SB-0504, As Passed House, June 7, 2016

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 504

     A bill to amend 1995 PA 279, entitled

"Horse racing law of 1995,"

by amending sections 2, 8, 9, 10, 12, 14, 17, 18, 19, 19a, 20, 22,

30, and 31 (MCL 431.302, 431.308, 431.309, 431.310, 431.312,

431.314, 431.317, 431.318, 431.319, 431.319a, 431.320, 431.322,

431.330, and 431.331), section 2 as amended by 2006 PA 445,

sections 9, 10, and 12 as amended by 2000 PA 164, sections 14, 17,

and 18 as amended and section 19a as added by 1998 PA 408, and

section 20 as amended by 2006 PA 185, and by adding sections 6a and

19b.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 2. As used in this act:

     (a) "Affiliate" means a person who, directly or indirectly,

controls, is controlled by, or is under common control with; is in

a partnership or joint venture relationship with; or is a co-

shareholder of a corporation, co-member of a limited liability

company, or co-partner in a limited liability partnership with a

person who holds or applies for a race meeting or track license

under this act. For purposes of this subdivision, a controlling

interest is a pecuniary interest of more than 15%.

     (b) "Breaks" means the cents over any multiple of 10 otherwise

payable to a patron on a wager of $1.00.

     (c) "Certified horsemen's organization" means an organization

that is registered with the office of racing commissioner in a

manner and form required by the racing commissioner , and that can

demonstrate all of the following:

     (i) The organization's capacity to supply horses.

     (ii) The organization's ability to assist a race meeting

licensee in conducting the licensee's racing program.

     (iii) The organization's ability to monitor and improve

physical conditions and controls for individuals and horses

participating at licensed race meetings.

     (iv) The organization's ability to protect the financial

interests of the individuals participating at licensed race

meetings.

     (d) "City area" means a city with a population of 750,000 or

more and every county located wholly or partly within 30 miles of

the city limits of the city.

     (d) "Commissioner" or "racing commissioner" means the

executive director of the Michigan gaming control board appointed

under section 4 of the Michigan gaming control and revenue act,

1996 IL 1, MCL 432.204, who is ordered under Executive

Reorganization Order No. 2009-31, MCL 324.99919, to perform all the

functions and exercise the powers performed and exercised by the

racing commissioner before that position was abolished.

     (e) "Controlled substance" means that term as defined in

section 7104 of the public health code, 1978 PA 368, MCL 333.7104.

     (f) "Day of operation" means a period of 24 hours beginning at

12 noon and ending at 11:59 a.m. the following day.

     (g) "Drug" means any of the following:

     (i) A substance intended for use in the diagnosis, cure,

mitigation, treatment, or prevention of disease in humans or other

animals.

     (ii) A substance, other than food, intended to affect the

structure , or condition , or any function of the body of humans or

other animals.

     (iii) A substance intended for use as a component of a

substance specified in subparagraph (i) or (ii).

     (h) "Fair" means any a county, district, or community fair and

any or a state fair.

     (i) "Foreign substance" means a substance, or its metabolites,

that does not exist naturally in an untreated horse or, if natural

to an untreated horse, exists at an unnaturally high physiological

concentration as a result of having been administered to the horse.

     (j) "Full card simulcast" means an entire simulcast racing

program of 1 or more race meeting licensees located in this state,

or an entire simulcast racing program of 1 or more races

simulcasted from 1 or more racetracks located outside of this

state.

     (k) "Horsemen's simulcast purse account" means an account

maintained with a financial institution and managed by a designated

agent as described in section 19 to receive and distribute money as

provided in this act.

(l) (k) "Member of the immediate family" means the spouse,

child, parent, or sibling.

     (m) "Net commission" means the amount determined under section

17(3), after first deducting from the licensee's statutory

commission the applicable state tax on wagering due and payable

under section 22 and the actual verified fee paid by the licensee

to the sending host track to receive the simulcast signal.

     (n) "Office of the racing commissioner" means the horse racing

section of the horse racing, audit, and gaming technology division

of the Michigan gaming control board created by section 4 of the

Michigan gaming control and revenue act, 1996 IL 1, MCL 432.204,

which operates under the direction of the executive director of the

Michigan gaming control board, to which Executive Reorganization

Order No. 2009-31, MCL 324.99919, transferred all of the authority,

powers, duties, functions, records, personnel, property, unexpended

balances of appropriations, allocations, or other funds of the

office of racing commissioner that previously existed under this

act and that was abolished by that executive reorganization order.

     (o) "Pari-mutuel" and "pari-mutuel wagering" mean the form or

system of gambling in which the winner or winners divide the total

amount of money bet, after deducting the net commission.

(p) (l) "Person" means an individual, firm, partnership,

corporation, association, or other legal entity.

(q) (m) "Purse pool" means an amount of money allocated or

apportioned to pay prizes for horse races and from which payments

may be made to certified horsemen's organizations pursuant to as

provided in this act.

     (r) "Standardbred" means a horse registered with the United

States Trotting Association that races on designated gaits of pace

or trot.

     (s) "Thoroughbred" means a thoroughbred, quarter, paint,

Arabian, or other breed horse. Thoroughbred does not include a

standardbred.

(t) (n) "Veterinarian" means a person an individual licensed

to practice veterinary medicine under part 188 of the public health

code, 1978 PA 368, MCL 333.16101 333.18801 to 333.18838, or under a

state or federal law applicable to that person.the individual.

     Sec. 6a. (1) The horse racing advisory commission is created

within the department of agriculture and rural development.

     (2) The advisory commission consists of the following members,

appointed by the governor:

     (a) An individual who has knowledge about and expertise in

horse racing in this state, who shall serve as chairperson of the

advisory commission.

     (b) The director of the department of agriculture and rural

development or his or her designee.

     (c) A veterinarian.

     (d) Two individuals from 2 different statewide horse racing

associations.

     (e) Two individuals who are owners or operators, or designees

of owners or operators, of 2 different horse racetracks in this

state.

     (3) The governor shall appoint the members first appointed to

the advisory commission within 90 days after the effective date of

this section.

     (4) Members of the advisory commission under subsection

(2)(c), (d), and (e) shall serve for terms of 4 years or until a

successor is appointed, whichever is later.

     (5) If a vacancy occurs on the advisory commission, the

governor shall make an appointment for the unexpired term in the

same manner as the original appointment.

     (6) The governor may remove a member of the advisory

commission for incompetence, dereliction of duty, malfeasance,

misfeasance, or nonfeasance in office, or any other good cause.

     (7) The chairperson of the advisory commission appointed under

subsection (2)(a) shall call the first meeting of the advisory

commission. At the first meeting, the advisory commission shall

elect from among its members other officers as it considers

necessary or appropriate. After the first meeting, the advisory

commission shall meet at the call of the chairperson or if

requested by 3 or more members.

     (8) A majority of the members of the advisory commission

constitute a quorum for the transaction of business at a meeting of

the advisory commission. A majority of the members present and

serving are required for official action of the advisory

commission.

     (9) The advisory commission shall conduct its business at

public meetings held in compliance with the open meetings act, 1976

PA 267, MCL 15.261 to 15.275.

     (10) A writing prepared, owned, used, in the possession of, or

retained by the advisory commission in the performance of an

official function is subject to the freedom of information act,

1976 PA 442, MCL 15.231 to 15.246.

     (11) Members of the advisory commission shall serve without

compensation. However, members of the advisory commission may be

reimbursed for their actual and necessary expenses incurred in the

performance of their official duties as members of the advisory

commission.

     (12) The advisory commission shall do all of the following:

     (a) Establish for the commissioner procedures governing the

operation and promotion of horse racing in this state.

     (b) Make recommendations to the legislature on amendments to

this act that would improve the regulatory structure of horse

racing in this state with a goal of maintaining the long-term

viability of horse racing in this state.

     (c) Annually submit a report to the legislature detailing its

recommendations under subdivisions (a) and (b).

     (13) The racing commissioner shall take under consideration

the procedures established by the advisory commission under

subsection (12)(a) in performing his or her duties under this act.

     Sec. 8. (1) The racing commissioner may issue the following

general classes of licenses:

     (a) Occupational licenses issued to individuals participating

in, involved in, or otherwise having to do with horse racing, pari-

mutuel wagering, or simulcasting at a licensed race meeting in this

state.

     (b) Race meeting licenses issued annually for the succeeding

year to a person persons to conduct live horse racing,

simulcasting, and pari-mutuel wagering on the results of live and

simulcast horse races at a licensed race meeting in this state

pursuant to and in accordance with the provisions of under this

act.

     (c) Track licenses issued to a person persons to maintain or

operate a racetrack at which 1 or more race meeting licensees may

conduct licensed race meetings in this state.

     (2) The racing commissioner shall not issue a race meeting

license to a person if the person is licensed to conduct a licensed

race meeting at another licensed racetrack within a city area in

this state and the person has a controlling interest in or co-

ownership of the other licensed racetrack. within the city area.

     Sec. 9. (1) The racing commissioner shall issue, without

further application, a track license to any person holding a valid

track license under former 1980 PA 327, and maintaining or

operating a licensed horse racetrack as of the effective date of

this act January 9, 1996 at which wagering by pari-mutuel methods

on the results of horse racing has been conducted by a race meeting

licensee.

     (2) A track license, once issued, is valid only as long as the

annual license fee is paid, or until the track license is

voluntarily surrendered or is revoked as provided in this act or

the rules promulgated under this act.

     (3) An applicant for a track license shall submit an

application that is in writing, that demonstrates to the racing

commissioner that the applicant has satisfactory financial

responsibility, that shows the location of the racetrack or of the

proposed racetrack, and that is accompanied by substantially

detailed plans and specifications for the racecourse, paddock,

grandstand, stable barns, racetrack buildings, fences, electrical

service and lighting, plumbing, parking, and other facilities and

improvements. The application shall must include the name and

address of the applicant, and, if the applicant is a corporation,

the place of its incorporation, and any other information required

by the rules promulgated under this act. by the racing

commissioner. Upon On the applicant's filing of the application and

the payment of the license fee, the racing commissioner shall

investigate the applicant and the racetrack or proposed racetrack

as the racing commissioner considers necessary. If the racing

commissioner determines that the applicant and the racetrack

satisfy the requirements of this act and the rules promulgated

under this act, the racing commissioner shall grant a license for

the racetrack, designating in the license the county or other

municipality in which the licensed racetrack shall will be or is

located. If the racing commissioner determines that the applicant

or the racetrack, or both, do not comply with this act and the

rules promulgated under this act, the racing commissioner shall

deny the license. The action of the racing commissioner in denying

a track license may be reviewed by the circuit court pursuant to

under section 631 of the revised judicature act of 1961, 1961 PA

236, MCL 600.631.

     (4) A track license may be transferred to a new owner of a

racetrack with the consent of the racing commissioner.

     (5) After a track license is issued under this section, the

racing commissioner may impose a fine or suspend or revoke the

license if the holder of the license, after reasonable notice from

the racing commissioner, does not make necessary improvements,

additions, or corrections to the licensed premises, fixtures, or

equipment as determined and required by the racing commissioner; if

the holder of the license violates or is no longer in compliance

with the requirements of this act or the rules promulgated under

this act; or if the licensed premises are not utilized used to

conduct a licensed race meeting for 2 consecutive years. In

addition to the suspension or revocation of the license, the racing

commissioner may impose a fine or bring an action in circuit court

seeking an order of the court requiring the licensee to make

reasonable and necessary racetrack improvements or additions as

determined by the commissioner if the licensee fails to make

improvements or corrections that comply with the applicable

construction code or local ordinances. The action of the racing

commissioner in In suspending or revoking a track license, the

racing commissioner shall comply with the administrative procedures

act of 1969, 1969 PA 306, MCL 24.201 to 24.328. , and shall be The

action of the racing commissioner is subject to appeal.

     (6) In a city area, not more than 3 racetracks shall be

licensed, except that in a city with a population of 900,000 or

more the racing commissioner may issue 1 additional license.

     (7) A person shall not be issued more than 1 track license.

Controlling ownership and interlocking directorates among the

holders of track licenses are prohibited.

(6) (8) A The racing commissioner shall not issue a track

license shall not be issued under this section if the new license

would result in harmful competition among existing racetracks.

     Sec. 10. (1) A person desiring that desires to conduct a

thoroughbred , or standardbred , quarter horse, Appaloosa, American

paint horse, or Arabian race meeting, or a combination of these

race meetings, with pari-mutuel wagering on the results of live and

simulcast horse races pursuant to under this act shall apply each

year to the racing commissioner for a race meeting license in the

manner and form required by the racing commissioner. The

application shall must be filed with the racing commissioner before

September 1 of the preceding year. except that applications for

1999 racing dates may be filed at any time. The racing commissioner

shall make an application, after being it is filed, shall be made

available for public inspection during regular business hours. The

application shall must be in writing and shall give the name and

address of the applicant, and, if the applicant is a corporation or

partnership, shall state the place of the applicant's incorporation

or partnership and the names and addresses of all corporate

directors, officers, shareholders, and partners. The application

shall must also do all of the following:

     (a) Specify the licensed racetrack at which the proposed race

meeting will be held.

     (b) Specify whether the applicant requests or will request to

conduct simulcasting at the proposed race meeting and, if so,

demonstrate the applicant's ability to conduct simulcasting in

accordance with this act.

     (c) Specify the horse breed for which the applicant desires to

conduct live racing at the proposed race meeting, and the days on

which the applicant proposes to conduct live horse racing at the

race meeting.

     (d) Specify the time period during which the applicant

requests to be licensed during the calendar year immediately

following the date of application.

     (e) Demonstrate to the racing commissioner that the applicant

and all persons associated with the applicant who hold any

beneficial or ownership interest in the business activities of the

applicant or who have power or ability to influence or control the

business decisions or actions of the applicant satisfy all of the

following requirements:

     (i) Are persons of good character, honesty, and integrity.

     (ii) Possess sufficient financial resources and business

ability and experience to conduct the proposed race meeting.

     (iii) Do not pose a threat to the public interest of the this

state or to the security and integrity of horse racing or pari-

mutuel wagering on the results of horse races in the this state.

     (f) Provide any other information required by the rules

promulgated under this act or by the racing commissioner.

     (2) Upon the filing of the application for a race meeting

license, the racing commissioner shall conduct an investigation of

the applicant and the application to determine whether the

applicant, application, and proposed race meeting comply with the

licensing requirements for a race meeting license under this act

and the rules promulgated under this act. Unless a different

agreement is reached by all the race meeting licensees in a city

area, a race meeting licensee shall not conduct a live thoroughbred

horse race after 6:45 p.m. on any day except Sunday. Unless a

different agreement is reached by all the race meeting licensees in

a city area, a race meeting licensee shall not conduct a live

standardbred horse race before 6:45 p.m. on any day except Sunday.

Notwithstanding the 6:45 p.m. time restrictions, the commissioner,

upon request by a race meeting licensee, may grant to the race

meeting licensee a race meeting license authorizing any of the

following:

     (a) The licensee to conduct live horse racing programs that

would otherwise be prevented by the 6:45 p.m. time restriction, if

no other race meeting in a city area is licensed or authorized to

conduct live horse racing at the same time the licensee proposes to

conduct the requested live horse racing programs.

     (b) Waiver of the 6:45 p.m. time restriction pursuant to the

written agreement of all race meeting licensees in the city area.

     (c) The licensee to conduct live horse racing programs after

6:45 p.m., if the licensee is not in a city area and is 75 miles or

more from the nearest race meeting licensee authorized to conduct

live horse racing.

     Sec. 12. (1) Each An applicant for a license to conduct a

thoroughbred , quarter horse, Appaloosa, American paint horse, or

Arabian license in a county located outside of a city area race

meeting shall apply to conduct at least 45 not fewer than 30 days

of live thoroughbred , quarter horse, Appaloosa, American paint

horse, or Arabian horse racing during its proposed race meeting.

Except during the opening and closing week of a race meeting, the

applicant shall apply to conduct live racing at least 3 not fewer

than 2 days per week, including Saturdays and Sundays, with not

less fewer than 9 8 live horse races programmed, and shall conduct

live racing programs on such the days allocated by the racing

commissioner. The commissioner shall allocate not fewer than 10

days of live horse racing to a race meeting licensee with not fewer

than 6 programmed live races per allocated day.

     (2) Each applicant for a thoroughbred, quarter horse,

Appaloosa, American paint horse, or Arabian race meeting license in

a city area shall apply to conduct at least 160 days of live

thoroughbred, quarter horse, Appaloosa, American paint horse, or

Arabian horse racing during its proposed race meeting. Except

during the opening and closing week of a race meeting, the

applicant shall apply to conduct live racing at least 5 days per

week, including Saturdays and Sundays, with not less than 9 live

horse races programmed, and shall conduct live racing programs on

such days allocated by the racing commissioner.

(2) (3) Each An applicant for a license to conduct a

standardbred race meeting license in a county having a population

of less than 250,000 and that is not part of a city area shall

apply to conduct at least 75 not fewer than 30 days of live

standardbred harness horse racing during its proposed race meeting.

Except during the opening and closing week of a race meeting, the

applicant shall apply to conduct live horse racing at least 4 not

fewer than 2 days per week, including Saturdays, with not less

fewer than 9 8 live horse races programmed, and shall conduct live

racing programs on such the days awarded. The commissioner shall

allocate not fewer than 10 days of live horse racing to a race

meeting licensee with not fewer than 6 programmed live races per

allocated day.

     (4) Each applicant for a standardbred race meeting license in

a county having a population greater than 250,000 but less than

750,000 and that is not part of a city area shall apply to conduct

at least 100 days of live standardbred harness horse racing during

its proposed race meeting. Except during the opening and closing

week of a race meeting, the applicant shall apply to conduct live

racing at least 4 days per week, including Saturdays, with not less

than 9 live horse races programmed, and shall conduct live racing

programs on such days awarded.

     (5) Each applicant for a standardbred race meeting license in

a city area shall apply to conduct during its race meeting no less

than the following number of live racing days:

     (a) The race meeting applicant with the highest pari-mutuel

handle in the previous calendar year shall apply for no less than

140 days of live racing and the applicant shall apply to conduct

live racing at least 5 days per week, including Saturdays, with not

less than 9 live horse races programmed and shall conduct live

racing programs on the days awarded.

     (b) All other applicants shall apply for not less than an

aggregate total of at least 120 days of live racing and the

applicants shall apply to conduct live racing at least 5 days per

week, including Saturdays, with not less than 9 live horse races

programmed and shall conduct live racing programs on the days

awarded.

(3) (6) If a race meeting licensee is unable to program and

conduct 9 8 live horse races on any a racing date that the

commissioner allocates awarded to the licensee because there are

less fewer than 5 entries in any a race, the licensee shall not

conduct any simulcasting on that day without the written consent of

the certified horsemen's organization with which it has a contract.

(4) (7) If a race meeting licensee is unable to conduct racing

on any a live racing dates allocated date awarded to the licensee

by the racing commissioner or less fewer than 9 8 live horse races

on any allocated an awarded live racing dates date because of a

labor dispute, fire, adverse weather conditions, or other causes

beyond the race meeting licensee's control, then the race meeting

licensee is considered to have conducted those races or that race

days date for purposes of this act and is not precluded from

conducting any simulcasts because of the licensee's inability to

conduct those live races or that race dates.date.

(5) (8) Intertrack simulcast races that a race meeting

licensee contracts to receive from other racetracks that are

canceled for any of the reasons described in subsection (7) shall

be considered to be (4) are offered to the public for purposes of

this act.

(6) (9) If an entire race meeting or the balance of a race

meeting and racing dates allocated awarded to a licensee cannot be

raced due to because of an act of God or significant physical

damage to the licensed racetrack at which the race meeting was

licensed to be conducted caused by fire or some other catastrophe,

the racing commissioner may transfer those dates to another race

meeting licensee upon application of the substitute licensee if the

substitute licensee satisfies the requirements for licensure under

this act and demonstrates that it has or will have a legal or

contractual right to the use of a different licensed racetrack

facility on the racing dates in question, and all race meeting

licensees that will be conducting live racing on such those dates

within 50 miles of the substitute racetrack consent to the

transfer.

     (7) Notwithstanding anything in this act to the contrary, if

the racing commissioner determines that 1 or more of the conditions

listed in subsection (8) apply and the contracted certified

horseman's organization is in agreement, the racing commissioner

may amend an existing race meeting license and simulcast permit to

allow the licensee to continue simulcasting during the remaining

period of the race meeting license. An amended license under this

section may be issued by the racing commissioner at any time,

including at the time of the initial issuance of the race meeting

license for the upcoming year during which it is valid.

     (8) The racing commissioner may issue an order amending a race

meeting license under subsection (7) if he or she determines that

the licensee is capable of conducting simulcast horse racing in

accordance with this act and that 1 or more of the following

conditions exist:

     (a) There is inadequate horse supply for the licensee to

conduct a live race meeting of at least 10 days with 6 races per

day.

     (b) There is inadequate funding of live racing purses to

support the licensee's conducting of a live race meeting of at

least 10 days with 6 races per day.

     (c) There is no certified horsemen's organization operating in

this state.

     (9) In order to obtain an amended license issued under

subsection (7) and satisfy the live racing requirements of this

act, the licensee must have a written contract with a certified

horsemen's organization to pay a percentage of its net commission

from simulcasting to the live racing purse pool at another

racetrack licensed under this act during the period when the

amended license issued under subsection (7) is in effect. Unless

otherwise provided in the written contract between the licensee and

the certified horsemen's organization, the payment must be not less

than 25% of net commission from simulcasting if only 1 certified

horsemen's organization has a contract for live race days in this

state for the calendar year. If both certified horsemen's

organizations have a contract for live race dates in this state for

the calendar year, the payment must be not more than 40% of the net

commission from simulcasting.

     (10) Subsections (7) to (9) apply only to amendments to a race

meeting license for the purpose of allowing simulcast-only

operations and are not limitations on or requirements for other

race meeting license amendments the racing commissioner may approve

or deny.

     (11) Notwithstanding anything in this act to the contrary, if

a race meeting licensee and the certified horsemen's organization

with which the licensee has a contract jointly request that the

licensee be allowed to conduct a live race meeting with fewer than

8 races per day, the racing commissioner shall approve the request

and issue an order amending the license accordingly.

     Sec. 14. (1) Except as provided in subsection (8), before

Before November 1 of the year preceding the year for which

applications are made, the racing commissioner shall grant or deny

each application for a race meeting license, allocate or deny the

dates, for which application has been made, on which pari-mutuel

wagering on live races may be conducted at each licensed race

meeting in this state, and shall also determine whether the

applicant may simulcast under section 18 during the calendar year

for which the license is issued. The racing commissioner may grant

a race meeting license for any time period up to 1 year during

which the licensee may conduct live and simulcast horse races with

pari-mutuel wagering on the results of such the races.

     (2) Subject to section 12(7), 12(4), all simulcasting

authorized by the racing commissioner shall must be conditioned

upon on the holder of the license conducting at least 9 not fewer

than 8 live horse races on each live racing date allocated in the

holder's race meeting license, unless this requirement is waived in

writing by both the racing commissioner and the certified

horsemen's organization with which the licensee has contracted.

     (3) The racing commissioner shall not issue a race meeting

license to an organization organized for a charitable purpose or

organized for the purpose of distributing its profits or income to

charitable organizations.

     (4) Except as provided in section 12(7), (8), and (9), 12(4),

(5), and (6), if after the issuance of a race meeting license , the

racing commissioner determines upon on further investigation that

the holder of a race meeting license has not met, or will be unable

to meet, the requirements of the license, the racing commissioner

may impose a fine or suspend or revoke the race meeting license, or

both, for all or part of the remainder of the time period for which

the license was granted. Before making the required determination

to impose a fine or suspend or revoke a race meeting license under

this subsection, the racing commissioner shall consider whether the

race meeting licensee's inability or failure to meet the

requirements of its license is due to a cause beyond the control of

the race meeting licensee.

     (5) Any action taken by the racing commissioner under

subsection (4) shall become becomes effective 10 days after the

holder of the race meeting license has received receives written

notice unless the commissioner finds that the public health,

safety, or welfare requires emergency action and immediate effect

of the commissioner's order.

     (6) A denial of a race meeting license under subsection (3)

may be appealed to the circuit court for judicial review pursuant

to under section 631 of the revised judicature act of 1961, 1961 PA

236, MCL 600.631. A suspension or revocation of a race meeting

license may be appealed pursuant to under the administrative

procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

     (7) Each applicant issued a race meeting license shall

maintain an interest bearing account used exclusively for to

deposit of all funds money due to horsemen's purse pools under this

act. All funds money due to this account shall must be deposited

within a reasonable time after receipt by the race meeting

licensee. The name of the depository and the identification number

of the account shall must be designated in each race meeting

license application and all interest earned by the account shall

must be credited to the purse pool and deposited in the account.

     (8) The November 1 deadline provided in subsection (1) does

not apply to 1999 thoroughbred race meeting dates. The racing

commissioner may issue 1999 thoroughbred race meeting dates at any

time.

     Sec. 17. (1) The pari-mutuel system of wagering upon the

results of horse races as permitted by this act shall not be held

or construed to be unlawful. All forms of pari-mutuel wagering

conducted at a licensed race meeting shall be preapproved by the

racing commissioner pursuant to under rule or written order of the

commissioner.

     (2) A holder of a race meeting license may provide a place in

the race meeting grounds or enclosure at which he or she may

conduct and supervise the pari-mutuel system of wagering on the

results of horse races as permitted by this act. If the pari-mutuel

system of wagering is used at a race meeting, a totalisator or

other device that is equal in accuracy and clearness to a

totalisator and approved by the racing commissioner shall must be

used. The odds display of the totalisator or other device shall

must be placed in full view of the patrons.

     (3) Subject to section 18(3), each holder of a race meeting

license shall retain as his or her commission on all forms of

straight wagering 17% of all money wagered involving straight

wagers on the results of live and simulcast horse races conducted

at the licensee's race meetings. Subject to section 18(3), each

holder of a race meeting license shall retain as his or her

commission on all forms of multiple wagering, without the written

permission of the racing commissioner not more than 28% and with

the written permission of the racing commissioner not more than 35%

of all money wagered involving any form of multiple wager on the

results of live and simulcast horse races conducted at the

licensee's race meeting. Except as otherwise provided by contract,

50% of all commissions from wagering on the results of live racing

at the racetrack where the live racing was conducted shall be paid

to the horsemen's purse pool at the racetrack where the live racing

was conducted. As used in this subsection:

     (a) "Straight wagering" means a wager made on the finishing

position of a single specified horse in a single specified race.

     (b) "Multiple wagering" means a wager made on the finishing

positions of more than 1 horse in a specified race or the finishing

positions of 1 or more horses in more than 1 specified race.

     (4) All breaks shall be retained by the race meeting licensee

and paid directly to the city or township in which the racetrack is

located as a fee for services provided pursuant to under section

21.

     (5) Payoff prices of tickets of a higher denomination shall

must be calculated as even multiples of the payoff price for a

$1.00 wager. Each holder of a race meeting license shall distribute

to the persons holding winning tickets, as a minimum, a sum not

less than $1.10 calculated on the basis of each $1.00 deposited in

a pool, except that each race meeting licensee may distribute a sum

of not less than $1.05 to persons holding winning tickets for each

$1.00 deposited in a minus pool. As used in this subsection, "minus

pool" means any win, place, or show pool in which the payout would

exceed the total value of the pool.

     (6) A holder of a race meeting license shall not knowingly

permit a person less than 18 years of age to be a patron of the

pari-mutuel wagering conducted or supervised by the holder.

     (7) Any act or transaction relative to pari-mutuel wagering on

the results of live or simulcast horse races shall only occur or be

permitted to occur within the enclosure of a licensed race meeting.

A person shall not participate or be a party to any act or

transaction relative to placing a wager or carrying a wager for

placement outside of a race meeting ground. may be conducted by a

race meeting licensee under this act for the race meeting licensee

to comply with the auditing requirements of section 23. A person

shall not provide messenger service for the placing of a bet for

another person who is not a patron. However, this subsection does

not prevent simulcasting or intertrack or interstate common pool

wagering inside or outside this state as permitted by this act or

the rules promulgated under this act.

     (8) Any form of pari-mutuel wagering on the results of live or

simulcast horse races must only occur or be permitted to occur at a

licensed race meeting. A person shall not participate or be a party

to any act or transaction relative to placing a wager or carrying a

wager for placement outside of a race meeting ground. A person

shall not provide messenger service for the placing of a bet for

another person who is not a patron. However, this subsection does

not prevent simulcasting or intrastate or interstate common pool

wagering inside or outside this state as permitted by this act or

the rules promulgated under this act.

     (9) A person that does not hold a race meeting license that

solicits or accepts wagers on the results of live or simulcast

horse races from individuals in this state is guilty of a felony

punishable by imprisonment for not more than 5 years or a fine of

not more than $10,000.00, or both. Each act of solicitation or

wager that is accepted in violation of this section is a separate

offense.

     (10) As used in this section, "act or transaction relative to

pari-mutuel wagering on the results of live or simulcast horse

races" means those steps taken by a race meeting licensee to accept

a wager and process it within the ordinary course of its business

and in accordance with this act.

     Sec. 18. (1) Simulcasting by race meeting licensees may be

authorized by the racing commissioner subject to the limitations of

this section. As used in this section, "simulcast" means the live

transmission of video and audio signals conveying a horse race held

either inside or outside this state to a licensed race meeting in

this state. A simulcast from 1 racetrack in this state to another

racetrack in this state shall be called an "intertrack simulcast".

A simulcast from a racetrack outside this state to a racetrack

inside this state shall be called an "interstate simulcast".Except

as specifically provided in section 12, a race meeting licensee

shall not conduct simulcast wagering unless the race meeting

licensee conducts 30 or more live racing days in that calendar

year.

     (2) The holder of a race meeting license may apply to the

racing commissioner, in the manner and form required by the

commissioner, for a permit to televise simulcasts of horse races to

viewing areas within the enclosure of the licensed racetrack at

which the applicant is licensed to conduct its race meeting. The

commissioner may issue a permit for individual race and full card

simulcasts televised during, between, before, or after programmed

live horse races on any day that live racing is conducted by the

applicant, and also on other days during the term of the

applicant's license when the applicant does not conduct live horse

racing, subject to the following conditions:

     (a) The applicant shall must have a current contract with a

certified horsemen's organization.

     (b) The applicant shall must have applied for and been

allocated the minimum number of live racing dates required by

section 12(1) to (5), or (2), subject to the availability of

adequate horse supply as determined by the racing commissioner.

     (c) The applicant shall must make a continuing good faith

effort throughout the duration of its race meeting to program and

conduct not less fewer than 9 8 live horse races on each live

racing date allocated to the applicant.

     (d) The certified horsemen's organization with which the

applicant has contracted shall must have consented to the requested

simulcasts on any live racing day when the applicant is unable to

program and conduct not less fewer than 9 8 live horse races, if

required by section 12(6).12(3).

     (e) If the requested simulcasts are interstate, the applicant

shall must waive in writing any right that the applicant may have

under the interstate horse racing act of 1978, Public Law 95-515,

15 U.S.C. USC 3001 to 3007, to restrict interstate simulcasts by

other race meeting licensees in this state.

     (f) If the applicant conducts its race meeting in a city area,

the The applicant shall must make the video and audio signals of

its live horse races available for intertrack simulcasting to all

licensed race meetings in this state located more than 12 miles

from the applicant's race meeting. The applicant shall must charge

each race meeting licensee the same fee to receive its live signals

for intertrack simulcasting. The fee shall not exceed 3% of the

total amount wagered on the intertrack simulcast at each race

meeting that receives the simulcast.

     (g) Except as otherwise agreed by the other race meeting

licensees in a city area and the respective certified horsemen's

organizations with which they contract, a licensee in a city area

shall the applicant must receive all available intertrack

simulcasts from licensed race meetings in the city area located

more than 12 miles from the licensee's applicant's race meeting.

     (h) A licensed race meeting outside a city area shall The

applicant must not conduct interstate simulcasts unless it also

receives all intertrack simulcasts from other licensed race

meetings in a city area that are available.

     (i) All applicants conducting licensed race meetings in a city

area shall authorize all other race meeting licensees in the state

to conduct simulcasts of the breed for which the applicant is

licensed to conduct live horse racing. An applicant may not conduct

interstate simulcasts unless authorization to do so is given by the

applicant, in accordance with subdivision (j), permitting all other

race meeting licensees to receive interstate simulcasts of a

different breed than they are licensed to race live.

     (j) A race meeting licensee shall not conduct an interstate

simulcast of a different breed than it is licensed to race live at

its race meeting, unless the licensee has the written permission of

all race meeting licensees in a city area that are licensed to race

that breed live at their race meetings.

(i) (k) All authorized simulcasts shall must be conducted in

compliance with the written permit and related orders issued by the

racing commissioner and all other requirements and conditions of

this act and the rules of the racing commissioner promulgated under

this act.

(j) (l) All authorized interstate simulcasts shall must also

comply with the interstate horse racing act of 1978, Public Law 95-

15, 15 U.S.C. USC 3001 to 3007.

     (3) All forms of wagering by pari-mutuel methods provided for

under this act for live racing shall be allowed on simulcast horse

races authorized under this section. All money wagered on simulcast

horse races at a licensed race meeting shall must be included in

computing the total amount of all money wagered at the licensed

race meeting for purposes of section 17. When If the simulcast is

an interstate simulcast, the money wagered on that the simulcast

shall must form a separate pari-mutuel pool at the receiving track

unless 2 or more licensees receive the same interstate simulcast

signals or the racing commissioner permits the receiving track to

combine its interstate simulcast pool with the pool created at the

out-of-state sending track on the same race. If 2 or more licensees

receive the same interstate simulcast signals, the money wagered on

the simulcasts shall must be combined in a common pool and the

licensees shall jointly agree and designate at which race meeting

the common pool will be located. However, if the law of the

jurisdiction in which the sending racetrack is located permits

interstate common pools at the sending racetrack, the racing

commissioner may permit pari-mutuel pools on interstate simulcast

races in this state to be combined with pari-mutuel pools on the

same races created at the out-of-state sending racetrack. If the

pari-mutuel pools on the interstate simulcast races in this state

are combined in a common pool at the out-of-state sending track,

then the commissions described in section 17 on the pool created in

this state shall must be adjusted to equal the commissions in

effect at the sending track under the laws of its jurisdiction. If

the simulcast is an intertrack simulcast, the money wagered on that

the simulcast at the receiving racetrack shall must be added to the

pari-mutuel pool at the sending racetrack.

     (4) Each race meeting licensee that receives an interstate

simulcast shall pay to the horsemen's simulcast purse pool

established under section 19 a sum equal to 40% of the licensee's

net commission from all money wagered on the interstate simulcast,

as determined by section 17(3) after first deducting from the

licensee's statutory commission the applicable state tax on

wagering due and payable under section 22 and the actual verified

fee paid by the licensee to the sending host track to receive the

interstate simulcast signal. The licensee shall retain the

remaining balance of its net commission and shall be responsible

for paying all other capital and operational expenses related to

receiving interstate simulcasts at its race meeting. Any subsequent

rebate of a fee paid by a licensee to receive interstate simulcast

signals shall be shared equally by the licensee and the horsemen's

simulcast purse pool established under section 19.

(4) (5) A race meeting licensee licensed to conduct pari-

mutuel horse racing in a city area shall provide the necessary

equipment to send intertrack simulcasts of the live horse races

conducted at its race meeting to all other race meeting licensees

in this state, and shall send its intertrack simulcast signals to

those licensees upon request for an agreed fee, which shall not

exceed 3% of the total amount wagered on the race at the receiving

track. Race meeting licensees that send or receive intertrack

simulcasts shall make the following payments to the horsemen's

purse pools:

     (a) Each race meeting licensee that sends an intertrack

simulcast shall pay 50% of the simulcast fee that it receives for

sending the simulcast signal to the horsemen's purse pool at the

sending track.

     (b) Each race meeting licensee that receives an intertrack

simulcast shall pay to the horsemen's simulcast purse pool

established pursuant to section 19 a sum equal to 40% of the

receiving track's net commission from wagering on the intertrack

simulcast under section 17(3) after first deducting from the

licensee's statutory commission the applicable state tax on

wagering due and owing under section 22 and the actual verified fee

paid by the receiving track to the sending host track to receive

the intertrack simulcast signal.

(5) (6) The racing commissioner may authorize a race meeting

licensee to transmit simulcasts of live horse races conducted at

its racetrack to locations outside of this state in accordance with

the interstate horse racing act of 1978, Public Law 95-515, 15

U.S.C. USC 3001 to 3007, or any other applicable laws, and may

permit pari-mutuel pools on such simulcast races created under the

laws of the jurisdiction in which the receiving track is located to

be combined in a common pool with pari-mutuel pools on the same

races created in this state. A race meeting licensee that transmits

simulcasts of its races to locations outside this state shall pay

50% of the fee that it receives for sending the simulcast signal to

the horsemen's purse pool at the sending track after first

deducting the actual verified cost of sending the signal out of

state.

     (6) Unless otherwise approved by the racing commissioner, a

race meeting licensee shall not receive and offer wagers on an

interstate simulcast unless the interstate simulcast is available

to all race meeting licensees in this state at the same rate.

     (7) Simulcasting of events other than horse races for purposes

of pari-mutuel wagering is prohibited.

     (8) As used in this section:

     (a) "Interstate simulcast" means a live simulcast from a

racetrack outside of this state to a racetrack inside this state.

     (b) "Intertrack simulcast" means a live simulcast from 1

racetrack in this state to another racetrack in this state.

     (c) "Simulcast" means the live transmission of video and audio

signals conveying a horse race held either inside or outside of

this state to a licensed race meeting in this state.

     Sec. 19. (1) All money designated by this act to be paid into

the A race meeting licensee shall pay an amount equal to not less

than 25% and not more than 40% of the net commission generated at

the licensee's race meeting to a site-specific horsemen's simulcast

purse pool, shall account. Money paid into a horsemen's simulcast

purse account under this act must be deposited in a depository

designated by all the participating certified horsemen's

organizations and distributed by their designated escrow agent as

follows:

     (a) 50% of the funds generated from thoroughbred simulcasts

for horsemen's purses and 35% of the funds generated from

standardbred simulcasts for horsemen's purses shall be divided

between all thoroughbred purse pools. The division shall be on a

pro rata basis between all thoroughbred race meeting licensees

based upon the percentage of total thoroughbred handle, from all

sources, for the previous calendar year.

     (b) 50% of the funds generated from thoroughbred simulcasts

for horsemen's purses and 65% of the funds generated from

standardbred simulcasts for horsemen's purses shall be divided

between all standardbred purse pools. The division shall be on a

pro rata basis between all standardbred race meeting licensees

based upon the percentage of total standardbred handle, from all

sources, for the previous calendar year.

     (2) The certified horsemen's organizations and race meeting

licensees shall have audit rights of the funds set forth in this

section.

     (a) For purses for live horse races at a licensed race meeting

in this state.

     (b) Each year, all certified horsemen's organizations that

participate in a live race meeting may receive an amount approved

by order of the racing commissioner to use for general expenses.

Beginning on January 1 and ending on December 31 of each year, the

certified horsemen's organization is entitled to not less than 5%

of the site-specific horsemen's simulcast purse account as ordered

by the racing commissioner.

     Sec. 19a. If a thoroughbred track license is surrendered,

revoked, or escrowed, or after January 1, 1998, a licensed

thoroughbred track is closed, the racing commissioner shall order

the deposit of horsemen's purse pool money deposited and

distributed pursuant to section 19 from the track be transferred to

a depository designated by a race meeting licensee upon on written

direction of the affected certified horsemen's organization

regardless of whether there was racing at the race meeting

licensee's location during the previous year. The money shall be

transferred to the horsemen's simulcast purse account at any

licensed racetrack in this state where the affected certified

horsemen's organization subsequently obtains a written contract for

live horse racing with pari-mutuel wagering. If the affected

certified horsemen's organization does not enter into a written

contract for live horse racing with pari-mutuel wagering at a track

in this state within 12 months after the date when the horsemen's

simulcast purse account money can be transferred under this

section, the money must be equally divided between the horsemen's

simulcast purse accounts at the licensed tracks in this state

conducting pari-mutuel wagering on the results of horse races. The

racing commissioner may rescind or modify any existing escrow

orders to carry out this section.

     Sec. 19b. Money that was to be distributed to a certified

horsemen's organization but that was placed and remains in escrow

under an escrow order of the racing commissioner before the

effective date of the amendatory act that added this section must

be used by September 1, 2017 for a race meeting conducted by the

certified horsemen's organization and the race meeting licensee

that were the subjects of the order in accordance with a

contractual agreement between a race meeting licensee and the

certified horsemen's organization. If a contractual agreement is

not reached by September 1, 2017, the racing commissioner shall

order distribution of the escrowed money as follows:

     (a) Fifteen percent to the race meeting licensee that was the

subject of the order to be used for track operations and

enhancements.

     (b) Eighty-five percent to the certified horsemen's

organization that was the subject of the order to be used for

purses at any race meeting in this state for which the certified

horsemen's organization has a contract.

     Sec. 20. (1) It is the policy of this state to encourage the

breeding of horses of all breeds in this state and the ownership of

such horses by residents of this state to provide for sufficient

numbers of high quality race horses of all breeds to participate in

licensed race meetings in this state; to promote the positive

growth and development of high quality horse racing and other

equine competitions in this state as a business and entertainment

activity for residents of this state; and to establish and preserve

the substantial agricultural and commercial benefits of the horse

racing and breeding industry to the this state. of Michigan. It is

the intent of the legislature to further this policy by the

provisions of this act and annual appropriations to administer this

act and adequately fund the agriculture and equine industry

programs established by this section.

     (2) Money received by the racing commissioner and the state

treasurer under this act shall be paid promptly into the state

treasury and placed in the Michigan agriculture equine industry

development fund created in subsection (3).

     (3) The Michigan agriculture equine industry development fund

is created in the department of treasury. The Michigan agriculture

equine industry development fund shall be administered by the

director of the department of agriculture and rural development

with the assistance and advice of the racing commissioner.

     (4) Money shall not be expended from the Michigan agriculture

equine industry development fund except as appropriated by the

legislature. Money appropriated by the legislature for the Michigan

agriculture equine industry development fund shall be expended by

the director of the department of agriculture and rural development

with the advice and assistance of the racing commissioner to

provide funding for the general fund as provided in subsection (17)

and agriculture and equine industry development programs as

provided in subsections (5) to (11).

     (5) The following amounts shall be paid to standardbred and

fair programs:

     (a) A sum not to exceed 75% of the purses for standardbred

harness horse races offered by fairs and races at licensed pari-

mutuel racetracks. Purse supplements paid under this subdivision

for overnight races at fairs paid pursuant to this subsection shall

for which Michigan sired, Michigan bred, or Michigan owned harness

horses are eligible must be $1,000.00. However, if the average

purse offered for maiden overnight races of the same breed at any

licensed race meeting in this state during the previous year as

calculated by the department of agriculture and rural development

was less than $1,000.00, purse supplements for overnight races at

fairs paid under this subsection subdivision shall not exceed that

average purse.

     (b) A sum to be allotted on a matching basis, but not to

exceed $15,000.00 each year to a single fair, for the purpose of

equipment rental during fairs; ground improvement; constructing,

maintaining, and repairing buildings; and making the racetrack more

suitable and safe for racing at fairs.

     (c) A sum to be allotted for paying special purses at fairs on

2-year-old and 3-year-old standardbred harness horses conceived

after January 1, 1992, and that is Michigan-bred, or that is sired

by a standardbred stallion registered with the Michigan department

of agriculture and rural development, that was leased or owned by a

resident or residents of this state, and that did not serve a mare

at a location outside of this state from February 1 through July 31

of the calendar year in which the conception occurred. A foal that

is born on or after January 1, 2002 of a mare owned by a

nonresident of this state and that is conceived outside of this

state from transported semen of a stallion registered with the

Michigan department of agriculture and rural development is

eligible for Michigan tax-supported races only if, in the year that

the foal is conceived, the Michigan department of agriculture's

agriculture and rural development's agent for receiving funds as

the holding agent for stakes and futurities is paid a transport fee

as determined by the Michigan department of agriculture and rural

development and administered by the Michigan harness horsemen's

association.

     (d) A sum to pay not more than 75% of an eligible cash premium

paid by a fair or exposition. The commission of agriculture and

rural development shall promulgate rules establishing which

premiums are eligible for payment and a dollar limit for all

eligible payments.

     (e) A sum to pay breeders' awards in an amount not to exceed

10% of the gross purse to breeders of Michigan bred standardbred

harness horses for each time the horse wins a race at a licensed

race meeting or fair in this state. As used in this subdivision,

"Michigan bred standardbred harness horse" means a horse from a

mare owned by a resident or residents of this state at the time of

conception, that was conceived after January 1, 1992, and sired by

a standardbred stallion registered with the Michigan department of

agriculture and rural development that was leased or owned by a

resident or residents of this state and that did not serve a mare

at a location outside of this state from February 1 through July 31

of the calendar year in which the conception occurred. To be

eligible, each mare shall must be registered with the Michigan

department of agriculture and rural development. A foal that is

born on or after January 1, 2002 of a mare owned by a nonresident

of this state and that is conceived outside of this state from

transported semen of a stallion registered with the Michigan

department of agriculture and rural development is eligible for

Michigan tax-supported races only if, in the year that the foal is

conceived, the Michigan department of agriculture's agriculture and

rural development's agent for receiving funds as the holding agent

for stakes and futurities is paid a transport fee as determined by

the Michigan department of agriculture and rural development and

administered by the Michigan harness horsemen's association.

     (f) A sum not to exceed $4,000.00 each year to be allotted to

fairs to provide training and stabling facilities for standardbred

harness horses.

     (g) A sum to be allotted to pay the presiding judges and

clerks of the course at fairs. Presiding judges and clerks of the

course shall be hired by the fair's administrative body with the

advice and approval of the racing commissioner. The director of the

department of agriculture and rural development may allot funds for

a photo finish system and a mobile starting gate. The director of

the department of agriculture and rural development shall allot

funds for the conducting of tests, the collection and laboratory

analysis of urine, saliva, blood, and other samples from horses,

and the taking of blood alcohol tests on drivers, jockeys, and

starting gate employees, for those races described in this

subdivision. The department may require a driver, jockey, or

starting gate employee to submit to a breathalyzer test, urine

test, or other noninvasive fluid test to detect the presence of

alcohol or a controlled substance. If the results of a test show

that a person has more than .05% of alcohol in his or her blood, or

has present in his or her body a controlled substance, the person

shall not be permitted to continue in his or her duties on that

race day and until he or she can produce, at his or her own

expense, a negative test result.

     (h) A sum to pay purse supplements to licensed pari-mutuel

harness race meetings for special 4-year-old filly and colt horse

races.

     (i) A sum not to exceed 0.25% of all money wagered on live and

simulcast horse races in Michigan this state shall be placed in a

special standardbred sire stakes fund each year, 100% of which

shall be used to provide purses for races run exclusively for 2-

year-old and 3-year-old Michigan sired standardbred horses at

licensed harness race meetings in this state. As used in this

subdivision, "Michigan sired standardbred horses" means

standardbred horses conceived after January 1, 1992 and sired by a

standardbred stallion registered with the Michigan department of

agriculture and rural development that was leased or owned by a

resident or residents of this state and that did not serve a mare

at a location outside of this state from February 1 through July 31

of the calendar year in which the conception occurred. A foal that

is born on or after January 1, 2002 of a mare owned by a

nonresident of this state and that is conceived outside of this

state from transported semen of a stallion registered with the

Michigan department of agriculture and rural development is

eligible for Michigan tax-supported races only if, in the year that

the foal is conceived, the Michigan department of agriculture's

agriculture and rural development's agent for receiving funds as

the holding agent for stakes and futurities is paid a transport fee

as determined by the Michigan department of agriculture and rural

development and administered by the Michigan harness horsemen's

association.

     (6) The following amounts shall be paid to thoroughbred

programs:

     (a) A sum to be allotted thoroughbred race meeting licensees

to supplement the purses for races to be conducted exclusively for

Michigan bred horses.

     (b) A sum to pay awards to owners of Michigan bred horses that

finish first, second, or third in races open to non-Michigan bred

horses.

     (c) A sum to pay breeders' awards in an amount not to exceed

10% of the gross purse to the breeders of Michigan bred

thoroughbred horses for each time Michigan bred thoroughbred horses

win at a licensed race meeting in this state.

     (d) A sum to pay purse supplements to licensed thoroughbred

race meetings for special 4-year-old and older filly and colt horse

races.

     (e) A sum not to exceed 0.25% of all money wagered on live and

simulcast horse races in Michigan shall be placed in a special

thoroughbred sire stakes fund each year, 100% of which shall be

used to provide purses for races run exclusively for 2-year-old and

3-year-old and older Michigan sired thoroughbred horses at licensed

thoroughbred race meetings in this state and awards for owners of

Michigan sired horses or stallions. As used in this subdivision,

"Michigan sired thoroughbred horses" means thoroughbred horses

sired by a stallion registered with the department of agriculture

and rural development that was leased or owned exclusively by a

resident or residents of this state and that did not serve a mare

at a location outside of this state during the calendar year in

which the service occurred.

     (f) A sum to be allotted sufficient to pay for the collection

and laboratory analysis of urine, saliva, blood, and other samples

from horses and licensed persons and for the conducting of tests

described in section 16(4)(b).

     (7) The following amounts shall be paid for quarter horse

programs:

     (a) A sum to supplement the purses for races to be conducted

exclusively for Michigan bred quarter horses.

     (b) A sum to pay not more than 75% of the purses for

registered quarter horse races offered by fairs.

     (c) A sum to pay breeders' awards in an amount not to exceed

10% of a gross purse to breeders of Michigan bred quarter horses

for each time a Michigan bred quarter horse wins at a county fair

or licensed race meeting in this state.

     (d) A sum to pay for the collection and laboratory analysis of

urine, saliva, blood, and other samples from horses and licensed

persons and the taking of blood alcohol tests on jockeys for those

races described in this subsection and for the conducting of tests

described in section 16(4)(b).

(d) (e) As used in this subsection, "Michigan bred quarter

horse" means that term as defined in R 285.817.1 of the Michigan

administrative code. Administrative Code. Each mare and stallion

shall be registered with the director of the department of

agriculture and rural development.

     (8) The following amounts shall be paid for Appaloosa

programs:

     (a) A sum to supplement the purses for races to be conducted

exclusively for Michigan bred Appaloosa horses.

     (b) A sum to pay not more than 75% of the purses for

registered Appaloosa horse races offered by fairs.

     (c) A sum to pay breeders' awards in an amount not to exceed

10% of the gross purse to the breeders of Michigan bred Appaloosa

horses for each time Michigan bred horses win at a fair or licensed

race meeting in this state.

     (d) The department shall also allot sufficient funds from the

revenue received from Appaloosa horse racing to pay for the

collection and laboratory analysis of urine, saliva, blood, or

other samples from horses and licensed persons and the taking of

blood alcohol tests on jockeys for those races described in this

subsection and for the conducting of tests described in section

16(4)(b).

(d) (e) As used in this subsection, "Michigan bred Appaloosa

horse" means that term as defined in R 285.819.1 of the Michigan

administrative code. Administrative Code. Each mare and stallion

shall be registered with the director of the department of

agriculture and rural development.

     (9) The following amounts shall be paid for Arabian programs:

     (a) A sum to supplement the purses for races to be conducted

exclusively for Michigan bred Arabian horses.

     (b) A sum to pay not more than 75% of the purses for

registered Arabian horse races offered by fairs.

     (c) A sum to pay breeders' awards in an amount not to exceed

10% of the gross purse to the breeders of Michigan bred Arabian

horses for each time Michigan bred horses win at a fair or licensed

racetrack in this state.

     (d) A sum allotted from the revenue received from Arabian

horse racing to pay for the collection and laboratory analysis of

urine, saliva, blood, and other samples from horses and licensed

persons and the taking of blood alcohol tests on jockeys for those

races described in this subsection and for the conducting of tests

described in section 16(4)(b).

(d) (e) As used in this subsection, "Michigan bred Arabian

horse" means a Michigan-bred horse as that term is defined in R

285.822.1(i) of the Michigan administrative code. Administrative

Code. Each mare and stallion shall be registered with the director

of the department of agriculture and rural development.

     (10) The following sums shall be paid for American paint horse

programs:

     (a) A sum to supplement the purses for races to be conducted

exclusively for Michigan bred American paint horses.

     (b) A sum to pay not more than 75% of the purses for

registered American paint horse races offered by fairs.

     (c) A sum to pay breeders' awards in an amount not to exceed

10% of the gross purse to the breeders of Michigan bred American

paint horses for each time a Michigan bred American paint horse

wins at a county fair or licensed race meeting in this state.

     (d) A sum to pay for the collection and laboratory analysis of

urine, saliva, blood, and other samples from horses and licensed

persons and the taking of blood alcohol tests on jockeys for those

races described in this subsection and for the conducting of tests

described in section 16(4)(b).

(d) (e) As used in this subsection, "Michigan bred American

paint horse" means a Michigan-bred paint horse as that term is

defined in R 285.823.1 of the Michigan administrative

code.Administrative Code.

     (11) The following amounts shall be paid for the equine

industry research, planning, and development grant fund program:

     (a) A sum to fund grants for research projects conducted by

persons affiliated with a university or governmental research

agency or institution or other private research entity approved by

the racing commissioner, which are beneficial to the horse racing

and breeding industry in this state.

     (b) A sum to fund the development, implementation, and

administration of new programs that promote the proper growth and

development of the horse racing and breeding industry in this state

and other valuable equine-related commercial and recreational

activities in this state.

     (12) As used in subsection (11), "equine industry research"

means the study, discovery and generation of accurate and reliable

information, findings, conclusions, and recommendations that are

useful or beneficial to the horse racing and breeding industry in

this state through improvement of the health of horses; prevention

of equine illness and disease, and performance-related accidents

and injuries; improvement of breeding technique and racing

performance; and compilation and study of valuable and reliable

statistical data regarding the size, organization, and economics of

the industry in this state; and strategic planning for the

effective promotion, growth, and development of the industry in

this state.

     (13) An amount shall be allotted annually to the racing

commissioner that is sufficient to pay for the collection and

laboratory analysis of urine, saliva, blood, and other samples from

horses and licensed individuals involved in horse racing on which

pari-mutuel wagers are made and for the conducting of tests

described in section 16(4).

(14) (13) Subject to subsection (17), money Money appropriated

and allotted to the Michigan agriculture equine industry

development fund shall not revert to the general fund and shall be

carried forward from year to year until disbursed to fund grants

for research projects beneficial to the industry.

(15) (14) A percentage of the Michigan agriculture equine

industry development fund that is equal to 1/100 of 1% of the gross

wagers made each year in each of the racetracks licensed under this

act shall be deposited in the compulsive gaming prevention fund

created in section 3 of the compulsive gaming prevention act, 1997

PA 70, MCL 432.253.

(16) (15) The director of the department of agriculture and

rural development shall promulgate rules pursuant to the

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

24.328, to implement this section. The rules promulgated under this

subsection shall do all of the following:

     (a) Prescribe the conditions under which the Michigan

agriculture equine industry development fund and related programs

described in subsections (1) to (13) (14) shall be funded.

     (b) Establish conditions and penalties regarding the programs

described in subsections (5) to (12).

     (c) Develop and maintain informational programs related to

this section.

(17) (16) Funds under the control of the department of

agriculture and rural development in this section shall be

disbursed under the rules promulgated pursuant to subsection (15).

(16). All funds under the control of the department of agriculture

and rural development approved for purse supplements and breeders'

awards shall be paid by the state treasurer not later than 45 days

from the date of the race.

     (17) Two million dollars shall be transferred from the

Michigan agriculture equine industry development fund to the

general fund in the fiscal year ending September 30, 2006.

     Sec. 22. (1) Each A licensed racetrack located in a city area

shall pay a license fee to the racing commissioner of $1,000.00

annually. , and any other licensed racetrack shall pay a license

fee of $200.00 annually.

     (2) During calendar year 1996, each Each holder of a race

meeting license shall pay to the state treasurer, from the holder's

commission, a tax in the amount of 2.5% 3.5% of all money wagered

on interstate and intertrack simulcast races conducted at the

holder's licensed race meetings. in 1996 in a manner and time as

the racing commissioner requires. For calendar year 1997 and each

year thereafter, the tax rate shall increase to 3.5% of all money

wagered on interstate and intertrack simulcast races conducted at

the holder's licensed race meetings each calendar year. Not later

than 4 years after the effective date of this act, the racing

commissioner shall report to the chairpersons of the senate and

house committees responsible for legislation concerning horse

racing as to the effect on the horse racing industry of the

reduction in the tax pursuant to subsection (2).

     (3) By eliminating the pari-mutuel wagering tax on live racing

programs and altering the calculation of the tax on simulcast horse

racing, it is not the intent of the legislature to diminish the

funding and appropriations for the Michigan agriculture equine

industry fund and related programs described in section 20. The

pari-mutuel tax reduction alteration effected by this section is

intended to generally allow for the improvement of the pari-mutuel

horse racing and breeding industry in this state by increasing

purses at licensed race meetings and making additional pari-mutuel

revenues available for capital improvements at licensed racetracks

in this state.

     Sec. 30. (1) A drug or painkiller that is a stimulant to a

horse or depressant to a horse shall foreign substance must not be

administered to a horse or be present in a horse that is intended

to be entered , or is entered, or be present in a horse that

participates, in a race with pari-mutuel wagering by pari-mutuel

methods or any nonbetting race or workout that is conducted at a

licensed race meeting in this state. Any A banned drug, a

nontherapeutic drug, or a foreign substance designated by the

racing commissioner as not permitted must not be present in a horse

eligible to race that is stabled in this state on the grounds of a

race meeting licensee, off-track training center, farm, or stable.

     (2) A drug or foreign substance , other than a stimulant or

depressant, may be administered to a horse or present in a horse

that is intended to be entered , or is entered, or be present in a

horse that participates, in a race with pari-mutuel wagering by

pari-mutuel methods or any nonbetting race or workout that is

conducted at a licensed race meeting in this state only if

authorized by the racing commissioner by rule or written order for

use in the care or treatment of the horse. A veterinarian is not

prohibited by this section from administering to a horse any drug

or foreign substance that is necessary and appropriate for the

emergency veterinary care and treatment of the horse under accepted

standards of veterinary practice in this state. The treating

veterinarian and the horse's trainer shall report immediately to

the racing commissioner, the state veterinarian, or the state

steward any unauthorized or emergency administration of an

unauthorized drug or foreign substance to a horse that is intended

to be entered, is entered, or participates in a race or workout at

a licensed race meeting in this state, before the running of the

race or workout, in the manner and form prescribed by the racing

commissioner and the stewards shall scratch the horse from the

race.

     (3) A veterinarian who administers a drug or foreign substance

to any horse that is intended to be entered, is entered, or

participates in a race or workout that is to be conducted at a

licensed race meeting in this state shall keep and maintain a true

and complete written record of the veterinarian's examination,

examination findings, diagnosis and treatment of the horse, and all

drugs or foreign substances administered to the horse by the

veterinarian, in the manner and form prescribed by the racing

commissioner, and shall provide the record to the commissioner for

review upon on request.

(4) (2) The racing commissioner or his or her designee shall

conduct random testing to detect the presence of a drug or foreign

substance in all winning horses and in any other horse in each

pari-mutuel horse race and may conduct individual testing for the

presence of a drug or foreign substance in any specific horse

eligible to race within the grounds of a racetrack or off-track

training center, farm, or stable.

(5) (3) The racing commissioner shall issue written orders or

promulgate rules pursuant to the administrative procedures act of

1969, Act No. 306 of the Public Acts of 1969, being sections 1969

PA 306, MCL 24.201 to 24.328, of the Michigan Compiled Laws, that

specify the condition of the horse that must exist in order to

permit authorization of the use and possession of a foreign

substance or a permissible drug for the intended care or treatment

of a horse and that specify the procedures that must be followed in

administering the authorized drugs. Any written order issued by the

racing commissioner pursuant to under this section shall must be

available for review in the office of racing commissioner at each

licensed race meeting in this state.

(6) (4) Except as authorized by the racing commissioner or as

provided in this section, a person who administers or conspires to

administer a drug or foreign substance, that could affect the

racing condition or performance of a horse, internally, externally,

by hypodermic method, or by any other method, to a horse that is

intended to be entered, is entered, or participates in a race or

workout at a licensed race meeting in this state, or who knowingly

starts a horse in any race or workout at a licensed race meeting in

this state knowing that the horse was administered a drug or

foreign substance, by any method, after the horse was entered or

intended to be entered in the race or workout is guilty of a felony

punishable by a fine of not more than $10,000.00 or by imprisonment

for not more than 5 years, or both.

(7) (5) A postmortem examination shall must be performed on

every horse that dies at a racetrack. A The postmortem examination

shall must be a complete autopsy unless the racing commissioner, on

the advice of the veterinarian, is satisfied as to the cause of

death without the complete autopsy being performed. A complete

autopsy shall must be ordered and performed if the presence of a

drug or foreign substance in the horse is suspected.

     Sec. 31. (1) Except as provided in subsection (3), a person

who does any of the following, or who aids or abets another in

doing any of the following, is guilty of a misdemeanor punishable

by a fine of not more than $10,000.00 or by imprisonment for not

more than 1 year, or both:

     (a) Introduces an object or foreign substance into the

nostrils or windpipe of a horse that is entered or intended to be

entered in a race or workout at a licensed race meeting in this

state for the purpose of affecting the racing condition or

performance of the horse in a race or workout, without

authorization of the racing commissioner.

     (b) Has in his or her possession within the confines of a

racetrack, stable, shed, building, or grounds of a licensed race

meeting, or within the confines of an off-track stable, shed,

building, or grounds where horses are kept which that are eligible

to race over the racetrack of the holder of a race meeting license,

any drug not authorized by the racing commissioner for use at those

locations, or a battery or buzzer, electrical or mechanical, or

syringe, hypodermic needle, or other appliance device, other than

the ordinary whip, which that may or can be used for the purpose of

affecting a horse's racing condition or performance in a race or

workout at a licensed race meeting in this state.

     (c) Has in his or her possession within the confines of a

racetrack, stable, shed, building, or grounds of a licensed race

meeting or within the confines of an off-track stable, shed,

building, or grounds where horses are kept that are eligible to

race over the racetrack of the holder of a race meeting license a

controlled substance as defined in section 7104 of the public

health code, Act No. 368 of the Public Acts of 1978, being section

333.7104 of the Michigan Compiled Laws, or a hypodermic needle or

other instrument that can be used to administer a controlled

substance, unless the controlled substance was obtained directly

from or pursuant to a prescription from , a licensed physician ,

and the person notifies the racing commissioner or racing

commissioner's designee that the person possesses the controlled

substance or instrument.

     (2) In addition to the penalties prescribed in subsection (1),

the racing commissioner shall suspend the license of a person who

is a licensee under this act and who does any of the acts described

in subsection (1) shall have his or her license suspended by the

racing commission for a period of not less than 5 years after being

the person is convicted.

     (3) Subsections (1) and (2) do not prohibit the possession and

use of drugs, foreign substances, controlled substances, hypodermic

needles and syringes, nasogastric tubes, endotracheal tubes,

endoscopes, or other instruments or equipment by a veterinarian

within the confines of a racetrack, stable, shed, building, or

grounds of a licensed race meeting or within the confines of an

off-track stable, shed, building, or grounds where horses are kept

that are eligible to race over the racetrack of the holder of a

race meeting license, if the drugs and equipment are recognized and

accepted in veterinary medicine for use in the care and treatment

of horses and are possessed and used by the veterinarian in

accordance with accepted standards of veterinary practice in this

state and applicable state and federal laws and not in violation of

other provisions of this act.