85R12629 DMS-F
 
  By: Kuempel H.B. No. 3926
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the regulation of horse racing and greyhound racing and
  pari-mutuel wagering in connection with that racing.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1.03, Texas Racing Act (Article 179e,
  Vernon's Texas Civil Statutes), is amended by amending Subdivisions
  (2), (6), (18), (46), (50), (67), and (74) and adding Subdivisions
  (82), (83), and (84) to read as follows:
               (2)  "Association" or "racetrack association" means a
  person licensed under this Act to offer [conduct a horse race
  meeting or a greyhound race meeting with] pari-mutuel wagering on
  horse racing or greyhound racing.
               (6)  "Horse race meeting" means the conducting of live,
  simulcast, or purpose-driven pari-mutuel wagering on horse races on
  a day or during a period of consecutive or nonconsecutive days.
               (18)  "Pari-mutuel wagering" means the form of wagering
  on the outcome of greyhound or horse races [racing] in which [those
  who wager purchase tickets of various denominations on an animal or
  animals and] all wagers [for each race] are pooled and held by the
  racing association for distribution of the total amount, less the
  deductions authorized by this Act, to winning wagers [holders of
  tickets on the winning animals].
               (46)  "Multiple wagering" means wagering on two or more
  entries [animals] in one race or on one or more entries [animals] in
  more than one race. "Multiple two wagering" means wagering on two
  entries [animals] in one or more races. "Multiple three wagering"
  means wagering on three or more entries [animals] in one or more
  races.
               (50)  "Greyhound racing days" means 24-hour periods
  ending at 12 midnight [days] on which a permitted racetrack
  association may conduct [conducts] greyhound racing. ["One racing
  day" means a period commencing at noon and ending at 2 a.m. the next
  calendar day, except in the case of days on which there are matinee
  races.]
               (67)  "Racetrack facility" means a facility operated by
  a racetrack [an] association within its enclosure for the purpose
  of offering [presenting races for] pari-mutuel wagering on the
  outcome of greyhound or horse races.
               (74)  "Race" includes previously run races, whether
  digitally represented, simulated, or presented by video recording
  and a live audio and visual signal of a race.
               (82)  "Purpose-driven pari-mutuel wagering" means
  wagering on a greyhound race or horse race, whether running or
  harness, that:
                     (A)  was previously conducted at a facility
  licensed to offer pari-mutuel wagering on the outcome of greyhound
  or horse races;
                     (B)  concluded with official results; and
                     (C)  concluded without a scratch,
  disqualification, or dead-heat finish.
               (83)  "Purpose-driven pari-mutuel pool" means the
  total amount of money wagered by patrons within the enclosure of a
  racetrack association on the results of a previously run race.
               (84)  "Purpose-driven pari-mutuel wagering system
  provider" means a person, company, or association that contracts
  with a racetrack association to provide the necessary systems and
  hardware to conduct purpose-driven pari-mutuel wagering.
         SECTION 2.  Section 3.02(a), Texas Racing Act (Article 179e,
  Vernon's Texas Civil Statutes), is amended to read as follows:
         (a)  The commission shall regulate and supervise every race
  meeting in this state involving wagering on the result of live,
  simulcast, or previously run greyhound or horse races [racing].
  All persons and things relating to the operation of those meetings
  are subject to regulation and supervision by the commission. The
  commission shall adopt rules for conducting greyhound or horse
  racing in this state involving wagering and shall adopt other rules
  to administer this Act that are consistent with this Act. The
  commission shall also make rules, issue licenses, and take any
  other necessary action relating exclusively to horse racing or to
  greyhound racing.
         SECTION 3.  Section 3.021(a), Texas Racing Act (Article
  179e, Vernon's Texas Civil Statutes), is amended to read as
  follows:
         (a)  Any provision in this Act to the contrary
  notwithstanding, the commission may license and regulate all
  aspects of greyhound racing and horse racing offered in this state,
  whether or not that racing involves pari-mutuel wagering.
         SECTION 4.  Section 3.09, Texas Racing Act (Article 179e,
  Vernon's Texas Civil Statutes), is amended by adding Subsection (c)
  to read as follows:
         (c)  A pari-mutuel pool may be funded with money allocated to
  initiate the pool or a guaranteed amount.
         SECTION 5.  Section 6.01, Texas Racing Act (Article 179e,
  Vernon's Texas Civil Statutes), is amended to read as follows:
         Sec. 6.01.  LICENSE REQUIRED. A person may not conduct
  wagering on a greyhound race or a horse race [meeting] without first
  obtaining a racetrack license from the commission. A person who
  violates this section commits an offense.
         SECTION 6.  Sections 6.03(a) and (b), Texas Racing Act
  (Article 179e, Vernon's Texas Civil Statutes), are amended to read
  as follows:
         (a)  The commission shall require each applicant for an
  original racetrack license to pay the required application fee and
  to submit an application, on a form prescribed by the commission,
  containing the following information:
               (1)  if the applicant is an individual, the full name of
  the applicant, the applicant's date of birth, a physical
  description of the applicant, the applicant's current address and
  telephone number, and a statement by the applicant disclosing any
  arrest or conviction for a felony or for a misdemeanor, except a
  misdemeanor under Subtitle C, Title 7, Transportation Code, [the
  Uniform Act Regulating Traffic on Highways (Article 6701d, Vernon's
  Texas Civil Statutes)] or a similar misdemeanor traffic offense;
               (2)  if the applicant is a corporation:
                     (A)  the state in which it is incorporated, the
  names and addresses of the corporation's agents for service of
  process in this state, the names and addresses of its officers and
  directors, the names and addresses of its stockholders, and, for
  each individual named under this subdivision, the individual's date
  of birth, current address and telephone number, and physical
  description, and a statement disclosing any arrest or conviction
  for a felony or for a misdemeanor, except a misdemeanor under
  Subtitle C, Title 7, Transportation Code, [the Uniform Act
  Regulating Traffic on Highways (Article 6701d, Vernon's Texas Civil
  Statutes)] or a similar misdemeanor traffic offense; and
                     (B)  identification of any other beneficial owner
  of shares in the applicant that bear voting rights, absolute or
  contingent, any other person that directly or indirectly exercises
  any participation in the applicant, and any other ownership
  interest in the applicant that the applicant making its best effort
  is able to identify;
               (3)  if the applicant is an unincorporated business
  association:
                     (A)  the names and addresses of each of its
  members and, for each individual named under this subdivision, the
  individual's date of birth, current address and telephone number,
  and physical description, and a statement disclosing any arrest or
  conviction for a felony or for a misdemeanor, except a misdemeanor
  under Subtitle C, Title 7, Transportation Code, [the Uniform Act
  Regulating Traffic on Highways (Article 6701d, Vernon's Texas Civil
  Statutes)] or a similar misdemeanor traffic offense; and
                     (B)  identification of any other person that
  exercises voting rights in the applicant or that directly or
  indirectly exercises any participation in the applicant and any
  other ownership interest in the applicant that the applicant making
  its best effort is able to identify;
               (4)  the exact location at which a race meeting is to be
  conducted;
               (5)  if the racing facility is in existence, whether it
  is owned by the applicant and, if leased to the applicant, the name
  and address of the owner and, if the owner is a corporation or
  unincorporated business association, the names and addresses of its
  officers and directors, its stockholders and members, if any, and
  its agents for service of process in this state;
               (6)  if construction of the racing facility has not
  been initiated, whether it is to be owned by the applicant and, if
  it is to be leased to the applicant, the name and address of the
  prospective owner and, if the owner is a corporation or
  unincorporated business association, the names and addresses of its
  officers and directors, the names and addresses of its
  stockholders, the names and addresses of its members, if any, and
  the names and addresses of its agents for service of process in this
  state;
               (7)  identification of any other beneficial owner of
  shares that bear voting rights, absolute or contingent, in the
  owner or prospective owner of the racing facility, or any other
  person that directly or indirectly exercises any participation in
  the owner or prospective owner and all other ownership interest in
  the owner or prospective owner that the applicant making its best
  effort is able to identify;
               (8)  a detailed statement of the assets and liabilities
  of the applicant;
               (9)  the kind of racing to be conducted and the dates
  requested;
               (10)  proof of residency as required by Section 6.06 of
  this Act;
               (11)  a copy of each management, concession, [and]
  totalisator contract, and purpose-driven pari-mutuel wagering
  system provider contract dealing with the proposed license at the
  proposed location in which the applicant has an interest for
  inspection and review by the commission; the applicant or licensee
  shall advise the commission of any change in any management,
  concession, [or] totalisator contract, or purpose-driven
  pari-mutuel wagering system provider contract; all management,
  concession, [and] totalisator contracts, and purpose-driven
  pari-mutuel wagering system provider contracts must have prior
  approval of the commission; the same fingerprint, criminal records
  history, and other information required of license applicants
  pursuant to Sections 5.03 and 5.04 and Subdivisions (1) through (3)
  of this subsection shall be required of proposed totalisator firms,
  purpose-driven pari-mutuel wagering system providers,
  concessionaires, and managers and management firms; and
               (12)  any other information required by the commission.
         (b)  When the commission receives a plan for the security of
  a racetrack facility, or a copy of a management, concession, [or]
  totalisator contract, or purpose-driven pari-mutuel wagering
  system provider contract for review under Subdivision (11) of
  Subsection (a) of this section, the commission shall review the
  contract or security plan in an executive session. Documents
  submitted to the commission under this section by an applicant are
  subject to discovery in a suit brought under this Act but are not
  public records and are not subject to Chapter 552, Government Code
  [424, Acts of the 63rd Legislature, Regular Session, 1973 (Article
  6252-17a, Vernon's Texas Civil Statutes)]. In reviewing and
  approving contracts under this subsection, the commission shall
  attempt to ensure the involvement of minority owned businesses
  whenever possible.
         SECTION 7.  Section 6.04, Texas Racing Act (Article 179e,
  Vernon's Texas Civil Statutes), is amended by adding Subsections
  (e) and (f) to read as follows:
         (e)  A racetrack association licensed to offer pari-mutuel
  wagering on horse races, whether live or simulcast, and granted
  live or simulcast race dates may offer purpose-driven pari-mutuel
  wagering on any day during the calendar year.
         (f)  A racetrack association licensed to offer pari-mutuel
  wagering on greyhound races, whether live or simulcast, and granted
  live or simulcast race dates may offer purpose-driven pari-mutuel
  wagering on any day during the calendar year.
         SECTION 8.  Section 6.08(b)(3), Texas Racing Act (Article
  179e, Vernon's Texas Civil Statutes), is amended to read as
  follows:
               (3)  The horse racetrack [racing] association shall
  transfer the amount set aside for purses from any live,
  purpose-driven, and simulcast pools and shall deposit the amounts
  in purse accounts maintained by breed by the horsemen's
  organization in one or more federally insured depositories. Legal
  title to purse accounts is vested in the horsemen's organization.
  The horsemen's organization may contract with a racetrack [an]
  association to manage and control the purse accounts and to make
  disbursements from the purse accounts:
                     (A)  to an owner whose horse won a purse;
                     (B)  to the horsemen's organization for its
  expenses; or
                     (C)  for other disbursements as provided by
  contract between the horsemen's organization and the association.
         SECTION 9.  Section 6.08, Texas Racing Act (Article 179e,
  Vernon's Texas Civil Statutes), is amended by amending Subsections
  (i) and (j) and adding Subsections (o) and (p) to read as follows:
         (i)  Ten percent of the total breakage from a live
  pari-mutuel pool, purpose-driven pari-mutuel pool, or a simulcast
  pari-mutuel pool is to be paid to the commission for use by the
  appropriate state horse breed registry, subject to rules
  promulgated by the commission. The appropriate breed registry for
  Thoroughbred horses is the Texas Thoroughbred [Breeders]
  Association, for quarter horses is the Texas Quarter Horse
  Association, for Appaloosa horses is the Texas Appaloosa Horse
  Club, for Arabian horses is the Texas Arabian Breeders Association,
  and for paint horses is the Texas Paint Horse Breeders Association.
         (j)  Ten percent of the total breakage from a live
  pari-mutuel pool, purpose-driven pari-mutuel pool, or a simulcast
  pari-mutuel pool is to be retained by the racetrack association to
  be used in stakes races restricted to accredited Texas-bred horses.
  The appropriate state horse breed registry shall pay out the
  remaining 80 percent of the total breakage as follows:
               (1)  40 percent of the remaining breakage is allocated
  to the owners of the accredited Texas-bred horses that finish
  first, second, or third;
               (2)  40 percent is allocated to the breeders of the
  accredited Texas-bred horses that finish first, second, or third;
  and
               (3)  20 percent is allocated to the owner of the
  stallion standing in this state at the time of conception whose
  Texas-bred get finish first, second, or third.
         (o)  A racetrack association may not begin offering
  purpose-driven pari-mutuel wagering until the association
  executes:
               (1)  a valid contract with the officially recognized
  horsemen's organization to establish the portion of the
  association's commission on purpose-driven pari-mutuel pools that
  will be set aside for purses; and
               (2)  a valid contract with the official breed
  registries to establish the portion of the association's commission
  on purpose-driven pari-mutuel pools that will be set aside for
  breeder incentives.
         (p)  The commission shall be the final arbiter of any
  disagreements between a racetrack association and the horsemen's
  organization, or between a racetrack association and the official
  breed registries when reaching the terms of a valid contract.
         SECTION 10.  Section 6.09, Texas Racing Act (Article 179e,
  Vernon's Texas Civil Statutes), is amended by amending Subsections
  (a) and (d) and adding Subsections (g) and (h) to read as follows:
         (a)  Every racetrack association authorized under this Act
  to conduct pari-mutuel wagering at a greyhound race meeting on
  races run shall distribute all sums deposited in any live or
  simulcast pari-mutuel pool to the holders of the winning tickets if
  those tickets are presented for payment within 60 days after the
  closing day of the race meeting at which the pool was formed, less
  an amount paid as a commission of 18 percent of the total deposits
  in pools resulting from regular win, place, and show wagering, and
  an amount not to exceed 21 percent of the total deposits in pools
  resulting from multiple two wagering and an amount not to exceed 25
  percent of the total deposits in pools resulting from multiple
  three wagering.
         (d)  Fifty percent of the breakage for live, previously run,
  or simulcast races is to be paid to the appropriate state greyhound
  breeding registry. Of that portion of the breakage 25 percent of
  that breakage is to be used in stakes races and 25 percent of that
  total breakage from a live pari-mutuel pool, purpose-driven
  pari-mutuel pool, or a simulcast pari-mutuel pool is to be paid to
  the commission for the use by the state greyhound breed registry,
  subject to rules promulgated by the commission.
         (g)  A racetrack association may not begin offering
  purpose-driven pari-mutuel wagering until the association executes
  a valid contract with the Texas Greyhound Association that
  establishes the portions of the association's commission on
  purpose-driven pari-mutuel pools that will be set aside for purses
  and breeder incentives.
         (h)  The commission shall be the final arbiter of any
  disagreements between an association and the Texas Greyhound
  Association when reaching the terms of a valid contract.
         SECTION 11.  Sections 6.092(a) and (c), Texas Racing Act
  (Article 179e, Vernon's Texas Civil Statutes), are amended to read
  as follows:
         (a)  The commission shall adopt reporting, monitoring, and
  auditing requirements or other appropriate performance measures
  for any funds distributed to or used by or any function or service
  provided by the expenditure of any funds distributed to or used by
  any organization that receives funds generated by live,
  purpose-driven, or simulcast pari-mutuel wagering [racing].
         (c)  An organization receiving funds generated by
  pari-mutuel wagering on live, purpose-driven, or simulcast
  [pari-mutuel] racing shall annually file with the commission a copy
  of an audit report prepared by an independent certified public
  accountant. The audit shall include a verification of any
  performance report sent to or required by the commission.
         SECTION 12.  Article 6, Texas Racing Act (Article 179e,
  Vernon's Texas Civil Statutes), is amended by adding Section 6.095
  to read as follows:
         Sec. 6.095.  DEDUCTIONS FROM PURPOSE-DRIVEN PARI-MUTUEL
  POOL. (a) For each dollar wagered in a purpose-driven pari-mutuel
  pool, a racetrack association shall set aside for this state an
  amount equal to one percent to be distributed in the following order
  of priority:
               (1)  $20 million is allocated to pay the costs of body
  armor for law enforcement officers in this state;
               (2)  $10 million is allocated as death benefits for
  families of law enforcement officers killed in the line of duty; and
               (3)  any remainder is allocated for deposit to the
  general revenue fund to be used at the discretion of this state.
         (b)  For each dollar wagered in a purpose-driven pari-mutuel
  pool, a racetrack association shall set aside for nonprofit
  corporations an amount equal to one percent.
         (c)  At any time purpose-driven pari-mutuel wagering is
  offered, each racetrack association shall contract with 10
  nonprofit corporations to provide contributions to the
  corporations from purpose-driven pari-mutuel wagering. A contract
  with a nonprofit corporation may be for a term of 30 days or more.
         (d)  Any nonprofit corporation registered under 26 U.S.C.
  Section 501(c)(3) that has operations in this state and that filed
  an Internal Revenue Service Form 990 in the previous calendar year
  is eligible to participate. The commission shall adopt rules on the
  application process and selection criteria under this section.
         (e)  Of the 10 nonprofit corporations contracted under
  Subsection (c):
               (1)  at least one must benefit law enforcement
  programs;
               (2)  at least one must benefit veterans of the armed
  forces of this state or the United States; and
               (3)  not more than three may benefit the racing
  industry.
         SECTION 13.  Section 6.11(a), Texas Racing Act (Article
  179e, Vernon's Texas Civil Statutes), is amended to read as
  follows:
         (a)  In no event shall the purse in a greyhound race be less
  than a minimum of 4.7 percent of the total deposited in each live or
  simulcast pool.
         SECTION 14.  Section 6.14(a), Texas Racing Act (Article
  179e, Vernon's Texas Civil Statutes), is amended to read as
  follows:
         (a)  A racetrack [An] association may not conduct greyhound
  or horse racing or offer pari-mutuel wagering on greyhound or horse
  races, whether live, simulcast, or purpose-driven, at any place
  other than the place designated in the license except as provided by
  this section or by Section 6.15 of this Act. However, if the
  racetrack or enclosure designated in the license becomes unsuitable
  for racing because of fire, flood, or other catastrophe, the
  affected association, with the prior approval of the commission,
  may conduct a race meeting or any remaining portion of a meeting
  temporarily at any other racetrack licensed by the commission to
  conduct the same type of racing as may be conducted by the affected
  association if the licensee of the other racetrack also consents to
  the usage.
         SECTION 15.  Section 11.01(a), Texas Racing Act (Article
  179e, Vernon's Texas Civil Statutes), is amended to read as
  follows:
         (a)  Pari-mutuel wagering on the outcome of greyhound races
  and horse races, whether live, simulcast, or previously run, is
  authorized under this Act. The commission shall adopt rules to
  regulate wagering on the outcome of greyhound races and horse
  races, whether live, simulcast, or previously run, under the system
  known as pari-mutuel wagering. Wagering may be conducted only by a
  racetrack [an] association within its enclosure. A person may not
  accept, in person, by telephone, or over the Internet, a wager for a
  horse race or greyhound race conducted inside or outside this state
  from a person in this state unless the wager is authorized under
  this Act.
         SECTION 16.  Section 11.04(a), Texas Racing Act (Article
  179e, Vernon's Texas Civil Statutes), is amended to read as
  follows:
         (a)  Only a person inside the enclosure where [both] live or
  [and] simulcast race meetings are authorized may wager on the
  results [result] of [a] live, previously run, or simulcast races
  [race] presented by the racetrack association in accordance with
  commission rules. Except as provided by this section, a person may
  not place, in person, by telephone, or over the Internet, a wager
  for a horse race or greyhound race conducted inside or outside this
  state. The commission shall adopt rules to prohibit wagering by
  employees of the commission and to regulate wagering by persons
  licensed under this Act.
         SECTION 17.  Section 6.09(e), Texas Racing Act (Article
  179e, Vernon's Texas Civil Statutes), is repealed.
         SECTION 18.  As soon as practicable after the effective date
  of this Act, the Texas Racing Commission shall adopt the rules
  necessary to implement the changes in law made by this Act.
         SECTION 19.  This Act takes effect September 1, 2017.