1-1                                   AN ACT
 1-2     relating to incentives under the Texas Racing Act for the
 1-3     Thoroughbred or Arabian horse breeding industry in this state.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 1.03(21), Texas Racing Act (Article 179e,
 1-6     Vernon's Texas Civil Statutes), is amended to read as follows:
 1-7                 (21)  "Texas-bred horse" means a horse qualified under
 1-8     the rules of the commission that is:
 1-9                       (A)  sired by a stallion standing in Texas at the
1-10     time of conception and foaled by a mare in Texas;
1-11                       (B)  foaled by a mare [, except that a mare may
1-12     be] bred outside Texas and brought into Texas to foal at any time
1-13     [and all foals sired and foaled under those conditions] in the
1-14     mare's lifetime [shall be considered "Texas-bred"] if the mare is
1-15     bred back to a stallion standing in Texas; or
1-16                       (C)  a Thoroughbred or Arabian horse foaled in
1-17     Texas by an accredited Texas-bred mare if the mare was bred outside
1-18     Texas and returned to Texas on or before August 15 of the calendar
1-19     year of conception.  [In all instances any foal must qualify under
1-20     the rules of the commission.]
1-21           SECTION 2.  Section 6.08, Texas Racing Act (Article 179e,
1-22     Vernon's Texas Civil Statutes), is amended by adding Subsection (n)
1-23     to read as follows:
1-24           (n)  An accredited Texas-bred Thoroughbred or Arabian horse
 2-1     described by Section 1.03(21)(C) of this Act is eligible for only
 2-2     one-half of the incentives awarded under Subsections (f) and (j)(2)
 2-3     of this section.  The remaining portion shall be retained by the
 2-4     appropriate state horse breed registry for general distribution at
 2-5     the same meeting in accordance with Subsections (f) and (j) of this
 2-6     section.
 2-7           SECTION 3.  Section 9.03, Texas Racing Act (Article 179e,
 2-8     Vernon's Texas Civil Statutes), is amended to read as follows:
 2-9           Sec. 9.03.  TEXAS-BRED RACE. (a)  An association shall
2-10     provide for the running of races limited to accredited Texas-bred
2-11     horses, each to be known as a Texas-bred race.  Unless otherwise
2-12     provided by this section, on every racing day, an association shall
2-13     provide for the running of at least two races limited to accredited
2-14     Texas-bred horses, one of which shall be restricted to maidens.
2-15     Before January 1, 1994, if on any day not enough horses are entered
2-16     in an accredited Texas-bred race to provide sufficient competition,
2-17     an association shall provide for the running of two races in which
2-18     accredited Texas-bred horses are preferred.  An association may
2-19     defer, in accordance with commission rule, the running of one or
2-20     both of the two races required by this section for each racing day,
2-21     but the association must provide that the total number of
2-22     accredited Texas-bred races in a race meeting is equal to twice the
2-23     total number of race dates in the race meeting.
2-24           (b)  To encourage the breeding of horses in this state, any
2-25     accredited Texas-bred horse finishing first, second, or third in
2-26     any race in this state except a restricted stakes race shall
2-27     receive a purse supplement.  The appropriate state breed registry
 3-1     shall act in an advisory capacity to the association and the
 3-2     commission for the purpose of administering the provisions of this
 3-3     section.
 3-4           (c)  An accredited Texas-bred Thoroughbred horse that
 3-5     finishes first, second, or third in a race other than a Texas-bred
 3-6     race shall receive an owner's bonus award as a purse supplement.  A
 3-7     percentage of the Texas-bred program funds received under Sections
 3-8     6.08 and 6.091, excluding expenses for administration of the
 3-9     Texas-bred program, shall be allocated to fund the bonus awards as
3-10     follows:
3-11                 (1)  for 2002, 10 percent;
3-12                 (2)  for 2003, 12.5 percent;
3-13                 (3)  for 2004, 15 percent;
3-14                 (4)  for 2005, 17.5 percent;
3-15                 (5)  for 2006, 20 percent;
3-16                 (6)  for 2007, 22.5 percent; and
3-17                 (7)  for 2008 and subsequent years, 25 percent.
3-18           SECTION 4.  This Act takes effect January 1, 2002.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 1196 was passed by the House on April
         10, 2001, by a non-record vote.
                                             _______________________________
                                                 Chief Clerk of the House
               I certify that H.B. No. 1196 was passed by the Senate on May
         17, 2001, by the following vote:  Yeas 30, Nays 0, 1 present, not
         voting.
                                             _______________________________
                                                 Secretary of the Senate
         APPROVED:  __________________________
                              Date
                    __________________________
                            Governor