1-1                                   AN ACT

 1-2     relating to the continuation and functions of the Texas Racing

 1-3     Commission and to the transfer of certain commission functions to

 1-4     the Texas Department of Commerce; providing penalties.

 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-6           SECTION 1.  Section 1.02, Texas Racing Act (Article 179e,

 1-7     Vernon's Texas Civil Statutes), is amended to read as follows:

 1-8           Sec. 1.02.  PURPOSE [PURPOSES].  The purpose [purposes] of

 1-9     this Act is [are] to [encourage agriculture, the horse-breeding

1-10     industry, the horse-training industry, the greyhound-breeding

1-11     industry, tourism, and employment opportunities in this state

1-12     related to horse racing and greyhound racing and to] provide for

1-13     the strict regulation of horse racing and greyhound racing and the

1-14     control of pari-mutuel wagering in connection with that racing.

1-15           SECTION 2.  Section 1.03, Texas Racing Act (Article 179e,

1-16     Vernon's Texas Civil Statutes), is amended by adding Subdivisions

1-17     (67)-(78) to read as follows:

1-18                 (67)  "Racetrack facility" means a facility operated by

1-19     an association within its enclosure for the purpose of presenting

1-20     races for pari-mutuel wagering.

1-21                 (68)  "Child" means a person younger than 16 years of

1-22     age.

1-23                 (69)  "Minor" means a person younger than 21 years of

1-24     age.

 2-1                 (70)  "Contraband" means:

 2-2                       (A)  any item or thing the possession of which is

 2-3     unlawful under this Act, a commission rule, or other law;

 2-4                       (B)  any item or thing that might reasonably have

 2-5     the effect of unnaturally depressing, stimulating, or exciting an

 2-6     animal during a race in a manner contrary to this Act or commission

 2-7     rule, including a prohibited device or substance; or

 2-8                       (C)  a document, including a credential or forged

 2-9     ticket, possessed by an individual or used by an individual in

2-10     violation of this Act or a commission rule.

2-11                 (71)  "Prohibited device" means:

2-12                       (A)  a spur or an electrical or other device

2-13     prohibited by a commission rule regulating the unlawful influence

2-14     of a race; or

2-15                       (B)  a device specifically designed, made, or

2-16     adapted to influence or affect the outcome of a race in a manner

2-17     contrary to this Act or a commission rule.

2-18                 (72)  "Prohibited substance" means a drug, chemical, or

2-19     other substance that:

2-20                       (A)  in its use or intended use, is reasonably

2-21     capable of influencing or affecting the outcome of a race in a

2-22     manner contrary to this Act or a commission rule; and

2-23                       (B)  is prohibited by a commission rule

2-24     regulating the unlawful influence of a race.

2-25                 (73)  "Unlawful touting" means an offense described by

2-26     Section 14.01 of this Act or a similar offense under the laws of

2-27     another state.

 3-1                 (74)  "Race" includes a live audio and visual signal of

 3-2     a race.

 3-3                 (75)  "Outstanding ticket" means a pari-mutuel ticket

 3-4     not presented for payment before the end of the greyhound racing or

 3-5     horse racing day for which the ticket was purchased.

 3-6                 (76)  "Pari-mutuel voucher" means a bearer instrument

 3-7     issued by a pari-mutuel wagering machine that represents money

 3-8     owned by a wagering patron and held by an association, including

 3-9     winnings from a pari-mutuel wager.

3-10                 (77)  "Horsemen's organization" means an organization

3-11     recognized by the commission that represents horse owners and

3-12     trainers in negotiating and contracting with associations on

3-13     subjects relating to racing and in representing and advocating the

3-14     interests of horse owners and trainers before administrative,

3-15     legislative, and judicial forums.

3-16                 (78)  "Cross-species simulcast signal" means a

3-17     simulcast signal of a horse race at a greyhound racetrack facility

3-18     or a simulcast signal of a greyhound race at a horse racetrack

3-19     facility.

3-20           SECTION 3.  Sections 2.02(a) and (b), Texas Racing Act

3-21     (Article 179e, Vernon's Texas Civil Statutes), are amended to read

3-22     as follows:

3-23           (a)  The commission consists of six members appointed by the

3-24     governor with the advice and consent of the senate and two ex

3-25     officio members who shall have the right to vote.  The ex officio

3-26     members are:

3-27                 (1)  the chairman of the Public Safety Commission or a

 4-1     member of the Public Safety Commission designated by the chairman

 4-2     of the Public Safety Commission; and

 4-3                 (2)  the comptroller of public accounts or the

 4-4     comptroller's designee.  [In making appointments to the commission,

 4-5     the governor shall strive to achieve representation by all the

 4-6     population groups of the state with regard to economic status, sex,

 4-7     race, and ethnicity.]

 4-8           (b)  Appointments to the commission shall be made without

 4-9     regard to the race, color, disability, sex, religion, age, or

4-10     national origin of the appointees.  [One appointed member must be a

4-11     veterinarian licensed to practice in this state who specializes in

4-12     the treatment of small animals.  One appointed member must be a

4-13     veterinarian licensed to practice in this state who specializes in

4-14     the treatment of large animals.  Two appointed members must be

4-15     individuals who are not veterinarians and who have special

4-16     knowledge or experience related to greyhound racing.  Two appointed

4-17     members must be individuals who are not veterinarians and who have

4-18     special knowledge or experience related to horse racing.]

4-19           SECTION 4.  Section 2.03, Texas Racing Act (Article 179e,

4-20     Vernon's Texas Civil Statutes), is amended to read as follows:

4-21           Sec. 2.03.  Term of office.  (a)  Appointed [Except for the

4-22     initial appointments, appointed] members hold office for staggered

4-23     terms of six years with two members' terms expiring February 1 of

4-24     each odd-numbered year.  A member holds office until that member's

4-25     successor is appointed and qualifies.

4-26           (b)  [In making the initial appointments, the governor shall

4-27     designate two appointed members for a term expiring February 1,

 5-1     1989, two for a term expiring February 1, 1991, and two for a term

 5-2     expiring February 1, 1993.  The governor shall make the initial

 5-3     appointments on or before February 1, 1987.]

 5-4           [(c)]  The ex officio members hold office on the commission

 5-5     for the time for which they hold their other offices.

 5-6           SECTION 5.  Section 2.05, Texas Racing Act (Article 179e,

 5-7     Vernon's Texas Civil Statutes), is amended to read as follows:

 5-8           Sec. 2.05.  Eligibility.  (a)  Four of the appointed members

 5-9     of the commission must be representatives of the general public and

5-10     have general knowledge of business or agribusiness.  One additional

5-11     appointed member must have special knowledge or experience related

5-12     to greyhound racing and one additional appointed member must have

5-13     special knowledge or experience related to horse racing.  A person

5-14     is not eligible for appointment as a member of the commission if

5-15     the person or the person's spouse:

5-16                 (1)  is licensed by the commission, except as a

5-17     commissioner;

5-18                 (2)  is employed by the commission or participates in

5-19     the management of a business entity or other organization regulated

5-20     by the commission or receiving funds from or through the

5-21     commission;

5-22                 (3)  owns or controls, directly or indirectly, more

5-23     than a 10 percent interest in a business entity or other

5-24     organization regulated by the commission or receiving funds from or

5-25     through the commission; or

5-26                 (4)  uses or receives a substantial amount of tangible

5-27     goods, services, or funds from or through the commission, other

 6-1     than compensation or reimbursement authorized by law for commission

 6-2     membership, attendance, or expenses.

 6-3           (b)  In addition to the eligibility requirements of

 6-4     Subsection (a), a [A] person is not eligible to be an appointed

 6-5     member of the commission if that person owns any financial interest

 6-6     in a racetrack or its operation or if that person is related within

 6-7     the second degree by affinity or the third degree by consanguinity,

 6-8     as determined under Subchapter B, Chapter 573, Government Code

 6-9     [Article 5996h, Revised Statutes], to a person who owns any

6-10     financial interest in a racetrack or its operation.

6-11           (c)  Each person appointed to or employed by the commission

6-12     is subject to all background checks and qualification criteria

6-13     required to hold a racetrack license or other license under this

6-14     Act.

6-15           (d)  A person who has been convicted of a felony or of any

6-16     crime involving moral turpitude is not eligible for appointment to

6-17     the commission.

6-18           SECTION 6.  Article 2, Texas Racing Act (Article 179e,

6-19     Vernon's Texas Civil Statutes), is amended by adding Sections

6-20     2.071-2.074 to read as follows:

6-21           Sec. 2.071.  CONFLICT OF INTEREST.  (a)  An officer,

6-22     employee, or paid consultant of a Texas trade association in the

6-23     field of horse or greyhound racing or breeding may not be a member

6-24     of the commission or an employee of the commission who is exempt

6-25     from the state's position classification plan or is compensated at

6-26     or above the amount prescribed by the General Appropriations Act

6-27     for step 1, salary group 17, of the position classification salary

 7-1     schedule.

 7-2           (b)  A person who is the spouse of an officer, manager, or

 7-3     paid consultant of a Texas trade association in the field of horse

 7-4     or greyhound racing or breeding may not be a member of the

 7-5     commission and may not be an employee of the commission who is

 7-6     exempt from the state's position classification plan or is

 7-7     compensated at or above the amount prescribed by the General

 7-8     Appropriations Act for step 1, salary group 17, of the position

 7-9     classification salary schedule.

7-10           (c)  For the purposes of this section, a Texas trade

7-11     association is a nonprofit association of business or professional

7-12     competitors in this state designed to assist its members and its

7-13     industry or profession in dealing with mutual business or

7-14     professional problems and in promoting their common interest.

7-15           Sec. 2.072.  LOBBYIST RESTRICTION.  A person may not serve as

7-16     a member of the commission or act as the general counsel to the

7-17     commission if the person is required to register as a lobbyist

7-18     under Chapter 305, Government Code, because of the person's

7-19     activities for compensation on behalf of a profession related to

7-20     the operation of the commission.

7-21           Sec. 2.073.  GROUNDS FOR REMOVAL.  (a)  It is a ground for

7-22     removal from the commission if a member:

7-23                 (1)  does not have at the time of appointment the

7-24     qualifications required by Section 2.02, 2.04, or 2.05 of this Act;

7-25                 (2)  does not maintain during service on the commission

7-26     the qualifications required by Section 2.02 or 2.05 of this Act;

7-27                 (3)  violates a prohibition established by Section

 8-1     2.05, 2.071, or 2.072 of this Act;

 8-2                 (4)  cannot because of illness or disability discharge

 8-3     the member's duties for a substantial part of the term for which

 8-4     the member is appointed; or

 8-5                 (5)  is absent from more than half of the regularly

 8-6     scheduled commission meetings that the member is eligible to attend

 8-7     during a calendar year.

 8-8           (b)  The validity of an action of the commission is not

 8-9     affected by the fact that it is taken when a ground for removal of

8-10     a commission member exists.

8-11           (c)  If the executive secretary has knowledge that a

8-12     potential ground for removal exists, the executive secretary shall

8-13     notify the presiding officer of the commission of the potential

8-14     ground.  The presiding officer shall then notify the governor and

8-15     the attorney general that a potential ground for removal exists.

8-16     If the potential ground for removal involves the presiding officer,

8-17     the executive secretary shall notify the next highest officer of

8-18     the commission, who shall notify the governor and the attorney

8-19     general that a potential ground for removal exists.

8-20           Sec. 2.074.  MEMBER TRAINING.  (a)  To be eligible to take

8-21     office as a member of the commission, a person appointed to the

8-22     commission must complete at least one course of a training program

8-23     that complies with this section.

8-24           (b)  The training program must provide information to the

8-25     person regarding:

8-26                 (1)  the enabling legislation that created the

8-27     commission;

 9-1                 (2)  the programs operated by the commission;

 9-2                 (3)  the role and functions of the commission;

 9-3                 (4)  the rules of the commission with an emphasis on

 9-4     the rules that relate to disciplinary and investigatory authority;

 9-5                 (5)  the current budget for the commission;

 9-6                 (6)  the results of the most recent formal audit of the

 9-7     commission;

 9-8                 (7)  the requirements of the:

 9-9                       (A)  open meetings law, Chapter 551, Government

9-10     Code;

9-11                       (B)  open records law, Chapter 552, Government

9-12     Code; and

9-13                       (C)  administrative procedure law, Chapter 2001,

9-14     Government Code;

9-15                 (8)  the requirements of the conflict of interests laws

9-16     and other laws relating to public officials; and

9-17                 (9)  any applicable ethics policies adopted by the

9-18     commission or the Texas Ethics Commission.

9-19           (c)  A person appointed to the commission is entitled to

9-20     reimbursement for travel expenses incurred in attending the

9-21     training program, as provided by the General Appropriations Act and

9-22     as if the person were a member of the commission.

9-23           SECTION 7.  Section 2.10, Texas Racing Act (Article 179e,

9-24     Vernon's Texas Civil Statutes), is amended to read as follows:

9-25           Sec. 2.10.  PRESIDING OFFICER [CHAIRMAN].  The governor shall

9-26     designate a public [one] member of the commission as the presiding

9-27     officer [chairman] of the commission to serve in that capacity at

 10-1    the pleasure of the governor.

 10-2          SECTION 8.  Section 2.11, Texas Racing Act (Article 179e,

 10-3    Vernon's Texas Civil Statutes), is amended by amending Subsection

 10-4    (b) and adding Subsection (d) to read as follows:

 10-5          (b)  A majority of the commission constitutes a quorum.  [A

 10-6    majority of a section of the commission constitutes a quorum for

 10-7    purposes of conducting business related to matters under the

 10-8    exclusive jurisdiction of that section.]

 10-9          (d)  The commission shall, by rule, develop and implement

10-10    policies that provide the public with a reasonable opportunity to

10-11    appear before the commission and to speak on any issue under the

10-12    jurisdiction of the commission.

10-13          SECTION 9.  Sections 2.12(b) and (c), Texas Racing Act

10-14    (Article 179e, Vernon's Texas Civil Statutes), are amended to read

10-15    as follows:

10-16          (b)  The commission may not employ or continue to employ a

10-17    person:

10-18                (1)  who owns or controls a financial interest in a

10-19    licensee of the commission [racetrack or its operation];

10-20                (2)  who is employed by or serves as a paid consultant

10-21    to a licensee of the commission, an official breed registry, or a

10-22    Texas trade association, as defined by Section 2.071(c) of this

10-23    Act, in the field of horse or greyhound racing or breeding [accepts

10-24    any remuneration from a racetrack];

10-25                (3)  who owns or leases a race animal that participates

10-26    in pari-mutuel racing [is an owner, lessor, or lessee of a

10-27    greyhound or a horse that is entered in a race] in this state; or

 11-1                (4)  who accepts or is entitled to any part of the

 11-2    purse or Texas-bred incentive award [purse supplement] to be paid

 11-3    on a greyhound or a horse in a race conducted in this state.

 11-4          (c)  The commission may not employ or continue to employ a

 11-5    person who is residentially domiciled with or related within the

 11-6    first [second] degree by affinity or [the third degree by]

 11-7    consanguinity to a person who is subject to a disqualification

 11-8    prescribed by Subsection (b) of this section.

 11-9          SECTION 10.  Article 2, Texas Racing Act (Article 179e,

11-10    Vernon's Texas Civil Statutes), is amended by adding Sections

11-11    2.17-2.24 to read as follows:

11-12          Sec. 2.17.  ANNUAL ACCOUNTING.  The commission shall prepare

11-13    annually a complete and detailed written report accounting for all

11-14    funds received and disbursed by the commission during the preceding

11-15    fiscal year.  The annual report must meet the reporting

11-16    requirements applicable to financial reporting provided in the

11-17    General Appropriations Act.

11-18          Sec. 2.18.  FUNDS PAID TO COMMISSION.  All money paid to the

11-19    commission under this Act is subject to Subchapter F, Chapter 404,

11-20    Government Code.

11-21          Sec. 2.19.  EMPLOYMENT PRACTICES.  (a)  The executive

11-22    secretary or the executive secretary's designee shall develop an

11-23    intra-agency career ladder program that addresses opportunities for

11-24    mobility and advancement for employees within the commission.  The

11-25    program shall require intra-agency posting of all positions

11-26    concurrently with any public posting.

11-27          (b)  The executive secretary or the executive secretary's

 12-1    designee shall develop a system of annual performance evaluations

 12-2    that are based on documented employee performance.  All merit pay

 12-3    for commission employees must be based on the system established

 12-4    under this subsection.

 12-5          (c)  The executive secretary or the executive secretary's

 12-6    designee shall prepare and maintain a written policy statement to

 12-7    assure implementation of a program of equal employment opportunity

 12-8    under which all personnel transactions are made without regard to

 12-9    race, color, disability, sex, religion, age, or national origin.

12-10    The policy statement must include:

12-11                (1)  personnel policies, including policies relating to

12-12    recruitment, evaluation, selection, appointment, training, and

12-13    promotion of personnel that are in compliance with the requirements

12-14    of Chapter 21, Labor Code;

12-15                (2)  a comprehensive analysis of the commission

12-16    workforce that meets federal and state laws, rules, regulations,

12-17    and instructions directly promulgated from those laws, rules, and

12-18    regulations;

12-19                (3)  procedures by which a determination can be made

12-20    about the extent of underuse in the commission workforce of all

12-21    persons for whom federal or state laws, rules, regulations, and

12-22    instructions directly promulgated from those laws, rules, and

12-23    regulations encourage a more equitable balance; and

12-24                (4)  reasonable methods to appropriately address those

12-25    areas of underuse.

12-26          (d)  A policy statement prepared under Subsection (c) of this

12-27    section must cover an annual period, be updated annually and

 13-1    reviewed by the Texas Commission on Human Rights for compliance

 13-2    with Subsection (c)(1) of this section, and be filed with the

 13-3    governor's office.

 13-4          (e)  The governor's office shall deliver a biennial report to

 13-5    the legislature based on the information received under Subsection

 13-6    (d) of this section.  The report may be made separately or as a

 13-7    part of other biennial reports made to the legislature.

 13-8          Sec. 2.20.  STANDARDS OF CONDUCT.  The executive secretary or

 13-9    the executive secretary's designee shall provide to members of the

13-10    commission and to agency employees, as often as necessary,

13-11    information regarding their qualification for office or employment

13-12    under this Act and their responsibilities under applicable laws

13-13    relating to standards of conduct for state officers or employees.

13-14          Sec. 2.21.  DIVISION OF RESPONSIBILITY.  The commission

13-15    shall, by rule, develop and implement policies that clearly

13-16    separate the policymaking responsibilities of the commission and

13-17    the management responsibilities of the executive secretary and the

13-18    staff of the commission.

13-19          Sec. 2.22.  PROGRAM AND FACILITY ACCESSIBILITY.  The

13-20    commission shall comply with federal and state laws related to

13-21    program and facility accessibility.  The executive secretary shall

13-22    also prepare and maintain a written plan that describes how a

13-23    person who does not speak English can be provided reasonable access

13-24    to the commission's programs and services.

13-25          Sec. 2.23.  INFORMATION TO PUBLIC.  (a)  The commission shall

13-26    prepare information of public interest describing the functions of

13-27    the commission and the procedures by which complaints are filed

 14-1    with and resolved by the commission.  The commission shall make the

 14-2    information available to the public and appropriate state agencies.

 14-3          (b)  The commission by rule shall establish methods by which

 14-4    racetrack patrons are notified of the name, mailing address, and

 14-5    telephone number of the commission for the purpose of directing

 14-6    complaints to the commission.  The commission may provide for that

 14-7    notification:

 14-8                (1)  on every race performance program provided by each

 14-9    racetrack association; or

14-10                (2)  on signs prominently displayed in the common

14-11    public areas on the premises of each racetrack association.

14-12          Sec. 2.24.  COMPLAINT HANDLING.  (a)  The commission shall

14-13    keep information about each complaint filed with the commission.

14-14    The information shall include:

14-15                (1)  the date the complaint is received;

14-16                (2)  the name of the complainant;

14-17                (3)  the subject matter of the complaint;

14-18                (4)  a record of all persons contacted in relation to

14-19    the complaint;

14-20                (5)  a summary of the results of the review or

14-21    investigation of the complaint; and

14-22                (6)  for complaints for which the agency took no

14-23    action, an explanation of the reason the complaint was closed

14-24    without action.

14-25          (b)  The commission shall keep a file about each written

14-26    complaint filed with the commission that the agency has authority

14-27    to resolve.  The commission shall provide to the person filing the

 15-1    complaint and the persons or entities complained about the

 15-2    commission's policies and procedures pertaining to complaint

 15-3    investigation and resolution.  The commission, at least quarterly

 15-4    and until final disposition of the complaint, shall notify the

 15-5    person filing the complaint and the persons or entities complained

 15-6    about of the status of the complaint unless the notice would

 15-7    jeopardize an undercover investigation.

 15-8          SECTION 11.  Section 3.02, Texas Racing Act (Article 179e,

 15-9    Vernon's Texas Civil Statutes), is amended to read as follows:

15-10          Sec. 3.02.  Regulation and supervision.  (a)  The [In

15-11    accordance with Section 3.01 of this Act, the] commission shall

15-12    regulate and supervise every race meeting in this state involving

15-13    wagering on the result of greyhound or horse racing.  All persons

15-14    and things relating to the operation of those meetings are subject

15-15    to regulation and supervision by the commission.  The commission

15-16    shall adopt rules for conducting greyhound or horse racing in this

15-17    state involving wagering and shall adopt other rules to administer

15-18    this Act that are consistent with this Act.  The commission shall

15-19    also make rules, issue licenses, and take any other necessary

15-20    action relating exclusively to horse racing or to greyhound racing.

15-21          (b)  The commission may establish separate sections to review

15-22    or propose rules of the commission.

15-23          (c)  The commission or a section of the commission shall hold

15-24    a meeting on any proposed rule before the commission publishes the

15-25    proposed rule in the Texas Register.

15-26          (d)  The commission shall post notice of a meeting under

15-27    Subsection (c) of this section at each racetrack facility.  The

 16-1    notice shall include an agenda of the meeting and a summary of the

 16-2    proposed rule.

 16-3          (e)  A copy of a proposed rule published in the Texas

 16-4    Register shall also be posted concurrently at each racetrack

 16-5    facility.

 16-6          (f)  The commission or a section of the commission may

 16-7    appoint a committee of experts, members of the public, or other

 16-8    interested parties to advise the commission or section of the

 16-9    commission about a proposed rule of the commission.

16-10          (g)  The commission, in adopting rules and in the supervision

16-11    and conduct of racing, shall consider the effect of a proposed

16-12    commission action on the state's agricultural, horse breeding,

16-13    horse training, greyhound breeding, and greyhound training

16-14    industry.

16-15          SECTION 12.  Section 3.021, Texas Racing Act (Article 179e,

16-16    Vernon's Texas Civil Statutes), is amended by amending Subsection

16-17    (b) and adding Subsection (d) to read as follows:

16-18          (b)  To protect the health, safety, and welfare of race

16-19    animals and participants in racing, to safeguard the interest of

16-20    the general public, and to promote the orderly [growth and] conduct

16-21    of racing within the state, the commission may adopt rules for the

16-22    licensing and regulation of races and workouts at racetracks that

16-23    do not offer pari-mutuel wagering and for workouts at training

16-24    facilities to secure past performances and workouts.

16-25          (d)  The commission may not adopt rules restricting

16-26    competitive bidding or advertising by a licensee except to prohibit

16-27    false, misleading, or deceptive practices.  In its rules to

 17-1    prohibit false, misleading, or deceptive practices, the commission

 17-2    may not include a rule that:

 17-3                (1)  restricts the use of any medium for advertising;

 17-4                (2)  restricts the use of a licensee's personal

 17-5    appearance or voice in an advertisement;

 17-6                (3)  relates to the size or duration of an

 17-7    advertisement by the licensee; or

 17-8                (4)  restricts the licensee's advertisement under a

 17-9    trade name.

17-10          SECTION 13.  Section 3.03, Texas Racing Act (Article 179e,

17-11    Vernon's Texas Civil Statutes), is amended to read as follows:

17-12          Sec. 3.03.  Power of entry.  A member of the commission, an

17-13    authorized agent of the commission, a commissioned officer of the

17-14    Department of Public Safety, or a peace officer of the local

17-15    jurisdiction in which the association maintains a place of business

17-16    may enter any part of the racetrack facility [the office,

17-17    racetrack,] or any other place of business of an association at any

17-18    time for the purpose of enforcing and administering this Act.

17-19          SECTION 14.  Sections 3.07(a), (b), (d), and (e), Texas

17-20    Racing Act (Article 179e, Vernon's Texas Civil Statutes), are

17-21    amended to read as follows:

17-22          (a)  The commission shall employ all of the judges and all of

17-23    the stewards for the supervision of a horse race or greyhound race

17-24    meeting.  Each horse race or greyhound race meeting shall be

17-25    supervised by three stewards [approved by the commission] for horse

17-26    racing or by three judges [approved by the commission] for

17-27    greyhound racing. The commission shall designate one of the

 18-1    stewards or judges as the presiding steward or judge for each race

 18-2    meeting.  The association, following the completion of the race

 18-3    meeting, may submit written comments to the commission regarding

 18-4    the job performance of the stewards and judges for the commission's

 18-5    review.  Comments received are not binding, in any way, on the

 18-6    commission.  [The commission shall employ one of the stewards who

 18-7    supervises a horse race meeting who shall be the presiding steward.

 18-8    The other stewards at the race meeting shall be compensated by the

 18-9    association.  The commission shall employ one of the judges who

18-10    supervises a greyhound race meeting who shall be the presiding

18-11    judge; the other judges at such a race meeting shall be compensated

18-12    by the association.]  For each race meeting, the commission shall

18-13    employ [appoint] at least one state veterinarian [who shall be

18-14    compensated by the commission.  The commission by rule shall

18-15    determine the amount of compensation for stewards, judges, and

18-16    state veterinarians who are required to be compensated by the

18-17    commission].  The commission may, by rule, impose a fee on an

18-18    association to offset the costs of compensating the [racetrack]

18-19    stewards, judges, and state veterinarians [for that association].

18-20    The amount of the fee for the compensation of stewards, judges, and

18-21    state veterinarians must be reasonable according to industry

18-22    standards for the compensation of those officials at other

18-23    racetracks and may not exceed the actual cost to the commission for

18-24    compensating the officials.  All other racetrack officials shall be

18-25    appointed by the association, with the approval of the commission.

18-26    Compensation for those officials not compensated by the commission

18-27    shall be determined by the association.

 19-1          (b)  The commission shall make rules specifying the authority

 19-2    and the duties of each official, including the power of stewards or

 19-3    judges to impose penalties for unethical practices or violations of

 19-4    racing rules.  A penalty imposed by the stewards or judges may

 19-5    include a fine of not more than $5,000, a suspension for not more

 19-6    than one year, or both a fine and suspension.  Before imposing a

 19-7    penalty under this subsection, the stewards and judges shall

 19-8    conduct a hearing that is consistent with constitutional due

 19-9    process.  A hearing conducted by a steward or judge under this

19-10    subsection is not subject to Chapter 2001, Government Code.  If, in

19-11    the opinion of the stewards or judges, the allowable penalties are

19-12    not sufficient, the stewards or judges may refer the case to the

19-13    commission for further action.

19-14          (d)  Medication or drug testing performed on a race animal

19-15    under [Section 14.03 of] this Act shall be conducted by a

19-16    laboratory selected by the commission on a yearly basis by

19-17    competitive bidding submitted to the commission for final approval.

19-18    The commission's decision shall be based on cost and integrity.

19-19    The Texas Veterinary Medical Diagnostic Laboratory may aid the

19-20    commission in its selection [either by the Texas Veterinary Medical

19-21    Diagnostic Laboratory or in conjunction with or by a private or

19-22    public agency that is approved by the commission and by the Texas

19-23    Veterinary Medical Diagnostic Laboratory].  Medication or drug

19-24    testing performed on a human under [Section 14.03 of] this Act

19-25    shall be conducted by a laboratory approved by the commission.

19-26    Charges for services performed under this section shall be

19-27    forwarded to the commission for approval as to the reasonableness

 20-1    of the charges for the services.  Charges may include but are not

 20-2    limited to expenses incurred for travel, lodging, testing, and

 20-3    processing of test results.  The reasonable charges associated with

 20-4    medication or drug testing conducted under this Act shall be paid

 20-5    by the association that receives the services. The commission shall

 20-6    adopt rules for the procedures for approving and paying laboratory

 20-7    charges under this section.  On the approval of the charges as

 20-8    reasonable, in relation to industry standards for testing charges,

 20-9    the commission shall forward a copy of the charges to the

20-10    association that receives the services for immediate payment.

20-11          (e)  To pay the charges associated with the medication or

20-12    drug testing, an association may use the money held [retained] by

20-13    the association to pay outstanding tickets and pari-mutuel vouchers

20-14    [on tickets that are purchased as wagers on horses or greyhounds

20-15    and that are not cashed by the holders of the tickets].  If

20-16    additional amounts are needed to pay the charges, the association

20-17    shall pay those additional amounts.  If the amount held [retained]

20-18    exceeds the amount needed to pay the charges, the association shall

20-19    pay the excess to the commission in accordance with Section 11.08

20-20    of this Act.

20-21          SECTION 15.  Section 3.08(b), Texas Racing Act (Article 179e,

20-22    Vernon's Texas Civil Statutes), is amended to read as follows:

20-23          (b)  A [In determining the distribution to holders of winning

20-24    tickets in a pari-mutuel pool, a] decision of the stewards or

20-25    judges on a disqualification for a foul in a race or on a finding

20-26    of fact regarding the running of a race is final and may not be

20-27    appealed.

 21-1          SECTION 16.  Article 3, Texas Racing Act (Article 179e,

 21-2    Vernon's Texas Civil Statutes), is amended by adding Sections

 21-3    3.13-3.22 to read as follows:

 21-4          Sec. 3.13.  RECOGNITION OF ORGANIZATION.  (a)  The commission

 21-5    by rule shall adopt criteria to recognize an organization to

 21-6    represent members of a segment of the racing industry, including

 21-7    owners, breeders, trainers, kennel operators, or other persons

 21-8    involved in the racing industry, in any interaction between the

 21-9    members of the organization and an association or the commission.

21-10          (b)  The commission may recognize an organization that meets

21-11    the requirements of Subsection (a) of this section.

21-12          Sec. 3.14.  DISCIPLINARY ACTIONS.  The commission shall

21-13    revoke, suspend, or refuse to renew a license, place on probation a

21-14    person whose license has been suspended, or reprimand a licensee

21-15    for a violation of this Act or a rule of the commission.  If a

21-16    license suspension is probated, the commission may require the

21-17    licensee to report regularly to the commission on matters that are

21-18    the basis of the probation.

21-19          Sec. 3.15.  HEARING REQUIREMENTS.  If the commission proposes

21-20    to suspend, revoke, or refuse to renew a person's license, the

21-21    person is entitled to a hearing conducted by the State Office of

21-22    Administrative Hearings.  Proceedings for a disciplinary action,

21-23    other than those conducted by racing stewards or judges, are

21-24    governed by Chapter 2001, Government Code.  Rules of practice

21-25    adopted by the commission under Section 2001.004, Government Code,

21-26    applicable to the proceedings for a disciplinary action, other than

21-27    those conducted by racing stewards or judges, may not conflict with

 22-1    rules adopted by the State Office of Administrative Hearings.

 22-2          Sec. 3.16.  RULES RELATING TO UNLAWFUL INFLUENCES ON RACING.

 22-3    (a)  The commission shall adopt rules prohibiting a person from

 22-4    unlawfully influencing or affecting the outcome of a race,

 22-5    including rules relating to the use of a prohibited device or

 22-6    prohibited substance at a racetrack or training facility.

 22-7          (b)  The commission may require prerace testing and shall

 22-8    require postrace testing to determine whether a prohibited

 22-9    substance has been used. The testing may be by an invasive or

22-10    noninvasive method. The commission's rules shall require

22-11    state-of-the-art testing methods.

22-12          (c)  Following the discovery of a prohibited device or a

22-13    return of a test showing the presence of a prohibited substance, a

22-14    steward or judge may summarily suspend a person who has used or

22-15    administered the prohibited device or prohibited substance until a

22-16    hearing before the stewards and judges. The steward or judge may

22-17    also disqualify an animal as provided by a commission rule adopted

22-18    under this section.

22-19          (d)  Except as otherwise provided, a person may appeal a

22-20    ruling of the stewards or judges to the commission. The commission

22-21    may stay a suspension during the period the matter is before the

22-22    commission.

22-23          (e)  The commission may require urine samples to be frozen

22-24    for a period necessary to allow any follow-up testing to detect and

22-25    identify  a prohibited substance. Any other specimen shall be

22-26    maintained for testing purposes in a manner required by commission

22-27    rule.

 23-1          (f)  If a test sample or specimen shows the presence of a

 23-2    prohibited substance, the entire sample, including any split

 23-3    portion remaining in the custody of the commission, shall be

 23-4    maintained until final disposition of the matter.

 23-5          (g)  A licensee whose animal test shows the presence of a

 23-6    prohibited substance is entitled to have a split portion of the

 23-7    test sample or specimen tested at a testing facility authorized to

 23-8    perform drug testing under this Act and selected by the licensee.

 23-9    The commission shall adopt rules relating to split testing

23-10    procedures.

23-11          (h)  The licensed trainer of an animal is:

23-12                (1)  considered by law to be the absolute ensurer that

23-13    no prohibited substance has been administered to the animal; and

23-14                (2)  responsible for ensuring that no prohibited

23-15    substance is administered to the animal.

23-16          (i)  The commission shall adopt rules relating to the drug

23-17    testing of licensees.

23-18          (j)  A person who violates a rule adopted under this section

23-19    may:

23-20                (1)  have any license issued to the person by the

23-21    commission revoked or suspended; or

23-22                (2)  be barred for life or any other period from

23-23    applying for or receiving a license issued by the commission or

23-24    entering any portion of a racetrack facility.

23-25          Sec. 3.17.  SECURITY FOR FEES AND CHARGES.  The commission

23-26    may require an association to post security in an amount and form

23-27    determined by the commission to adequately ensure the payment of

 24-1    any fees or charges due to the state or the commission relating to

 24-2    pari-mutuel racing, including charges for drug testing.

 24-3          Sec. 3.18.  CEASE AND DESIST ORDER.  (a)  The executive

 24-4    secretary may issue a cease and desist order if the executive

 24-5    secretary reasonably believes an association or other licensee is

 24-6    engaging or is likely to engage in conduct that violates this Act

 24-7    or a commission rule.

 24-8          (b)  On issuance of a cease and desist order, the executive

 24-9    secretary shall serve on the association or other licensee by

24-10    personal  delivery or registered or certified mail, return receipt

24-11    requested, to the person's last known address, a proposed cease and

24-12    desist order.  The proposed order must state the specific acts or

24-13    practices alleged to violate this Act or a commission rule.  The

24-14    proposed order must state its effective date. The effective date

24-15    may not be before the 21st day after the date the proposed order is

24-16    mailed or delivered.  If the person against whom the proposed order

24-17    is directed requests, in writing, a hearing before the effective

24-18    date of the proposed order, the order is automatically stayed

24-19    pending final adjudication of the order.  Unless the person against

24-20    whom the proposed order is directed requests, in writing, a hearing

24-21    before the effective date of the proposed order, the order takes

24-22    effect and is final and nonappealable as to that person.

24-23          (c)  On receiving a request for a hearing, the executive

24-24    secretary shall serve notice of the time and place of the hearing

24-25    by personal delivery or registered or certified mail, return

24-26    receipt requested.  At a hearing, the commission has the burden of

24-27    proof and must present evidence in support of the order.  Each

 25-1    person against whom the order is directed may cross-examine and

 25-2    show cause why the order should not be issued.

 25-3          (d)  After the hearing, the commission shall issue or decline

 25-4    to issue a cease and desist order.  The proposed order may be

 25-5    modified as necessary to conform to the findings at the hearing.

 25-6    An order issued under this section is final for purposes of

 25-7    enforcement and appeal and shall require the person to immediately

 25-8    cease and desist from the conduct that violates this Act or a

 25-9    commission rule.

25-10          (e)  A person affected by a cease and desist order issued,

25-11    affirmed, or modified after a hearing may file a petition for

25-12    judicial review in a district court of Travis County under Chapter

25-13    2001, Government Code.  A petition for judicial review does not

25-14    stay or vacate the order unless the court, after hearing,

25-15    specifically stays or vacates the order.

25-16          Sec. 3.19.  EMERGENCY CEASE AND DESIST ORDER.  (a)  The

25-17    executive secretary may issue an emergency cease and desist order

25-18    if the executive secretary reasonably believes an association or

25-19    other licensee is engaged in a continuing activity that violates

25-20    this Act or a commission rule in a manner that threatens immediate

25-21    and irreparable public harm.

25-22          (b)  After issuing an emergency cease and desist order, the

25-23    executive secretary shall serve on the association or other

25-24    licensee by personal delivery or registered or certified mail,

25-25    return receipt requested, to the person's last known address, an

25-26    order stating the specific charges and requiring the person

25-27    immediately to cease and desist from the conduct that violates this

 26-1    Act or a commission rule.  The order must contain a notice that a

 26-2    request for hearing may be filed under this section.

 26-3          (c)  An association or other licensee that is the subject of

 26-4    an emergency cease and desist order may request a hearing. The

 26-5    request must be filed with the executive secretary not later than

 26-6    the 10th day after the date the order was received or delivered.  A

 26-7    request for a hearing must be in writing and directed to the

 26-8    executive secretary and must state the grounds for the request to

 26-9    set aside or modify the order.  Unless a person who is the subject

26-10    of the emergency order requests a hearing in writing before the

26-11    11th day after the date the order is received or delivered, the

26-12    emergency order is final and nonappealable as to that person.

26-13          (d)  On receiving a request for a hearing, the executive

26-14    secretary shall serve notice of the time and place of the hearing

26-15    by personal delivery or registered or certified mail, return

26-16    receipt requested.  The hearing must be held not later than the

26-17    10th day after the date the executive secretary receives the

26-18    request for a hearing unless the parties agree to a later hearing

26-19    date.  At the hearing, the commission has the burden of proof and

26-20    must present evidence in support of the order.  The person

26-21    requesting the hearing may cross-examine witnesses and show cause

26-22    why the order should not be affirmed.  Section 2003.021(b),

26-23    Government Code, does not apply to hearings conducted under this

26-24    section.

26-25          (e)  An emergency cease and desist order continues in effect

26-26    unless the order is stayed by the executive secretary.  The

26-27    executive secretary may impose any condition before granting a stay

 27-1    of the order.

 27-2          (f)  After the hearing, the executive secretary shall affirm,

 27-3    modify, or set aside in whole or part the emergency cease and

 27-4    desist order.  An order affirming or modifying the emergency cease

 27-5    and desist order is final for purposes of enforcement and appeal.

 27-6          Sec. 3.20.  VIOLATION OF FINAL CEASE AND DESIST ORDER.  (a)

 27-7    If the executive secretary reasonably believes that a person has

 27-8    violated a final and enforceable cease and desist order, the

 27-9    executive secretary may:

27-10                (1)  initiate administrative penalty proceedings under

27-11    Article 15 of this Act;

27-12                (2)  refer the matter to the attorney general for

27-13    enforcement by injunction and any other available remedy; or

27-14                (3)  pursue any other action, including suspension of

27-15    the person's license, that the executive secretary considers

27-16    appropriate.

27-17          (b)  If the attorney general prevails in an action brought

27-18    under Subsection (a)(2) of this section, the attorney general is

27-19    entitled to recover reasonable attorney's fees.

27-20          Sec. 3.21.  INJUNCTION.  The commission may institute an

27-21    action in its own name to enjoin the violation of this Act.  An

27-22    action for an injunction is in addition to any other action,

27-23    proceeding, or remedy authorized by law.

27-24          Sec. 3.22.  ENFORCEMENT REGARDING HORSEMEN'S ACCOUNT.  (a)

27-25    The commission, by rule, shall develop a system for monitoring the

27-26    activities of managers and employees of an association relating to

27-27    the horsemen's account. The monitoring system may include review of

 28-1    the financial operations of the association, including inspections

 28-2    of records at the association's offices, at any racetrack, or at

 28-3    any other place the association transacts business.

 28-4          (b)  The executive secretary may issue an order prohibiting

 28-5    the association from making any transfer from a bank account held

 28-6    by the association for the conduct of its business under this Act,

 28-7    pending commission review of the records of the account, if the

 28-8    executive secretary reasonably believes that the association has

 28-9    failed to maintain the proper amount of money in the horsemen's

28-10    account.  The executive secretary shall provide in the order a

28-11    procedure for the association to pay certain expenses necessary for

28-12    the operation of the racetrack, subject to the executive

28-13    secretary's  approval.  An order issued under this section may be

28-14    made valid for a period not to exceed 14 days.

28-15          (c)  The executive secretary may issue an order requiring the

28-16    appropriate transfers to or from the horsemen's account if, after

28-17    reviewing the association's records of its bank accounts, the

28-18    executive secretary determines there is an improper amount of money

28-19    in the horsemen's account.

28-20          SECTION 17.  Section 5.01(a), Texas Racing Act (Article 179e,

28-21    Vernon's Texas Civil Statutes), is amended to read as follows:

28-22          (a)  The commission shall prescribe forms for applications

28-23    for licenses and shall provide each occupational licensee with a

28-24    license certificate or credentials.

28-25          SECTION 18.  Sections 5.03(a) and (b), Texas Racing Act

28-26    (Article 179e, Vernon's Texas Civil Statutes), are amended to read

28-27    as follows:

 29-1          (a)  An applicant for any license under this Act must, except

 29-2    as allowed under Section 7.10 of this Act, submit to the commission

 29-3    a complete set of fingerprints of the individual natural person

 29-4    applying for the license or, if the applicant is not an individual

 29-5    natural person, a complete set of fingerprints of each officer or

 29-6    director and of each person owning an interest of at least five

 29-7    percent in the applicant.  The Department of Public Safety may

 29-8    request any person owning any interest in an applicant for a

 29-9    racetrack license to submit a complete set of fingerprints.

29-10          (b)  If a complete set of fingerprints is required by the

29-11    commission, the [The] commission shall, not later than the next day

29-12    after receiving the prints, forward the prints to the Department of

29-13    Public Safety or the Federal Bureau of Investigation.  If the

29-14    prints are forwarded to the Department of Public Safety, the [The]

29-15    department shall classify the prints and check them against its

29-16    fingerprint files and shall report to the commission its findings

29-17    concerning the criminal record of the applicant or the lack of such

29-18    a record.  A racetrack license may not be issued until the report

29-19    is made to the commission.  A temporary occupational license may be

29-20    issued before a report is made to the commission.

29-21          SECTION 19.  Article 5, Texas Racing Act (Article 179e,

29-22    Vernon's Texas Civil Statutes), is amended by adding Section 5.05

29-23    to read as follows:

29-24          Sec. 5.05.  COST OF CRIMINAL HISTORY CHECK.  (a)  The

29-25    commission shall, in determining the amount of a license fee, set

29-26    the fee in an amount that will cover, at least, the cost of

29-27    conducting a criminal history check on the applicant for a license.

 30-1          (b)  The commission shall reimburse the Department of Public

 30-2    Safety for the cost of conducting a criminal history check under

 30-3    this article.

 30-4          SECTION 20.  Section 6.01, Texas Racing Act (Article 179e,

 30-5    Vernon's Texas Civil Statutes), is amended to read as follows:

 30-6          Sec. 6.01.  License required.  A person may [shall] not

 30-7    conduct wagering on a greyhound race [meeting] or a horse race

 30-8    meeting without first obtaining a racetrack license from the

 30-9    commission [with wagering on the results without a racetrack

30-10    license].  A person who violates this section commits an offense.

30-11          SECTION 21.  Section 6.02(b), Texas Racing Act (Article 179e,

30-12    Vernon's Texas Civil Statutes), is amended to read as follows:

30-13          (b)  A class 1 racetrack is a racetrack on which live racing

30-14    is conducted for a number of days in a calendar year, the number of

30-15    days and the actual dates to be determined by the commission under

30-16    Article 8 of this Act.  A class 1 racetrack may operate only in a

30-17    county with a population of not less than 750,000, according to the

30-18    most recent federal census, or in a county adjacent to a county

30-19    with such a population.  Not more than three [four] class 1

30-20    racetracks may be licensed and operated in this state.

30-21          SECTION 22.  Sections 6.04(a) and (d), Texas Racing Act

30-22    (Article 179e, Vernon's Texas Civil Statutes), are amended to read

30-23    as follows:

30-24          (a)  The commission may issue a racetrack license to a

30-25    qualified person if it finds that the conduct of race meetings at

30-26    the proposed track and location will be in the public interest,

30-27    complies with all zoning laws, and complies with this Act and the

 31-1    rules adopted by the commission and if the commission finds by

 31-2    clear and convincing evidence that the applicant will comply with

 31-3    all criminal laws of this state.  In determining whether to grant

 31-4    or deny an application for any class of racetrack license, the

 31-5    commission may consider [the degree to which any of] the following

 31-6    factors [regarding the applicant's racetrack or proposed race

 31-7    meeting serve to nurture, promote, develop, or improve the horse or

 31-8    greyhound industry in this state]:

 31-9                (1)  the applicant's financial stability;

31-10                (2)  the applicant's resources for supplementing the

31-11    purses for races for various breeds;

31-12                (3)  the location of the proposed track;

31-13                (4)  the effect of the proposed track on traffic flow;

31-14                (5)  facilities for patrons and occupational licensees;

31-15                (6)  facilities for race animals;

31-16                (7)  availability to the track of support services and

31-17    emergency services;

31-18                (8)  the experience of the applicant's employees;

31-19                (9)  the potential for conflict with other licensed

31-20    race meetings;

31-21                (10)  the anticipated effect of the race meeting on the

31-22    greyhound or horse breeding industry in this state; and

31-23                (11)  the anticipated effect of the race meeting on the

31-24    state and local economy from tourism, increased employment, and

31-25    other sources.

31-26          (d)  In considering an application for a class 4 racetrack

31-27    license, the commission may waive or defer compliance with the

 32-1    commission's standards regarding the physical facilities or

 32-2    operations of a horse racetrack.  The commission may not waive or

 32-3    defer compliance with standards that relate to the testing of

 32-4    horses or licensees for the presence of a prohibited drug,

 32-5    chemical, or other substance [as provided by Section 14.03 of this

 32-6    Act]. If the commission defers compliance, the commission shall,

 32-7    when granting the application, establish a schedule under which the

 32-8    licensee must comply with the standards.

 32-9          SECTION 23.  Section 6.06, Texas Racing Act (Article 179e,

32-10    Vernon's Texas Civil Statutes), is amended by amending Subsections

32-11    (a), (b), (e), (f), and (g) and adding Subsection (i) to read as

32-12    follows:

32-13          (a)  To preserve and protect the public health, welfare, and

32-14    safety, the commission shall adopt rules relating to license

32-15    applications, [renewal applications,] the financial responsibility,

32-16    moral character, and ability of applicants, and all matters

32-17    relating to the planning, construction, and operation of

32-18    racetracks.  The commission may refuse to issue a [an original or

32-19    renewal] racetrack license or may revoke or suspend a license if,

32-20    after notice and hearing, it has reasonable grounds to believe and

32-21    finds that:

32-22                (1)  the applicant has been convicted in a court of

32-23    competent jurisdiction of a violation of this Act or any rule

32-24    adopted by the commission or that the applicant has aided, abetted,

32-25    or conspired with any person to commit such a violation;

32-26                (2)  the applicant has been convicted of a felony or of

32-27    any crime involving moral turpitude, including convictions for

 33-1    which the punishment received was a suspended sentence, probation,

 33-2    or a nonadjudicated conviction, that is reasonably related to the

 33-3    applicant's present fitness to hold a license under this Act;

 33-4                (3)  the applicant has violated or has caused to be

 33-5    violated this Act or a rule of the commission in a manner that

 33-6    involves moral turpitude, as distinguished from a technical

 33-7    violation of this Act or of a rule;

 33-8                (4)  the applicant is unqualified, by experience or

 33-9    otherwise, to perform the duties required of a licensee under this

33-10    Act;

33-11                (5)  the applicant failed to answer or falsely or

33-12    incorrectly answered a question in an [original or renewal]

33-13    application;

33-14                (6)  the applicant fails to disclose the true ownership

33-15    or interest in a greyhound or horse as required by the rules of the

33-16    commission;

33-17                (7)  the applicant is indebted to the state for any

33-18    fees or for the payment of a penalty imposed by this Act or by a

33-19    rule of the commission;

33-20                (8)  the applicant is not of good moral character or

33-21    the applicant's reputation as a peaceable, law-abiding citizen in

33-22    the community where the applicant resides is bad;

33-23                (9)  the applicant has not yet attained the minimum age

33-24    necessary to purchase alcoholic beverages in this state;

33-25                (10)  the applicant is in the habit of using alcoholic

33-26    beverages to an excess or uses a controlled substance as defined in

33-27    Chapter 481, Health and Safety Code, or a dangerous drug as defined

 34-1    in Chapter 483, Health and Safety Code, or is mentally

 34-2    incapacitated;

 34-3                (11)  the applicant may be excluded from a track

 34-4    enclosure under [Article 13 or 14 of] this Act;

 34-5                (12)  the applicant has not been a United States

 34-6    citizen residing in this state for the period of 10 consecutive

 34-7    years immediately preceding the filing of the application;

 34-8                (13)  the applicant has improperly used a license

 34-9    certificate, credential, or identification card issued under this

34-10    Act;

34-11                (14)  the applicant is residentially domiciled with a

34-12    person whose license has been revoked for cause within the 12

34-13    months immediately preceding the date of the present application;

34-14                (15)  the applicant has failed or refused to furnish a

34-15    true copy of the application to the commission's district office in

34-16    the district in which the premises for which the permit is sought

34-17    are located; [or]

34-18                (16)  the applicant is engaged or has engaged in

34-19    activities or practices that the commission finds are detrimental

34-20    to the best interests of the public and the sport of greyhound

34-21    racing or horse racing; or

34-22                (17)  the applicant fails to fully disclose the true

34-23    owners of all interests, beneficial or otherwise, in a proposed

34-24    racetrack facility.

34-25          (b)  Subsection (a) of this section applies to a corporation,

34-26    partnership, limited partnership, or any other organization or

34-27    group whose application is comprised of more than one person if a

 35-1    shareholder, partner, limited partner [if any], director, or

 35-2    officer is disqualified under Subsection (a) of this section.

 35-3          (e)  The [appropriate section of the] commission may

 35-4    condition the issuance of a license under this article on the

 35-5    observance of its rules.  The commission may amend the rules at any

 35-6    time and may condition the continued holding of the license on

 35-7    compliance with the rules as amended.

 35-8          (f)  The [appropriate section of the] commission may refuse

 35-9    to issue a license or may suspend or revoke a license of a licensee

35-10    under this article who knowingly or intentionally allows access to

35-11    an enclosure where greyhound races or horse races are conducted to

35-12    a person who has engaged in bookmaking, touting, or illegal

35-13    wagering, whose income is from illegal activities or enterprises,

35-14    or who has been convicted of a violation of this Act.

35-15          (g)  A person awarded a management contract [by a nonprofit

35-16    corporation licensed under this Act] to operate a racetrack must

35-17    meet all of the requirements of this section.

35-18          (i)  Subsections (a)(12), (c), and (d) of this section do not

35-19    apply to an applicant for or the holder of a racetrack license if

35-20    the applicant, the license holder, or the license holder's parent

35-21    company is a publicly traded company.

35-22          SECTION 24.  Article 6, Texas Racing Act (Article 179e,

35-23    Vernon's Texas Civil Statutes), is amended by adding Sections

35-24    6.061-6.063 to read as follows:

35-25          Sec. 6.061.  REGULATION OF INAPPROPRIATE OR UNSAFE

35-26    CONDITIONS.  (a)  The commission shall adopt rules implementing

35-27    this section, including rules:

 36-1                (1)  requiring the report of and correction of:

 36-2                      (A)  an inappropriate condition on the premises

 36-3    of a racetrack facility, including a failure to properly maintain

 36-4    the facility, that interferes with the administration of this Act;

 36-5    or

 36-6                      (B)  a condition on the premises of a racetrack

 36-7    facility that makes the facility unsafe for a race participant,

 36-8    patron, or animal; and

 36-9                (2)  determining the methods and manner in which the

36-10    executive secretary may determine and remedy inappropriate

36-11    conditions or unsafe facilities on the premises of a racetrack

36-12    facility, including the methods and manner in which the executive

36-13    secretary may conduct inspections of the racetrack facility and

36-14    remedy emergency situations.

36-15          (b)  The executive secretary shall issue a notice of

36-16    violation to a racetrack facility on a finding that an

36-17    inappropriate or unsafe condition exists.

36-18          (c)  If the executive secretary determines that an

36-19    inappropriate or unsafe condition exists at the racetrack facility,

36-20    the executive secretary shall order the racetrack facility to take

36-21    action within a specified period to remedy the inappropriate

36-22    condition or unsafe condition.  In determining the period for

36-23    compliance, the executive secretary shall consider the nature and

36-24    severity of the problem and the threat to the health, safety, and

36-25    welfare of the race participants, patrons, or animals.

36-26          (d)  The commission shall adopt rules requiring the reporting

36-27    of any corrective action taken by a racetrack facility in response

 37-1    to an order of the executive secretary under Subsection (c) of this

 37-2    section.

 37-3          (e)  If a racetrack facility fails to take any action as

 37-4    required under Subsection (c) of this section, the executive

 37-5    secretary shall initiate an enforcement action against the

 37-6    racetrack facility.  The executive secretary may rescind any live

 37-7    or simulcast race date of any racetrack association that does not

 37-8    take corrective action within the period set by the executive

 37-9    secretary.

37-10          (f)  The commission shall adopt rules relating to the

37-11    commission's review of an action taken under this section by the

37-12    executive secretary.  A  review procedure adopted under this

37-13    subsection must be consistent with Chapter 2001, Government Code.

37-14          Sec. 6.062.  SUPERVISION OF CHANGES TO PREMISES.  (a)  The

37-15    commission shall adopt a method of supervising and approving the

37-16    construction, renovation, or maintenance of any building or

37-17    improvement on the premises of a racetrack facility.

37-18          (b)  The commission shall adopt rules relating to:

37-19                (1)  the approval of plans and specifications;

37-20                (2)  the contents of plans and specifications;

37-21                (3)  the maintenance of records to ensure compliance

37-22    with approved plans and specifications;

37-23                (4)  the content and filing of construction progress

37-24    reports by the racetrack facility to the commission;

37-25                (5)  the inspection by the commission or others;

37-26                (6)  the method for making a change or amendment to an

37-27    approved plan or specification; and

 38-1                (7)  any other method of supervision or oversight

 38-2    necessary.

 38-3          (c)  If the commission has grounds to believe that an

 38-4    association has failed to comply with the requirements of this

 38-5    section, a representative of the association shall appear before

 38-6    the commission to consider the issue of compliance with the rules

 38-7    adopted under this section.

 38-8          (d)  Before a building or improvement may be used by the

 38-9    association, the commission shall determine whether the

38-10    construction, renovation, or maintenance of the building or

38-11    improvement was completed in accordance with the approved plans and

38-12    specifications and whether other requirements of the commission

38-13    were met.

38-14          (e)  If the commission determines that the association failed

38-15    to comply with a requirement of this section or rule adopted under

38-16    this section, the commission shall initiate an enforcement action

38-17    against the association.  In addition to any other authorized

38-18    enforcement action, the commission may rescind any live or

38-19    simulcast race date of any association that has failed to comply

38-20    with the requirement of this section.

38-21          Sec. 6.063.  SUMMARY SUSPENSION.  (a)  The commission may

38-22    summarily suspend a racetrack license if the commission determines

38-23    that a racetrack at which races or pari-mutuel wagering are

38-24    conducted under the license is being operated in a manner that

38-25    constitutes an immediate threat to the health, safety, or welfare

38-26    of the participants in racing or the patrons.

38-27          (b)  After issuing a summary suspension order, the executive

 39-1    secretary shall serve on the association by personal delivery or

 39-2    registered or certified mail, return receipt requested, to the

 39-3    licensee's last known address, an order stating the specific

 39-4    charges and requiring the licensee immediately to cease and desist

 39-5    from all conduct permitted by the license.  The order must contain

 39-6    a notice that a request for hearing may be filed under this

 39-7    section.

 39-8          (c)  An association that is the subject of a summary

 39-9    suspension order may request a hearing. The request must be filed

39-10    with the executive secretary not later than the 10th day after the

39-11    date the order was received or delivered.  A request for a hearing

39-12    must be in writing and directed to the executive secretary and must

39-13    state the grounds for the request to set aside or modify the order.

39-14    Unless a licensee who is the subject of the order requests a

39-15    hearing in writing before the 11th day after the date the order is

39-16    received or delivered, the order is final and nonappealable as to

39-17    that licensee.

39-18          (d)  On receiving a request for a hearing, the executive

39-19    secretary shall serve notice of the time and place of the hearing

39-20    by personal delivery or registered or certified mail, return

39-21    receipt requested.  The hearing must be held not later than the

39-22    10th day after the date the executive secretary receives the

39-23    request for a hearing unless the parties agree to a later hearing

39-24    date.  At the hearing, the commission has the burden of proof and

39-25    must present evidence in support of the order.  The licensee

39-26    requesting the hearing may cross examine witnesses and show cause

39-27    why the order should not be affirmed.  Section 2003.021(b),

 40-1    Government Code, does not apply to hearings conducted under this

 40-2    section.

 40-3          (e)  A summary suspension order continues in effect unless

 40-4    the order is stayed by the executive secretary.  The executive

 40-5    secretary may impose any condition before granting a stay of the

 40-6    order.

 40-7          (f)  After the hearing, the executive secretary shall affirm,

 40-8    modify, or set aside in whole or part the summary suspension order.

 40-9    An order affirming or modifying the summary suspension order is

40-10    final for purposes of enforcement and appeal.

40-11          SECTION 25.  Section 6.08(b), Texas Racing Act (Article 179e,

40-12    Vernon's Texas Civil Statutes), is amended to read as follows:

40-13          (b)(1)  A horse racing association shall set aside for purses

40-14    an amount not less than seven percent of a live regular wagering

40-15    pool or live multiple two wagering pool and not less than 8.5

40-16    percent of a live multiple three wagering pool.

40-17                (2)  A horse racing association, after January 1, 1999,

40-18    shall set aside from simulcast pools for purses not less than the

40-19    following amounts from the takeout of the sending racetrack:

40-20                      (A)  38.8 percent of the regular wagering pool;

40-21                      (B)  33.3 percent of the multiple two wagering

40-22    pool; and

40-23                      (C)  34 percent of the multiple three wagering

40-24    pool.

40-25    If the cost of the simulcast signal exceeds five percent of the

40-26    simulcast handle, the receiving horse racing association shall

40-27    split the cost of the signal in excess of five percent evenly with

 41-1    the horsemen's organization by allocating the cost against the

 41-2    purse money derived from that simulcast signal.

 41-3                (3)  The horse racing association shall transfer the

 41-4    amount set aside for purses from any live and simulcast pools and

 41-5    shall deposit the amounts in purse accounts maintained by breed by

 41-6    the horsemen's organization in one or more federally insured

 41-7    depositories.  Legal title to purse accounts is vested in the

 41-8    horsemen's organization.  The horsemen's organization may contract

 41-9    with an association to manage and control the purse accounts and to

41-10    make disbursements from the purse accounts:

41-11                      (A)  to an owner whose horse won a purse;

41-12                      (B)  to the horsemen's organization for its

41-13    expenses; or

41-14                      (C)  for other disbursements as provided by

41-15    contract between the horsemen's organization and the association.

41-16                (4)  An association, after January 1, 1999, may pay a

41-17    portion of the revenue set aside under this subsection to an

41-18    organization recognized under Section 3.13 of this Act, as provided

41-19    by a contract approved by the commission.

41-20          SECTION 26.  Section 6.09, Texas Racing Act (Article 179e,

41-21    Vernon's Texas Civil Statutes), is amended by adding Subsection (f)

41-22    to read as follows:

41-23          (f)  The commission in adopting rules relating to money paid

41-24    to the commission for use by the state greyhound breed registry

41-25    under Subsection (d) of this section shall require the award of a

41-26    grant in an amount equal to two percent of the amount paid to the

41-27    commission for use by the state greyhound breed registry to a

 42-1    person for the rehabilitation of greyhounds or to locate homes for

 42-2    greyhounds.

 42-3          SECTION 27.  Section 6.091, Texas Racing Act (Article 179e,

 42-4    Vernon's Texas Civil Statutes), is amended to read as follows:

 42-5          Sec. 6.091.  DISTRIBUTION OF DEDUCTIONS FROM SIMULCAST

 42-6    PARI-MUTUEL POOL.  (a)  An association shall distribute from the

 42-7    total amount deducted as provided by Sections 6.08(a) and 6.09(a)

 42-8    of this Act from each simulcast pari-mutuel pool and each simulcast

 42-9    cross-species pool the following shares:

42-10                (1)(A)  until January 1, 1999, an amount equal to 0.25

42-11    [one] percent of each simulcast pari-mutuel pool and each simulcast

42-12    cross-species simulcast pool as the amount set aside to reimburse

42-13    the general revenue fund for amounts that are appropriated for the

42-14    administration and enforcement of this Act and that are in excess

42-15    of the cumulative amount of funds deposited in the Texas Racing

42-16    Commission fund, until the excess amount and interest on the excess

42-17    amount are fully reimbursed;

42-18                      (B)  an amount equal to one percent of each

42-19    simulcast pool as the amount set aside for the state; and

42-20                      (C)  an amount equal to 1.25 percent of each

42-21    cross-species simulcast pool as the amount set aside for the state;

42-22                (2)  an amount equal to 0.25 percent of each pool set

42-23    aside to reimburse the general revenue fund for amounts that are

42-24    appropriated for the administration and enforcement of this Act and

42-25    that are in excess of the cumulative amount of funds deposited in

42-26    the Texas Racing Commission fund, until the excess amount and

42-27    interest on the excess amount are fully reimbursed [to the Texas

 43-1    Commission on Alcohol and Drug Abuse to be expended for the

 43-2    prevention of problem gambling];

 43-3                (3)  if the association is a horse racing association,

 43-4    an amount equal to one percent of a multiple two wagering pool or

 43-5    multiple three wagering pool as the amount set aside for the

 43-6    Texas-bred program to be used as provided by Section 6.08(f) of

 43-7    this Act;

 43-8                (4)  if the association is a greyhound association, an

 43-9    amount equal to one percent of a multiple two wagering pool or a

43-10    multiple three wagering pool as the amount set aside for the

43-11    Texas-bred program for greyhound races, to be distributed and used

43-12    in accordance with rules of the commission adopted to promote

43-13    greyhound breeding in this state; and

43-14                (5)  the remainder as the amount set aside for purses,

43-15    expenses, the sending association, and the receiving location

43-16    pursuant to a contract approved by the commission between the

43-17    sending association and the receiving location.

43-18          (b)  Section 6.09(b)(1) of this Act does not apply to amounts

43-19    deducted from a simulcast pari-mutuel pool in a greyhound race.

43-20          (c)  A greyhound racetrack association that receives an

43-21    interstate cross-species simulcast signal shall distribute the

43-22    following amounts from the total amount deducted as provided by

43-23    Subsection (a) of this section from each pool wagered on the signal

43-24    at the facility:

43-25                (1)  a fee of 1.5 percent to be paid to the racetrack

43-26    facility in this state sending the signal;

43-27                (2)  a purse in the amount of 0.75 percent to be paid

 44-1    to the official state breed registry for thoroughbred horses for

 44-2    use as purses at racetracks in this state;

 44-3                (3)  a purse in the amount of 0.75 percent to be paid

 44-4    to the official state breed registry for quarter horses for use as

 44-5    purses at racetracks in this state; and

 44-6                (4)  a purse of 4.5 percent to be escrowed with the

 44-7    commission for purses in the manner set forth in Subsection (e) of

 44-8    this section.

 44-9          (d)  A horse racetrack association receiving an interstate

44-10    cross-species simulcast signal shall distribute the following

44-11    amounts from the total amount deducted as provided by Subsection

44-12    (a) of this section from each pool wagered on the signal at the

44-13    facility:

44-14                (1)  a fee of 1.5 percent to be paid to the racetrack

44-15    facility in this state sending the signal; and

44-16                (2)  a purse in the amount of 5.5 percent to be paid to

44-17    the official state breed registry for greyhounds for use at

44-18    racetracks in this state.  The breed registry may use not more than

44-19    20 percent of this amount to administer this subdivision.

44-20          (e)  The purse set aside under Subsection (c)(4) of this

44-21    section shall be deposited into an escrow account in the registry

44-22    of the commission.  Any horse racetrack association in this state

44-23    may apply to the commission for receipt of all or part of the

44-24    escrowed purse account for use as purses.  The commission shall

44-25    determine to which horse racetracks the escrowed purse account

44-26    shall be allocated and in what percentages, taking into

44-27    consideration purse levels, racing opportunities, and the financial

 45-1    status of the requesting racetrack.  The first distribution of the

 45-2    escrowed purse account allocated to a racetrack under this section

 45-3    may not be made before October 1, 1998.

 45-4          (f)  After October 15, 1998, a horse racetrack association

 45-5    that is located not more than 75 miles from a greyhound racetrack

 45-6    facility that offers wagering on a cross-species simulcast signal

 45-7    may apply to the commission for an additional allocation of up to

 45-8    20 percent of the funds in the escrowed purse account that is

 45-9    attributable to the wagering on a cross-species simulcast signal at

45-10    the greyhound racetrack facility, if the horse racetrack facility

45-11    sends the cross-species simulcast signal to the greyhound

45-12    racetrack.  If the applying horse racetrack can prove to the

45-13    commission's satisfaction that a decrease in the racetrack's handle

45-14    has occurred that is directly due to wagering on an interstate

45-15    cross-species simulcast signal at a greyhound racetrack facility

45-16    that is located not more than 75 miles from the applying racetrack,

45-17    the commission shall allocate the amounts from the escrowed purse

45-18    account as the commission considers appropriate to compensate the

45-19    racetrack for the decrease, but the amount allocated may not exceed

45-20    20 percent of the funds in the escrowed purse account that are

45-21    attributable to the wagering on the interstate cross-species

45-22    simulcast signal at the greyhound racetrack facility.  Any amount

45-23    allocated by the commission under this subsection may be used by

45-24    the racetrack facility for any purpose.

45-25          (g)  If a racing association purchases an interstate

45-26    simulcast signal and the cost of the signal is more than five

45-27    percent of the pari-mutuel pool, the commission shall reimburse the

 46-1    racing association an amount equal to one-half of the signal cost

 46-2    that is more than five percent of the pari-mutuel pool from the

 46-3    escrowed purse account under Subsection (c)(4) of this section.

 46-4          (h)  A racetrack facility offering wagering on an intrastate

 46-5    cross-species simulcast signal shall send the purse amount

 46-6    specified under Subsection (c)(4) or (d)(2) of this section, as

 46-7    appropriate, to the racetrack facility conducting the live race

 46-8    that is being simulcast.

 46-9          (i)  A racing facility conducting a live race that is being

46-10    simulcast may charge the receiving racetrack facility a host fee in

46-11    addition to the amounts described in this section.

46-12          (j)  The commission shall adopt rules relating to this

46-13    section and the oversight of amounts allocated under Subsections

46-14    (c) and (d) of this section.

46-15          SECTION 28.  Article 6, Texas Racing Act (Article 179e,

46-16    Vernon's Texas Civil Statutes), is amended by adding Sections 6.092

46-17    and 6.093 to read as follows:

46-18          Sec. 6.092.  OVERSIGHT OF USE OF FUNDS GENERATED BY

46-19    PARI-MUTUEL RACING.  (a)  The commission shall adopt reporting,

46-20    monitoring, and auditing requirements or other appropriate

46-21    performance measures for any funds distributed to or used by or any

46-22    function or service provided by the expenditure of any funds

46-23    distributed to or used by any organization that receives funds

46-24    generated by live or simulcast pari-mutuel racing.

46-25          (b)  The commission shall adopt the requirements or

46-26    performance measures after consultation with the affected

46-27    organization.  In adopting the rules, the commission shall give

 47-1    consideration to the concerns of the affected organization.

 47-2          (c)  An organization receiving funds generated by live or

 47-3    simulcast pari-mutuel racing shall annually file with the

 47-4    commission a copy of an audit report prepared by an independent

 47-5    certified public accountant.  The audit shall include a

 47-6    verification of any performance report sent to or required by the

 47-7    commission.

 47-8          (d)  The commission may review any records or books of an

 47-9    organization that submits an independent audit to the commission as

47-10    the commission determines necessary to confirm or further

47-11    investigate the findings of an audit or report.

47-12          (e)  The commission by rule may suspend or withhold funds

47-13    from an organization that:

47-14                (1)  it determines has failed to comply with the

47-15    requirements or performance measures adopted under Subsection (a)

47-16    of this section; or

47-17                (2)  has, following an independent audit or other

47-18    report to the commission, material questions raised on the use of

47-19    funds by the organization.

47-20          Sec. 6.093.  DEDUCTIONS FROM LIVE PARI-MUTUEL POOL.  (a)(1)

47-21    A horse racing association, until January 1, 1999, shall set aside

47-22    for the state:

47-23                      (A)  an amount equal to one percent of each live

47-24    pari-mutuel pool from the first $100 million of the total amount of

47-25    all live pari-mutuel pools of the association in a calendar year;

47-26                      (B)  an amount equal to two percent of each live

47-27    pari-mutuel pool from the next $100 million of the total amount of

 48-1    all live pari-mutuel pools of the association in a calendar year;

 48-2                      (C)  an amount equal to three percent of the next

 48-3    $100 million of the total amount of all live pari-mutuel pools of

 48-4    the association in a calendar year;

 48-5                      (D)  an amount equal to four percent of the next

 48-6    $100 million of the total amount of all live pari-mutuel pools of

 48-7    the association in a calendar year; and

 48-8                      (E)  an amount equal to five percent of each live

 48-9    pari-mutuel pool from the amount of all live pari-mutuel pools of

48-10    the association in a calendar year not covered by Paragraphs (A)

48-11    through (D) of this subdivision.

48-12                (2)  A greyhound racing association, until January 1,

48-13    1999, shall set aside for the state:

48-14                      (A)  an amount equal to two percent of each live

48-15    pari-mutuel pool from the first $100 million of the total amount of

48-16    all live pari-mutuel pools of the association in a calendar year;

48-17                      (B)  an amount equal to three percent of each

48-18    live pari-mutuel pool from the next $100 million of the total

48-19    amount of all live pari-mutuel pools of the association in a

48-20    calendar year;

48-21                      (C)  an amount equal to four percent of each live

48-22    pari-mutuel pool from the next $100 million of the total amount of

48-23    all live pari-mutuel pools of the association in a calendar year;

48-24                      (D)  an amount equal to five percent of each live

48-25    pari-mutuel pool from the total amount of all live pari-mutuel

48-26    pools of the association in a calendar year not covered by

48-27    Paragraphs (A) through (C) of this subdivision; and

 49-1                      (E)  50 percent of the breakage.

 49-2                (3)  All amounts set aside by the association for the

 49-3    state in Subdivisions (1) and (2) of this subsection shall be

 49-4    applied to the reimbursement of all amounts of general revenue

 49-5    appropriated for the administration and enforcement of this Act in

 49-6    excess of the cumulative amount deposited to the Texas Racing

 49-7    Commission fund until the earlier of:

 49-8                      (A)  the excesses together with interest thereon

 49-9    are reimbursed in full; or

49-10                      (B)  January 1, 1999.

49-11          (b)  On or after January 1, 1999, a horse or greyhound racing

49-12    association shall set aside for the state from the live pari-mutuel

49-13    pool at the association:

49-14                (1)  an amount equal to one percent of each live

49-15    pari-mutuel pool from the total amount of all live pari-mutuel

49-16    pools of the association in a calendar year in excess of $100

49-17    million but less than $200 million;

49-18                (2)  an amount equal to two percent of each live

49-19    pari-mutuel pool from the total amount of all live pari-mutuel

49-20    pools of the association in a calendar year in excess of $200

49-21    million but less than $300 million;

49-22                (3)  an amount equal to three percent of each live

49-23    pari-mutuel pool from the total amount of all live pari-mutuel

49-24    pools of the association in a calendar year in excess of $300

49-25    million but less than $400 million;

49-26                (4)  an amount equal to four percent of each live

49-27    pari-mutuel pool from the total amount of all live pari-mutuel

 50-1    pools of the association in a calendar year in excess of $400

 50-2    million but less than $500 million; and

 50-3                (5)  an amount equal to five percent of each live

 50-4    pari-mutuel pool from the total amount of all live pari-mutuel

 50-5    pools of the association in a calendar year in excess of $500

 50-6    million.

 50-7          SECTION 29.  Section 7.01, Texas Racing Act (Article 179e,

 50-8    Vernon's Texas Civil Statutes), is amended to read as follows:

 50-9          Sec. 7.01.  License required.  A person may [shall] not

50-10    participate in racing with pari-mutuel wagering [as regulated by

50-11    this Act] without first obtaining a license from the commission. [A

50-12    person who violates this section commits an offense.]

50-13          SECTION 30.  Section 7.02, Texas Racing Act (Article 179e,

50-14    Vernon's Texas Civil Statutes), is amended by amending Subsection

50-15    (a) and adding Subsections (c)-(e) to read as follows:

50-16          (a)  Each person, other than a spectator or person placing a

50-17    wager, involved in any capacity with racing with pari-mutuel

50-18    wagering under[, other than as a spectator, as regulated by] this

50-19    Act[,] must obtain a license under this article.  [A person who

50-20    violates this subsection commits an offense.]

50-21          (c)  If an examination is required for the issuance of a

50-22    license under this article, not later than the 30th day after the

50-23    date on which a licensing examination is administered under this

50-24    Act, the commission shall notify each examinee of the results of

50-25    the examination.

50-26          (d)  If requested in writing by a person who fails a

50-27    licensing examination administered under this Act, the commission

 51-1    shall furnish the person with an analysis of the person's

 51-2    performance on the examination.

 51-3          (e)  The commission may not approve a management contract to

 51-4    operate or manage a racetrack owned by a governmental entity unless

 51-5    the racetrack license holder is an owner of the entity that

 51-6    proposes to manage the racetrack.

 51-7          SECTION 31.  Section 7.04, Texas Racing Act (Article 179e,

 51-8    Vernon's Texas Civil Statutes), is amended to read as follows:

 51-9          Sec. 7.04.  Licenses; grounds for denial, revocation, and

51-10    suspension.  The commission, after notice and hearing, may refuse

51-11    to issue any original or renewal license under this article or may

51-12    revoke or suspend the license if it has reasonable grounds to

51-13    believe and finds that:

51-14                (1)  the applicant has been convicted in a court of

51-15    competent jurisdiction of a violation of this Act or of any rule

51-16    adopted by the commission or has aided, abetted, or conspired with

51-17    any person to commit such a violation;

51-18                (2)  the applicant has been convicted of a felony or of

51-19    any crime involving moral turpitude that is reasonably related to

51-20    the applicant's present fitness to hold a license under this Act;

51-21                (3)  the applicant has violated or has caused to be

51-22    violated this Act or a rule of the commission in a manner that

51-23    involves moral turpitude, as distinguished from a technical

51-24    violation of this Act or of a rule;

51-25                (4)  the applicant is unqualified, by experience or

51-26    otherwise, to perform the duties required of a licensee under this

51-27    Act;

 52-1                (5)  the applicant failed to answer or has falsely or

 52-2    incorrectly answered a question in an original or renewal

 52-3    application;

 52-4                (6)  the applicant fails to disclose the true ownership

 52-5    or interest in a greyhound or horse as required by the rules of the

 52-6    commission;

 52-7                (7)  the applicant is indebted to the state for any

 52-8    fees or for the payment of a penalty imposed by this Act or by a

 52-9    rule of the commission;

52-10                (8)  the applicant is not of good moral character or

52-11    the applicant's reputation as a peaceable, law-abiding citizen in

52-12    the community where the applicant resides is bad;

52-13                (9)  the applicant is in the habit of using alcoholic

52-14    beverages to an excess or uses a controlled substance as defined in

52-15    Chapter 481, Health and Safety Code, or a dangerous drug as defined

52-16    in Chapter 483, Health and Safety Code, or is mentally

52-17    incapacitated;

52-18                (10)  the applicant may be excluded from a track

52-19    enclosure under [Article 13 or 14 of] this Act;

52-20                (11)  the commission determines that the applicant has

52-21    improperly used a temporary pass, license certificate, credential,

52-22    or identification card issued under this Act;

52-23                (12)  the applicant is residentially domiciled with a

52-24    person whose license has been revoked for cause within the 12

52-25    months immediately preceding the date of the present application;

52-26                (13)  the applicant has failed or refused to furnish a

52-27    true copy of the application to the commission's district office in

 53-1    the district in which the premises for which the permit is sought

 53-2    are located; or

 53-3                (14)  the applicant is engaged or has engaged in

 53-4    activities or practices that are detrimental to the best interests

 53-5    of the public and the sport of horse racing or greyhound racing.

 53-6          SECTION 32.  Section 7.05, Texas Racing Act (Article 179e,

 53-7    Vernon's Texas Civil Statutes), is amended to read as follows:

 53-8          Sec. 7.05.  License fees.  (a)  The commission shall adopt by

 53-9    rule a fee schedule for licenses issued under this article.

53-10          (b)  The commission shall base the license fees on the

53-11    relative or comparative incomes or property interests of the

53-12    various categories of licensees, with the lower income category of

53-13    licensees being charged nearer the minimum fee and the higher

53-14    income category of licensees charged nearer the maximum fee.

53-15          (c)  In setting the fee schedule under Subsection (a) of this

53-16    section, the commission shall include the cost of criminal history

53-17    checks determined under Section 5.05 of this Act.  The commission

53-18    may determine the best method for recouping this cost and complying

53-19    with the other provisions of this section, including collecting the

53-20    costs over an extended period.

53-21          SECTION 33.  Section 7.07, Texas Racing Act (Article 179e,

53-22    Vernon's Texas Civil Statutes), is amended to read as follows:

53-23          Sec. 7.07.  Term of license.  (a)  A license issued under

53-24    this article is valid for a period set by the commission not to

53-25    exceed 36 months following the date of its issuance.  It is

53-26    renewable on application and payment of the fee in accordance with

53-27    the rules of the commission.

 54-1          (b)  The commission by rule may adopt a system under which

 54-2    licenses expire on various dates during the year.  For the year in

 54-3    which the license expiration date is changed, license fees shall be

 54-4    prorated on a monthly basis so that each licensee pays only that

 54-5    portion of the license fee that is allocable to the number of

 54-6    months during which the license is valid.  On renewal of the

 54-7    license on the new expiration date, the total license renewal fee

 54-8    is payable.

 54-9          SECTION 34.  Article 7, Texas Racing Act (Article 179e,

54-10    Vernon's Texas Civil Statutes), is amended by adding Section 7.10

54-11    to read as follows:

54-12          Sec. 7.10.  RECIPROCAL LICENSES; OUT-OF-STATE APPLICANTS.

54-13    (a)  The commission may waive any prerequisite to obtaining a

54-14    license for an applicant, including any requirement to submit a set

54-15    of fingerprints, after reviewing the applicant's credentials and

54-16    determining that the applicant holds a valid license from another

54-17    state that has license requirements substantially equivalent to

54-18    those of this state.

54-19          (b)  The commission may waive any prerequisite to obtaining a

54-20    license, including any requirement to submit a set of fingerprints,

54-21    for an applicant with a valid license from another state with which

54-22    the State of Texas has a reciprocity agreement.  The commission may

54-23    enter into reciprocal agreements with other states to allow for

54-24    licensing by reciprocity.

54-25          SECTION 35.  Section 9.01, Texas Racing Act (Article 179e,

54-26    Vernon's Texas Civil Statutes), is amended to read as follows:

54-27          Sec. 9.01.  Texas-bred horses.  Subject to this Act or any

 55-1    rule of the commission, the [The] state horse breed registries

 55-2    shall make reasonable rules to establish the qualifications of

 55-3    accredited Texas-bred horses to promote, develop, and improve the

 55-4    breeding of horses in this state.  Rules adopted by a registry are

 55-5    subject to commission approval.

 55-6          SECTION 36.  Section 10.04, Texas Racing Act (Article 179e,

 55-7    Vernon's Texas Civil Statutes), is amended to read as follows:

 55-8          Sec. 10.04.  Texas-bred greyhounds.  (a)  Subject to this Act

 55-9    or any rule of the commission, the [The] state greyhound breed

55-10    registry shall make reasonable rules to establish the

55-11    qualifications of accredited Texas-bred greyhounds to promote,

55-12    develop, and improve the breeding of greyhounds in this state.

55-13    Rules adopted by the registry are subject to commission approval.

55-14          (b)  The commission shall adopt standards relating to the

55-15    operation of greyhound farms or other facilities where greyhounds

55-16    are raised for pari-mutuel racing.

55-17          SECTION 37.  Section 11.011, Texas Racing Act (Article 179e,

55-18    Vernon's Texas Civil Statutes), is amended by amending Subsection

55-19    (g) and adding Subsections (h)-(m) to read as follows:

55-20          (g)  Nothing in this Act is to be construed to prohibit

55-21    [allow] wagering on a simulcast horse race at a greyhound racetrack

55-22    in this state, or to prohibit [permit] wagering on a simulcast

55-23    greyhound race at a horse racetrack in this state.  A horse

55-24    racetrack may not be required to accept a greyhound simulcast

55-25    signal, nor may a greyhound racetrack be required to accept a horse

55-26    simulcast signal.

55-27          (h)  Except as provided by this section, a horse racetrack

 56-1    facility that offers wagering on interstate greyhound race

 56-2    simulcast signals must do so as provided by a contract with the

 56-3    nearest greyhound racetrack.  If an agreement between the

 56-4    racetracks cannot be reached by October 1 of the year preceding the

 56-5    calendar year in which the simulcasting is to occur, the horse

 56-6    racetrack may purchase and offer wagering on greyhound race

 56-7    simulcast signals and shall pay the amounts specified under Section

 56-8    6.091(d)(1) of this Act to the nearest greyhound racetrack.

 56-9          (i)  Except as provided by this section, a greyhound

56-10    racetrack facility that offers wagering on interstate horse race

56-11    simulcast signals must do so as provided by a contract with the

56-12    nearest Class 1 horse racetrack.  If an agreement between the

56-13    racetracks cannot be reached by October 1 of the year preceding the

56-14    calendar year in which the simulcasting is to occur, the greyhound

56-15    racetrack may purchase and offer wagering on interstate horse race

56-16    simulcast signals and shall pay the amounts specified in Section

56-17    6.091(c)(1) of this Act to the nearest Class 1 horse racetrack.

56-18          (j)  A horse racetrack that offers wagering on interstate

56-19    greyhound simulcast races must offer wagering on all Texas

56-20    greyhound races made available for simulcast wagering.  A greyhound

56-21    racetrack that offers wagering on interstate horse simulcast races

56-22    must offer wagering on all Texas horse races made available for

56-23    simulcast wagering.

56-24          (k)  Wagering on a simulcast greyhound race at a horse

56-25    racetrack that conducts its inaugural meet within 12 months of

56-26    September 1, 1997, or at an operational horse racetrack within 60

56-27    miles of such racetrack may be conducted only pursuant to an

 57-1    agreement between said racetracks.

 57-2          (l)  Notwithstanding other provisions of law, a greyhound

 57-3    racing association and the state greyhound breed registry shall by

 57-4    contract agree that each simulcast contract to which the greyhound

 57-5    racing association is a party, including a simulcast contract with

 57-6    a horse racing association or a simulcast contract with another

 57-7    greyhound racing association, include terms that provide adequately

 57-8    for the development of greyhound racing, breeding, purses, and any

 57-9    actual or potential loss of live racing handle based on the

57-10    association's historical live racing schedule and handle in this

57-11    state.  If a greyhound racing association and the state greyhound

57-12    breed registry fail to reach an agreement, the racing association

57-13    or the breed registry may submit the contract negotiations for

57-14    binding arbitration under Chapter 171, Civil Practice and Remedies

57-15    Code, and rules adopted by the commission.  The arbitration must be

57-16    conducted by a board of three arbitrators.  The greyhound racing

57-17    association shall appoint one arbitrator.  The state greyhound

57-18    breed registry shall appoint one arbitrator.  The arbitrators

57-19    appointed by the greyhound racing association and the state

57-20    greyhound breed registry shall appoint the third arbitrator.  A

57-21    greyhound racing association and the state greyhound breed registry

57-22    shall each pay its own arbitration expenses.  The greyhound racing

57-23    association and the state greyhound breed registry shall equally

57-24    pay the arbitrator fees and costs.  This subsection does not apply

57-25    to a contract that was in effect before September 2, 1997.

57-26          (m)  The commission shall not approve wagering on an

57-27    interstate simulcast race unless the receiving location consents to

 58-1    wagering on interstate simulcast races at all other receiving

 58-2    locations in this state.

 58-3          SECTION 38.  Section 11.04, Texas Racing Act (Article 179e,

 58-4    Vernon's Texas Civil Statutes), is amended by amending Subsection

 58-5    (c) and adding Subsection (e) to read as follows:

 58-6          (c)  The commission shall adopt rules prohibiting an

 58-7    association from accepting a wager made on credit and shall adopt

 58-8    rules providing for the use of [prohibiting] automatic banking

 58-9    machines within the enclosure.  The commission shall limit the use

58-10    of an automatic banking machine to:

58-11                (1)  allow a person to have access to only the person's

58-12    checking account at a bank or other financial institution; and

58-13                (2)  deliver no more than $200.

58-14          (e)  An association that allows a machine in an enclosure as

58-15    provided by Subsection (c) shall collect a fee of $1 for each

58-16    transaction under Subsection (c).  The commission shall adopt rules

58-17    providing for collection, reporting, and auditing of the

58-18    transaction fee.  The association shall forward the fee to the

58-19    commission.  The commission shall deposit the fee to the credit of

58-20    the general revenue fund.

58-21          SECTION 39.  Section 11.06, Texas Racing Act (Article 179e,

58-22    Vernon's Texas Civil Statutes), is amended to read as follows:

58-23          Sec. 11.06.  Minors.  [(a)]  The commission shall adopt rules

58-24    to prohibit wagering by a minor [prevent wagering by persons who

58-25    have not yet attained the minimum age required to purchase

58-26    alcoholic beverages in this state] and to prohibit [prevent] a

58-27    child [person under 16 years of age] from entering the viewing

 59-1    section of a racetrack unless accompanied by the child's [person's]

 59-2    parent or guardian.  The rules may except any conduct described as

 59-3    an affirmative defense by Section 14.13 of this Act [A person who

 59-4    intentionally, knowingly, recklessly, or with criminal negligence

 59-5    violates a rule adopted under this section commits an offense.  An

 59-6    offense under this section is a Class B misdemeanor].

 59-7          [(b)  A person commits an offense if the person intentionally

 59-8    or knowingly engages in gaming at a racetrack when the person has

 59-9    not yet attained the minimum age required to purchase alcoholic

59-10    beverages in this state.  An offense under this subsection is a

59-11    Class C misdemeanor.]

59-12          SECTION 40.  Section 11.08, Texas Racing Act (Article 179e,

59-13    Vernon's Texas Civil Statutes), is amended to read as follows:

59-14          Sec. 11.08.  Money not claimed.  Not later than the 61st day

59-15    after the closing day of a race meeting, an association shall pay

59-16    to the commission all distributable money [in a pari-mutuel pool]

59-17    that is subject to payment [to a claimant] under Section 11.07 of

59-18    this Act but that is not successfully claimed and that is not spent

59-19    on drug testing under the provisions of this Act.

59-20          SECTION 41.  Section 11.09, Texas Racing Act (Article 179e,

59-21    Vernon's Texas Civil Statutes), is amended to read as follows:

59-22          Sec. 11.09.  No liability to prosecution.  The defense to

59-23    prosecution under Chapter 47, Penal Code, that the conduct was

59-24    authorized under this Act is available only to a person who is:

59-25                (1)  [A person] lawfully conducting or participating in

59-26    the conduct of pari-mutuel wagering in connection with horse racing

59-27    or greyhound racing; or

 60-1                (2)  permitting the lawful conduct of an activity

 60-2    described by Subdivision (1) of this section on any racetrack

 60-3    facility [on any premises owned or leased by him or it under any

 60-4    license lawfully issued under this Act is not liable to prosecution

 60-5    for that conduct].

 60-6          SECTION 42.  Section 13.03, Texas Racing Act (Article 179e,

 60-7    Vernon's Texas Civil Statutes), is amended to read as follows:

 60-8          Sec. 13.03.  CRIMINAL TRESPASS [Entry after ejection].

 60-9    [(a)]  A person, for the purposes of Section 30.05, Penal Code, is

60-10    presumed to have received notice that entry to an enclosure was

60-11    forbidden if the person:

60-12                (1)  was excluded or ejected from the enclosure under

60-13    this Act;

60-14                (2)  possessed, displayed, or used in the enclosure a

60-15    credential that the person was not authorized to use; or

60-16                (3)  entered the enclosure using a falsified credential

60-17    [who has been excluded or ejected from an enclosure under this

60-18    article commits an offense if the person knowingly enters an

60-19    enclosure of the same or another licensed racetrack unless the

60-20    commission or a final judgment of a court has ordered that the rule

60-21    does not apply to the person].

60-22          [(b)  An offense under this section is a Class A misdemeanor.]

60-23          [(c)  The provisions of Section 7.22, Penal Code, imposing

60-24    criminal responsibility on a corporation or association for an

60-25    offense committed by its agent apply to conduct constituting an

60-26    offense under this section that is performed by an agent of a

60-27    corporation or association.]

 61-1          SECTION 43.  Article 14, Texas Racing Act (Article 179e,

 61-2    Vernon's Texas Civil Statutes), is amended to read as follows:

 61-3            ARTICLE 14.  CRIMINAL [TOUTING AND OTHER] OFFENSES

 61-4          Sec. 14.01.  Touting.  (a)  A person commits an offense if,

 61-5    with an intent to deceive and an intent to obtain a benefit

 61-6    [knowing the information is false], the person knowingly makes a

 61-7    false statement [or intentionally conveys] or offers, agrees to

 61-8    convey, or conveys false information about a greyhound race or

 61-9    horse race to another [others for compensation].

61-10          (b)  Except as provided by Subsection (c) of this section, an

61-11    offense under this section is a Class A misdemeanor [felony of the

61-12    third degree].

61-13          (c)  An offense under this section is a state jail felony [of

61-14    the second degree] if:

61-15                (1)  the actor is a licensee under this Act or an

61-16    employee or member of the commission and the actor knowingly

61-17    represents that a member [an official] or employee of the

61-18    commission or a [of an association or an owner, trainer, jockey, or

61-19    other] person licensed by the commission is the source of the false

61-20    information; or

61-21                (2)  the false statement or information was contained

61-22    in racing selection information provided to the public [the actor

61-23    previously has been finally convicted of an offense under this

61-24    section or has been convicted of a felony for which the punishment

61-25    received was a suspended sentence, probation, or a nonadjudicated

61-26    conviction which has not yet been fully served].

61-27          [(d)  The provisions of Section 7.22, Penal Code, imposing

 62-1    criminal responsibility on a corporation or association for an

 62-2    offense committed by its agent apply to conduct constituting an

 62-3    offense under this section that is performed by an agent of a

 62-4    corporation or association.]

 62-5          Sec. 14.02.  Unlawful Possession or use of credential.

 62-6    (a)  A person commits an offense if the person knowingly or

 62-7    intentionally possesses or displays a [license or] credential or

 62-8    false credential that identifies [has been issued or purports to

 62-9    have been issued by the commission and represents that] the person

62-10    as [is] the holder of the [license or] credential and [when] the

62-11    person knows:

62-12                (1)  that the [license or] credential is not issued to

62-13    the person; or

62-14                (2)  the person is not a licensee [if the person

62-15    impersonates in any way a person holding a license or credential

62-16    issued by the commission].

62-17          (b)  An offense under this section is a Class C misdemeanor

62-18    [felony of the third degree].

62-19          [(c)  The provisions of Section 7.22, Penal Code, imposing

62-20    criminal responsibility on a corporation or association for an

62-21    offense committed by its agent apply to conduct constituting an

62-22    offense under this section that is performed by an agent of a

62-23    corporation or association.]

62-24          [Sec. 14.03.  ILLEGAL INFLUENCE OF RACE OUTCOME.  (a)  The

62-25    commission shall adopt rules prohibiting the illegal influencing of

62-26    the outcome of a race, including but not limited to the use of

62-27    medication, stimulants, or depressants to attempt to or to

 63-1    influence illegally the outcome of a race.]

 63-2          [(b)  The commission may require prerace testing by any

 63-3    invasive or noninvasive method or methods to determine whether such

 63-4    a drug, chemical, or other substance has been administered.  The

 63-5    commission shall require postrace testing by such method or

 63-6    methods.  The commission shall adopt rules that require all such

 63-7    tests to be conducted using state-of-the-art methods.  On any

 63-8    positive test showing the presence of prohibited drugs, chemicals,

 63-9    or other substances, the stewards or racing judges may summarily

63-10    suspend any person who has administered or applied the drug,

63-11    chemical, or other substance or any electric device or spur pending

63-12    hearing by the stewards or judges with the right of appeal to the

63-13    commission.  Such a suspension may be stayed, in the discretion of

63-14    the commission only, during the pendency of such appeal. In

63-15    addition, the stewards or racing judges may disqualify the affected

63-16    animal pursuant to rules adopted by the commission under this

63-17    section.  The commission may require that urine samples be frozen

63-18    and maintained for a period that will enable veterinarians and

63-19    chemists to conduct follow-up tests to detect and identify

63-20    prohibited drugs.  All other specimens shall be maintained for

63-21    testing purposes in the manner prescribed by the commission. In the

63-22    event a sample tests positive for a drug, chemical, or other

63-23    substance, all samples, including the split portion, shall be

63-24    maintained until the matter is finally adjudicated.  A licensee

63-25    whose animal has tested positive for a drug, chemical, or other

63-26    substance is entitled to have a split portion of the sample tested

63-27    at a testing facility authorized to perform drug testing under

 64-1    Section 3.07 of this Act and selected by the licensee.  The

 64-2    commission shall adopt rules regarding the procedure for the split

 64-3    testing.]

 64-4          [(c)  The official licensed trainer of each such animal is

 64-5    deemed by law to be the absolute insurer that no prohibited drug,

 64-6    chemical, or other substance has been administered and shall be

 64-7    responsible to see that such a drug, chemical, or other substance

 64-8    is not administered.]

 64-9          [(d)  By applying for a license under this Act, each

64-10    occupational licensee consents to both prerace and postrace search

64-11    for the purpose of determining the presence of such a drug,

64-12    chemical, or other substance or of any electrical device or other

64-13    device that might have the effect of unnaturally depressing,

64-14    stimulating, or exciting any animal during a race.  The commission

64-15    shall adopt rules relating to drug testing for occupational

64-16    licensees.]

64-17          [(e)  A person who knowingly violates a rule adopted under

64-18    this section may be barred, either for a period set by the

64-19    commission or for life, from receiving any license under this Act

64-20    or may be barred for a period set by the commission or for life

64-21    from any premises licensed under this Act, or both.]

64-22          [(f)  A person who knowingly violates a rule adopted under

64-23    this section commits a felony of the third degree for the first

64-24    offense and a felony of the second degree for a second or

64-25    subsequent offense.]

64-26          [(g)  A person who gives, offers or promises to give, or

64-27    attempts to give or offer any money, bribe, or thing of value to

 65-1    any jockey, trainer, owner, groom, or other person associated with

 65-2    or interested in any stable, kennel, horse, or dog, or race in

 65-3    which any horse or dog participates, with the intention or

 65-4    understanding or agreement that such individual shall not use his

 65-5    best efforts to win such race, or shall so conduct himself in such

 65-6    race that any other participant shall thereby be assisted or

 65-7    enabled to win such race, or shall so conduct himself in such race

 65-8    as to limit his finishing or placing in such race commits an

 65-9    offense.  Such an offense is a felony of the third degree.]

65-10          [(h)  A person who accepts, attempts to accept, offers to

65-11    accept, or agrees to accept any money, bribe, or thing of value,

65-12    with the intention or understanding or agreement that he will not

65-13    use his best efforts to win any horse or dog race, in which he is

65-14    the jockey, trainer, groom, owner, or other interested party or is

65-15    about to participate in, or will so conduct himself in such race

65-16    that any other horse or dog shall thereby be assisted or enabled to

65-17    win such race, or will so conduct himself in such race as to limit

65-18    his finishing or placing in such race commits an offense.  Such an

65-19    offense is a felony of the third degree.]

65-20          [(i)  A person who gives, offers to give, promises to give,

65-21    or attempts to give any money, bribe, or thing of value to any

65-22    person who is presiding or officiating at or who is about to

65-23    preside or officiate at any dog or horse race with the intention or

65-24    agreement or understanding that such person shall corruptly or

65-25    dishonestly preside or officiate at any such race with the

65-26    intention or purpose that the result of the race will be affected

65-27    or influenced thereby commits an offense.  Such an offense is a

 66-1    felony of the third degree.]

 66-2          Sec. 14.04.  Illegal access.  (a)  A person commits an

 66-3    offense if the person is a licensee and the person [licensee who]

 66-4    knowingly or intentionally permits, facilitates, or allows access,

 66-5    to an enclosure where races are conducted, to another [a] person

 66-6    who the person knows:

 66-7                (1)  has engaged in bookmaking, touting, or illegal

 66-8    wagering;

 66-9                (2)  derives[, whose] income [is] from illegal

66-10    activities or enterprises;

66-11                (3)  [, or who] has been convicted of a violation of

66-12    this  Act; or

66-13                (4)  is excluded by the commission from entering a

66-14    racetrack facility[, commits an offense].

66-15          (b)  An offense under this section is a Class B misdemeanor

66-16    [felony of the third degree].

66-17          Sec. 14.05.  RACES CONDUCTED ON CERTAIN INDIAN LANDS.  (a)  A

66-18    person who is subject to this section commits an offense if the

66-19    person intentionally or knowingly wagers on the result of a

66-20    greyhound race or horse race conducted in this state that:

66-21                (1)  is held on an American Indian reservation or on

66-22    American Indian trust land located in this state; and

66-23                (2)  is not held under the supervision of the

66-24    commission under rules adopted under this Act.

66-25          (b)  An offense under this section is a felony of the third

66-26    degree.

66-27          (c)  It is an exception to the application of this section

 67-1    that the person is a member of a recognized Texas Indian tribe who

 67-2    lives on a reservation or on trust lands located in this state.

 67-3          Sec. 14.06.  False statements.  (a)  A person commits an

 67-4    offense if the person [intentionally,] knowingly[, recklessly, or

 67-5    with criminal negligence] makes a material and false, incorrect, or

 67-6    deceptive statement to another who is conducting an investigation

 67-7    or exercising discretion under this Act or a rule adopted under

 67-8    this Act.

 67-9          (b)  In this section, the [The] term "statement" means a

67-10    representation of fact and includes[, but is not limited to]:

67-11                (1)  a written or oral statement [statements]; or

67-12                (2)  a sworn or unsworn statement [statements].

67-13          (c)  An offense under this section is a state jail felony

67-14    unless the statement was material in a commission action relating

67-15    to a racetrack license, in which event the offense is a felony of

67-16    the third degree.

67-17          Sec. 14.07.  HINDERING OF ENTRY OR SEARCH.  (a)  A person

67-18    commits an offense if the person [intentionally, knowingly,

67-19    recklessly, or] with criminal negligence refuses, denies, or

67-20    hinders entry to another who is exercising or attempting to

67-21    exercise a power of entry under this Act or a commission rule.

67-22          (b)  A person commits an offense if the person with criminal

67-23    negligence refuses, denies, hinders, interrupts, disrupts, impedes,

67-24    or otherwise interferes with a search by a person exercising or

67-25    attempting to exercise a power to search under this Act or a

67-26    commission rule.

67-27          (c) [(b)]  An offense under this section is a Class B

 68-1    misdemeanor.

 68-2          Sec. 14.08.  FORGING PARI-MUTUEL TICKET.  (a) A person

 68-3    commits an offense if the person intentionally or knowingly forges

 68-4    a pari-mutuel ticket with the intent to defraud or harm another.

 68-5          (b)  In this section, "forge" has the meaning assigned by

 68-6    Section 32.21, Penal Code.

 68-7          (c)  An offense under this section is a felony of the third

 68-8    degree.

 68-9          Sec. 14.09.  IMPERSONATING A LICENSEE.  (a)  A person commits

68-10    an offense if the person impersonates a licensee with the intent to

68-11    induce another person to submit to the actor's purported authority

68-12    as a licensee or to rely on the actor's actions as an alleged

68-13    licensee.

68-14          (b)  An offense under this section is a Class A misdemeanor.

68-15          Sec. 14.10.  UNLAWFUL INFLUENCE ON RACING.  (a)  A person

68-16    commits an offense if the person possesses a prohibited device or

68-17    prohibited substance on a racetrack facility, in an enclosure, or

68-18    at a training facility.

68-19          (b)  An offense under Subsection (a) of this section is a

68-20    Class A misdemeanor, unless the actor possessed the device or

68-21    substance with the intent to influence or affect the outcome of a

68-22    horse or greyhound race in a manner contrary to this Act or a

68-23    commission rule, in which event it is a state jail felony.

68-24          (c)  A person commits an offense if, with the intent to

68-25    influence or affect a horse or greyhound race in a manner contrary

68-26    to this Act or a commission rule, the person:

68-27                (1)  uses or offers to use a prohibited device; or

 69-1                (2)  uses or offers to use a prohibited substance.

 69-2          (d)  An offense under Subsection (c) of this section is a

 69-3    felony of the third degree.

 69-4          Sec. 14.11.  BRIBERY AND CORRUPT INFLUENCE.  (a) A person

 69-5    commits an offense if, with the intent to influence or affect the

 69-6    outcome of a race in a manner contrary to this Act or a commission

 69-7    rule, the person offers, confers, agrees to confer on another, or

 69-8    solicits, accepts, or agrees to accept from another person any

 69-9    benefit as consideration for the actions of a person who receives

69-10    the benefit relating to the conduct, decision, opinion,

69-11    recommendation, vote, or exercise of discretion as a licensee or

69-12    other person associated with or interested in any stable, kennel,

69-13    horse, greyhound, or horse or greyhound race.

69-14          (b)  An offense under this section is a state jail felony,

69-15    unless the recipient of the benefit is a steward, judge, or other

69-16    racetrack official exercising authority over a horse or greyhound

69-17    race that the person providing or offering the benefit intended to

69-18    influence, in which event it is a felony of the third degree.

69-19          Sec. 14.12.  CRIMINAL CONFLICT OF INTEREST.  A person who is

69-20    a member of the commission commits an offense if the person:

69-21                (1)  accepts, directly or indirectly, employment or

69-22    remuneration from a racetrack facility, association, or other

69-23    licensee, including a facility, association, or licensee located or

69-24    residing in another state;

69-25                (2)  wagers or causes a wager to be placed on the

69-26    outcome of a horse or greyhound race conducted in this state; or

69-27                (3)  accepts or is entitled to any part of a purse to

 70-1    be paid to an animal in a race conducted in this state.

 70-2          Sec. 14.13.  OFFENSES INVOLVING A MINOR.  (a) A person

 70-3    commits an offense if the person with criminal negligence permits,

 70-4    facilitates, or allows:

 70-5                (1)  wagering by a minor at a racetrack facility; or

 70-6                (2)  entry by a child to the viewing section of a

 70-7    racetrack facility.

 70-8          (b)  An offense under Subsection (a) of this section is a

 70-9    Class B misdemeanor.

70-10          (c)  A person commits an offense if the person is a minor and

70-11    intentionally or knowingly engages in wagering at a racetrack.

70-12          (d)  An offense under Subsection (c) of this section is a

70-13    Class C misdemeanor.

70-14          (e)  It is an affirmative defense to prosecution of an

70-15    offense under Subsection (a)(2) that a child was accompanied by and

70-16    was in the physical presence of a parent, guardian, or spouse who

70-17    was 21 years of age or older.

70-18          (f)  It is an affirmative defense to prosecution of an

70-19    offense under Subsection (a) of this section that the minor falsely

70-20    represented the minor's age by displaying to the person an

70-21    apparently valid Texas driver's license or identification card

70-22    issued by the Department of Public Safety that contains a physical

70-23    description consistent with the minor's appearance.

70-24          Sec. 14.14.  UNLAWFUL RACING.  A person commits an offense

70-25    if:

70-26                (1)  the person participates, permits, or conducts a

70-27    greyhound or horse race at a licensed racetrack facility;

 71-1                (2)  the person wagers on the partial or final outcome

 71-2    of the greyhound or horse race or knows or reasonably should know

 71-3    that another is betting on the partial or final outcome of the

 71-4    race; and

 71-5                (3)  the race is not part of a performance or meeting

 71-6    conducted under this Act or commission rule.

 71-7          Sec. 14.15.  PARI-MUTUEL RACING WITHOUT LICENSE.  (a) A

 71-8    person commits an offense if, without a license, the person

 71-9    participates or is otherwise involved in, in any capacity,

71-10    greyhound racing or horse racing with pari-mutuel wagering.

71-11          (b)  It is an affirmative defense to prosecution under

71-12    Subsection (a) of this section that the actor was a spectator or a

71-13    person placing a wager.

71-14          (c)  An offense under Subsection (a) of this section is a

71-15    Class A misdemeanor, unless the actor was required by this Act to

71-16    obtain a racetrack license, in which event it is a state jail

71-17    felony.

71-18          Sec. 14.16.  RACING WITHOUT LICENSE.  (a)  A person commits

71-19    an offense if the person:

71-20                (1)  conducts a greyhound or horse race without a

71-21    racetrack license; and

71-22                (2)  knows or reasonably should know that another

71-23    person is betting on the final or partial outcome of the race.

71-24          (b)  An offense under this section is a felony of the third

71-25    degree.

71-26          Sec. 14.17.  FAILURE TO DISPLAY CREDENTIAL.  (a)  A person

71-27    commits an offense if the person intentionally or knowingly:

 72-1                (1)  fails or refuses to display a credential to

 72-2    another after a lawful request; or

 72-3                (2)  fails or refuses to give the person's name,

 72-4    residence address, or date of birth to another after a lawful

 72-5    request.

 72-6          (b)  In this section, "lawful request" means a request from

 72-7    the commission, an authorized agent of the commission, the director

 72-8    or a commissioned officer of the Department of Public Safety, a

 72-9    peace officer, or a steward or judge at any time and any restricted

72-10    location that:

72-11                (1)  is on a racetrack facility; and

72-12                (2)  is not a public place.

72-13          (c)  Except as provided by Subsection (d) of this section, an

72-14    offense under this section is a Class B misdemeanor.

72-15          (d)  At the punishment stage of a trial for an offense under

72-16    Subsection (a)(1) of this section, the defendant may raise an issue

72-17    as to whether the defendant was a licensee at the time of the

72-18    offense. If the defendant proves the issue, the offense is a Class

72-19    C misdemeanor.

72-20          Sec. 14.18.  SEARCH AND SEIZURE.  (a)  A person consents to a

72-21    search at a time and location described in Subsection (b) of this

72-22    section for a prohibited device, prohibited substance, or other

72-23    contraband if the person:

72-24                (1)  accepts a license or other credential issued under

72-25    this Act; or

72-26                (2)  enters a racetrack facility under the authority of

72-27    a license or other credential alleged to have been issued under

 73-1    this Act.

 73-2          (b)  A search may be conducted by a commissioned officer of

 73-3    the Department of Public Safety or a peace officer, including a

 73-4    peace officer employed by the commission, at any time and at any

 73-5    location that is on a racetrack facility, except a location:

 73-6                (1)  excluded by commission rule from searches under

 73-7    this section; or

 73-8                (2)  provided by an association under commission rule

 73-9    for private storage of personal items belonging to a licensee

73-10    entering a racetrack facility.

73-11          (c)  A person conducting a search under Subsection (b) of

73-12    this section may seize any prohibited device, prohibited substance,

73-13    or other contraband discovered during the search.

73-14          Sec. 14.19.  PROSECUTION. A person who is subject to

73-15    prosecution for a penal offense under this Act and another law may

73-16    be prosecuted under either law.

73-17          Sec. 14.20.  COMMISSION AUTHORITY. This article may not be

73-18    construed to restrict the commission's administrative authority to

73-19    enforce this Act or commission rules to the fullest extent

73-20    authorized by this Act.

73-21          Sec. 14.21.  VENUE FOR CRIMINAL PROSECUTION. The venue for

73-22    the prosecution of a criminal offense under this Act is in Travis

73-23    County or in a county where an element of the offense occurred.

73-24          SECTION 44.  Section 15.01, Texas Racing Act (Article 179e,

73-25    Vernon's Texas Civil Statutes), is amended to read as follows:

73-26          Sec. 15.01.  GENERAL PENALTY.  If [With regard to any

73-27    provision of this Act that is a penal offense, if] no specific

 74-1    penalty is provided for a provision of this Act that is a penal

 74-2    offense, a person who violates the [such a] provision commits a

 74-3    state jail felony [of the third degree].

 74-4          SECTION 45.  Article 16, Texas Racing Act (Article 179e,

 74-5    Vernon's Texas Civil Statutes), is amended by adding Section 16.021

 74-6    to read as follows:

 74-7          Sec. 16.021.  APPROVAL OF SIMULCAST RACES.  The commissioners

 74-8    court of a county in which there is a racetrack conducting live

 74-9    racing, on its own motion by a majority vote of its members, may

74-10    order an election to approve pari-mutuel wagering on simulcast

74-11    greyhound or horse races.

74-12          SECTION 46.  Section 16.11(b), Texas Racing Act (Article

74-13    179e, Vernon's Texas Civil Statutes), is amended to read as

74-14    follows:

74-15          (b)  The ballots shall be printed to permit voting for or

74-16    against the proposition:  "Legalizing pari-mutuel wagering on horse

74-17    races in __________ County," [or] "Legalizing pari-mutuel wagering

74-18    on greyhound races in __________ County," or "Authorizing

74-19    pari-mutuel wagering on simulcast races in _____ County," as

74-20    appropriate.

74-21          SECTION 47.  Section 16.12(a), Texas Racing Act (Article

74-22    179e, Vernon's Texas Civil Statutes), is amended to read as

74-23    follows:

74-24          (a)  If a majority of the votes cast in the election are for

74-25    the legalization of pari-mutuel wagering on horse races or

74-26    greyhound races in the county, or for the authorization of

74-27    pari-mutuel wagering on simulcast races in the county, as

 75-1    appropriate, the commissioners court shall certify that fact to the

 75-2    secretary of state not later than the 10th day after the date of

 75-3    the canvass of the returns.

 75-4          SECTION 48.  Section 18.01(a), Texas Racing Act (Article

 75-5    179e, Vernon's Texas Civil Statutes), is amended to read as

 75-6    follows:

 75-7          (a)  The Texas Racing Commission is subject to Chapter 325,

 75-8    Government Code (Texas Sunset Act).  Unless continued in existence

 75-9    as provided by that chapter, and except as provided by Subsections

75-10    (b) and (c) of this section, the commission is abolished and this

75-11    Act expires September 1, 2005 [1997].

75-12          SECTION 49.  Section 18.06, Texas Racing Act (Article 179e,

75-13    Vernon's Texas Civil Statutes), is amended to read as follows:

75-14          Sec. 18.06.  Release of liability.  A member of the

75-15    commission, an employee of the commission, a steward or judge, an

75-16    association, a horsemen's organization, or any other person

75-17    regulated under this Act is not liable to any individual,

75-18    corporation, business association, or other entity for a cause of

75-19    action that arises out of that person's performance or exercise of

75-20    discretion in the implementation or enforcement of this Act or a

75-21    rule adopted under this Act if the person has acted in good faith.

75-22          SECTION 50.  Article 18, Texas Racing Act (Article 179e,

75-23    Vernon's Texas Civil Statutes), is amended by adding Section 18.08

75-24    to read as follows:

75-25          Sec. 18.08.  DISTANCE LEARNING.  The commission may provide

75-26    assistance to members of the racing industry who are attempting to

75-27    develop or implement adult, youth, or continuing education programs

 76-1    that use distance learning.

 76-2          SECTION 51.  Section 466.155(a), Government Code, is amended

 76-3    to read as follows:

 76-4          (a)  After a hearing, the director shall deny an application

 76-5    for a license or the commission shall suspend or revoke a license

 76-6    if the director or commission, as applicable, finds that the

 76-7    applicant or sales agent:

 76-8                (1)  is an individual who:

 76-9                      (A)  has been convicted of a felony, criminal

76-10    fraud, gambling or a gambling-related offense, or a misdemeanor

76-11    involving moral turpitude, if less than 10 years has elapsed since

76-12    the termination of the sentence, parole, mandatory supervision, or

76-13    probation served for the offense;

76-14                      (B)  is or has been a professional gambler;

76-15                      (C)  is married to an individual:

76-16                            (i)  described in Paragraph (A) or (B); or

76-17                            (ii)  who is currently delinquent in the

76-18    payment of any state tax;

76-19                      (D)  is an officer or employee of the commission

76-20    or a lottery operator; or

76-21                      (E)  is a spouse, child, brother, sister, or

76-22    parent residing as a member of the same household in the principal

76-23    place of residence of a person described by Paragraph (D);

76-24                (2)  is not an individual, and an individual described

76-25    in Subdivision (1):

76-26                      (A)  is an officer or director of the applicant

76-27    or sales agent;

 77-1                      (B)  holds more than 10 percent of the stock in

 77-2    the applicant or sales agent;

 77-3                      (C)  holds an equitable interest greater than 10

 77-4    percent in the applicant or sales agent;

 77-5                      (D)  is a creditor of the applicant or sales

 77-6    agent who holds more than 10 percent of the applicant's or sales

 77-7    agent's outstanding debt;

 77-8                      (E)  is the owner or lessee of a business that

 77-9    the applicant or sales agent conducts or through which the

77-10    applicant will conduct a ticket sales agency;

77-11                      (F)  shares or will share in the profits, other

77-12    than stock dividends, of the applicant or sales agent; or

77-13                      (G)  participates in managing the affairs of the

77-14    applicant or sales agent;

77-15                (3)  is currently delinquent in the payment of any

77-16    state tax;

77-17                (4)  is a person whose location for the sales agency

77-18    is:

77-19                      (A)  [a racetrack at which wagering is authorized

77-20    under the Texas Racing Act (Article 179e, Vernon's Texas Civil

77-21    Statutes);]

77-22                      [(B)]  a location licensed for games of bingo

77-23    under the Bingo Enabling Act (Article 179d, Vernon's Texas Civil

77-24    Statutes);

77-25                      (B) [(C)]  on land that is owned by:

77-26                            (i)  this state; or

77-27                            (ii)  a political subdivision of this state

 78-1    and on which is located a public primary or secondary school, an

 78-2    institution of higher education, or an agency of the state; or

 78-3                      (C) [(D)]  a location for which a person holds a

 78-4    wine and beer retailer's permit, mixed beverage permit, mixed

 78-5    beverage late hours permit, private club registration permit, or

 78-6    private club late hours permit issued under Chapter 25, 28, 29, 32,

 78-7    or 33, Alcoholic Beverage Code; or

 78-8                (5)  has violated this chapter or a rule adopted under

 78-9    this chapter.

78-10          SECTION 52.  Section 481.172, Government Code, is amended to

78-11    read as follows:

78-12          Sec. 481.172.  Duties.  The department shall:

78-13                (1)  promote and advertise within the United States and

78-14    in foreign countries, by radio, television, newspaper, and other

78-15    means considered appropriate, tourism in this state by non-Texans,

78-16    including persons from foreign countries, and distribute

78-17    promotional materials through appropriate agencies, including the

78-18    United States Travel and Tourism Agency;

78-19                (2)  encourage travel by Texans to this state's scenic,

78-20    historical, natural, agricultural, educational, recreational, and

78-21    other attractions;

78-22                (3)  coordinate and stimulate orderly and accelerated

78-23    development of tourist attractions throughout this state;

78-24                (4)  conduct a public relations campaign to create a

78-25    responsible and accurate national and international image of this

78-26    state;

78-27                (5)  cooperate fully with the Parks and Wildlife

 79-1    Department in all matters relating to promotion of tourism;

 79-2                (6)  cooperate with the Texas Transportation Commission

 79-3    in the administration of the commission's collateral program of

 79-4    highway map distribution and operation of travel information

 79-5    bureaus and other tourist-related functions of the commission;

 79-6    [and]

 79-7                (7)  encourage communities, organizations, and

 79-8    individuals in this state to cooperate with its program by their

 79-9    activities and use of their own funds and collaborate with those

79-10    organizations and other governmental entities in the pursuit of the

79-11    objectives of this subchapter; and

79-12                (8)  promote and encourage the horse racing and

79-13    greyhound racing industry, if funds are appropriated for the

79-14    promotion or encouragement.

79-15          SECTION 53.  Section 151.0035, Tax Code, is amended to read

79-16    as follows:

79-17          Sec. 151.0035.  "DATA PROCESSING SERVICE".  "Data processing

79-18    service" includes word processing, data entry, data retrieval, data

79-19    search, information compilation, payroll and business accounting

79-20    data production, the performance of a totalisator service with the

79-21    use of computational equipment required by the Texas Racing Act

79-22    (Article 179e, Vernon's Texas Civil Statutes), and other

79-23    computerized data and information storage or manipulation.  "Data

79-24    processing service" also includes the use of a computer or computer

79-25    time for data processing whether the processing is performed by the

79-26    provider of the computer or computer time or by the purchaser or

79-27    other beneficiary of the service.

 80-1          SECTION 54.  Sections 2.07, 3.01, 6.08(c), 6.09(b), 11.04(d),

 80-2    15.02, and 18.02, Texas Racing Act (Article 179e, Vernon's Texas

 80-3    Civil Statutes), are repealed.

 80-4          SECTION 55.  (a)  This Act takes effect September 1, 1997.

 80-5          (b)  The changes in law made by this Act relating to the

 80-6    qualifications and appointment of members to the Texas Racing

 80-7    Commission do not affect the entitlement of a member of the

 80-8    commission serving immediately before the effective date of this

 80-9    Act to continue to serve on the commission for the term to which

80-10    the member was appointed.  As the terms of members of the

80-11    commission expire or as vacancies on the commission occur, the

80-12    governor shall make appointments to the commission to achieve as

80-13    soon as possible the membership plan prescribed for the commission

80-14    by the Texas Racing Act (Article 179e, Vernon's Texas Civil

80-15    Statutes), as amended by this Act.

80-16          (c)  The Texas Racing Commission shall review all of the

80-17    rules of the commission before January 1, 2002.  The commission,

80-18    following the review, shall readopt, modify, or repeal the rules

80-19    before January 1, 2002.  In reviewing the rules of the commission,

80-20    the commission shall, to the extent feasible, attempt to have

80-21    uniform approaches to the regulation of activities related to horse

80-22    racing and greyhound racing.

80-23          (d)  The authority for rulemaking and licensing and for any

80-24    action relating exclusively to horse racing or exclusively to

80-25    greyhound racing that was granted to a separate section of the

80-26    Texas Racing Commission is transferred to the Texas Racing

80-27    Commission.

 81-1          SECTION 56.  For the purpose of providing a fair and

 81-2    effective transition for the racing stewards and judges from

 81-3    employment by an association to employment by the state, the Texas

 81-4    Racing Commission shall provide an opportunity for a steward or

 81-5    judge to obtain an exemption from the application of Section

 81-6    2.12(c), Texas Racing Act (Article 179e, Vernon's Texas Civil

 81-7    Statutes), as amended by this Act.  The request for an exemption

 81-8    must be filed by a judge or steward with the Texas Racing

 81-9    Commission on or before October 31, 1997.  The executive secretary

81-10    may approve, limit, or deny the exemption as determined to be

81-11    appropriate under standards adopted by the commission to promote

81-12    fairness and the purposes of this Act.

81-13          SECTION 57.  All amounts, estimated to be $2,741,015 together

81-14    with $194,741 in interest, that have been transferred into Fund 517

81-15    since fiscal year 1992 are applied to reimburse any amount of

81-16    general revenue appropriated for the administration and enforcement

81-17    of the Texas Racing Act that is in excess of the cumulative amount

81-18    deposited in the Texas Racing Commission fund.

81-19          SECTION 58.  For the purpose of providing a study of the

81-20    growth and progress of horse racing in this state, the lieutenant

81-21    governor may create a senate interim committee to report to the

81-22    76th Legislature, Regular Session, 1999.  The committee shall

81-23    consider the overall performance and growth of the state's horse

81-24    racing industry and the relationship between the thoroughbred and

81-25    quarter horse breeds, the horse racing associations, and the Texas

81-26    Racing Commission as that relationship relates to the availability

81-27    of horse racing opportunities and live and simulcasting wagering.

 82-1    The Texas Racing Commission shall provide assistance to the interim

 82-2    committee.

 82-3          SECTION 59.  From September 1, 1997, through December 31,

 82-4    1997, the Texas Racing Commission shall allow cross-species

 82-5    simulcasting to be conducted under the terms of an agreement, if an

 82-6    agreement exists, or, if no agreement exists, as provided by

 82-7    Section 6.091, Texas Racing Act (Article 179e, Vernon's Texas Civil

 82-8    Statutes), as amended by this Act.

 82-9          SECTION 60.  (a)  The changes in law made by this Act apply

82-10    only to an offense committed on or after the effective date of this

82-11    Act.  For purposes of this section, an offense is committed before

82-12    the effective date of this Act if any element of the offense occurs

82-13    before the effective date.

82-14          (b)  An offense committed before the effective date of this

82-15    Act is covered by the law in effect when the offense was committed,

82-16    and the former law is continued in effect for this purpose.

82-17          SECTION 61.  The importance of this legislation and the

82-18    crowded condition of the calendars in both houses create an

82-19    emergency and an imperative public necessity that the

82-20    constitutional rule requiring bills to be read on three several

82-21    days in each house be suspended, and this rule is hereby suspended.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I certify that H.B. No. 1445 was passed by the House on April

         16, 1997, by a non-record vote; and that the House concurred in

         Senate amendments to H.B. No. 1445 on May 22, 1997, by a non-record

         vote; and that the House adopted H.C.R. No. 316 authorizing certain

         corrections in H.B. No. 1445 on May 28, 1997, by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

               I certify that H.B. No. 1445 was passed by the Senate, with

         amendments, on May 20, 1997, by a viva-voce vote; and that the

         Senate adopted H.C.R. No. 316 authorizing certain corrections in

         H.B. No. 1445 on May 29, 1997, by a viva-voce vote.

                                             _______________________________

                                                 Secretary of the Senate

         APPROVED:  _____________________

                            Date

                    _____________________

                          Governor