Bill Text: MI SB0661 | 2019-2020 | 100th Legislature | Engrossed

Michigan Senate Bill 661 (Prior Session Legislation)

Bill Title: Gaming: horse racing; pari-mutuel wagering on horse races run in the past; allow, and modify certain licensing procedures. Amends secs. 2, 6a, 8, 9 & 22 of 1995 PA 279 (MCL 431.302 et seq.); adds secs. 19d & 20a & repeals sec. 19b of 1995 PA 279 (MCL 431.319b).

Spectrum: Slight Partisan Bill (Republican 2-1)

Status: (Engrossed - Dead) 2020-12-02 - Referred To Second Reading [SB0661 Detail]

Download: Michigan-2019-SB0661-Engrossed.html

Substitute For

SENATE BILL NO. 661

A bill to amend 1995 PA 279, entitled

"Horse racing law of 1995,"

by amending sections 2, 6a, 8, 9, and 22 (MCL 431.302, 431.306a, 431.308, 431.309, and 431.322), sections 2, 8, 9, and 22 as amended and section 6a as added by 2016 PA 271, and by adding sections 19d and 20a; and to repeal acts and parts of acts.

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) "Commissioner" or "racing commissioner" means the executive director of the Michigan gaming control board appointed under section 4 of the Michigan gaming control Gaming Control and revenue act, 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 a county, district, or community fair 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) "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 Gaming Control and revenue act, 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.a system by which the wagers on the outcome of a live horse race, run in the past or to be run in the future, are placed with, or in, a wagering pool conducted by an operator licensed or otherwise permitted to do so under the laws of this state and in which the participants do not wager against the operator. Pari-mutuel and pari-mutuel wagering do not include wagering on a banked game in which the race meeting licensee is a participant or otherwise holds a stake in the outcome of the game, or in which the race meeting licensee established a bank against which the participants play. However, pari-mutuel and pari-mutuel wagering include a nonrefundable contribution to the pool to serve as a seed or guarantee. Pari-mutuel and pari-mutuel wagering do not include a video lottery that must be authorized under the McCauley-Traxler-Law-Bowman-McNeely lottery act, 1972 PA 239, MCL 432.1 to 432.47, or any other law of this state.

(p) "Person" means an individual, firm, partnership, corporation, association, or other legal entity.

(q) "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 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) "Veterinarian" means an individual licensed to practice veterinary medicine under part 188 of the public health code, 1978 PA 368, MCL 333.18801 to 333.18838, or under a state or federal law applicable to 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.

(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.by September 29, 2016.

(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 racing 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.

(d) Expend money received under section 20a, as appropriated by the legislature, for the following purposes:

(i) Promotion and marketing of horse racing.

(ii) Equine-related research.

(iii) Grants for equine-related support and aftercare and programs related to horse racing.

(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 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 under this act.

(c) Track licenses issued to 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 in this state and the person has a controlling interest in or co-ownership of the other licensed racetrack.

(3) If, after the effective date of the amendatory act that added this subsection, the racing commissioner issues a race meeting license to a person that has previously held a race meeting license but that will be conducting all or part of its race meeting under the new license at a different racetrack than under the previous licenses, the person shall not conduct pari-mutuel wagering at a licensed racetrack that is within 35 miles of another licensed racetrack at which 1 or more race meeting licensees may conduct pari-mutuel wagering.

(4) If, after the effective date of the amendatory act that added this subsection, the racing commissioner issues a race meeting license to a person that has not held a race meeting license before the effective date of the amendatory act that added this subsection, the person shall not conduct pari-mutuel wagering at a licensed racetrack that is within 50 miles of another licensed racetrack at which 1 or more race meeting licensees may conduct pari-mutuel wagering.

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 January 9, 1996 at which wagering by pari-mutuel methods on the results of horse racing has been conducted by a race meeting licensee. After the effective date of the amendatory act that added this sentence, the racing commissioner may issue, without further application, a track license to a local unit of government that holds or has previously held a track license issued under this act.

(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 must include the name and address of the applicant, if the applicant is a corporation, the place of its incorporation, and any other information required by the rules promulgated under this act. On the applicant's filing of the application and 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 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 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 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. 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. The action of the racing commissioner is subject to appeal.

(6) The racing commissioner shall not issue a track license under this section if the new license would result in harmful competition among existing racetracks.

Sec. 19d. (1) If the racing commissioner determines that all of the requirements of this act for issuing a race meeting license are met, the racing commissioner shall issue a race meeting license to the holder of a casino license issued under section 6 of the Michigan Gaming Control and Revenue Act, 1996 IL 1, MCL 432.206.

(2) The holder of a race meeting license issued under this section shall not conduct pari-mutuel wagering at a licensed racetrack that is within 50 miles of another licensed racetrack at which 1 or more race meeting licensees may conduct pari-mutuel wagering.

Sec. 20a. The tax imposed under section 22(4) must be allocated as follows:

(a) Ninety percent to be deposited in the Michigan agriculture equine industry development fund created under section 20.

(b) Ten percent to the horse racing advisory commission created in section 6a to be expended as provided in section 6a(12)(d).

Sec. 22. (1) A licensed racetrack shall pay a license fee to the racing commissioner of $1,000.00 annually.

(2) Each holder of a race meeting license shall pay to the state treasurer, from the holder's commission, a tax in the amount of 3.5% of money wagered on interstate and intertrack simulcast races conducted at the holder's licensed race meetings.

(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 development fund and related programs described in section 20. The pari-mutuel tax 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.

(4) A race meeting licensee that conducts pari-mutuel wagering on the results of live horse races that are run in the past shall pay to the state treasurer a tax in the amount of 1% of all money wagered on the pari-mutuel wagering in a manner and time as required by the racing commissioner.

Enacting section 1. Section 19b of the horse racing law of 1995, 1995 PA 279, MCL 431.319b, is repealed.