight-year period, make statutory modifications recommended by the Sunset Advisory Commission, and other statutory modifications. The modifications proposed by this bill: -change the composition of the Commission by requiring four public members with a general knowledge of business or agri-business, one member with expertise in horse racing, and one member with expertise in greyhound racing, and removing existing requirements for the Commission to operate through separately acting sections representing horse and greyhound racing; -focus the Commission's activities on regulation of the racing industry and not promotion; -improve the Commission's racetrack inspection and enforcement activities; -increase the Commission's oversight of programs funded through provisions of the Texas Racing Act; -improve the integrity and safety of pari-mutuel racing by making the top regulatory officials at each track directly responsible to the state; - require the Commission to recover the costs of the criminal history reports; -expands the Commission's enforcement powers to help the agency respond to emergency situations at the track and to racetrack closures; -removes the Racing Act's prohibition of cross-species simulcasting; and, -provide for other changes. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is expressly granted to the Texas Racing Commission in the following sections: SECTION 8 - Section 2.11(d), Texas Racing Act (Article 179e, Vernon's Texas Civil Statutes), SECTION 9 - Section 2.21 and 2.23, SECTION 10 Section 3.02, SECTION 11 - Section 3.021(d), SECTION 13 - Section 3.07(a), SECTION 14 Section 3.13, Section 3.16, Section 3.22, SECTION 21 - Sections 6.061 and 6.062, SECTION 24 - Section 6.092, SECTION 29 - Section 7.07(b), SECTION 31- Section 9.01, SECTION 32 Section 10.04, SECTION 38 - Section 14.18, SECTION 43. The Texas Racing Commission's rulemaking authority is amended in the following sections: SECTION 20 - Section 6.06, SECTION 28 - Section 7.05(c), SECTION 34 - Section 11.06. In addition, under the general rulemaking authority already granted to the commission, rules may be adopted to implement other new provisions found in this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 1.02, Texas Racing Act (Article 179e, Vernon's Texas Civil Statutes). Removes language on the promotion of racing from the purpose clause of the Act so that it only refers to the regulation and control of horse racing, greyhound racing, and parimutuel wagering. SECTION 2. Amends Section 1.03, by adding Subdivisions (67) to (76). (67) Adds definition of "Racetrack facility." (68) Adds definition of "Child." (69) Adds definition of "Minor." (70) Adds definition of "Contraband." (71) Adds definition of "Prohibited device." (72) Adds definition of "Prohibited substance." (73) Adds definition of "Unlawful touting." (74) Adds definition of "Race." (75) Adds definition of "Outstanding ticket." (76) Adds definition of "Pari-mutuel voucher." SECTION 3. Amends Section 2.02(a) and (b). Changes the composition of the commission by eliminating the requirement for two veterinarians, two members with knowledge of horse racing, and two members with knowledge of greyhound racing. Deletes language related to appointment of members which requires the governor to strive to achieve representation of the state's population in regard to economic status, sex, race, and ethnicity. Instead, adds standard language developed by the Sunset Commission that requires that appointments to the commission be made without regard to race, color, disability, sex, religion, age or national origin. SECTION 4. Amends Section 2.03. Technical correction. Removes language regarding initial appointments of members of the Commission. SECTION 5. Amends Section 2.05(a) and (b). (a) Requires four of the members on the commission to be public members and have a general knowledge of business or agri-business. Requires two additional appointed members, one having expertise related to greyhound racing and the other having expertise related to horse racing. Adds standard language developed by the Sunset Commission to prohibit the appointment of a public member if the person or the person's spouse is a licensed by the commission (except as a commissioner), conducts business with the commission, or otherwise has financial ties to the regulated industry. (b) Includes nepotism prohibition in standard language developed by the Sunset Commission prohibiting any conflict of interest. Technical change. Updates statutory citation. Reletters subsections. SECTION 6. Adds Sections 2.071-2.074. Section 2.071. Adds standard language developed by the Sunset Commission. Prohibits commission members or their spouses and employees compensated at or above Group 17 in the General Appropriations Act or their spouses from being an officer or employee of a related Texas trade association. Also defines Texas trade association. Section 2.072. Adds standard language developed by the Sunset Commission. Prohibits registered lobbyists from serving as a member of the commission or from being employed as the commission's general counsel. Section 2.073. Adds standard language developed by the Sunset Commission. Defines the grounds for removing a commission member. Affirms that an action of the commission is valid even if it is taken when a ground for removal exists for one of the members. Requires notification of the commission's presiding officer, the Governor and the Attorney General if knowledge that a potential ground for removal exists. Section 2.074. Adds standard language developed by the Sunset Commission. Requires the commission members to complete training before assuming their duties and being confirmed by the Senate. SECTION 7. Amends Section 2.10. Updates standard language developed by the Sunset Commission. Requires the Governor to designate a public member as the presiding officer of the commission. SECTION 8. Amends Section 2.11(b) and adds (d). (b) Removes language referring to quorum requirements for conducting business of a section of the commission. (d) Adds standard language developed by the Sunset Commission. Requires the commission to give the public reasonable opportunity to appear before it regarding issues under the jurisdiction of the commission. SECTION 9. Adds Sections 2.17-2.24. Section 2.17. Adds standard language developed by the Sunset Commission. Requires the commission to prepare an annual financial report that meets the reporting requirements in the General Appropriations Act. Section 2.18. Adds standard language developed by the Sunset Commission. Requires the commission's funds to be managed in accordance with the State Funds Reform Act. Section 2.19. (a) Adds standard language developed by the Sunset Commission. Requires the executive secretary or a designee to develop an intra-agency career ladder program that addresses mobility and advancement opportunities for employees within the commission and requires intra-agency postings of job openings concurrently with any public posting. (b) Adds standard language developed by the Sunset Commission. Requires the executive secretary or a designee to develop a system of annual performance evaluations based on documented employee performance upon which merit salary increases must be based. (c)-(e) Adds standard language developed by the Sunset Commission. Requires the executive secretary or a designee to develop an equal employment policy that is annually updated, reviewed by the Texas Commission on Human Rights, and filed with the Governor's Office. Section 2.20. Adds standard language developed by the Sunset Commission. Requires the executive secretary or a designee to inform commission members and agency employees of the qualifications for office or employment and each person's responsibilities under the law. Section 2.21. Adds standard language developed by the Sunset Commission. Requires the commission to clearly separate its policymaking responsibilities from the management responsibilities of the executive secretary and staff of the commission. Section 2.22. Adds standard language developed by the Sunset Commission. Requires the commission to comply with state and federal program and facility accessibility laws and to develop a plan that describes how non-English speaking persons can be provided reasonable access to the commission's programs. Section 2.23. Adds standard language developed by the Sunset Commission. Requires the commission to prepare and distribute information to the public concerning the commission's functions and complaint procedures. Also requires commission rules to establish a method by which racetrack patrons can be notified of the complaint procedures. Section 2.24. Adds standard language developed by the Sunset Commission. Requires the commission to collect and maintain information about all complaints filed with the commission. Requires the commission to maintain files on written complaints that the commission has the authority to resolve and to notify the parties regarding the status of the complaint quarterly until disposition. SECTION 10. Amends Section 3.02. Deletes reference to Section 3.01, which is repealed in SECTION 42 of this bill. Requires the commission to make rules, issue licenses, and take any other necessary action relating exclusively to horse racing and greyhound racing. Requires a majority vote of the commission for any commission decision. Authorizes the commission to establish separate sections to review or propose rules. Requires the commission to hold meetings on proposed rules before they are published in the Texas Register and post notice on these meetings at each racetrack facility. Requires copy of the proposed rule be posted concurrently at each racetrack facility. Authorizes the Commission or section of the Commission to appoint committees to advise on proposed rules. Requires the Commission consider the effect of proposed Commission action on the state's agricultural, horse breeding, horse training, greyhound breeding, and greyhound training industry. SECTION 11. Amends Section 3.021(b) and adds (d). (b) Removes language directing the commission to promote the growth of the racing industry. (d) Adds standard language developed by the Sunset Commission. Prevents the commission from adopting rules that restrict competitive bidding or advertising except to prohibit false, misleading or deceptive practices. SECTION 12. Amends Section 3.03. Conforming change increasing a commission member, commission agent, DPS officer, or local peace officer's power of entry to include any part of the racetrack facility or any other place of business of a racetrack association. SECTION 13. Amends Section 3.07(a), (d) and (e). (a) Changes the employment of racetrack stewards and judges so that all three officials must be employed by the commission instead of current language that allows two of the three officials to be employed by the racetrack association. Requires the commission to designate one of the stewards or judges as the presiding officer for each race meeting. Allows the racetrack association to submit written comments to the commission regarding job performance, however the comments are not considered binding on the Commission. Requires the commission to employ, rather than appoint, at least one state veterinarian for each race meeting. Clarifies that the Commission may impose fees by rule. (d) Makes conforming changes by deleting Section 14.03 references. (e) Allows the racetrack association to use outstanding pari-mutuel vouchers to pay for animal drug testing with excess revenue going to the Racing Commission. This change allows the Commission to handle uncashed pari-mutuel vouchers in the same manner it currently handles uncashed parimutuel tickets. SECTION 14. Adds Sections 3.13-3.22. Section 3.13. Requires the commission, by rule, to adopt criteria for recognizing organizations that represent members of the racing industry. Section 3.14. Adds standard language developed by the Sunset Commission. Requires the commission to use a full range of penalties, such as reprimand, suspension or revocation, for violations of state laws or agency rules. Section 3.15. Adds standard language developed by the Sunset Commission. Entitles licensees to a hearing conducted by the State Office of Administrative Hearings before any sanction may be taken against their license. Exempts proceedings conducted by racing stewards or judges. Section 3.16. Grants the commission rulemaking authority to adopt rules prohibiting unlawful influence on the outcome of a race, relating to the use of prohibited devices or substances. Specifies drug testing procedures to be followed by the commission and administrative sanctions for rule violations in this area. This authority is currently provided in Article 14 of the Act, has been deleted in SECTION 36 of this bill and relocated here in new Section 3.16. Section 3.17. Authorizes the Commission to require racetracks to post security in an amount and form to ensure payment of fees and charges due to the state or Commission relating to pari-mutuel racing, including charges for drug testing. Section 3.18. Authorizes the executive secretary of the Commission to issue cease and desist orders if a racetrack or other licensee is engaging or likely to engage in conduct that violates the Racing Act or Commission rules. Specifically outlines procedures for issuance of the order with requirements for notice, time frame, hearing proceedings, and opportunity for judicial review of the order. Section 3.19. Authorizes the executive secretary to issue emergency cease and desist orders if a racetrack or other licensee engages in continuing activity that violates the Act or Commission rule and threatens immediate and irreparable public harm. Specifically outlines procedures for issuance of the order with requirements for notice, time frame, hearing proceedings, and provides for appeal. Section 3.20. Authorizes the executive secretary to take action if a final cease and desist order is violated including authority to initiate administrative penalty proceedings, refer the matter to the attorney general, or pursue other action such as license suspension. Entitles the attorney general to recover reasonable attorney's fees. Section 3.21. Authorizes the Commission to institute an injunction to enjoin a violation of the Act. Section 3.22. Requires the Commission, by rule, to monitor activities relating to the horsemen's account including review of a racetrack's financial operations and inspection of its financial records. Authorizes the executive secretary to issue an order prohibiting the racetrack from transferring funds out of a bank account held by the racetrack for business related to racing, if the association fails to maintain the proper amount of money in the horsemen's account. Requires the executive secretary to establish a procedure to allow the racetrack to pay necessary operational expenses from the racetrack's bank account while under order. Specifies the order to be valid for a period not to exceed 14 days. Also, authorizes the executive secretary to require appropriate transfers to or from the horsemen's account if an improper amount of money is in the horsemen's account. SECTION 15. Amends Section 5.01(a). Technical change. SECTION 16. Amends Sections 5.03(a) and (b). (a) Exempts reciprocal license applicants under certain conditions from fingerprint requirements. Clarifies the Department of Public Safety's authority to obtain fingerprints from any person owning any interest in an applicant for a racetrack license. (b) Ensures that if the Commission requires fingerprints, the prints are forwarded appropriately to the Department of Public Safety or the Federal Bureau of Investigation. SECTION 17. Adds Section 5.05. Requires the Texas Racing Commission to recover costs of criminal history reports and reimburse the Department of Public Safety for conducting the checks. SECTION 18. Amends Section 6.01. Technical change related to the requirement to obtain a racetrack license from the Commission. SECTION 19. Amends Section 6.04(a) and (d). (a) Removes language directing the commission to promote the racing industry. (d) Makes conforming change by deleting Section 14.03 reference. SECTION 20. Amends Sections 6.06(a), (b), (e) and (f). (a) Technical changes. Also, expands grounds for denial, revocation, or suspension of a racetrack license to include previous participation in activities detrimental to the racing industry and failure to disclose all true owners of the racetrack. (b) Expands the grounds for denial, revocation, or suspension of a racetrack license to include licenses held by a partnership or limited partnership. (e) and (f) Removes language referencing the two separate sections of the commission. SECTION 21. Adds Sections 6.061-6.063. Section 6.061. Grants the commission rulemaking authority to improve the commission's racetrack inspection and enforcement activities. Requires rules on reporting and correcting inappropriate and unsafe conditions at a racetrack facility, including methods for remedying emergency situations. Requires the executive secretary to issue a notice of violation for an inappropriate or unsafe condition and order the racetrack to correct the situation within a specified period of time. Requires the commission to adopt rules relating to the reporting of corrective actions taken by the racetrack facility. Requires the executive secretary to initiate enforcement action if a racetrack fails to take required action. Also, authorizes the executive secretary to rescind race dates for racetrack's failure to take required action. Section 6.062. Requires the commission to adopt a method of supervising and approving any changes made to a racetrack facility through construction or renovation. Requires rules related to approval, change and content of facility plans and specifications, maintenance of records, progress reports, inspection, and oversight of changes. If a racetrack licensee fails to comply with commission requirements, authorizes the commission to require the licensee to appear before the commission to consider the matter. Requires the commission to determine whether the racetrack facility meets commission requirements before the facility can be used. Requires the commission to initiate enforcement action if a racetrack fails to take action required. Also authorizes the executive secretary to rescind race dates for racetrack's failure to take required action. Section 6.063. Authorizes the commission to summarily suspend a racetrack license if the commission determines that a racetrack is being operated in a manner that is an immediate threat to the health, safety, or welfare of racing participants or patrons. Specifically outlines procedures for the suspension with requirements for notice, time frame, hearing proceedings, and provides for appeal. Specifies that the suspension continues in effect unless the order is stayed by the executive secretary and allows the executive secretary to impose any condition before granting a stay of the order. Requires the executive secretary to affirm, modify or set aside in whole or part of the order. SECTION 22. Amends Section 6.08(1). Makes conforming change so that a current statutory reference to any horsemen's organization reflects the requirement (being added in SECTION 14 of this bill) for the Commission to officially recognize such an organization. SECTION 23. Amends Section 6.091(a). Changes the distribution of the simulcast pari-mutuel pool by setting aside 0.25 percent for the Racing Commission instead of the Texas Commission on Alcohol and Drug Abuse. Requires these funds be set aside to reimburse the general revenue fund for the amount of funds including interest owed by the Racing Commission. SECTION 24. Adds Section 6.092. Increases the commission's oversight of programs funded through provisions of the Texas Racing Act. Requires the commission to adopt reporting, monitoring, and auditing requirements or other performance measures for organizations receiving racing funds. Requires the commission to consult with the affected organization. Requires that an annual, independent audit be conducted and a report of the results sent to the commission. Also, allows the commission to review any records of an organization that submits such an audit. Authorizes the commission to withhold funds from an organization. SECTION 25. Amends Section 7.01. Removes language making the violation of this section a criminal offense to be relocated in Article 14, Texas Racing Act in SECTION 38 of this bill. SECTION 26. Amends Section 7.02(a) and adds (c) and (d). (a) Removes the language making any violation of this section a criminal offense. Wagering without a license is replaced as an offense in Article 14, Texas Racing Act in SECTION 38 of this bill. Also makes technical change. (c) and (d) Adds standard language developed by the Sunset Commission. Requires the commission to notify license applicants of licensing examination results within a reasonable time of the examination date. Requires the commission, upon request of an applicant who failed a licensing examination, to provide an analysis of the applicant's exam performance. SECTION 27. Amends Section 7.04. Provides that the improper use of a temporary pass and previous participation in activities detrimental to the racing industry are additional grounds for refusing to issue, suspending or revoking an occupational license. SECTION 28. Amends Section 7.05. Requires the commission to include the cost of the criminal history checks when setting the fee for licenses. Allows the commission to collect the costs over an extended period. Reletters subsections. SECTION 29. Amends Section 7.07. Adds standard language developed by the Sunset Commission. Authorizes the commission to adopt a staggered license renewal system. SECTION 30. Adds Section 7.10(a) and (b). (a) Adds standard language developed by the Sunset Commission. Authorizes the Commission to waive any license requirements and grant a license to an applicant with a valid license from another state that has license requirements substantially equivalent to those of this state. (b) Adds standard language developed by the Sunset Commission. Authorizes the commission to waive any license requirements and grant a license to an applicant with a valid license from another state with which Texas has a reciprocity agreement. Also authorizes the commission to enter into reciprocity agreements. SECTION 31. Amends Section 9.01. Makes a conforming change to increase the commission's oversight of programs funded through provisions of the Texas Racing Act as provided for in SECTION 24 of this bill. SECTION 32. Amends Section 10.04. Makes a conforming change to increase the commission's oversight of programs funded through provisions of the Texas Racing Act as provided for in SECTION 24 of this bill. SECTION 33. Amends Section 11.011(g) and adds (h)-(k). (g) Removes prohibition to cross-species simulcasting. Specifies that no track can be required to take a cross-species signal. (h)-(i) Specifies necessary agreements between greyhound racetracks and horse racetracks. Requires horse racetracks offering greyhound simulcasting to do so pursuant to an agreement with the nearest greyhound track. If an agreement cannot be reached by September 1 of the year preceding the proposed simulcasting, then the horse racetrack may purchase the signal from any greyhound racetrack with which it can reach an agreement. Requires greyhound racetracks offering horse simulcasting to have an agreement with the nearest Class 1 horse track. If agreements cannot be reached by September 1 of the year preceding the proposed simulcasting, then the greyhound racetrack may purchase the signal from any Class 1 racetrack in the state with which it can reach an agreement. (j) Requires a horse racetrack that offers an interstate greyhound signal to offer wagering on any available Texas greyhound signal. Requires a greyhound track that offers an interstate horse signal to offer wagering on any available Texas horse signal. (k) Requires an agreement for wagering on a simulcast greyhound race between two horse racetracks. Specifies an agreement is required between a horse racetrack that conducts its inaugural meet within 12 months of the effective date of this Act and an operational horse racetrack with 60 miles of such a racetrack. SECTION 34. Amends Section 11.06. Clarifies the commission's rulemaking authority to prohibit minors from wagering at the racetrack. Removes the language making any violation of these rules a criminal offense and relocates provision in Article 14, Texas Racing Act in SECTION 38 of this bill. SECTION 35. Amends Section 11.08. Makes conforming change to the procedure used by the Commission for receiving money not claimed at the racetrack. SECTION 36. Amends Section 11.09. Technical change rewording the defense to prosecution section to more closely match Penal Code language. SECTION 37. Amends Section 13.03. Creates a criminal trespass presumption, in accordance with the Penal Code, for those persons who have been excluded or ejected from the racetrack enclosure or who are otherwise unauthorized to enter. Removes offense language conflicting with Penal Code. Applies Penal Code, Section 30.05, so that a person committing criminal trespass at a racetrack is punishable with a Class B misdemeanor except in some circumstances in which case the penalty is a Class A misdemeanor. SECTION 38. Amends Article 14. Changes title to "CRIMINAL OFFENSES" Section 14.01. Makes the offense of touting a Class A misdemeanor unless the actor is a license holder or member or employee of the commission or the information was provided to the public in a tip sheet, in which case the penalty is a state jail felony. Strikes the redundant provision imposing liability on a corporation or association for the actions of an agent for touting, which already exists in the Penal Code. Section 14.02. Makes possession as well as use of an unlawful credential a criminal offense. Strikes the redundant provision imposing liability on a corporation or association for the actions of an agent for unlawfully using a credential, which already exists in the Penal Code. Strikes Section 14.03 thus deleting existing language from section relating to unlawful influence on a race through use of prohibited devices and substances or bribery to be relocated in Sections 3.16 and 14.10 - 14.11, Texas Racing Act. Section 14.04. Clarifies the offense of permitting illegal access to a racetrack. Reduces the penalty for permitting illegal access to a racetrack to fit the crime. Lowers the offense from a third-degree felony to a Class B misdemeanor. Section 14.05. No change. Section 14.06. Lowers the level of culpability that must be shown for the offense of making false statements in connection with a racing investigation from "intentionally" to "knowingly." Clarifies the definition of the term "statement" for the offense of making false statements. Makes this offense a state jail felony unless the statement was material in a commission action relating to a racetrack license, in which case, it is a felony of the third degree. Section 14.07. Expands the offense for hindering an authorized entry to include interfering with an authorized search. Lowers the level of culpability that must be shown for the offense of hindering an authorized entry from "intentionally, knowingly, or recklessly" to "with criminal negligence." Section 14.08. Adds the offense of forging a pari-mutuel ticket as a third degree felony. Assigns Penal Code definition for the term "forge". Section 14.09. Adds the offense of impersonating a license holder as a Class A misdemeanor. Section 14.10. Adds the offense of unlawfully influencing a race by possession or use of a prohibited device or substance. Specifies that possession only is punishable by a state jail felony, unless it can be shown that the actor intended to influence the outcome of a race, in which case it is a third degree felony. Makes the use of such a prohibited device or substance a felony of the third degree. Section 14.11. Adds the offense of unlawfully influencing a race through bribery or corrupt influence as a state jail felony unless the recipient of the benefit is a racetrack official, in which case, it is a felony of the third degree. Makes the definition of bribery and corrupt influence comparable to the Penal Code. Section 14.12. Makes it illegal for a member of the commission to accept employment or payment from any racetrack association or occupational licensee, to wager on a greyhound or horse race in Texas, or to accept any part of a purse paid to an animal racing in Texas. An offense under this Section is a state jail felony under the general penalty provision of the Act as modified in SECTION 39 of this bill. Section 14.13. Makes it a Class B misdemeanor for a person with criminal negligence to contribute to a minor's wagering at a racetrack or a child's entry to the viewing section of a racetrack, unless a parent, guardian, or adult spouse accompanies the child. Makes it a Class C misdemeanor to allow a minor to intentionally or knowingly wager at a racetrack, unless the minor shows an apparently valid driver's license or DPS-issued identification card. Section 14.14. Makes it illegal for a person to participate in, permit, or conduct an unauthorized race at a licensed racetrack if the person wagers on the outcome of the race, or knows or reasonably should know someone else is betting on the race. An offense under this Section is a state jail felony under the general penalty provision of the act as modified in SECTION 37 of this bill. Section 14.15. Makes it illegal for an unlicensed person to be involved in pari-mutuel racing, unless the person is a spectator or wagerer. Makes the offense a state jail felony for unlicensed racetrack operators and Class A misdemeanor for others. Section 14.16. Makes it a third-degree felony for a person to conduct a race without a license if he knows or reasonably should know that someone else is betting on the race. Section 14.17. Makes it illegal for a person to intentionally or knowingly fail or refuse to display a credential or to identify himself when lawfully requested to do so in a restricted area on the premises of a racetrack. Makes the offense a Class B misdemeanor unless the defendant holds a license at the time it occurs, in which case the offense is a Class C misdemeanor. Section 14.18. Authorizes commission members, their agents, stewards or judges, and DPS or other peace officers to search actual and purported licensees on the premises of a racetrack and to seize any prohibited items discovered during a search. Excludes a location from a search if excluded by commission rule or if location is provided by an association for private storage according to commission rule. Section 14.19. Allows a defendant to be prosecuted under the Texas Racing Act or another law for the same illegal conduct. Section 14.20. Prohibits Article 14 of the Act, the criminal offense provisions, from being construed to restrict the commission's administrative authority to fully enforce the act or commission rules. SECTION 39. Amends Section 15.01. Changes the default penalty provision from a felony of the third degree to a state jail felony. SECTION 40. Amends Section 18.01(a). Updates the commission's Sunset review date to 2005, which provides for an 8-year review. SECTION 41. Amends Section 481.172, Government Code. Adds language directing the Texas Department of Commerce to promote the racing industry if funds are appropriated specifically for that purpose. SECTION 42. Repeals Sections 2.07, 3.01, 11.04(d), 15.02, and 18.02, Texas Racing Act. Removes language regarding prohibited conflict of interest of commission members and relocates this provision in Article 14. Removes language which divides the commission into two separate sections. Removes language making a violation of commission rules on wagering a criminal offense. Removes language which made all commission rules and orders subject to the Administrative Procedure and Texas Register Act because this Act already generally applies to all state agencies. SECTION 43. (a) Specifies the effective date of the Act as September 1, 1997. (b) Provides that the changes made by this Act only apply to members of the commission appointed after the effective date of this bill. Requires the governor to make appointments according to membership plan outlined by the Texas Racing Act, as amended by this Act. (c) Requires the commission to review all of the rules of the commission and readopt, modify, or repeal these rules before January 1, 2002. Requires the commission, to the extent possible, to attempt to regulate horse and greyhound racing activities with uniform approaches. (d) Transfers any rulemaking authority given to a separate section of the Texas Racing Commission to the full Texas Racing Commission. SECTION 44. Provides that the changes made by this Act do not apply to offenses, any element of which were committed before the effective date which instead will be prosecuted under the earlier law. SECTION 45. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute incorporates the following major changes from the original bill: 1.Expands the Commission's enforcement powers to include: _authority to require racetracks to post a security bond to ensure that payments due to the state are made, _authority to issue cease and desist orders, including issuing orders on an emergency basis, _the authority to issue an injunction, _the authority to oversee the horsemen's accounts to ensure that funds are properly maintained, and _the authority to summarily suspend a racetrack license if the Commission determines that the track is being operated in a manner that constitutes an immediate threat to the health, safety or welfare of racing participants or the public 2.Changes the distribution of the simulcast pari-mutuel pool by setting aside 0.25 percent for the Racing Commission instead of the Texas Commission on Alcohol and Drug Abuse. The substitute requires that these funds be used to reimburse the General Revenue Fund for past appropriations loaned to the agency. 3.Removes prohibition to cross-species simulcasting and specifies required agreements between greyhound racetracks and horse racetracks. Also, requires that if interstate crossspecies simulcasting occurs, racetracks must offer wagering on those Texas signals that are made available.