82R6380 KYF-D
	By: Hinojosa, Hegar	S.B. No. 659

	A BILL TO BE ENTITLED
	AN ACT
	relating to the continuation and functions of the Texas Racing
	Commission, the abolishment of the Equine Research Account Advisory
	Committee, and the authority of Texas AgriLife Research; providing
	an administrative penalty.
	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 adding Subdivisions
	(80) and (81) to read as follows:
	(80)  "Active license" means a racetrack license
	designated by the commission as active.
	(81)  "Inactive license" means a racetrack license
	designated by the commission as inactive.
	SECTION 2.  Section 2.071, Texas Racing Act (Article 179e,
	Vernon's Texas Civil Statutes), is amended to read as follows:
	Sec. 2.071.  CONFLICT OF INTEREST.  (a)  A person may not be
	a member of the commission and may not be a commission employee
	employed in a "bona fide executive, administrative, or professional
	capacity," as that phrase is used for purposes of establishing an
	exemption to the overtime provisions of the federal Fair Labor
	Standards Act of 1938 (29 U.S.C. Section 201 et seq.), if:
	(1)  the person is an [An] officer, employee, or paid
	consultant of a Texas trade association in the field of horse or
	greyhound racing or breeding; or
	(2) the person's [may not be a member of the commission
	or an employee of the commission who is exempt from the state's
	position classification plan or is compensated at or above the
	amount prescribed by the General Appropriations Act for step 1,
	salary group 17, of the position classification salary schedule.
	[(b)  A person who is the] spouse is [of] an officer,
	manager, or paid consultant of a Texas trade association in the
	field of horse or greyhound racing or breeding [may not be a member
	of the commission and may not be an employee of the commission who
	is exempt from the state's position classification plan or is
	compensated at or above the amount prescribed by the General
	Appropriations Act for step 1, salary group 17, of the position
	classification salary schedule].
	(b)  A person may not be a member of the commission or act as
	the general counsel to the commission if the person is required to
	register as a lobbyist under Chapter 305, Government Code, because
	of the person's activities for compensation on behalf of a
	profession related to the operation of the commission.
	(c)  In [For the purposes of] this section, "Texas trade
	association" means [a Texas trade association is] a cooperative and
	voluntarily joined statewide [nonprofit] association of business
	or professional competitors in this state designed to assist its
	members and its industry or profession in dealing with mutual
	business or professional problems and in promoting their common
	interest.
	SECTION 3.  Article 2, Texas Racing Act (Article 179e,
	Vernon's Texas Civil Statutes), is amended by adding Section 2.25
	to read as follows:
	Sec. 2.25.  NEGOTIATED RULEMAKING AND ALTERNATIVE DISPUTE
	RESOLUTION PROCEDURES. (a) The commission shall develop and
	implement a policy to encourage the use of:
	(1)  negotiated rulemaking procedures under Chapter
	2008, Government Code, for the adoption of commission rules; and
	(2)  appropriate alternative dispute resolution
	procedures under Chapter 2009, Government Code, to assist in the
	resolution of internal and external disputes under the commission's
	jurisdiction.
	(b)  The commission's procedures relating to alternative
	dispute resolution shall conform, to the extent possible, to any
	model guidelines issued by the State Office of Administrative
	Hearings for the use of alternative dispute resolution by state
	agencies.
	(c)  The commission shall:
	(1)  coordinate the implementation of the policy
	adopted under Subsection (a) of this section;
	(2)  provide training as needed to implement the
	procedures for negotiated rulemaking or alternative dispute
	resolution; and
	(3)  collect data concerning the effectiveness of those
	procedures.
	SECTION 4.  Section 3.07(e), Texas Racing Act (Article 179e,
	Vernon's Texas Civil Statutes), is amended to read as follows:
	(e)  To pay the charges associated with the medication or
	drug testing, an association may use the money held by the
	association to pay outstanding tickets and pari-mutuel vouchers.
	If additional amounts are needed to pay the charges, the
	association shall pay those additional amounts. [If the amount
	held exceeds the amount needed to pay the charges, the association
	shall pay the excess to the commission in accordance with Section
	11.08 of this Act.]
	SECTION 5.  Sections 5.03(a) and (c), Texas Racing Act
	(Article 179e, Vernon's Texas Civil Statutes), are amended to read
	as follows:
	(a)  An applicant for any license or license renewal under
	this Act must, except as allowed under Section 7.10 of this Act,
	submit to the commission a complete set of fingerprints of the
	individual natural person applying for the license or license
	renewal or, if the applicant is not an individual natural person, a
	complete set of fingerprints of each officer or director and of each
	person owning an interest of at least five percent in the applicant.
	The Department of Public Safety may request any person owning any
	interest in an applicant for a racetrack license to submit a
	complete set of fingerprints.
	(c)  A peace officer of this or any other state, or any
	district office of the commission, shall take the fingerprints of
	an applicant for a license or license renewal on forms approved and
	furnished by the Department of Public Safety and shall immediately
	deliver them to the commission.
	SECTION 6.  Article 6, Texas Racing Act (Article 179e,
	Vernon's Texas Civil Statutes), is amended by adding Section 6.032
	to read as follows:
	Sec. 6.032.  BOND. (a)  The commission at any time may
	require a holder of a racetrack license or an applicant for a
	racetrack license to post security in an amount determined by
	commission rule to adequately ensure the license holder's or
	applicant's compliance with this Act and commission rules.
	(b)  Cash, cashier's checks, surety bonds, irrevocable bank
	letters of credit, United States Treasury bonds that are readily
	convertible to cash, or irrevocable assignments of federally
	insured deposits in banks, savings and loan institutions, and
	credit unions are acceptable as security for purposes of this
	section.  The security must be:
	(1)  conditioned on compliance with this Act and
	commission rules adopted under this Act; and
	(2)  returned after the conditions of the security are
	met.
	SECTION 7.  The heading to Section 6.04, Texas Racing Act
	(Article 179e, Vernon's Texas Civil Statutes), is amended to read
	as follows:
	Sec. 6.04.  ISSUANCE OF LICENSE[; BOND].
	SECTION 8.  Section 6.06(k), Texas Racing Act (Article 179e,
	Vernon's Texas Civil Statutes), is amended to read as follows:
	(k)  The commission shall review the ownership and
	management of an active [a] license issued under this article every
	five years beginning on the fifth anniversary of the issuance of the
	license.  In performing the review, the commission may require the
	license holder to provide any information that would be required to
	be provided in connection with an original license application
	under Article 5 of this Act or this article.  The commission shall
	charge fees for the review in amounts sufficient to implement this
	subsection.
	SECTION 9.  Article 6, Texas Racing Act (Article 179e,
	Vernon's Texas Civil Statutes), is amended by adding Sections
	6.0601, 6.0602, and 6.0603 to read as follows:
	Sec. 6.0601.  DESIGNATION OF ACTIVE AND INACTIVE RACETRACK
	LICENSES.  (a)  The commission shall designate each racetrack
	license as an active license or an inactive license.  The commission
	may change the designation of a racetrack license as appropriate.
	(b)  The commission shall designate a racetrack license as an
	active license if the license holder:
	(1)  holds live racing events at the racetrack; or
	(2)  makes good faith efforts to conduct live racing.
	(c)  Before the first anniversary of the date a new racetrack
	license is issued, the commission shall conduct an evaluation of
	the license to determine whether the license is an active or
	inactive license.
	Sec. 6.0602.  RENEWAL OF INACTIVE RACETRACK LICENSE; FEES.
	(a)  The commission by rule shall establish an annual renewal
	process for inactive licenses and may require the license holder to
	provide any information required for an original license
	application under this Act.  An inactive license holder must
	complete the annual renewal process established under this section
	until the commission:
	(1)  designates the license as an active license; or
	(2)  refuses to renew the license.
	(b)  In determining whether to renew an inactive license, the
	commission shall consider:
	(1)  the inactive license holder's:
	(A)  financial stability;
	(B)  ability to conduct live racing;
	(C)  ability to construct and maintain a racetrack
	facility; and
	(D)  other good faith efforts to conduct live
	racing; and
	(2)  other necessary factors considered in the issuance
	of the original license.
	(c)  The commission may refuse to renew an inactive license
	if, after notice and a hearing, the commission determines that:
	(1)  renewal of the license is not in the best interests
	of the racing industry or the public; or
	(2)  the license holder has failed to make a good faith
	effort to conduct live racing.
	(d)  The commission shall consult with members of the racing
	industry and other key stakeholders in developing the license
	renewal process under this section.
	(e)  The commission shall set and collect renewal fees in
	amounts reasonable and necessary to cover the costs of
	administering and enforcing this section.
	Sec. 6.0603.  DISCIPLINARY ACTION. (a) The commission by
	rule shall establish procedures for disciplinary action against a
	racetrack license holder.
	(b)  If, after notice and hearing, the commission finds that
	a racetrack license holder or a person employed by the racetrack has
	violated this Act or a commission rule or if the commission finds
	during a review or renewal that the racetrack is ineligible for a
	license under this article, the commission may:
	(1)  revoke, suspend, or refuse to renew the racetrack
	license;
	(2)  impose an administrative penalty as provided under
	Section 15.03 of this Act; or
	(3)  take any other action as provided by commission
	rule.
	SECTION 10.  Section 6.08(h), Texas Racing Act (Article
	179e, Vernon's Texas Civil Statutes), is amended to read as
	follows:
	(h)  Two percent of the breakage shall be allocated to the
	equine research account under Subchapter F, Chapter 88 [51],
	Education Code. The remaining 98 percent of the breakage shall
	constitute "total breakage" and shall be allocated pursuant to
	Subsections (i) and (j) of this section.
	SECTION 11.  The heading to Section 6.18, Texas Racing Act
	(Article 179e, Vernon's Texas Civil Statutes), is amended to read
	as follows:
	Sec. 6.18.  ANNUAL FEE FOR RACETRACK [TERM OF] LICENSE[;
	RESTRICTIONS ON RACETRACKS].
	SECTION 12.  Section 6.18(b), Texas Racing Act (Article
	179e, Vernon's Texas Civil Statutes), is amended to read as
	follows:
	(b)  The commission may prescribe a reasonable annual fee to
	be paid by each racetrack licensee. The fee must be in an amount
	sufficient to provide that the total amount of fees imposed under
	this section, together with the license fees prescribed under
	Section 5.01(b) of this Act and the renewal fees prescribed under
	Section 6.0602(e) of this Act, is sufficient to pay the costs of
	administering and enforcing this Act.
	SECTION 13.  Section 7.01, Texas Racing Act (Article 179e,
	Vernon's Texas Civil Statutes), is amended to read as follows:
	Sec. 7.01.  LICENSE REQUIRED. (a)  Except as provided by
	this section, a [A] person may not participate in racing with
	pari-mutuel wagering other than as a spectator or as a person
	placing a wager without first obtaining a license from the
	commission.  A person may not engage in any occupation for which
	commission rules require a license under this Act without first
	obtaining a license from the commission.
	(b)  The commission by rule shall categorize the occupations
	of racetrack employees and determine the occupations that afford
	the employee an opportunity to influence racing with pari-mutuel
	wagering.  The rules must require the following employees to be
	licensed under this Act:
	(1)  an employee who works in an occupation determined
	by the commission to afford the employee an opportunity to
	influence racing with pari-mutuel wagering; or
	(2)  an employee who will likely have significant
	access to the backside of a racetrack or to restricted areas of the
	frontside of a racetrack.
	(c)  A racetrack licensed under this Act is responsible for
	ensuring that its employees comply with this Act and commission
	rules.  The commission may impose disciplinary action against a
	licensed racetrack for violations of this Act and commission rules
	by its employees as provided by Section 6.0603 of this Act.
	SECTION 14.  Section 7.07, Texas Racing Act (Article 179e,
	Vernon's Texas Civil Statutes), is amended by amending Subsection
	(a) and adding Subsection (a-1) to read as follows:
	(a)  A license issued under this article is valid for a
	period set by the commission not to exceed 36 months following the
	date of its issuance. It is renewable on application, satisfactory
	results of a criminal history information record check, and payment
	of the fee in accordance with the rules of the commission.
	(a-1)  The commission shall obtain criminal history record
	information on each applicant renewing an occupational license
	under this article. The commission shall ensure that criminal
	history record information is obtained on each license holder at
	least once every 36 months.
	SECTION 15.  Section 11.01, Texas Racing Act (Article 179e,
	Vernon's Texas Civil Statutes), is amended by amending Subsection
	(a) and adding Subsection (a-1) to read as follows:
	(a)  The commission shall adopt rules to regulate wagering on
	greyhound races and horse races under the system known as
	pari-mutuel wagering. Wagering may be conducted only by 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.
	(a-1)  The commission may commission as many investigators
	as the commission determines necessary to enforce this Act and the
	rules of the commission. Each investigator shall take the
	constitutional oath of office and file it with the commission. Each
	commissioned investigator has the powers of a peace officer.
	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 and
	simulcast race meetings are authorized may wager on the result of a
	live or simulcast race presented by the 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 11.05, Texas Racing Act (Article 179e,
	Vernon's Texas Civil Statutes), is amended to read as follows:
	Sec. 11.05.  UNLAWFUL WAGERING.  A person shall not wager on
	the result of a greyhound race or horse race in this state except as
	permitted by this Act. A person who is not an association under
	this Act may not accept from a Texas resident while the resident is
	in this state a wager on the result of a greyhound race or horse race
	conducted inside or outside this state.
	SECTION 18.  Section 18.01(a), Texas Racing Act (Article
	179e, Vernon's Texas Civil Statutes), is amended to read as
	follows:
	(a)  The Texas Racing Commission is subject to Chapter 325,
	Government Code (Texas Sunset Act). Unless continued in existence
	as provided by that chapter, and except as provided by Subsections
	(b) and (c) of this section, the commission is abolished and this
	Act expires September 1, 2017 [2011].
	SECTION 19.  Section 88.521(2), Education Code, is amended
	to read as follows:
	(2)  "Director" means the executive director of Texas
	AgriLife Research, formerly known as the Texas Agricultural
	Experiment Station.
	SECTION 20.  Sections 88.522(b), (c), (f), and (g),
	Education Code, are amended to read as follows:
	(b)  The director shall administer the account through
	established procedures of Texas AgriLife Research, formerly known
	as the Texas Agricultural Experiment Station.
	(c)  The comptroller shall periodically transfer the amounts
	specified by Sections [Section] 6.08(f) and (h), Texas Racing Act
	(Article 179e, Vernon's Texas Civil Statutes), to the account.
	(f)  Not more than 10 percent of the account may be spent each
	year on the cost incurred in the operation or administration of the
	[advisory committee or] account.
	(g)  All money received by [the advisory committee or] the
	account under this chapter is subject to Subchapter F, Chapter 404,
	Government Code.
	SECTION 21.  Section 88.525, Education Code, is amended by
	adding Subsections (a-1) and (b-1) and amending Subsection (b) to
	read as follows:
	(a-1)  In awarding grants under this section, the director
	shall comply with the conflict of interest provisions of The Texas
	A&M University System.
	(b)  The [With the advice of the advisory committee, the]
	director shall develop annually a request for proposals for equine
	research grants. Each proposal received may [must] be evaluated by
	a peer review committee appointed by the director and subject
	matter experts as necessary to evaluate the proposal. The peer
	review committee shall consider the applicant's research capacity
	and the relevance and scientific merit of the proposal and make
	recommendations to the director.
	(b-1)  The director may award a grant to an applicant who
	proposes to commingle grant money awarded under this section with
	other sources of funding or proposes to conduct research that
	includes equine research.
	SECTION 22.  Section 88.526(a), Education Code, is amended
	to read as follows:
	(a)  The director shall prepare an annual report on equine
	research funded under this subchapter. The director shall
	distribute the report to the Texas Racing Commission and [the]
	members of the Texas horse racing industry [advisory committee].
	The director shall make copies of the report available to
	interested parties.
	SECTION 23.  Section 88.527, Education Code, is amended to
	read as follows:
	Sec. 88.527.  CONFERENCE.  Texas AgriLife Research [The
	Texas Agricultural Extension Service] shall conduct an annual
	conference on equine research. Money from the equine research
	account shall be used to defray the costs of the conference. The
	conference must be designed to bring to the attention of the Texas
	horse racing industry the latest research results and technological
	developments in equine research. The director shall make the
	report created under Section 88.526 available at the conference.
	SECTION 24.  The following sections of the Texas Racing Act
	(Article 179e, Vernon's Texas Civil Statutes) are repealed:
	(1)  Section 2.072;
	(2)  Section 6.04(b);
	(3)  Section 6.18(a); and
	(4)  Section 7.02(a).
	SECTION 25.  The following sections of the Education Code
	are repealed:
	(1)  Section 88.521(1);
	(2)  Section 88.523;
	(3)  Section 88.5231;
	(4)  Section 88.5232;
	(5)  Section 88.524;
	(6)  Section 88.5245; and
	(7)  Section 88.525(c).
	SECTION 26.  (a)  Not later than September 1, 2012, the Texas
	Racing Commission shall designate each racetrack license as active
	or inactive as required by Section 6.0601, Texas Racing Act
	(Article 179e, Vernon's Texas Civil Statutes), as added by this
	Act.
	(b)  The Texas Racing Commission may adjust license renewal
	and review fees pursuant to the commission's authority to adjust
	fees under Section 5.01, Texas Racing Act (Article 179e, Vernon's
	Texas Civil Statutes), and Section 6.0602, Texas Racing Act
	(Article 179e, Vernon's Texas Civil Statutes), as added by this
	Act, to recover any money lost by the change in law made by this Act
	to Section 3.07(e), Texas Racing Act (Article 179e, Vernon's Texas
	Civil Statutes).
	(c)  As soon as practicable, the executive director of Texas
	AgriLife Research shall submit a report to the Texas Racing
	Commission as required by Section 88.526, Education Code, as
	amended by this Act.
	SECTION 27.  This Act takes effect September 1, 2011.