By: Anchia (Senate Sponsor - Hinojosa) H.B. No. 2271
(In the Senate - Received from the House April 12, 2011;
April 14, 2011, read first time and referred to Committee on
Government Organization; April 29, 2011, reported adversely, with
favorable Committee Substitute by the following vote: Yeas 5,
Nays 0; April 29, 2011, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 2271 By: Hegar
A BILL TO BE ENTITLED
AN ACT
relating to the continuation and functions of the Texas Racing
Commission, the abolishment of the Equine Research Account Advisory
Committee, and the authority of Texas AgriLife Research; providing
an administrative penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1.03, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended by amending Subdivision
(52) and adding Subdivisions (80) and (81) to read as follows:
(52) "Performance" means the consecutive running of a
specified number of greyhound races as determined by the commission
[not more than 13 greyhound races].
(80) "Active license" means a racetrack license
designated by the commission as active.
(81) "Inactive license" means a racetrack license
designated by the commission as inactive.
SECTION 2. Section 2.071, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended to read as follows:
Sec. 2.071. CONFLICT OF INTEREST. (a) A person may not be
a member of the commission and may not be a commission employee
employed in a "bona fide executive, administrative, or professional
capacity," as that phrase is used for purposes of establishing an
exemption to the overtime provisions of the federal Fair Labor
Standards Act of 1938 (29 U.S.C. Section 201 et seq.), if:
(1) the person is an [An] officer, employee, or paid
consultant of a Texas trade association in the field of horse or
greyhound racing or breeding; or
(2) the person's [may not be a member of the commission
or an employee of the commission who is exempt from the state's
position classification plan or is compensated at or above the
amount prescribed by the General Appropriations Act for step 1,
salary group 17, of the position classification salary schedule.
[(b) A person who is the] spouse is [of] an officer,
manager, or paid consultant of a Texas trade association in the
field of horse or greyhound racing or breeding [may not be a member
of the commission and may not be an employee of the commission who
is exempt from the state's position classification plan or is
compensated at or above the amount prescribed by the General
Appropriations Act for step 1, salary group 17, of the position
classification salary schedule].
(b) A person may not be a member of the commission or act as
the general counsel to the commission if the person is required to
register as a lobbyist under Chapter 305, Government Code, because
of the person's activities for compensation on behalf of a
profession related to the operation of the commission.
(c) In [For the purposes of] this section, "Texas trade
association" means [a Texas trade association is] a cooperative and
voluntarily joined statewide [nonprofit] association of business
or professional competitors in this state designed to assist its
members and its industry or profession in dealing with mutual
business or professional problems and in promoting their common
interest.
SECTION 3. Article 2, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended by adding Section 2.25
to read as follows:
Sec. 2.25. NEGOTIATED RULEMAKING AND ALTERNATIVE DISPUTE
RESOLUTION PROCEDURES. (a) The commission shall develop and
implement a policy to encourage the use of:
(1) negotiated rulemaking procedures under Chapter
2008, Government Code, for the adoption of commission rules; and
(2) appropriate alternative dispute resolution
procedures under Chapter 2009, Government Code, to assist in the
resolution of internal and external disputes under the commission's
jurisdiction.
(b) The commission's procedures relating to alternative
dispute resolution shall conform, to the extent possible, to any
model guidelines issued by the State Office of Administrative
Hearings for the use of alternative dispute resolution by state
agencies.
(c) The commission shall:
(1) coordinate the implementation of the policy
adopted under Subsection (a) of this section;
(2) provide training as needed to implement the
procedures for negotiated rulemaking or alternative dispute
resolution; and
(3) collect data concerning the effectiveness of those
procedures.
SECTION 4. Sections 3.07(b) and (e), Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes), are amended to read
as follows:
(b) The commission shall make rules specifying the
authority and the duties of each official, including the power of
stewards or judges to impose penalties for unethical practices or
violations of racing rules. A penalty imposed by the stewards or
judges may include a fine of not more than $5,000, a suspension for
not more than one year, or both a fine and suspension. Before
imposing a penalty under this subsection, the stewards and judges
shall conduct a hearing that is consistent with constitutional due
process. A hearing conducted by a steward or judge under this
subsection is not subject to Chapter 2001, Government Code. A
decision of a steward or judge is subject to review by the executive
director, who may modify the penalty. A penalty modified by the
executive director under this section may include a fine not to
exceed $10,000, a suspension not to exceed two years, or both a fine
and a suspension. A decision of a steward or judge that is not
reviewed or modified by the executive director is a final decision.
Any decision of a steward or judge may be appealed under Section
3.08(a) of this Act regardless of whether the decision is modified
by the executive director. [If, in the opinion of the stewards or
judges, the allowable penalties are not sufficient, the stewards or
judges may refer the case to the commission for further action.]
(e) To pay the charges associated with the medication or
drug testing, an association may use the money held by the
association to pay outstanding tickets and pari-mutuel vouchers.
If additional amounts are needed to pay the charges, the
association shall pay those additional amounts. [If the amount
held exceeds the amount needed to pay the charges, the association
shall pay the excess to the commission in accordance with Section
11.08 of this Act.]
SECTION 5. Section 3.09(b), Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended to read as follows:
(b) The commission shall deposit the money it collects under
this Act in the State Treasury to the credit of a special fund to be
known as the Texas Racing Commission fund. The Texas Racing
Commission fund may be appropriated only for the administration and
enforcement of this Act. Any unappropriated money exceeding
$750,000 that remains [remaining] in the [that special] fund at the
close of each fiscal biennium shall be transferred to the General
Revenue Fund and may be appropriated for any legal purpose. The
legislature may also appropriate money from the General Revenue
Fund for the administration and enforcement of this Act. Any amount
of general revenue appropriated for the administration and
enforcement of this Act in excess of the cumulative amount
deposited in the Texas Racing Commission fund shall be reimbursed
from the Texas Racing Commission fund not later than one year after
the date on which the general revenue funds are appropriated, with
[12 percent interest per year until August 31, 1993, and] 6-3/4
percent interest [thereafter] with all payments first attributable
to interest.
SECTION 6. Sections 5.03(a) and (c), Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes), are amended to read
as follows:
(a) An applicant for any license or license renewal under
this Act must, except as allowed under Section 7.10 of this Act,
submit to the commission a complete set of fingerprints of the
individual natural person applying for the license or license
renewal or, if the applicant is not an individual natural person, a
complete set of fingerprints of each officer or director and of each
person owning an interest of at least five percent in the applicant.
The Department of Public Safety may request any person owning any
interest in an applicant for a racetrack license to submit a
complete set of fingerprints.
(c) A peace officer of this or any other state, or any
district office of the commission, shall take the fingerprints of
an applicant for a license or license renewal on forms approved and
furnished by the Department of Public Safety and shall immediately
deliver them to the commission.
SECTION 7. Article 6, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended by adding Section 6.032
to read as follows:
Sec. 6.032. BOND. (a) The commission at any time may
require a holder of a racetrack license or an applicant for a
racetrack license to post security in an amount reasonably
necessary, as provided by commission rule, to adequately ensure the
license holder's or applicant's compliance with substantive
requirements of this Act and commission rules.
(b) Cash, cashier's checks, surety bonds, irrevocable bank
letters of credit, United States Treasury bonds that are readily
convertible to cash, or irrevocable assignments of federally
insured deposits in banks, savings and loan institutions, and
credit unions are acceptable as security for purposes of this
section. The security must be:
(1) conditioned on compliance with this Act and
commission rules adopted under this Act; and
(2) returned after the conditions of the security are
met.
SECTION 8. The heading to Section 6.04, Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes), is amended to read
as follows:
Sec. 6.04. ISSUANCE OF LICENSE[; BOND].
SECTION 9. Section 6.04, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended by adding Subsections
(a-1) and (a-2) to read as follows:
(a-1) When all of the requirements of licensure for the
applicant described in this article have been satisfied, the
commission shall notify the applicant that the application is
complete.
(a-2) The commission shall make a determination with
respect to a pending application not later than the 120th day after
the date on which the commission provided to the applicant the
notice required under Subsection (a-1) of this section.
SECTION 10. Section 6.06(k), Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes), is amended to read as
follows:
(k) The commission shall review the ownership and
management of an active [a] license issued under this article every
five years beginning on the fifth anniversary of the issuance of the
license. In performing the review, the commission may require the
license holder to provide any information that would be required to
be provided in connection with an original license application
under Article 5 of this Act or this article. The commission shall
charge fees for the review in amounts sufficient to implement this
subsection.
SECTION 11. Article 6, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended by adding Sections
6.0601, 6.0602, and 6.0603 to read as follows:
Sec. 6.0601. DESIGNATION OF ACTIVE AND INACTIVE RACETRACK
LICENSES. (a) The commission shall designate each racetrack
license as an active license or an inactive license. The commission
may change the designation of a racetrack license as appropriate.
(b) The commission shall designate a racetrack license as an
active license if the license holder:
(1) holds live racing events at the racetrack; or
(2) makes good faith efforts to conduct live racing.
(c) The commission by rule shall provide guidance on what
actions constitute, for purposes of this Act, good faith efforts to
conduct live racing.
(d) Before the first anniversary of the date a new racetrack
license is issued, the commission shall conduct an evaluation of
the license to determine whether the license is an active or
inactive license.
(e) An active license is effective until the license is
designated as an inactive license or is surrendered, suspended, or
revoked under this Act.
Sec. 6.0602. RENEWAL OF INACTIVE RACETRACK LICENSE; FEES.
(a) The commission by rule shall establish an annual renewal
process for inactive licenses and may require the license holder to
provide any information required for an original license
application under this Act. An inactive license holder must
complete the annual renewal process established under this section
until the commission:
(1) designates the license as an active license; or
(2) refuses to renew the license.
(b) In determining whether to renew an inactive license, the
commission shall consider:
(1) the inactive license holder's:
(A) financial stability;
(B) ability to conduct live racing;
(C) ability to construct and maintain a racetrack
facility; and
(D) other good faith efforts to conduct live
racing; and
(2) other necessary factors considered in the issuance
of the original license.
(c) The commission may refuse to renew an inactive license
if, after notice and a hearing, the commission determines that:
(1) renewal of the license is not in the best interests
of the racing industry or the public; or
(2) the license holder has failed to make a good faith
effort to conduct live racing.
(d) The commission shall consult with members of the racing
industry and other key stakeholders in developing the license
renewal process under this section.
(e) The commission shall set and collect renewal fees in
amounts reasonable and necessary to cover the costs of
administering and enforcing this section.
(f) The commission by rule shall establish criteria to make
the determinations under Subsections (c)(1) and (2).
Sec. 6.0603. DISCIPLINARY ACTION. (a) The commission by
rule shall establish procedures for disciplinary action against a
racetrack license holder.
(b) If, after notice and hearing, the commission finds that
a racetrack license holder or a person employed by the racetrack has
violated this Act or a commission rule or if the commission finds
during a review or renewal that the racetrack is ineligible for a
license under this article, the commission may:
(1) revoke, suspend, or refuse to renew the racetrack
license;
(2) impose an administrative penalty as provided under
Section 15.03 of this Act; or
(3) take any other action as provided by commission
rule.
(c) The commission may not revoke an active license unless
the commission reasonably determines that other disciplinary
actions are inadequate to remedy the violation.
SECTION 12. Section 6.08(h), Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes), is amended to read as
follows:
(h) Two percent of the breakage shall be allocated to the
equine research account under Subchapter F, Chapter 88 [51],
Education Code. The remaining 98 percent of the breakage shall
constitute "total breakage" and shall be allocated pursuant to
Subsections (i) and (j) of this section.
SECTION 13. The heading to Section 6.18, Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes), is amended to read
as follows:
Sec. 6.18. ANNUAL FEE FOR RACETRACK [TERM OF] LICENSE[;
RESTRICTIONS ON RACETRACKS].
SECTION 14. Section 6.18(b), Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes), is amended to read as
follows:
(b) The commission may prescribe a reasonable annual fee to
be paid by each racetrack licensee. The fee must be in an amount
sufficient to provide that the total amount of fees imposed under
this section, together with the license fees prescribed under
Section 5.01(b) of this Act and the renewal fees prescribed under
Section 6.0602(e) of this Act, is sufficient to pay the costs of
administering and enforcing this Act.
SECTION 15. Section 7.01, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended to read as follows:
Sec. 7.01. LICENSE REQUIRED. (a) Except as provided by
this section, a [A] person may not participate in racing with
pari-mutuel wagering other than as a spectator or as a person
placing a wager without first obtaining a license from the
commission. A person may not engage in any occupation for which
commission rules require a license under this Act without first
obtaining a license from the commission.
(b) The commission by rule shall categorize the occupations
of racetrack employees and determine the occupations that afford
the employee an opportunity to influence racing with pari-mutuel
wagering. The rules must require the following employees to be
licensed under this Act:
(1) an employee who works in an occupation determined
by the commission to afford the employee an opportunity to
influence racing with pari-mutuel wagering; or
(2) an employee who will likely have significant
access to the backside of a racetrack or to restricted areas of the
frontside of a racetrack.
(c) A racetrack licensed under this Act is responsible for
ensuring that its employees comply with this Act and commission
rules. The commission may impose disciplinary action against a
licensed racetrack for violations of this Act and commission rules
by its employees as provided by Section 6.0603 of this Act.
SECTION 16. Section 7.07, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended by amending Subsection
(a) and adding Subsection (a-1) to read as follows:
(a) A license issued under this article is valid for a
period set by the commission not to exceed 36 months following the
date of its issuance. It is renewable on application, satisfactory
results of a criminal history information record check, and payment
of the fee in accordance with the rules of the commission.
(a-1) The commission shall obtain criminal history record
information on each applicant renewing an occupational license
under this article. The commission shall ensure that criminal
history record information is obtained on each license holder at
least once every 36 months.
SECTION 17. Section 11.01, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended by amending Subsection
(a) and adding Subsection (a-1) to read as follows:
(a) The commission shall adopt rules to regulate wagering on
greyhound races and horse races under the system known as
pari-mutuel wagering. Wagering may be conducted only by an
association within its enclosure. A person may not accept, in
person, by telephone, or over the Internet, a wager for a horse race
or greyhound race conducted inside or outside this state from a
person in this state unless the wager is authorized under this Act.
(a-1) The commission may commission as many investigators
as the commission determines necessary to enforce this Act and the
rules of the commission. Each investigator shall take the
constitutional oath of office and file it with the commission. Each
commissioned investigator has the powers of a peace officer.
SECTION 18. Sections 11.04(a) and (c), Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes), are amended to read
as follows:
(a) Only a person inside the enclosure where both live and
simulcast race meetings are authorized may wager on the result of a
live or simulcast race presented by the association in accordance
with commission rules. Except as provided by this section, a person
may not place, in person, by telephone, or over the Internet, a
wager for a horse race or greyhound race conducted inside or outside
this state. The commission shall adopt rules to prohibit wagering
by employees of the commission and to regulate wagering by persons
licensed under this Act.
(c) The commission shall adopt rules prohibiting an
association from accepting a wager made on credit and shall adopt
rules providing for the use of automatic banking machines within
the enclosure. The commission shall limit the use of an automatic
banking machine to [:
[(1)] allow a person to have access to only the
person's checking account at a bank or other financial
institution[; and
[(2) deliver no more than $200].
SECTION 19. Section 11.05, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended to read as follows:
Sec. 11.05. UNLAWFUL WAGERING. A person shall not wager on
the result of a greyhound race or horse race in this state except as
permitted by this Act. A person who is not an association under
this Act may not accept from a Texas resident while the resident is
in this state a wager on the result of a greyhound race or horse race
conducted inside or outside this state.
SECTION 20. Section 18.01(a), Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes), is amended to read as
follows:
(a) The Texas Racing Commission is subject to Chapter 325,
Government Code (Texas Sunset Act). Unless continued in existence
as provided by that chapter, and except as provided by Subsections
(b) and (c) of this section, the commission is abolished and this
Act expires September 1, 2017 [2011].
SECTION 21. Section 88.521(2), Education Code, is amended
to read as follows:
(2) "Director" means the executive director of Texas
AgriLife Research, formerly known as the Texas Agricultural
Experiment Station.
SECTION 22. Sections 88.522(b), (c), (f), and (g),
Education Code, are amended to read as follows:
(b) The director shall administer the account through
established procedures of Texas AgriLife Research, formerly known
as the Texas Agricultural Experiment Station.
(c) The comptroller shall periodically transfer the amounts
specified by Sections [Section] 6.08(f) and (h), Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes), to the account.
(f) Not more than 10 percent of the account may be spent each
year on the cost incurred in the operation or administration of the
[advisory committee or] account.
(g) All money received by [the advisory committee or] the
account under this chapter is subject to Subchapter F, Chapter 404,
Government Code.
SECTION 23. Section 88.525, Education Code, is amended by
adding Subsections (a-1) and (b-1) and amending Subsection (b) to
read as follows:
(a-1) In awarding grants under this section, the director
shall comply with the conflict of interest provisions of The Texas
A&M University System.
(b) The [With the advice of the advisory committee, the]
director shall develop annually a request for proposals for equine
research grants. Each proposal received may [must] be evaluated by
a peer review committee appointed by the director and subject
matter experts as necessary to evaluate the proposal. The peer
review committee shall consider the applicant's research capacity
and the relevance and scientific merit of the proposal and make
recommendations to the director.
(b-1) The director may award a grant to an applicant who
proposes to commingle grant money awarded under this section with
other sources of funding or proposes to conduct research that
includes equine research.
SECTION 24. Section 88.526(a), Education Code, is amended
to read as follows:
(a) The director shall prepare an annual report on equine
research funded under this subchapter. The director shall
distribute the report to the Texas Racing Commission and [the]
members of the Texas horse racing industry [advisory committee].
The director shall make copies of the report available to
interested parties.
SECTION 25. Section 88.527, Education Code, is amended to
read as follows:
Sec. 88.527. CONFERENCE. Texas AgriLife Research [The
Texas Agricultural Extension Service] shall conduct an annual
conference on equine research. Money from the equine research
account shall be used to defray the costs of the conference. The
conference must be designed to bring to the attention of the Texas
horse racing industry the latest research results and technological
developments in equine research. The director shall make the
report created under Section 88.526 available at the conference.
SECTION 26. The following sections of the Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes) are repealed:
(1) Section 2.072;
(2) Section 6.04(b);
(3) Section 6.18(a); and
(4) Section 7.02(a).
SECTION 27. The following sections of the Education Code
are repealed:
(1) Section 88.521(1);
(2) Section 88.523;
(3) Section 88.5231;
(4) Section 88.5232;
(5) Section 88.524;
(6) Section 88.5245; and
(7) Section 88.525(c).
SECTION 28. (a) Not later than September 1, 2012, the Texas
Racing Commission shall designate each racetrack license as active
or inactive as required by Section 6.0601, Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes), as added by this
Act.
(b) The Texas Racing Commission by rule shall establish a
staggered schedule and the procedure for the review of licenses
required under Section 6.06(k), Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), as amended by this Act.
(c) The Texas Racing Commission may adjust license renewal
and review fees pursuant to the commission's authority to adjust
fees under Section 5.01, Texas Racing Act (Article 179e, Vernon's
Texas Civil Statutes), and Section 6.0602, Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes), as added by this
Act, to recover any money lost by the change in law made by this Act
to Section 3.07(e), Texas Racing Act (Article 179e, Vernon's Texas
Civil Statutes).
(d) As soon as practicable, the executive director of Texas
AgriLife Research shall submit a report to the Texas Racing
Commission as required by Section 88.526, Education Code, as
amended by this Act.
SECTION 29. This Act takes effect September 1, 2011.
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