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S.F. No. 2112 - Racing Commission Pari-Mutuel Horse Racing Licensing, Reporting 
 
Author: Senator Eric R. Pratt
 
Prepared By: Stephanie James, Senate Counsel (651/296-0103)
 
Date: March 14, 2019



 

Section 1 [Racing or Gaming-Related Vendor] adds a definition to the Racing Commission chapter for “racing or gaming-related vendor” to mean any person that manufactures, sells, provides, distributes, repairs, or maintains equipment or supplies used at a licensed racetrack (i.e. Canterbury or Running Aces) or license sponsors or managers of horse-racing on which pari-mutuel betting is conducted.  This definition is used in a grant of rulemaking authority later in the bill.

Section 2 [Qualifications] eliminates a requirement for members of the Racing Commission to post a $100,000 bond before serving on the commission that is payable to the state conditioned on the faithful performance of duties.

Section 3 [Biennial Report] changes the Racing Commission’s annual report to a biennial report.

Section 4 [Revocation and Suspension] requires the Racing Commission to provide notice and an opportunity to be heard to an occupational licensee before revoking the license for a violation that affects the integrity of horse racing, the public health, welfare, or safety, or for a false statement in a license application. (Occupational licenses are granted under current law to horse owners or lessees; jockeys or drivers; exercise riders; grooms; trainers and their assistants; pari-mutuel personnel; security officers; vendors and others.)

This section also extends the amount of time that the commission may suspend an occupational license, from one year to five years, after providing notice and an opportunity to be heard. If a license expires during a suspension, the licensee is ineligible to apply for another license until the suspension expires.

This section limits a licensee’s access to a contested case procedure to only those revocations or suspensions that last more than one year and specifies a procedure and ten-day deadline for requesting a contested case hearing. (Under current law, a license revocation or suspension for more than 90 days is a contested case.) The commission is authorized to suspend a license summarily for up to 90 days and the licensee may appeal the summary suspension according to the commission’s rules.

Section 5 [License Fees] authorizes the commission to adopt a license fee for racing and gaming-related vendors of up to $2,500, without requiring further legislative approval of the fee.

Section 6 [License Agreements] permits the commission to enter into “compacts” with comparable bodies in other racing jurisdictions for the mutual recognition of occupational licenses.  Current law permits the commission to enter into “agreements” of this nature.

Section 7 [Purses] provides for “breakage” to be paid to Class B and D licensees.  Under current law, the licensees may contract to pay a horseperson’s organization out of purse money.  This section allows that payment to the horsepersons’ organization to be paid from breakage, as well as from purse money.  Breakage is defined in current law as “odd cents of all money distributed based on each dollar bet exceeding a sum equal to the next lowest multiple of ten.” Under current law, Class B licenses are for managers of horse racing on which pari-mutuel wagering is conducted and class D licenses are for county agricultural societies that conduct pari-mutuel wagering on horse racing.

This section requires contracts between the licensees and the horsepersons’ organization to be in writing and must be reviewed by the commission for compliance with this subdivision. Changes a requirement for certain agreement to be filed with the commission to a requirement that the agreements be reviewed for compliance by the commission.

Section 8 [Payments to State] extends the deadlines for Advanced Deposit Wager providers to pay certain fees to the Racing Commission, from seven days to 15 days.

Section 9 [Card Club Revenue] changes a requirement for an agreement between the commission and a horsepersons’ organization regarding payments of card-club proceeds to be filed with the commission to a requirement that the agreement be reviewed by the commission for compliance.

Section 10 [Powers and Duties] makes changes to duties that the commission may delegate to a board of stewards: increases the cap on fines that may imposed on licensees for a violation of law or rules, allows the board to issue suspensions of up to one year, and allows the board to impose other sanctions as delegated by the commission or as permitted in rules.

Section 11 [Appeals; Heaings] is a conforming change. Review of a decision by the board of stewards will be reviewable by the commission, except for rulings on revocations and suspensions of more than one year for which a licensee must request a contested case hearing. Clarifies that the commission has the authority to review all rulings of the board of stewards.

Section 12 [Thoroughbred and Quarterhorse Categories] expands the eligible institutions to receive money for equine research to all public institutions of postsecondary learning in the state. Under current law, only the University of Minnesota School of Veterinary Medicine is eligible. This section eliminates an outdated list of legislative chairs to whom the commission must submit its annual report, and makes the report biennial. 

Under current law, the commission is required to pay a portion of the taxes it collects as awards to breeders and owners of Minnesota-bred horses that win money at Minnesota’s licensed racetracks.  This section permits payment of the awards to breeders and owners of horses that win money at any pari-mutuel track in any state or province.

Section 13 [Standardbred Category] eliminates a requirement for the commission to provide money for the development of nonpari-mutuel standardbred tracks. Doubles the amount the commission must pay for equine research and education.

Section 14 [Fines] limits the cap on civil fines the commission is authorized to set by schedule. Raises the threshold for a fine for which the licensee may request a contested case hearing, from $5,000 to $10,000.

Section 15 [Exclusion of Certain Persons]

Subdivision 1 [Persons excluded] adds public safety and integrity of card playing as justifications for the commission to exclude someone from a licensed racetrack.

Subdivision 2 [Hearing; appeal] clarifies that the commission need provide due process only to licensed people that the commission orders to be excluded from a track.

Subdivision 5 [Exclusions by racetrack] eliminates procedural requirements for a racetrack licensee to exclude a person from its premises. Requires a racetrack licensee to report to the commission when the track excludes a person for a suspected or potential violation of law, or if the licensee excludes a person for more than five days.

 

 
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