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PRINTER'S NO. 3794
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2303
Session of
2015
INTRODUCED BY CAUSER, GODSHALL, A. HARRIS, LAWRENCE, MILLARD,
PICKETT, RAPP, WARD, WATSON AND ZIMMERMAN, SEPTEMBER 1, 2016
REFERRED TO COMMITTEE ON AGRICULTURE AND RURAL AFFAIRS,
SEPTEMBER 1, 2016
AN ACT
Amending Title 3 (Agriculture) of the Pennsylvania Consolidated
Statutes, making editorial changes; consolidating an article
of The Administrative Code of 1929 relating to race horse
industry reform; further providing for Pennsylvania Breeding
Fund; and making a related repeal.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The heading of Part VIII of Title 3 of the
Pennsylvania Consolidated Statutes is renumbered to read:
PART [VIII] C
MISCELLANEOUS PROVISIONS
Section 2. The heading of Chapter 81 of Title 3 is
renumbered to read:
CHAPTER [81] 999
MISCELLANEOUS PROVISIONS
Section 3. Section 8101 of Title 3 is renumbered to read:
§ [8101] 99901. (Reserved).
Section 4. Title 3 is amended by adding a part to read:
PART VIII
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HORSE RACING
Chapter
91. Preliminary Provisions (Reserved)
93. Race Horse Industry Reform
CHAPTER 91
PRELIMINARY PROVISIONS
(RESERVED)
CHAPTER 93
RACE HORSE INDUSTRY REFORM
Subchapter
A. Preliminary Provisions
B. Racing Oversight
C. Additional Licensing Requirements for Licensed Racing
Entity, Secondary Pari-mutuel Organization, Totalisator
and Racing Vendors
D. Compliance
E. Medication Rules and Enforcement Provisions
SUBCHAPTER A
PRELIMINARY PROVISIONS
Sec.
9301. Definitions.
§ 9301. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Account." An account for account wagering with a specific
identifiable record of deposits, wagers and withdrawals
established by an account holder and managed by the licensed
racing entity or secondary pari-mutuel organization.
"Account holder." An individual who successfully completed
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an application and for whom the licensed racing entity or
secondary pari-mutuel organization has opened an account.
"Advance deposit account wagering system." A system by which
wagers are debited and payouts are credited to an advance
deposit account held by a licensed racing entity or secondary
pari-mutuel organization on behalf of a person.
"Applicant." A person who, on his own behalf or on behalf of
another, is applying for permission to engage in an act or
activity which is regulated under the provisions of this
chapter. If the applicant is a person other than an individual,
the commission shall determine the associated persons whose
qualifications are necessary as a precondition to the licensing
of the applicant.
"Backside area." An area of the racetrack enclosure that is
not generally accessible to the public and which includes, but
is not limited to, a facility commonly referred to as a barn,
paddock enclosure, track kitchen, recreation hall, backside
employee quarters and training track and roadways providing
access to the area. The term does not include an area of the
racetrack enclosure which is generally accessible to the public,
including the various buildings commonly referred to as the
grandstand or the racing surface and walking ring.
"Breakage." The odd cents of redistributions to be made on
contributions to pari-mutuel pools exceeding a sum equal to the
next lowest multiple of 10.
"Clean letter of credit." A letter of credit which is
available to the beneficiary against presentation of only a
draft or receipt.
"Commission." The State Horse Racing Commission.
"Commissioner." An individual appointed to and sworn in as a
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member of the commission in accordance with section 9311(b)
(relating to State Horse Racing Commission).
"Conviction." A finding of guilt or a plea of guilty or nolo
contendere, whether or not a judgment of sentence has been
imposed as determined by the law of the jurisdiction in which
the prosecution was held. The term does not include a conviction
that has been expunged or overturned or for which an individual
has been pardoned or an order of accelerated rehabilitative
disposition.
"Electronic wagering." A method of placing or transmitting a
legal wager by an individual in this Commonwealth through
telephone, electromechanical, computerized system or any other
form of electronic media approved by the commission and accepted
by a secondary pari-mutuel organization or a licensed racing
entity or the licensed racing entity's approved off-track
betting system located in this Commonwealth.
"Evergreen clause." A term in a letter of credit providing
for automatic renewal of the letter of credit.
"Ex parte communication." An off-the-record communication
engaged in or received by a commissioner of the commission
regarding the merits of, or any fact in issue relating to, a
pending matter before the commission or which may reasonably be
expected to come before the commission in a contested on-the-
record proceeding. The term shall not include:
(1) An off-the-record communication by a commissioner,
the Department of Revenue, Pennsylvania State Police,
Attorney General or other law enforcement official, prior to
the beginning of the proceeding solely for the purpose of
seeking clarification or correction to evidentiary materials
intended for use in the proceedings.
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(2) A communication between the commission or a
commissioner and legal counsel.
"Felony." An offense under the laws of this Commonwealth or
the laws of another jurisdiction, punishable by imprisonment for
more than five years.
"Financial interest." An ownership, property, leasehold or
other beneficial interest in an entity. The term shall not
include an interest which is held or deemed to be held in any of
the following:
(1) Securities that are held in a pension plan, profit-
sharing plan, individual retirement account, tax-sheltered
annuity, a plan established under section 457 of the Internal
Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 457), or
any successor provision, deferred compensation plan whether
qualified or not qualified under the Internal Revenue Code of
1986, or any successor provision or other retirement plan
that:
(i) Is not self-directed by the individual.
(ii) Is advised by an independent investment adviser
who has sole authority to make investment decisions with
respect to contributions made by the individual to these
plans.
(2) A tuition account plan organized and operated under
section 529 of the Internal Revenue Code of 1986 that is not
self-directed by the individual.
(3) A mutual fund where the interest owned by the mutual
fund in a licensed racing entity does not constitute a
controlling interest as defined in 4 Pa.C.S. § 1103 (relating
to definitions).
"Horse race meeting." A specified period and dates each year
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during which a licensed racing entity is authorized to conduct
live racing or pari-mutuel wagering as approved by the
commission.
"Horse racing." Standardbred horse racing and thoroughbred
horse racing.
"Horsemen's organization." A trade association which
represents the majority of owners and trainers who own and race
horses at a racetrack.
"Immediate family." A spouse, parent, brother, sister or
child.
"Irrevocable clean letter of credit." A clean letter of
credit which cannot be canceled or amended unless there is an
agreement to cancel or amend among all parties to the letter of
credit.
"Land mile." A unit of distance equal to 1,609.3 meters or
5,280 feet, as measured in a straight line.
"Licensed racing entity." Any person that has obtained a
license to conduct live thoroughbred or harness horse race
meetings respectively with pari-mutuel wagering from the
commission.
"Licensee." The holder of a license issued under this
chapter.
"Nominal change in ownership." The sale, pledge,
encumbrance, execution of an option agreement or other transfer
of less than 5% of the equity securities or other ownership
interest of a person whose percentage ownership does not affect
the decisions of the licensed racing entity.
"Nonprimary location." Any facility in which pari-mutuel
wagering is conducted by a licensed racing entity under this
chapter other than the racetrack where live racing is conducted.
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"Ownership interest." Owning or holding, or being deemed to
hold, debt or equity securities or other ownership interest or
profit interest.
"Pari-mutuel wagering." A form of wagering, including
manual, electronic, computerized and other forms as approved by
the commission, on the outcome of a horse racing event in which
all wagers are pooled and held by a licensed racing entity or
secondary pari-mutuel organization for distribution of the total
amount, less the deductions authorized by law, to holders of
winning tickets.
"Person." Any natural person, corporation, foundation,
organization, business trust, estate, limited liability company,
license corporation, trust, partnership, limited liability
partnership, association or any other form of legal business
entity.
"Primary market area of a racetrack." The land area included
in a circle drawn with the racetrack as the center and a radius
of 35 land miles.
"Principal." Any of the following individuals associated
with a partnership, trust association, limited liability company
or corporation:
(1) The chairman and each member of the board of
directors of a corporation.
(2) Each partner of a partnership and each participating
member of a limited liability company.
(3) Each trustee and trust beneficiary of an
association.
(4) The president or chief executive officer and each
other officer, manager and employee who has policy-making or
fiduciary responsibility within the organization.
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(5) Each stockholder or other individual who owns, holds
or controls, either directly or indirectly, 5% or more of
stock or financial interest in the collective organization.
(6) Any other employee, agent, guardian, personal
representative, lender or holder of indebtedness who has the
power to exercise a significant influence over the
applicant's or licensee's operation.
"Racetrack." The physical facility where a licensed racing
entity conducts thoroughbred or standardbred horse race meetings
respectively with pari-mutuel wagering.
"Racetrack enclosure." For purposes of this chapter, the
term "racetrack enclosure," with respect to each licensed racing
entity, shall be deemed to include at least one primary
racetrack location at which horse race meetings authorized to be
held by the licensed racing entities are conducted, including
the grandstand, frontside and backside facilities and all
primary, nonprimary, contiguous and noncontiguous locations of
the licensed racing entity which are specifically approved by
the commission for conducting the pari-mutuel system of wagering
on the results of horse racing held at such meetings or race
meetings conducted by another licensed racing entity or
transmitted to such locations by simulcasting.
"Racing vendor." A person who provides goods or services to
a licensed racing entity directly related to racing or the
racing product, as determined by the commission.
"Secondary market area of a racetrack." The land area
included in a circle drawn with the racetrack as the center and
a radius of 50 land miles, not including the primary market area
of the racetrack.
"Secondary pari-mutuel organization." A licensed entity,
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other than a licensed racing entity, that offers and accepts
pari-mutuel wagers. A person or entity that provides to a
licensed racing entity hardware, software, equipment, content or
services used to manage, conduct, operate or record pari-mutuel
wagering activity by or from residents of this Commonwealth
shall not be deemed to be a secondary pari-mutuel organization
solely by virtue of the provision of the assets or services.
"Simulcast." Live video and audio transmission of a race and
pari-mutuel information for the purpose of pari-mutuel wagering
at locations other than the racetrack where the race is run.
"Standardbred horse racing" or "harness racing." A form of
horse racing in which the horses participating are attached "in
harness" to a sulky or other similar vehicle, at a specific
gait, either a trot or pace.
"Substantial change in ownership." The sale, pledge,
encumbrance, execution of an option agreement or another
transfer of 5% or more of the equity securities or other
ownership interest of a person whose percentage ownership
affects the decisions of the licensed racing entity.
"Thoroughbred horse racing." The form of horse racing in
which each participating horse is mounted by a jockey, is duly
registered with The Jockey Club of New York and engages in horse
racing on the flat, which may include a steeplechase or hurdle
race.
"Totalisator." A computer system used to pool wagers, record
sales, calculate payoffs and display wagering data on a display
device that is located at a pari-mutuel facility or nonprimary
location.
SUBCHAPTER B
RACING OVERSIGHT
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Sec.
9311. State Horse Racing Commission.
9312. Additional powers of commission.
9313. Budget.
9314. Location.
9315. Number of licensed racing entities.
9316. Department of Revenue.
9317. Allocation of racing days.
9318. Licenses for horse race meetings.
9319. Code of conduct.
9320. Financial interests.
9321. Officials at horse race meetings.
9322. Secondary pari-mutuel organization.
9323. Occupational licenses for individuals.
9324. (Reserved).
9325. Power of commission to impose fines.
9326. Admission to racetrack.
9327. Security personnel.
9328. (Reserved).
9329. Interstate simulcasting.
9330. Place and manner of conducting pari-mutuel wagering at
racetrack enclosure.
9331. Pari-mutuel wagering at nonprimary locations.
9332. Books and records of pari-mutuel wagering.
9333. Filing of certain agreements with commission.
9334. State Racing Fund and tax rate.
9335. Pari-mutuel pool distribution.
9336. Pennsylvania Breeding Fund.
9337. Pennsylvania Sire Stakes Fund.
9338. Fair fund proceeds.
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9339. Hearing.
9340. Prohibition of wagering.
9341. Veterinarians and State stewards.
9342. Promotions and discounts.
9343. Monitoring of wagering on video screens.
9344. Intrastate simulcasting.
9345. Commingling.
9346. Standardbred horse racing purse money.
§ 9311. State Horse Racing Commission.
(a) Establishment.--The State Horse Racing Commission is
established as a commission within the Department of Agriculture
to independently regulate the operations of horse racing, the
conduct of pari-mutuel wagering and the promotion and marketing
of horse racing in this Commonwealth in accordance with this
chapter.
(b) Membership.--The commission shall consist of the
following members:
(1) Four members appointed by the Governor as follows:
(i) One individual representing the thoroughbred
horsemen's organizations in this Commonwealth, selected
from a list of at least 10 qualified individuals
submitted by the thoroughbred horsemen's organizations.
(ii) One individual representing a thoroughbred
breeder organization in this Commonwealth, selected from
a list of at least 10 qualified individuals submitted by
a thoroughbred breeder organization.
(iii) One individual representing the standardbred
horsemen's organizations in this Commonwealth, selected
from a list of at least 10 qualified individuals
submitted by the standardbred horsemen's organizations.
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(iv) One individual representing a standardbred
breeder organization in this Commonwealth, selected from
a list of at least 10 qualified individuals submitted by
a standardbred breeder organization.
(2) One member appointed by each of the following, none
of whom shall be a member of a horsemen's organization or
breeder organization:
(i) The President pro tempore of the Senate.
(ii) The Minority Leader of the Senate.
(iii) The Speaker of the House of Representatives.
(iv) The Minority Leader of the House of
Representatives.
(3) The Secretary of Agriculture or the secretary's
designee, who shall be a nonvoting ex officio member.
(4) One individual who is a licensed doctor of
veterinary medicine in this Commonwealth, who shall not be a
member of a horsemen's organization or a breeder
organization, appointed by the Governor.
(5) Each appointing authority shall make its
appointments within 30 days of the effective date of this
section. Appointments to fill a vacancy shall be made within
10 days of the creation of the vacancy. An appointment shall
not be final until receipt by the appointing authority of a
background investigation of the appointee by the Pennsylvania
State Police, which shall be completed within 30 days of the
appointment. A person who has been convicted in a domestic or
foreign jurisdiction of a felony, infamous crime, gambling
offense or an offense related to fixing horse races or animal
cruelty may not be appointed to the commission.
(6) The following shall apply to appointees,
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commissioners, employees and independent contractors:
(i) Each commissioner at the time of appointment
must be at least 25 years of age and must have been a
resident of this Commonwealth for a period of at least
one year immediately preceding appointment. Each
commissioner must remain a resident of this Commonwealth
during the term of membership on the commission.
(ii) Except for the commissioner appointed under
paragraph (3), a person may not be appointed a
commissioner if the person is a public official or party
officer as defined in 4 Pa.C.S. § 1512 (relating to
financial and employment interests) in this Commonwealth
or any of its political subdivisions.
(iii) Each commissioner, employee and independent
contractor of the commission must sign an agreement not
to disclose confidential information.
(iv) Except for a commissioner appointed under
paragraph (1), a commissioner, employee or independent
contractor of the commission or other agency having
regulatory authority over horse racing under this chapter
may not be employed, hold an office or position or be
engaged in an activity which is incompatible with the
position, employment or contract.
(v) A commissioner may not be paid or receive a fee
or other compensation for any activity related to the
duties or authority of the commission other than
compensation and expenses provided by law.
(vi) A commissioner, employee or independent
contractor of the commission may not participate in a
hearing, proceeding or other matter in which the member,
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employee or independent contractor, or the immediate
family thereof, has a financial interest in the subject
matter of the hearing or proceeding or other interest
that could be substantially affected by the outcome of
the hearing or proceeding without first fully disclosing
the nature of the interest to the commission and other
persons participating in the hearing or proceeding. The
commission shall determine if the interest is a
disqualifying interest that requires the disqualification
or nonparticipation of a commissioner, an employee or
independent contractor.
(vii) At the time of appointment and annually
thereafter, each commissioner shall disclose the
existence of any financial interest in any applicant or
licensed racing entity and in an affiliate, intermediary,
subsidiary or holding company thereof held by the
commissioner or known to be held by a commissioner's
immediate family. The disclosure statement shall be filed
with each director established under subsection (d)(2)
and with the appointing authority for such commissioner
and shall be open to inspection by the public at the
office of the commission during the normal business hours
of the commission and posted on the commission's Internet
website for the duration of a commissioner's term and for
two years after a commissioner leaves office.
(viii) (Reserved).
(ix) A commissioner, employee or bureau director of
the commission may not directly or indirectly solicit,
request, suggest or recommend to any applicant, licensed
racing entity or an affiliate, intermediary, subsidiary
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or holding company thereof or to an employee or agent
thereof, the appointment or employment of any person in
any capacity by the applicant, licensed racing entity or
an affiliate, intermediary, subsidiary or holding company
thereof during the term of office or employment with the
commission.
(x) Except for a commissioner appointed under
paragraph (1), a commissioner may not accept employment
with an applicant for a horse racing license, a licensed
racing entity, or an affiliate, intermediary, subsidiary
or holding company thereof, for a period of two years
from the termination of the term of office.
(xi) A former commissioner may not appear before the
commission in any hearing or proceeding or participate in
any other activity on behalf of any applicant for a horse
racing license, a licensed racing entity, or an
affiliate, intermediary, subsidiary or holding company of
an applicant or licensed racing entity for a period of
two years from the termination of term of office.
(xii) A commissioner or employee of the commission
may not accept a complimentary service, place a wager or
be paid any prize from any wager on a horse race at a
racetrack or nonprimary location within this Commonwealth
or at any other racetrack or nonprimary location outside
this Commonwealth which is owned or operated by a
licensed racing entity or any of its affiliates,
intermediaries, subsidiaries or holding companies for the
duration of the commissioner's or employee's term of
office or employment. Nothing in this section shall be
construed to prohibit a commissioner appointed under
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paragraph (1) from being awarded a purse or breeders'
award for the commissioner's participation in horse
racing.
(xiii) A commissioner who has been convicted during
his term of office in a domestic or foreign jurisdiction
of a felony, infamous crime, offense related to fixing or
rigging horse races or gambling offense shall, upon
conviction, be automatically removed from the commission
and shall be ineligible to become a commissioner in the
future.
(xiv) The following shall apply to an employee of
the commission, who is not subject to a collective
bargaining agreement, whose duties substantially involve
licensing, enforcement, development of law, promulgation
of regulations or development of policy relating to horse
racing under this chapter or who has other discretionary
authority which may affect or influence the outcome of an
action, proceeding or decision under this chapter,
including the director of a bureau:
(A) The individual may not, for a period of two
years following termination of employment, accept
employment with or be retained by an applicant for a
horse racing license or a licensed racing entity or
by an affiliate, intermediary, subsidiary or holding
company of an applicant or a licensed racing entity.
(B) The individual may not, for a period of two
years following termination of employment, appear
before the commission in a hearing or proceeding or
participate in activity on behalf of any applicant,
licensee or licensed racing entity or on behalf of an
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affiliate, intermediary, subsidiary or holding
company of any applicant, licensee or licensed racing
entity.
(C) This subparagraph shall not apply to an
employee subject to the jurisdiction of the
Pennsylvania Supreme Court under section 10(c) of
Article V of the Constitution of Pennsylvania.
(xv) Nothing under subparagraph (xiv) shall prevent
a current or former employee of the commission from
appearing before the commission in a hearing or
proceeding as a witness or testifying as to a fact or
information.
(xvi) The State Ethics Commission shall issue a
written determination of whether a person is subject to
subparagraph (xiv) upon the written request of the person
or the person's employer or potential employer. A person
that relies in good faith on a determination issued under
this paragraph shall not be subject to any penalty for an
action taken, if all material facts set forth in the
request for the determination are correct.
(xvii) The State Ethics Commission shall publish a
list of all employment positions within the commission
whose duties would subject the individuals in those
positions to the provisions of subparagraph (xiv). The
commission shall assist the State Ethics Commission in
the development of the list, which shall be published by
the State Ethics Commission in the Pennsylvania Bulletin
biennially and posted by the commission on the
commission's Internet website. Upon request, employees of
the commission shall have a duty to provide the State
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Ethics Commission with adequate information to accurately
develop and maintain the list. The State Ethics
Commission may impose a civil penalty under 65 Pa.C.S. §
1109(f) (relating to penalties) upon an individual who
fails to cooperate with the State Ethics Commission under
this subparagraph. An individual who relies in good faith
on the list published by the State Ethics Commission
shall not be subject to any penalty for a violation of
subparagraph (xiv).
(xviii) A commissioner may not solicit, request,
suggest or recommend the employment by the commission of
an immediate family member.
(xix) If a commissioner violates any provision of
this section, the appointing authority may remove the
person from the commission. A commissioner removed under
this paragraph shall, for a period of five years
following removal, be prohibited from future appointment
to the commission and shall be prohibited from applying
for a license or other authorization under this chapter
and from becoming an independent contractor with the
commission.
(xx) Except for a commissioner appointed under
paragraph (1), a commissioner or employee of the
commission may not directly or indirectly have an
ownership interest in a race horse which is entered in a
horse race meeting in this Commonwealth.
(7) A commissioner shall not be personally liable for
any of the following:
(i) Obligations of the commission.
(ii) Actions which were within the scope of their
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office and made in good faith.
(b.1) Initial appointments to commission.--
(1) Appointees initially appointed under subsection (b)
shall serve an initial term of two years and until their
successors are appointed and qualified.
(2) An appointment to fill a vacancy created by a
commissioner appointed in accordance with paragraph (1) shall
be for the remainder of the unexpired term.
(b.2) Terms of office.--Upon the expiration of a term of a
commissioner appointed under subsections (b) and (b.1), the
following shall apply:
(1) The term of office of a gubernatorial appointee
shall be three years and until a successor is appointed and
qualified.
(2) The term of office of a legislative appointee shall
be two years and until a successor is appointed and
qualified.
(3) A legislative appointee shall serve no more than
three full consecutive terms.
(4) A gubernatorial appointee shall serve no more than
two full consecutive terms.
(5) An appointment to fill a vacancy shall be for the
remainder of the unexpired term.
(6) A commissioner appointed to fill a vacancy under
paragraph (3) may serve three full terms following the
expiration of the term related to the vacancy.
(7) A commissioner appointed to fill a vacancy under
paragraph (4) may serve two full terms following the
expiration of the term related to the vacancy.
(c) Chairperson.--The governor shall appoint the chairperson
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of the commission.
(c.1) Compensation.--Commissioners shall be reimbursed for
documented expenses incurred in the performance of their
official duties and, except for commissioners appointed under
subsection (b)(3), commissioners shall be paid $150 per diem.
(c.2) Meetings.--The commission shall meet at least once a
month and at other times as the commission chairperson deems
necessary. Public notice of the time and place of meetings of
the commission shall be given in accordance with 65 Pa.C.S. Ch.
7 (relating to open meetings).
(d) Office of Horse Racing.--There is established within the
commission an Office of Horse Racing.
(1) The office shall be comprised of the following:
(i) The Bureau of Thoroughbred Horse Racing shall
have oversight over the conduct of thoroughbred horse
racing in this Commonwealth.
(ii) The Bureau of Standardbred Horse Racing shall
have oversight over the conduct of standardbred horse
racing in this Commonwealth.
(2) There shall be a Director of the Bureau of
Thoroughbred Horse Racing and a director of the Bureau of
Standardbred Horse Racing to serve and report to the
commission. The director of each bureau shall not be
supervised by the Department of Agriculture. The commission
shall assign the directors duties and responsibilities as
required to fulfill the commission's obligations under this
chapter or any other act. The commission may, by order,
delegate duties and responsibilities to the bureau director
as the commission determines necessary to discharge the day-
to-day licensing, enforcement and administrative operations
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of the commission. The director of each bureau established in
this section must meet all of the following requirements:
(i) Has either:
(A) been certified as a racing official; or
(B) has at least five years' experience in the
management of a licensed racing entity or equivalent
racing experience.
(ii) Any other criteria established by the
commission.
(3) Each bureau established under this subsection shall
have the following powers and duties:
(i) Evaluate and review all applicants and
applications for a thoroughbred horse racing or
standardbred horse racing license. A bureau under this
section shall be prohibited from disclosing any portion
of an evaluation to a commissioner prior to the decision
relating to the applicant's suitability for licensure by
the commission.
(ii) Inspect and monitor licensees and other persons
regulated under this chapter for noncriminal violations,
including potential violations referred to either bureau
by the commission or other person.
(iii) Monitor horse racing operations to ensure
compliance with this chapter.
(iv) Inspect and examine licensed racing entities
and racetrack facilities.
(A) Inspections may include the review and
reproduction of any document or record.
(B) Examinations may include the review of
accounting, administrative and financial records,
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management control systems, procedures and other
records.
(v) Refer possible criminal violation to law
enforcement.
(vi) Cooperate in the investigation and prosecution
of any criminal violation.
(vii) Issue administrative subpoenas to effectuate
an inspection and review under this paragraph, administer
oaths and take testimony as necessary for the
administration of this chapter.
(e) Jurisdiction.--The commission shall have jurisdiction
and regulatory authority over the following:
(1) Pari-mutuel wagering and other horse racing
activities in this Commonwealth.
(2) A licensed person engaged in pari-mutuel horse
racing activities.
(3) Out-of-competition drug testing, which shall include
the random drug testing of any horse entered in a race,
notwithstanding the physical location of the horse, stabled
on the grounds or shipped into a licensed racing entity's
facility.
(4) The conduct of horse racing in this Commonwealth.
(f) Voting.--
(1) Except as otherwise provided in this subsection,
actions of the commission shall be subject to a simple
majority vote of the commission.
(2) A qualified majority vote consisting of the two
commissioners appointed under subsection (b)(1)(i) and (ii)
and as many votes of the remaining voting commissioners as
necessary to constitute a majority of those commissioners
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voting shall be required to:
(i) Approve, issue, deny or condition a license to
conduct thoroughbred horse race meetings under section
9318 (relating to licenses for horse race meetings).
(ii) Adopt regulations governing thoroughbred horse
race meetings under this section.
(iii) Employ a director of the Bureau of
Thoroughbred Horse Racing under subsection (d)(2).
(3) A qualified majority vote consisting of the two
commissioners appointed under subsection (b)(1)(iii) and (iv)
and as many votes of the remaining voting commissioners as
necessary to constitute a majority of those commissioners
voting shall be required to:
(i) Approve, issue, deny or condition a license to
conduct standardbred horse race meetings under section
9318.
(ii) Adopt rules and regulations governing
standardbred horse race meetings under this section.
(iii) Employ a director of the Bureau of
Standardbred Horse Racing under subsection (d)(2).
(4) Commissioners appointed under subsection (b)(1)(i)
and (ii) shall be disqualified and must abstain from voting
on any matter under paragraph (3).
(5) Commissioners appointed under subsection (b)(1)(iii)
and (iv) shall be disqualified and must abstain from voting
on any matter under paragraph (2).
(6) If one or more appointees under subsection (b)(1) is
not participating in voting on any matter upon which they are
otherwise eligible to vote under paragraph (2) or (3), the
qualified majority shall consist of the remaining appointee
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under the respective subparagraph of subsection (b)(1)
pursuant to which the nonparticipating commissioner has been
appointed, if any, and as many commissioners as necessary to
constitute a majority of those commissioners voting.
(g) Records.--The commission shall maintain at its office
the following:
(1) All documents, digital or nondigital, provided to or
filed with the commission relating to the regulation of horse
racing and pari-mutuel wagering under this chapter. The
commission may accept digital signatures on documents
provided or filed and documents may be designated as
confidential in accordance with commission policy.
(2) A docket setting forth the names of all stockholders
in a licensed racing entity. The docket shall be available
for public inspection during normal business hours of the
commission.
(3) The number of shares held by each stockholder.
(4) A complete record of proceedings of the commission
relating to horse racing and pari-mutuel wagering.
(h) Rules and regulations.--The following shall apply:
(1) All rules and regulations promulgated under the
former act of December 11, 1967 (P.L.707, No.331), referred
to as the Pennsylvania Thoroughbred Horse Racing Law, or the
former act of December 22, 1959 (P.L.1978, No.728), referred
to as the Pennsylvania Harness Racing Law, shall remain in
effect except to the extent that they are in direct conflict
with this chapter. The commission may adopt, amend, revise or
alter the rules and regulations as the commission deems
necessary.
(2) The commission shall promulgate rules and
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regulations necessary for the administration and enforcement
of this chapter. Except as provided in this paragraph and
paragraph (3), regulations shall be promulgated in accordance
with law.
(3) In order to facilitate the prompt implementation of
this chapter, regulations promulgated by the commission shall
be deemed temporary regulations which shall not expire for a
period of three years following publication. Temporary
regulations shall not be subject to:
(i) Sections 201, 202, 203, 204 and 205 of the act
of July 31, 1968 (P.L.769, No.240), referred to as the
Commonwealth Documents Law.
(ii) Sections 204(b) and 301(10) of the act of
October 15, 1980 (P.L.950, No.164), known as the
Commonwealth Attorneys Act.
(iii) The act of June 25, 1982 (P.L.633, No.181),
known as the Regulatory Review Act.
(4) The commission's authority to promulgate temporary
regulations under paragraph (3) shall expire three years
after the effective date of this section. Regulations adopted
after this period shall be promulgated as provided by law.
(i) Application.--The commission shall develop an
application for applicants seeking a license to conduct horse
racing under this chapter.
(j) Licenses.--Each license to conduct horse racing or any
other activity under this chapter issued prior to January 1,
2017, shall remain in effect for the remainder of the term for
which the license was issued unless revoked or suspended.
Beginning January 1, 2017, a license shall be renewed or a new
license shall be issued in accordance with this chapter.
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(k) Report of commission.--Twelve months after the effective
date of this section and every year on that date thereafter, the
commission, through the Department of Agriculture, shall issue a
report to the Governor and each member of the General Assembly
on the general operation of the commission and each licensee's
performance, including number and win per race and total gross
revenue at each facility of a licensed racing entity during the
previous year, all taxes, fees, fines and other revenues
collected and, where appropriate, disbursed, the costs of
operation of the commission, all hearings conducted and the
results of the hearings and other information that the
commission deems necessary and appropriate. Notwithstanding any
other reporting requirements in 4 Pa.C.S. § 1211 (relating to
reports of board), the Pennsylvania Gaming Control Board and the
Department of Agriculture must jointly submit the report under
this subsection relating to racing on an annual basis.
(l) Record of proceedings.--The commission shall cause to be
made and kept a record of all proceedings held at public
meetings of the commission. A verbatim transcript of those
proceedings shall be prepared by the commission upon the request
of any person and the payment by that person of the costs of
preparation.
(m) Public records.--The commission shall annually post on
its Internet website a list of all the itemized expenses of
employees and commissioners that were or are to be reimbursed
from the State Racing Fund. The list shall identify the nature
of the expense, the employee, member or the agency and employee
of the agency to which an expense is attributable. By October 1
of each year, a final report of all expenses described in this
subsection for the preceding fiscal year shall be posted on the
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commission's Internet website and shall be submitted to the
Appropriations Committee of the Senate, the Agriculture and
Rural Affairs Committee of the Senate, the Appropriations
Committee of the House of Representatives and the Agriculture
and Rural Affairs Committee of the House of Representatives.
Information posted on the Internet website under this subsection
shall be financial records for the purposes of and subject to
redaction under the act of February 14, 2008 (P.L.6, No.3),
known as the Right-to-Know Law.
(n) Reimbursement.--The Department of Agriculture's
provision of shared administrative services, shared staff and
shared facilities to the commission must be reimbursed from the
State Racing Fund and shall be limited to actual costs of
providing the services, staff and facilities, including
salaries, benefits and expenses of employees providing the
shared administrative services. The Department of Agriculture
must retain records regarding administrative shared services
provided to the commission by a Department of Agriculture's
employee.
§ 9312. Additional powers of commission.
The commission shall regulate horse racing at which pari-
mutuel wagering is conducted and approve the number of racing
days allocated to each licensed racing entity. In addition to
any other powers of the commission:
(1) The commission shall promulgate regulations
regarding medication rules as required under Subch. E
(relating to medication rules and enforcement provisions).
(2) The following shall apply:
(i) The commission shall require an applicant under
this chapter to submit to fingerprinting for a report of
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Federal criminal history record information.
(ii) The applicant must submit a full set of
fingerprints to the Pennsylvania State Police or the
Pennsylvania State Police's authorized agent for the
purpose of a record check. The Pennsylvania State Police
or the Pennsylvania State Police's authorized agent must
then submit the fingerprints to the Federal Bureau of
Investigation for the purpose of verifying the identity
of the applicant and obtaining a current record of any
criminal arrests and convictions.
(iii) The commission shall consider information
obtained under this paragraph for the purpose of
screening applicants for fitness for licensure in
accordance with the provisions of this chapter.
(iv) National criminal history record information
received by the commission shall be handled and
maintained in accordance with Federal Bureau of
Investigation policy.
(v) Fingerprints obtained under this paragraph may
be maintained by the commission and Pennsylvania State
Police to enforce this chapter and for general law
enforcement purposes.
(vi) In addition to any other fee or cost assessed
by the commission, an applicant must pay for the cost of
the fingerprint process.
(vii) The commission may exempt applicants for
positions not related to the care or training of horses,
racing, wagering, security or the management of a
licensed racing entity, from the provisions of this
chapter.
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(3) Within 90 days of the effective date of this
section, the commission must adopt and publish a
comprehensive fee schedule in the Pennsylvania Bulletin. Two
years following the effective date of this section, the
commission may adopt regulations to annually increase any
fee, charge or cost authorized under this chapter.
(4) The commission or designated employee of the
commission shall have the power to administer oaths and
examine witnesses and may issue subpoenas to compel
attendance of witnesses and production of all relevant and
material reports, books, papers, documents, correspondence
and other evidence related to regulation and enforcement of
horse racing under this chapter.
(5) The commission's consideration and resolution of all
license or other regulatory administrative actions shall be
conducted in accordance with 2 Pa.C.S. (relating to
administrative law and procedure) or with procedures adopted
by order of the commission. Notwithstanding 2 Pa.C.S. §§ 504
(relating to hearing and record) and 505 (relating to
evidence and cross-examination), the commission may adopt
procedures to provide parties before it with a documentary
hearing and may resolve disputed material facts without
conducting an oral hearing where constitutionally
permissible.
(6) The commission may adopt national standards from
other racing jurisdictions or commission-approved trade
organizations to establish:
(i) uniform drug threshold levels;
(ii) consistent sanctions for drug testing
violations; and
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(iii) a system to monitor advanced deposit wagering
and online pari-mutuel wagering company activities.
(7) The commission may issue grants from the annual
appropriations to race horse rescue and rehabilitation
programs operating within this Commonwealth.
(8) The commission shall direct and oversee that each
licensed racing entity's racetrack surface is maintained in
such a way as to maximize the safety of the horse, jockey or
driver. The commission may develop guidelines to carry out
this paragraph and may contract with, hire or otherwise
consult with racetrack surface experts to carry out the
provisions of this section.
(9) The State Horse Racing Commission shall have
jurisdiction over and shall promulgate regulations as
necessary for the proper administration of all racing
conducted by a county agricultural society or an independent
agricultural society as provided in the act of July 8, 1986
(P.L.437, No.92), known as the Pennsylvania Agricultural Fair
Act.
§ 9313. Budget.
Beginning July 1, 2016, the commission and the Department of
Agriculture shall annually submit a budget request to the
Secretary of the Budget in accordance with the provisions
contained in section 610 of the act of April 9, 1929 (P.L.177,
No.175), known as The Administrative Code of 1929, consisting of
amounts to be appropriated from the State Racing Fund, the
Pennsylvania Race Horse Development Fund and the General Fund to
administer and enforce this chapter and for the promotion of
horse racing. Beginning July 1, 2016, and annually thereafter,
1% of the previous fiscal year's deposits into the Pennsylvania
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Race Horse Development Fund shall be transferred from the
Pennsylvania Race Horse Development Fund to the State Racing
Fund to provide for the promotion of horse racing.
§ 9314. Location.
After January 1, 2017, a licensed racing entity shall conduct
a horse race meeting at the location designated and approved by
the commission.
§ 9315. Number of licensed racing entities.
(a) Standardbred horse racing.--No more than five persons
shall be licensed to conduct a horse race meeting. No person
licensed under this chapter to conduct standardbred horse racing
with pari-mutuel wagering shall be licensed to conduct
thoroughbred horse racing with pari-mutuel wagering.
(b) Thoroughbred horse racing.--No more than six persons
shall be licensed by the commission to conduct a horse race
meeting. No person licensed under this chapter to conduct
thoroughbred horse racing with pari-mutuel wagering shall be
licensed to conduct standardbred horse racing with pari-mutuel
wagering.
§ 9316. Department of Revenue.
The Department of Revenue shall provide financial
administration of pari-mutuel wagering under this chapter in
accordance with Department of Revenue regulations and
regulations of the commission. The Department of Revenue shall
prescribe the form and system of accounting to be used by
licensed racing entities and may access and examine records,
equipment and other information relating to pari-mutuel
wagering.
§ 9317. Allocation of racing days.
(a) General rule.--
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(1) Horse racing shall be conducted consistent with 4
Pa.C.S. § 1303 (relating to additional Category 1 slot
machine license requirements).
(2) The required racing days under this section and 4
Pa.C.S. § 1303(a)(2) and (b) may be waived or modified by the
commission if the waiver or modification has been agreed to
by the horsemen's organization and the licensed racing entity
at the racetrack where the racing days are to be scheduled or
raced.
(3) The provisions of 4 Pa.C.S. § 1303(d) shall not
apply if the reason for noncompliance with that section by a
licensed racing entity is the cancellation of racing days due
to the commission's inability to properly regulate and
oversee the conduct of horse racing in this Commonwealth due
to inadequate funding.
(b) Certification.--The commission shall submit to the
Secretary of Revenue the approved number of racing days for each
licensed racing entity, including the following information:
(1) the names and addresses of the licensed racing
entity;
(2) the names and addresses of the owners, officers and
general managers of the licensed racing entity; and
(3) any other information the commission deems
appropriate.
(c) Cancellation.--
(1) If a racing day is canceled by a licensed racing
entity for reasons beyond the licensed racing entity's
control, the commission shall grant the licensed racing
entity the right to conduct that racing day in the same or
the next ensuing calendar year, if schedules permit.
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(2) A director of a bureau established under section
9311 (relating to State Horse Racing Commission), after
consultation with the licensed racing entity and the
horsemen's organization at the racetrack, may cancel a race
if it is determined that fewer than six horses have entered
the race.
§ 9318. Licenses for horse race meetings.
(a) Procedure and terms.--
(1) After January 1, 2017, a person seeking a license to
conduct horse race meetings at which pari-mutuel wagering is
permitted or seeking to renew the license shall file an
application or renewal application with the commission in the
manner prescribed by the commission. A license to conduct
horse race meetings shall be issued for a period of three
years.
(2) A licensed racing entity shall have the privilege to
conduct a horse race meeting at which pari-mutuel wagering is
permitted. A license to conduct a horse race meeting shall
not be a property right and may not be used as collateral or
be encumbered.
(3) The commission may revoke or suspend the license of
a licensed racing entity if the commission finds that the
licensed racing entity, or its owners, officers, managers or
agents, have not complied with this chapter and regulations
promulgated in accordance with this chapter.
(4) A licensed racing entity may not transfer a license
without the approval of the commission.
(b) Conditions.--Each horse racing license shall be issued
and remain in effect if the licensed racing entity complies with
each condition, rule and regulation of the commission and the
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provisions of this chapter, including the following conditions:
(1) A horse race meeting at which pari-mutuel wagering
is conducted shall be regulated by the commission.
(2) The conduct of pari-mutuel wagering shall also be
regulated by the Department of Revenue.
(3) The licensed racing entity shall print in its racing
programs the procedure for filing a complaint with the
commission.
(c) Applications.--Applications to conduct horse race
meetings shall be in the form prescribed by the commission and
shall contain information as the commission may require.
(d) Fee.--An applicant or licensee seeking to conduct a
horse race meeting or seeking renewal of a license shall pay to
the commission a fee of $50,000. Notwithstanding the foregoing,
a licensed racing entity that holds more than one horse race
meeting license shall pay no more than $50,000 upon renewal of
the licenses. The license or renewal fee shall be deposited into
the State Racing Fund.
(e) Action on licenses.--The following shall apply:
(1) The commission shall be prohibited from issuing a
license to conduct a horse race meeting at which pari-mutuel
wagering is permitted to an individual or applicant or an
owner, officer, director or manager of the applicant who has
been convicted of:
(i) A felony in any jurisdiction.
(ii) A misdemeanor gambling offense in any
jurisdiction, unless 15 years has elapsed from the date
of conviction.
(iii) Fraud or misrepresentation in any jurisdiction
related to horse racing or horse breeding, unless 15
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years has elapsed from the date of conviction.
(iv) An offense under 18 Pa.C.S. § 5511 (relating to
cruelty to animals).
(v) An offense related to fixing or rigging horse
races, including 18 Pa.C.S. § 4109 (relating to rigging
publicly exhibited contest) or 7102 (relating to
administering drugs to race horses), or any similar crime
in another jurisdiction, unless the conviction has been
overturned on appeal under the laws of the jurisdiction
of the original finding or a pardon has been issued.
(2) Following expiration of any period applicable to an
applicant under paragraph (1)(ii) or (iii), in determining
whether to issue a horse racing license to an applicant, the
commission shall consider the following factors:
(i) The individual or a principal of the applicant's
position with the applicant.
(ii) The nature and seriousness of the offense or
conduct.
(iii) The circumstances under which the offense or
conduct occurred.
(iv) The age of the applicant when the offense or
conduct occurred.
(v) Whether the offense or conduct was an isolated
or a repeated incident.
(vi) Any evidence of rehabilitation, including good
conduct in the community, counseling or psychiatric
treatment received and the recommendations of persons who
have substantial contact with the applicant.
(3) If, in the judgment of the commission, the applicant
has demonstrated by clear and convincing evidence that the
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participation of the applicant in horse racing or related
activities is not:
(i) inconsistent with the public interest or best
interests of horse racing;
(ii) interfering with the effective regulation of
horse racing; or
(iii) creating or enhancing the danger of
unsuitable, unfair or illegal practices, methods or
activities in the conduct of horse racing.
(f) Denial, suspension or revocation.--The commission may
deny an application for a license or revoke, suspend or fail to
renew the license of any applicant or licensed racing entity, if
the commission finds by a preponderance of the evidence that:
(1) The applicant or licensed racing entity, or any of
its owners, officers, director, managers, employees or
agents:
(i) Has not complied with the conditions, rules,
regulations and provisions of this chapter and that it
would be in the public interest, convenience or necessity
to deny, revoke, suspend or not renew the license.
(ii) Has been convicted of a violation or attempt to
violate a horse racing law, rule or regulation of a horse
racing jurisdiction.
(iii) Has furnished the commission with false or
misleading information relating to the application or
license renewal.
(iv) Has been convicted of a crime involving moral
turpitude.
(v) Has been convicted of a misdemeanor gambling
offense in any jurisdiction.
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(vi) Has been convicted in any jurisdiction of fraud
or misrepresentation related to horse racing or horse
breeding.
(2) The applicant or licensed racing entity does not
have the use of a racetrack or racetrack enclosure in
accordance with the provisions of 4 Pa.C.S. Pt. II (relating
to gaming).
(3) The licensed racing entity has commingled horsemen's
organization funds in violation of section 9345(c) (relating
to commingling) or has refused to place on deposit a letter
of credit under section 9346 (relating to standardbred horse
racing purse money).
(4) The commission determines that the licensed racing
entity has failed to properly maintain its racetrack and
racetrack enclosure in good condition under this chapter or
to provide adequate capital improvements to the racetrack and
racetrack enclosure as required under this chapter and 4
Pa.C.S. § 1404 (relating to distributions from licensee's
revenue receipts).
(5) The licensee has been convicted in any jurisdiction
of an offense related to fixing or rigging horse races,
including 18 Pa.C.S. § 4109 or 7102, or any similar crime in
another jurisdiction, unless the conviction has been
overturned on appeal under the laws of the jurisdiction of
the original finding or a pardon has been issued.
(g) Cessation.--If a revocation or failure to renew a
license under subsection (e) occurs, the licensee's
authorization to conduct previously approved activity shall
immediately cease, subject to 2 Pa.C.S. (relating to
administrative law and procedure). In the case of a suspension,
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the licensee's authorization to conduct previously approved
activity shall immediately cease until the commission has
notified the licensee that the suspension is no longer in
effect. After request for a hearing by a licensee, the
commission may grant a supersedeas, pending the final
determination of the suspension.
(h) Renewal.--A horse race meeting license shall be renewed
every three years upon application and, except as provided for
under subsection (a)(4), shall not be transferred. Renewals of
horse race meeting licenses shall not be granted automatically.
(i) Conditional licenses.--Pending a final determination
under this section, the commission may issue a conditional
license upon the terms and conditions as are necessary to
effectuate the provisions of this chapter.
(j) Compliance.--Nothing in this section shall be construed
to relieve a licensed racing entity of its duty to comply with
the requirements of 4 Pa.C.S. Pt. II.
§ 9319. Code of conduct.
(a) Scope.--The commission may adopt a comprehensive code of
conduct applicable to commissioners, employees of the
commission, independent contractors and the immediate family of
the commissioners, employees and independent contractors to
enable them to avoid any perceived or actual conflict of
interest and to promote public confidence in the integrity and
impartiality of the commission.
(b) Restrictions.--In addition to the other prohibitions
contained in this chapter, a commissioner shall:
(1) Not accept any discount, gift, gratuity,
compensation, travel, lodging or other thing of value,
directly or indirectly, from any applicant, licensed racing
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entity, affiliate, subsidiary or intermediary of an applicant
or other licensee.
(2) Disclose a conflict of interest and recuse himself
from any hearing or other proceeding in which the
commissioner's objectivity, impartiality, integrity or
independence of judgment may be reasonably questioned due to
the commissioner's relationship or association with a party
connected to any hearing or proceeding or a person appearing
before the commission.
(3) Refrain from any financial or business dealing which
would tend to reflect adversely on the commissioner's
objectivity, impartiality or independence of judgment.
(4) Avoid impropriety and the appearance of impropriety
at all times and observe standards and conduct that promote
public confidence in the oversight of horse racing.
(5) Comply with any other laws, rules or regulations
relating to the conduct of a commissioner.
(6) Except for a commissioner appointed under section
9311(b)(3) (relating to State Horse Racing Commission), not
hold or campaign for public office, hold an office in any
political party or political committee as defined in 4
Pa.C.S. § 1513(d) (relating to political influence),
contribute to or solicit contributions to a political
campaign, political party, political committee or candidate,
publicly endorse a candidate or actively participate in a
political campaign.
(c) (Reserved).
(d) Ex parte communications.--
(1) A commissioner may not engage in any ex parte
communication with any person.
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(2) If a commissioner received or engaged in an ex parte
communication, a commissioner shall inform the director of
the appropriate bureau who shall notify all parties directly
affected by the anticipated vote or action of the
commissioner related to the ex parte communication of the
substance of the communication and provide the parties with
an opportunity to respond.
(3) A commissioner who engaged in or received an ex
parte communication shall disqualify himself from the hearing
or proceeding related to the ex parte communication if the
context and substance of the communication creates
substantial reasonable doubt as to a commissioner's ability
to act objectively, independently or impartially.
(4) A commissioner who engaged in or received an ex
parte communication and elects not to disqualify himself from
the hearing or proceeding shall state the reasons for not
disqualifying himself on the record prior to the commencement
of the hearing or proceeding.
(5) If a commissioner disqualifies himself under this
subsection, a qualified majority vote under this chapter
shall consist of the remaining commissioners.
(6) Failure of a commissioner who received or engaged in
an ex parte communication to disqualify himself under this
subsection shall be grounds for appeal to a court of
competent jurisdiction if the commission action being
appealed could not have occurred without the participation of
the commissioner.
(7) This subsection shall not preclude a commissioner
from consulting with other commissioners individually if the
consultation complies with 65 Pa.C.S. Ch. 7 (relating to open
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meetings) or with commission employees or independent
contractors whose functions are to assist the commission in
carrying out its adjudicative functions.
§ 9320. Financial interests.
No director, owner, officer, manager or employee of an
applicant or licensed racing entity or their immediate family
shall accept gifts from breeders, owners, trainers or other
individuals who participate in the conduct of horse racing in
this Commonwealth.
§ 9321. Officials at horse race meetings.
(a) Racetrack racing official.--The commission shall approve
each racetrack employee whose duties include the enforcement of
pari-mutuel racing activities which directly or indirectly
affect the racing product. Compensation for an official under
this subsection shall be paid by the licensed racing entity.
(b) Commission racing official.--The commission shall employ
individuals who shall be designated as commission racing
officials and whose duties shall include the oversight and
enforcement of this chapter, regulations and commission policies
related to prerace activities, the conduct of live racing and
pari-mutuel wagering. The commission, by regulation, shall
establish the duties and responsibilities for a commission
racing official. The cost for and compensation of a commission
racing official shall be paid by the commission.
§ 9322. Secondary pari-mutuel organization.
(a) Requirements.--The following shall apply to a secondary
pari-mutuel organization:
(1) A secondary pari-mutuel organization offering and
accepting pari-mutuel wagers within this Commonwealth must be
properly licensed by the commission. Each secondary pari-
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mutuel organization employee directly or indirectly
responsible for the acceptance of wagers on horse races or
the transmittal of wagering information to and from the
Commonwealth must be properly licensed.
(2) A secondary pari-mutuel organization must comply
with each rule and regulation of the commission.
(3) As a condition of licensing and annual license
renewal, a license application of a secondary pari-mutuel
organization must include all of the following:
(i) Disclosure of each officer, director, partner
and share holder with a 5% or greater share of ownership
or beneficial interest.
(ii) A list of personnel assigned to work in this
Commonwealth.
(iii) Certification of compliance with totalisator
standards and licensing requirements adopted by the
commission.
(iv) A type II SAS 70 report, or other independent
report in a form acceptable to the commission, completed
within the preceding 12 months, to assure adequate
financial controls are in place in the secondary pari-
mutuel organization.
(v) An agreement to allow the commission to inspect
and monitor each facility used by the secondary pari-
mutuel organization for accepting, recording or
processing pari-mutuel wagers accepted in this
Commonwealth.
(vi) Certification of the use of a pari-mutuel
system which meets all requirements for a pari-mutuel
system utilized by a licensed racing entity in this
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Commonwealth.
(4) Fitness and experience of a secondary pari-mutuel
organization must be consistent with the public interest,
convenience and necessity and the best interests of racing
generally, including, but not limited to, all of the
following:
(i) Meeting general industry standards for business
and financial practices, procedures and controls.
(ii) Possession of a wagering system that ensures
that all wagering information is transmitted to and
calculated in the appropriate host track pool.
(iii) Utilization of a totalisator system that meets
wagering-industry standards and certification criteria.
(iv) Meeting general industry standards for physical
security of computerized wagering systems, business
records, facilities and patrons.
(v) Having no indications of improper manipulation
of a secondary pari-mutuel organization's wagering
system, including software.
(vi) Having policies and procedures that ensure a
secondary pari-mutuel organization's key individuals have
applied and are eligible for all required occupational
licenses.
(vii) Having an annual independent audit with no
audit opinion qualifications that reflect adversely on
integrity.
(viii) Having a system that verifies the identity of
each person placing a wager and requires the person
placing a wager to disclose each beneficial interest in a
wager the secondary pari-mutuel organization accepts.
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(ix) Having a real-time independent monitoring
system to monitor wagering activity to detect suspicious
patterns, including any that might indicate criminal
activity or regulatory violations. The system must verify
each transaction performed by the totalisator system and
provide expeditious notice of any discrepancies or
suspicious activity to the host track, wagering site, due
diligence investigating body and any affected regulatory
agency.
(x) Having a satisfactory record of customer
relations, including no excessive unresolved patron
complaints concerning the secondary pari-mutuel
organization's business practices.
(xi) Holding required permits, licenses,
certifications or similar documents that may be required
by a racing, gaming or other pari-mutuel wagering
jurisdiction.
(xii) Having sufficient measures to protect customer
funds.
(xiii) Publicizing and providing a sufficient
program for customer self-exclusion and wagering
limitation.
(xiv) Having expertise in pari-mutuel wagering and
being technologically capable of participating in
simulcast and wagering activities.
(5) Financial responsibility of a secondary pari-mutuel
organization must be consistent with the public interest,
convenience and necessity and the best interests of racing
generally, including all of the following:
(i) The secondary pari-mutuel organization and the
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secondary pari-mutuel organization's key individuals may
not be in default or have a history of defaulting in the
payment of an financial obligation, including the payment
of taxes due to a taxing jurisdiction or on the payment
of gaming, wagering or pari-mutuel racing-related
financial obligations. A secondary pari-mutuel
organization's key individuals may not be four or more
months in arrears for child support that is ordered or
approved by a court in any jurisdiction within the United
States.
(ii) The secondary pari-mutuel organization and the
secondary pari-mutuel organization's owners and sources
of funds must have sufficient financial means to
participate in simulcast and wagering activities,
including sufficient assets and means to pay industry-
related debts and obligations and to fund the operations
of the secondary pari-mutuel organization.
(6) The secondary pari-mutuel organization must be fully
cooperative and act in good faith with all disclosure and
other duties involved in a due diligence investigation,
voluntarily submit to regulatory and investigating body
oversight, permit inspection of each business record upon
request by a regulatory authority or investigating body,
promptly honor regulatory or investigating body requests for
wagering patterns or other information and, after reasonable
notice, permit full access to each facility and property by a
regulatory authority or investigating body.
(b) Waiver.--
(1) A due diligence investigation may rely on an
investigation and oversight conducted by a commission-
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approved entity.
(2) The commission may not consent to the acceptance of
an interstate off-track wager by a secondary pari-mutuel
organization that has not been determined to be suitable
under this section.
§ 9323. Occupational licenses for individuals.
(a) General rule.--The commission shall develop a licensing
or other classification system for the regulation of racing
vendors, trainers, jockeys, drivers, horse owners, backside area
employees and other individuals participating in horse racing
and all other persons required to be licensed as determined by
the commission. The license shall not be a property right.
(b) Fee.--The commission shall fix and may establish classes
for application fees to be paid by individuals. A license fee
shall not exceed $500. All fees shall be paid to the commission
and deposited into the State Racing Fund.
(c) Application.--The application for a license shall be in
the form and contain the information as the commission may
require.
(d) Renewal.--All licenses shall be subject to renewal every
three years upon application and review. Nothing in this chapter
shall be construed to relieve a licensee of the affirmative duty
to notify the commission of any changes relating to the status
of its license or to any other information contained in the
application materials on file with the commission. The
application for renewal shall be submitted at least 60 days
prior to expiration of the license and shall include an update
of the information contained in the initial application and any
prior renewal applications and the payment of any renewal fee
required by the commission. A license for which a completed
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renewal application and fee, if required, has been received by
the commission shall continue in effect unless and until the
commission sends written notification to the holder of the
license that the commission has denied the renewal of the
license.
(e) Licenses.--The commission may issue any of the
following:
(1) A temporary license for four months within a 12-
month period pending a final determination.
(2) A conditional license upon the terms and conditions
as necessary to administer this chapter.
(f) Processing and issuance.--The commission shall adopt
regulations to fix the manner by which licenses are processed
and issued.
(g) Action on applications.--The following shall apply:
(1) The commission may not issue a license under this
section to an individual who has been convicted in a
jurisdiction of a felony offense, a misdemeanor gambling
offense or a fraud or misrepresentation in connection with
horse racing or breeding, unless 15 years has passed from the
date of conviction of the offense.
(2) Following expiration of a period applicable to an
applicant under paragraph (1), in determining whether to
issue a license to an applicant, the commission shall
consider the following factors:
(i) The nature of the applicant's involvement with
horse racing.
(ii) The nature and seriousness of the offense or
conduct.
(iii) The circumstances under which the offense or
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conduct occurred.
(iv) The age of the applicant when the offense or
conduct occurred.
(v) Whether the offense or conduct was an isolated
or a repeated incident.
(vi) Any evidence of rehabilitation, including good
conduct in the community, counseling or psychiatric
treatment received and the recommendations of persons who
have substantial contact with the applicant.
(g.1) Denial.--The commission may deny an application for a
license or suspend, revoke or refuse to renew a license issued
under this section if it determines that the applicant or
licensee meets any of the following:
(1) (Reserved).
(2) Has been convicted of any violation or attempts to
violate any law, rule or regulation of horse racing in any
jurisdiction.
(3) Has been convicted of an offense under 18 Pa.C.S. §
5511 (relating to cruelty to animals).
(4) Has violated a rule, regulation or order of the
commission.
(5) Has been convicted in any jurisdiction of an offense
related to fixing or rigging horse races, including 18
Pa.C.S. § 4109 (relating to rigging publicly exhibited
contest) or 7102 (relating to administering drugs to race
horses), or any similar crime in any other jurisdiction,
unless the conviction has been overturned on appeal under the
laws of the jurisdiction of the original finding or a pardon
has been issued.
(6) Has not demonstrated by clear and convincing
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evidence that the applicant or licensee:
(i) Is a person of good character, honesty and
integrity.
(ii) Is a person whose prior activities, criminal
record, if any, reputation, habits and associations:
(A) Do not pose a threat to the public interest
or the effective regulation and control of horse
racing.
(B) Do not create or enhance the danger of
unsuitable, unfair or illegal practices, methods and
activities in the conduct of horse racing or the
carrying on of the business and financial
arrangements incidental to the conduct of horse
racing.
(h) Inspection.--The commission shall have the right to
inspect all contracts directly affecting the administration of
the racing product and wagering activities between a secondary
pari-mutuel organization, licensed racing entities and racing
vendors for goods and services. The commission shall adopt
regulations to require racing vendors to disclose all principal
owners and officers and a description of their interests in the
vendors' businesses. Failure to disclose this information shall
constitute grounds to deny, to revoke or to suspend any racing
vendor's license issued under this chapter.
(i) Revocation or failure to renew.--In the event of a
revocation or failure to renew, the licensee's authorization to
conduct previously approved activity shall immediately cease and
all fees paid in connection therewith shall be deemed to be
forfeited. In the event of a suspension, the applicant's
authorization to conduct the previously approved activity shall
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immediately cease until the commission has notified the
applicant that the suspension is no longer in effect.
(j) Hearings.--The commission may suspend a license under
subsection (i) pending a hearing on the matter, which must occur
within 10 days of the suspension. The commission or its director
may grant a supersedeas, if requested, pending a final
resolution of the matter.
(k) (Reserved).
(l) Criminal action.--
(1) Each district attorney shall have authority to
investigate and to institute criminal proceedings for a
violation of this chapter.
(2) In addition to the authority conferred upon the
Attorney General under the act of October 15, 1980 (P.L.950,
No.164), known as the Commonwealth Attorneys Act, the
Attorney General shall have the authority to investigate and,
following consultation with the appropriate district
attorney, to institute criminal proceedings for a violation
of this chapter. A person charged with a violation of this
chapter by the Attorney General shall not have standing to
challenge the authority of the Attorney General to
investigate or prosecute the case, and, if any such challenge
is made, the challenge shall be dismissed and no relief shall
be available in the courts of this Commonwealth to the person
making the challenge.
(m) Regulatory action.--Nothing contained in subsection (l)
shall be construed to limit the existing regulatory or
investigative authority of an agency or the Commonwealth whose
functions relate to persons or matters within the scope of this
part.
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(n) Inspection, seizure and warrants on racetrack
enclosures.--
(1) The commission, the Attorney General and the
Pennsylvania State Police shall have the authority without
notice and without warrant to do all of the following in the
performance of their duties:
(i) Inspect and examine all premises where horse
racing is conducted, or where records of these activities
are prepared or maintained.
(ii) Inspect all equipment and supplies in, about,
upon or around premises referred to in subparagraph (i).
(iii) Seize, summarily remove and impound equipment
and supplies from premises referred to in subparagraph
(i) for the purposes of examination and inspection.
(iv) Inspect, examine and audit all books, records
and documents pertaining to a licensee's operation.
(v) Seize, impound or assume physical control of any
book, record, ledger or device.
(2) The provisions of paragraph (1) shall not be deemed
to limit warrantless inspections except in accordance with
constitutional requirements.
§ 9324. (Reserved).
§ 9325. Power of commission to impose fines.
(a) General rule.--The commission may impose administrative
fines upon any licensed or unlicensed racing entity, association
or person participating in horse racing at which pari-mutuel
wagering is conducted, other than as a patron, for a violation
of any provision of this chapter or rule or regulation of the
commission, not exceeding $10,000 for each violation. Each day
may be considered a separate violation. Fines shall be deposited
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in the State Racing Fund and may be appropriated for the
enforcement of this chapter.
(b) Interests.--
(1) No owner, officer or employee of a licensed racing
entity or their immediate family shall have any direct or
indirect interest in a race horse that is participating in a
horse race meeting at which the person or relative listed
under this paragraph holds any interest in the licensed
racing entity conducting the horse race meeting or in the
racetrack facility.
(2) The commission may impose a fine upon any person for
a violation of this subsection in accordance with subsection
(a).
§ 9326. Admission to racetrack.
(a) Power of licensed racing entity.--Except as provided in
subsection (b), a licensed racing entity may refuse admission to
and eject from the racetrack enclosure operated by the licensed
racing entity, any person licensed by the commission under this
chapter and employed at an occupation at the racetrack if the
person's presence is deemed detrimental to the best interests of
horse racing and after citing the reasons for the determination
in writing. The action of the licensed racing entity refusing
the person admission to or ejecting the person from a horse race
meeting ground or racetrack enclosure shall have immediate
effect unless a supersedeas has been granted by the bureau
director. The person refused admission or ejected shall receive
a hearing before the commission, if requested, pursuant to rules
and regulations adopted for that purpose by the commission and a
decision rendered following that hearing.
(b) Admission.--A licensed racing entity may not refuse
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admission to or eject a law enforcement official, commission
member or employee or employee of the Department of Revenue
while the official is engaged in the performance of the
individual's official duties.
§ 9327. Security personnel.
(a) General rule.--The commission shall require licensed
racing entities to employ persons as security as determined by
the commission. Designated security personnel:
(1) Shall refer possible violations of the criminal laws
of this Commonwealth within the racetrack or racetrack
enclosure to law enforcement agencies.
(2) May not eject or exclude from the racetrack or
racetrack enclosure any person because of the race, creed,
color, sex, sexual orientation, national origin or religion
of that person.
(b) Penalty.--An individual found within a racetrack or
racetrack enclosure after having been ejected therefrom shall,
upon conviction, be guilty of a summary offense and be sentenced
to pay a fine of not more than $500.
§ 9328. (Reserved).
§ 9329. Interstate simulcasting.
(a) Host licensees.--The commission may approve the
application of a licensed racing entity or secondary pari-mutuel
organization to electronically simulcast horse races to and from
this Commonwealth. Upon request by a licensed racing entity or
secondary pari-mutuel organization, the commission may designate
the entity as a host licensee, authorized to maintain common
pari-mutuel pools on international and interstate races
transmitted to and from the racetrack enclosures within this
Commonwealth. All simulcasts of horse races shall comply with
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the provisions of the Interstate Horseracing Act of 1978 (Public
Law 95-515, 15 U.S.C. § 3001 et seq.) and the laws of each state
involved, placed or transmitted by an individual in one state
via telephone, Internet or other electronic media and accepted
and maintained in common pari-mutuel pools. The designation as a
host licensee for international and interstate simulcast races
shall be limited to licensed racing entities which comply with 4
Pa.C.S. § 1303(d) (relating to additional Category 1 slot
machine license requirements).
(b) Simulcasts.--The following apply:
(1) Cross simulcasting of the races described in
subsection (a) shall be permitted if all amounts wagered on
the races in this Commonwealth are included in common pari-
mutuel pools. A host licensee seeking permission to cross
simulcast must obtain approval from the commission.
(2) All forms of pari-mutuel wagering shall be allowed
on horse races simulcasted. The commission may permit pari-
mutuel pools in this Commonwealth to be combined with pari-
mutuel pools created under the laws of another jurisdiction
and may permit pari-mutuel pools created under the laws of
another jurisdiction to be combined with pari-mutuel pools in
this Commonwealth. The commission shall promulgate
regulations necessary to regulate wagering on televised
simulcasts.
(c) Taxation.--Money wagered by patrons in this Commonwealth
on horse races shall be computed by the amount of money wagered
each racing day for purposes of taxation under section 9334
(relating to State Racing Fund and tax rate). Thoroughbred races
shall be considered a part of a thoroughbred horse race meeting
and standardbred horse races shall be considered a part of a
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standardbred horse race meeting.
§ 9330. Place and manner of conducting pari-mutuel wagering at
racetrack enclosure.
(a) Wagering location.--A licensed racing entity shall
provide a location during a horse race meeting within the
racetrack enclosure where the licensed racing entity shall
operate the pari-mutuel system of wagering by its patrons on the
results of horse races held at the racetrack or televised to the
racetrack enclosure by simulcasting under section 9329 (relating
to interstate simulcasting). The licensed racing entity shall
erect a sign or board compatible with the totalisator systems
which shall display all of the following:
(1) The approximate straight odds on each horse in any
race.
(2) The value of a winning mutuel ticket, straight,
place or show on the first three horses in the race.
(3) The elapsed time of the race.
(4) The value of a winning daily double ticket, if a
daily double is conducted, and any other information that the
commission deems necessary to inform the general public.
(b) Equipment.--The commission may test and examine the
equipment to be used for the display of the information under
subsection (a).
(c) Electronic wagering system.--In addition to other forms
of live wagering, including cash at a window teller, a licensed
racing entity may operate an electronic wagering system on horse
racing in accordance with all of the following:
(1) Messages to place wagers shall be to a place within
the racetrack enclosure.
(2) Money used to place wagers under this subsection
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shall be on deposit in an amount sufficient to cover the
wager at the racetrack where the account is opened.
(c.1) Regulations.--The commission may promulgate
regulations necessary to regulate electronic wagering for horse
racing.
(d) Taxation.--Money wagered as a result of electronic
wagering shall be included in the amount wagered each racing day
for purposes of taxation under section 9334 (relating to State
Racing Fund and tax rate) and shall be included in the same
pari-mutuel pools for each posted race. Electronic wagering
systems shall be operated by the licensed racing entity,
secondary pari-mutuel organization or by a duly licensed racing
vendor.
(e) Conditions.--A licensed racing entity shall only accept
and tabulate a wager by a direct request via electronic media
from the holder of an electronic wagering account. Only the
holder of the electronic wagering account shall place a wager.
(f) Primary market area.--
(1) A licensed racing entity or secondary pari-mutuel
organization may not accept a wager or establish electronic
wagering or advanced deposit account wagering for any person
located in the primary market area of a racetrack, other than
the racetrack at which the licensed racing entity is
conducting a horse race meeting.
(2) Nothing in this subsection shall be construed to
prohibit a licensed racing entity from accepting a wager from
or establishing an electronic wagering account for any person
located in the primary market area of the racetrack where the
licensed racing entity is conducting a horse race meeting. If
two tracks share the primary market area, both racetracks
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shall have equal rights to the market in the shared area.
§ 9331. Pari-mutuel wagering at nonprimary locations.
(a) Nonprimary locations.--The following shall apply:
(1) Notwithstanding any other provision of this chapter,
the commission may approve a licensed racing entity to
continue to operate a nonprimary location where it has
conducted pari-mutuel wagering on horse races conducted by
the licensed racing entity. The licensed racing entity may
continue to conduct pari-mutuel wagering at the location on
horse races conducted by another licensed racing entity,
which horse races may be televised to the location or on
horse races simulcast to the location under section 9326
(relating to admission to racetrack), provided that:
(i) A licensed racing entity has not established a
nonprimary location within the primary market area of any
racetrack other than a racetrack where the licensed
racing entity conducts horse race meetings. Establishment
of a nonprimary location by a licensed racing entity
within the primary market area of a racetrack where the
licensed racing entity conducts horse race meetings shall
require approval of the commission.
(ii) A licensed racing entity has not established a
nonprimary location within the secondary market area of a
racetrack if the nonprimary location is approved by the
commission.
(iii) A licensed racing entity has not established a
nonprimary location in an area outside the primary and
secondary market areas of any racetrack if the location
is approved by the commission.
(2) Except as provided under paragraph (1), no
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additional licenses shall be permitted.
(3) The commission shall annually conduct inspections of
the primary facility.
(4) The regulatory authority of the commission shall
apply to nonprimary locations and any employees or racing
vendors of the licensed racing entity establishing the
nonprimary location.
(b) Taxation and records.--Money wagered at all primary and
nonprimary locations under this chapter shall be included in
common pari-mutuel pools. Money wagered by patrons on the races
shall be computed by the amount of money wagered each racing day
for purposes of taxation under section 9334 (relating to State
Racing Fund and tax rate). The licensed racing entity conducting
the horse race meeting and maintaining the pari-mutuel pools
shall maintain accurate records of the amount wagered in each
pool from every primary and nonprimary location.
(c) Retention.--Money retained under section 9334 shall be
calculated for each location where pari-mutuel wagering is being
conducted. If wagering has taken place at a nonprimary location
where the wagering is conducted by a licensed racing entity
other than the licensed racing entity conducting the horse race
meeting, the licensed racing entity conducting the horse race
meeting shall retain any money to which it is entitled by
agreement. The licensed racing entity conducting the horse race
meeting shall pay over the balance of the retained money to the
licensed racing entity conducting the wagering at the nonprimary
location.
(d) Payment of purses.--A licensed racing entity conducting
a horse race meeting where pari-mutuel wagering is conducted at
one or more nonprimary locations shall distribute money to the
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horsemen's organization, or, in accordance with the practice of
the parties, to be used for payment of purses at that racetrack,
as follows:
(1) Except as provided for in paragraphs (2), (3), (4)
and (5), an amount equal to but not less than 6% of the daily
gross wagering handle on the races at a nonprimary location.
(2) When the gross wagering handle on the races at a
nonprimary location on a given day is less than $30,000, the
percentage may not be less than 3%.
(3) When the gross wagering handle on the races at a
nonprimary location on a given day is between $30,000 and
$75,000, the percentage may not be less than 4.75%.
(4) Whenever a nonprimary location is within the primary
market area of a licensed racing entity other than the
licensed racing entity conducting the races, the applicable
percentage shall be distributed one-half to the horsemen's
organization at the racetrack or in accordance with the
practice of the parties.
(5) Where the horse race meeting is being conducted to
be used for the payment of purses at the racetrack and one-
half to the horsemen's organization, or in accordance with
the practice of the parties, at the racetrack within the
primary market area to be used for the payment of purses at
the racetrack.
Nothing in this subsection shall be construed to prevent a
licensed racing entity from agreeing to distribute amounts
greater than the percentages set forth in this subsection.
However, if no alternative agreement has been reached, the total
percentage for purses under this subsection shall be paid in
accordance with the minimum percentages set forth in this
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subsection.
(e) Other payments.--Notwithstanding any other provision of
this chapter, a nonprimary location may be established within
the primary market area of a racetrack by agreement between the
licensed racing entity and the horsemen's organization at the
racetrack specifying the total percentage of handle wagered at
the nonprimary location to be distributed to the horsemen's
organization, or, in accordance with the practice of the
parties, to be used for the payment of purses at that racetrack.
If no agreement is reached covering the locations, the total
percentage to be paid for purses shall be the same as that
applied to on-track wagering at the racetrack located within the
primary market area.
§ 9332. Books and records of pari-mutuel wagering.
Every licensed racing entity that conducts a horse race
meeting at which pari-mutuel wagering is authorized shall
maintain books and records that clearly show by separate record
the total amount of money contributed to every pari-mutuel pool.
The Department of Revenue or its authorized representative shall
have access to examine all books and records and ascertain
whether the proper amount due to the State is being paid by the
licensed racing entity.
§ 9333. Filing of certain agreements with commission.
A licensed racing entity shall promptly file with the
commission any lease agreement concerning any concession, labor
management relation, hiring of designated classes of officers,
employees or contractors specified by the commission or any
other contract or agreement as the commission may prescribe.
§ 9334. State Racing Fund and tax rate.
(a) Fund.--There is hereby established in the State Treasury
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the State Racing Fund. For fiscal year 2015-2016, money in the
fund is appropriated on a continuing basis to the department for
the purposes of administering this chapter. Beginning on July 1,
2016, all money deposited in the fund, except money deposited in
restricted accounts, shall be annually appropriated by the
General Assembly for the administration and enforcement of this
chapter and for the oversight and promotion of horse racing in
this Commonwealth. A licensed racing entity that conducts horse
race meetings or a secondary pari-mutuel organization shall pay
a tax to the Department of Revenue for deposit in the State
Racing Fund.
(b) Tax rate.--The tax imposed on a licensed racing entity
or secondary pari-mutuel organization shall be 1.5% of the
amount wagered each racing day on win, place or show wagers and
2.5% of the total amount on an exotic wager, including an
exacta, daily double, quinella and trifecta wager.
(c) Expenditures.--Funds collected under subsection (b) and
any interest shall be used as follows:
(1) For the administration and enforcement of this
chapter including:
(i) Funds to the commission in an amount
appropriated by the General Assembly.
(ii) Funds to the Department of Revenue in an amount
appropriated by the General Assembly.
(2) If annual revenue under subsection (b) is sufficient
to satisfy the requirement under paragraph (1), the remainder
of the money shall be distributed as follows:
(i) Fifty percent shall remain in the State Racing
Fund as a carry forward balance to the next fiscal year.
Any carry forward balance shall be first applied to the
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cost of equine testing under section 9374 (relating to
costs of enforcement of medication rules or regulations)
and, if any still remains, for commission expenses as
budgeted by the General Assembly.
(ii) Fifty percent shall be divided equally and
distributed as follows:
(A) Twenty-five percent shall be paid by the
Department of Revenue from the State Racing Fund for
credit to the Pennsylvania Breeding Fund.
(B) Twenty-five percent shall be paid by the
Department of Revenue from the State Racing Fund for
credit to the Pennsylvania Sire Stakes Fund.
(d) Breakage.--All breakage retained under section 9335
(relating to pari-mutuel pool distribution) by licensed racing
entities that conduct horse race meetings shall be distributed
in the following manner:
(1) Thirty-seven and one-half percent of the breakage
shall be paid to the Department of Revenue for credit to the
State Racing Fund.
(2) Sixty-two and one-half percent of the breakage shall
be retained by the licensed racing entity.
(e) Other revenues.--The State Racing Fund may also receive
moneys from any other source, including, but not limited to
appropriations made by the General Assembly.
§ 9335. Pari-mutuel pool distribution.
(a) Distribution.--A licensed racing entity shall distribute
money in a pari-mutuel pool to the holders of winning tickets
presented for payment before the first day of April of the year
following the date of purchase. Failure to present a winning
ticket within the prescribed period of time shall constitute a
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waiver of the right to participate in the award or dividend.
After April 1 of the year following the year of purchase, a
licensed racing entity shall forward the necessary funds held
for uncashed tickets to the Department of Revenue. The funds
shall be deposited into the State Racing Fund.
(b) Remainder.--The remainder of the money shall be retained
by the licensed racing entity in the following manner:
(1) Seventeen percent of the money plus the breakage
from regular wagering pools or 19% of the money plus the
breakage from regular wagering pools for licensed racing
entities whose daily total in all pari-mutuel pools averaged
less than $300,000.
(2) Twenty percent of the money plus breakage from the
exacta, daily double, quinella and other wagering pools as
determined by the commission.
(3) At least 26%, but no more than 35%, from the
trifecta or other wagering pools as determined by the
commission.
(c) Retention.--A licensed racing entity may retain lesser
percentages upon approval of the commission.
§ 9336. Pennsylvania Breeding Fund.
(a) Establishment.--There is created a restricted account in
the State Racing Fund to be known as the Pennsylvania Breeding
Fund which shall consist of the money deposited under section
9334 (relating to State Racing Fund and tax rate) and any
provision of 4 Pa.C.S. Pt. II (relating to gaming) and which
shall be distributed by the commission.
(b) Awards from the Pennsylvania Breeding Fund.--The
commission shall distribute money from the Pennsylvania Breeding
Fund as follows:
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(1) An award of 30% of the purse earned by every
registered Pennsylvania-bred thoroughbred race horse sired by
a registered Pennsylvania sire at the time of conception of
the registered Pennsylvania-bred thoroughbred race horse, or
an award of 20% of the purse earned by every registered
Pennsylvania-bred thoroughbred race horse sired by a
nonregistered sire, which finishes first, second or third in
any race conducted by a licensed racing entity under this
chapter shall be paid to the breeder of said registered
Pennsylvania-bred thoroughbred race horse. A single award
under this paragraph may not exceed 1% of the total annual
fund money.
(2) An award of 10% of the purse earned by any
registered Pennsylvania-bred thoroughbred race horse which
finishes first, second or third in any race conducted by a
licensed racing entity under this chapter shall be paid to
the owner of the registered Pennsylvania sire which regularly
stood in Pennsylvania at the time of conception of the
Pennsylvania-bred thoroughbred race horse. A single award
under this paragraph may not exceed 0.5% of the total annual
fund money.
(3) This subsection shall expire at 11:59 p.m. on
December 31, 2016.
(b.1) Awards from the Pennsylvania Breeding Fund.--The
commission shall distribute money from the Pennsylvania Breeding
Fund as follows:
(1) An award of 40% of the purse earned by every
registered Pennsylvania-bred thoroughbred race horse sired by
a registered Pennsylvania sire at the time of conception of
the registered Pennsylvania-bred thoroughbred race horse
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which finishes first, second or third in any race conducted
by a licensed racing entity under this chapter shall be paid
to the breeder of the registered Pennsylvania-bred
thoroughbred race horse.
(2) An award of 20% of the purse earned by every
registered Pennsylvania-bred thoroughbred race horse sired by
a nonregistered sire, which finishes first, second or third
in any race conducted by a licensed racing entity under this
chapter shall be paid to the breeder of the registered
Pennsylvania-bred thoroughbred race horse.
(3) A single award under paragraphs (1) and (2) may not
exceed 1% of the total annual fund money.
(4) An award of 10% of the purse earned by any
registered Pennsylvania-bred thoroughbred race horse which
finishes first, second or third in any race conducted by a
licensed racing entity under this chapter shall be paid to
the owner of the registered Pennsylvania sire which regularly
stood in Pennsylvania at the time of conception of the
Pennsylvania-bred thoroughbred race horse. A single award
under this paragraph may not exceed 0.5% of the total annual
fund money.
(c) Purses from Pennsylvania Breeding Fund.--
(1) Up to one-fifth of the total of the estimated
Pennsylvania Breeding Fund money remaining each year after
the deduction of expenses related to the administration and
development of the Pennsylvania Breeding Fund program and the
payment of breeder and stallion awards, shall be divided
among the licensed racing entities that conduct thoroughbred
horse race meetings in direct proportion to the rate by which
each licensed racing entity generated the fund money during
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the previous year to be used solely for purses for
Pennsylvania Breeding Fund stakes races which restrict entry
to a registered Pennsylvania-bred thoroughbred race horse.
(2) This subsection shall expire at 11:59 p.m. on
December 31, 2016.
(d) Remaining funds.--The Pennsylvania Breeding Fund money
remaining following disbursements as directed in subsections (b)
(1) and (2) and (c) shall be divided among the licensed racing
entities that conduct thoroughbred horse race meetings in direct
proportion to the rate by which each licensed racing entity
generated the fund money during the previous year to be used for
purses as follows:
(1) Claiming and nonclaiming Pennsylvania Breeding Fund
races which restrict entry to registered Pennsylvania-bred
thoroughbred race horses.
(2) Claiming and nonclaiming Pennsylvania Breeding Fund
races which prefer registered Pennsylvania-bred thoroughbred
race horses as starters. In these races, should eight or more
registered Pennsylvania-bred thoroughbred race horses pass
the entry box, the race shall be considered closed to horses
other than registered Pennsylvania-bred thoroughbred race
horses.
(3) This subsection shall expire at 11:59 p.m. on
December 31, 2016.
(d.1) Remaining funds from Pennsylvania Breeding Fund.--The
estimated Pennsylvania Breeding Fund money remaining each year
after the deduction of expenses related to the administration
and development of the Pennsylvania Breeding Fund Program and
the payment of breeder and stallion awards under subsection
(b.1) shall be divided among the licensed racing entities that
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conduct thoroughbred horse race meetings in direct proportion to
the rate by which each licensed racing entity generated the fund
money during the previous year to be used solely for purses as
follows:
(1) Fifty percent shall be used to award a bonus to the
owner of, or pay purses of races that restrict entry to, a
registered Pennsylvania-bred thoroughbred race horse sired by
a registered Pennsylvania sire.
(2) Fifty percent shall be used to award a bonus to the
owner of, or pay purses of races that restrict entry to, a
registered Pennsylvania-bred thoroughbred race horse.
(3) In all claiming and nonclaiming races which prefer
registered Pennsylvania-bred thoroughbred race horses as
starters, if eight or more registered Pennsylvania-bred
thoroughbred race horses pass the entry box, the race shall
be considered closed to horses other than registered
Pennsylvania-bred thoroughbred race horses.
(e) Funds not expended.--
(1) Pennsylvania Breeding Fund money due to licensed
racing entities, as outlined in subsections (c) and (d), but
not expended during the calendar year may be carried forth in
the fund on the accounts of the licensed racing entities to
be expended during the succeeding year in addition to the
licensed racing entities' fund money annually due to them for
purses. This paragraph shall expire at 11:59 p.m. on December
31, 2016.
(2) Pennsylvania Breeding Fund money due to licensed
racing entities, as outlined in subsections (b.1) and (d.1),
but not expended during the calendar year may be carried
forth in the fund on the accounts of the licensed racing
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entities to be expended during the succeeding year in
addition to the racing entities' fund money annually due to
them for purses.
(f) Pennsylvania Horse Breeders' Association.--The
commission shall contract with the Pennsylvania Horse Breeders'
Association as the organization responsible for the registration
and records of Pennsylvania-bred thoroughbred race horses. The
Pennsylvania Horse Breeders' Association shall advise the
commission when called upon and shall determine the
qualifications for Pennsylvania-bred thoroughbred race horses
and Pennsylvania sires. Registration and records of the
association shall be official records of the Commonwealth and
shall be subject to the act of February 14, 2008 (P.L.6, No.3),
known as the Right-to-Know Law. At the close of each calendar
year, the Pennsylvania Horse Breeders' Association shall submit
to the commission for its approval an itemized budget of
projected expenses for the ensuing year relating to the
administration and development of the Pennsylvania Breeding Fund
Program. The commission, on no more than a quarterly basis,
shall reimburse from the fund the Pennsylvania Horse Breeders'
Association for those expenses actually incurred in the
administration and development of the Pennsylvania Breeding Fund
Program.
§ 9337. Pennsylvania Sire Stakes Fund.
(a) Establishment.--There is created a restricted account in
the State Racing Fund to be known as the Pennsylvania Sire
Stakes Fund which shall consist of the money deposited under
section 9334 (relating to State Racing Fund and tax rate) and
any provision of 4 Pa.C.S. Pt. II (relating to gaming) and which
shall be administered by the commission.
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(b) Distribution and use of funds.--Funds shall be
distributed as follows:
(1) Sixty percent of the money remaining in the excess
fund account of the Pennsylvania Sire Stakes Fund at the end
of the calendar year in which this subsection is enacted
shall be distributed to licensed racing entities that conduct
standardbred horse race meetings to be used in the next
succeeding calendar year as purse money for Pennsylvania-
sired horses. The remaining 40% of the money in the excess
fund account at the end of the calendar year of the enactment
of this subsection, together with the interest earned on that
money, shall be distributed to licensed racing entities that
conduct standardbred horse race meetings to be used in the
next succeeding calendar year as purse money for
Pennsylvania-sired horses.
(2) After deduction of sufficient funds to cover the
commission's cost of administration, 80% of all remaining
money in the Pennsylvania Sire Stakes Fund at the end of the
calendar year shall be distributed to licensed racing
entities that conduct standardbred horse race meetings to be
used as purse money for Pennsylvania-sired horses. The
commission may allocate up to a total of 40% of the amount to
be distributed to licensed racing entities in a calendar year
for use for a series of championship final races at the
racetracks of licensed business entities that conduct
standardbred horse race meetings. The commission shall
distribute the money to these championship final races in an
equal amount for each sex, age and gait for two-year-old
trotters and pacers and three-year-old trotters and pacers
based on conditions establishing eligibility to these final
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events. No pari-mutuel standardbred racetrack shall be
awarded more than 50% of the championship final races in any
calendar year. The commission shall schedule these final
events so as to evenly alternate classes at each racetrack
each year. After the allocation for the championship final
races has been determined, the remaining funds to be
distributed to licensed racing entities that conduct
standardbred horse race meetings shall be divided equally
among the licensed racing entities. Each licensed racing
entity shall divide the funds received equally for each of:
(i) four two-year-old races; one pace for colts, one
pace for fillies, one trot for colts and one trot for
fillies; and
(ii) four three-year-old races; one pace for colts,
one pace for fillies, one trot for colts and one trot for
fillies.
(c) Purse money.--Each allotment shall provide purse money
for the respective races. The purse money shall be in addition
to any entry fees or other funds available.
(d) Entry restriction.--Entry for these races shall be
limited to standardbred horses which were sired by a
standardbred stallion regularly standing in Pennsylvania and
each race shall be designated a Pennsylvania sire stakes race.
The commission shall adopt regulations as necessary to
administer the entry restriction.
(e) Agricultural fairs and events.--
(1) The following shall apply:
(i) The remaining money in the Pennsylvania Sire
Stakes Fund, up to a total of $75,000 for each
agricultural fair and one-day or two-day events as
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defined in the commission's regulations, shall be divided
equally among the agricultural fairs and one-day or two-
day events.
(ii) No more than five one-day or two-day events may
be authorized by the commission per year.
(iii) No more than two one-day or two-day events per
county may be authorized by the commission except if,
after a date established by the commission, the five
events referenced under subparagraph (ii) conducting
harness horse races for two-year-old and three-year-old
harness horses have not been allocated.
(iv) Not less than $225,000 shall be allocated from
the Pennsylvania Sire Stakes Fund and be divided equally
among agricultural fairs and one-day or two-day events
conducting harness horse races for two-year-old and
three-year-old harness horses.
(2) Each fair or one-day or two-day event receiving
funds under this subsection shall divide the total amount
equally among all eligible races for two-year-old and three-
year-old harness horses and shall apply the funds solely as
additional purse funds. Only races to which entry is
restricted to Pennsylvania-sired horses shall be eligible.
The commission shall provide for and promulgate regulations
necessary for the proper administration of racing provided
for under this subsection, including, but not limited to,
portable stall rentals at one-day or two-day events.
§ 9338. Fair fund proceeds.
(a) Distribution.--The Department of Agriculture shall
distribute money in the fair fund annually, on or before March
1, for reimbursement for each county agricultural society and
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each independent agricultural society conducting standardbred
horse racing during its annual fair, other than races for two-
year-old colts and fillies and three-year-old colts and fillies,
an amount of money equal to that used during their annual fair
as purse money for standardbred horse racing, track and stable
maintenance, starting gate rental and the cost of all
standardbred horse racing officials required during their annual
fair. The reimbursement amount may not be more than $13,000, a
minimum of $4,000 of which must be used for purse money and the
balance of the allotment per fair, not used for purse money over
the minimum $4,000 allotment, shall be used for the specific
purposes referenced above or otherwise the allotment shall be
retained in the fund.
(b) Inspection.--The commission shall annually inspect each
track facility at a county fair and advise each operating fair
about track maintenance which is necessary to ensure adequate
racing surface during the course of scheduled fairs and racing
events. If it is the opinion of the commission that the fair
society or event sponsor is not adequately financing track
maintenance, the Department of Revenue shall surcharge the fair
fund account of the fair society or event sponsor to effectuate
the remediation. The commission may contract with, hire or
otherwise consult with race track surface experts to carry out
the provisions of this section.
§ 9339. Hearing.
An applicant, licensee or other person whose application has
been denied or whose license has been suspended, revoked or not
renewed may request a hearing before the commission. The
provisions of 2 Pa.C.S. Chs. 5 Subch. A (relating to practice
and procedure of Commonwealth agencies) and 7 Subch. A (relating
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to judicial review of Commonwealth agency action) shall apply,
unless superseded by the commission's administrative
regulations.
§ 9340. Prohibition of wagering.
(a) General.--No commissioner or employee of the commission
shall wager upon the outcome of any horse race conducted at or
simulcast to a track at which pari-mutuel wagering is conducted
by any licensed racing entity regulated by the commission. No
licensed racing entity shall permit any person who is under 18
years of age to wager at a horse race meeting conducted by the
licensed racing entity. No licensed racing entity shall permit
any person who is under 18 years of age to attend a horse race
meeting conducted by the licensed racing entity unless the
person is accompanied by a parent or guardian. This section
shall not be construed to prohibit persons under 18 years of
age, who are legally employed, from being upon the racetrack
premises for the sole purpose of engaging in the performance of
their duties as employees.
(b) Fair racing.--Pari-mutuel wagering on horse races at any
county or other political subdivision, agricultural or other
fair shall not be authorized. No lottery, pool selling,
bookmaking or any other kind of gambling upon the results of
races, heats or contests of speed of horses shall be allowed at
any fair or at any horse race meeting conducted in this
Commonwealth, except those licensed to operate pari-mutuel
wagering under the provisions of this chapter.
§ 9341. Veterinarians and State stewards.
(a) General rule.--The commission shall have the authority
to employ or contract with licensed veterinarians, stewards and
other personnel deemed appropriate by the commission to serve at
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each horse race meeting conducted by a licensed racing entity.
The commission may employ or contract with other individuals as
shall be necessary to carry out the responsibilities of this
section.
(b) Costs and compensation.--The costs and compensation of
the horse racing veterinarians, State stewards and other
personnel shall be fixed and paid by the commission.
§ 9342. Promotions and discounts.
The commission may approve a licensed racing entity to issue
a free pass, card or badge for a special promotional program and
seasonal discount ticket program.
§ 9343. Monitoring of wagering on video screens.
A licensed racing entity conducting pari-mutuel wagering
shall display on video screens the approximate odds or
approximate will-pays on each horse for each race as well as a
combination of races, including, but not limited to, quinellas,
exactas, perfectas and any other combination or pool of races. A
display of approximate odds or approximate will-pays is not
required where the wager is on horses in four or more races,
such as Pick 4, Pick 5 or Pick 6. In addition to displaying the
amount of money wagered, the approximate odds or approximate
will-pays on each horse or combination of horses must be shown
on video screens in each wagering division. For trifectas, in
lieu of odds or approximate will-pays, the amount of money being
wagered on each horse to win in the trifecta pool must be
displayed on video screens separately from any other
information. Information must be displayed from the opening of
bets or wagering and be continually displayed until the wagering
is closed. At least one video screen in each wagering division
shall display the amount of money wagered on each horse involved
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in a trifecta pool.
§ 9344. Intrastate simulcasting.
(a) General rule.--The commission shall permit intrastate
simulcasting of live horse racing between the licensed racing
entities that conduct live racing.
(b) Simulcast signal.--The simulcast signal shall be
encoded, and the racetrack receiving the simulcast signal may
not send the signal anywhere other than a public location
authorized under section 9329 (relating to interstate
simulcasting).
(c) Forms of pari-mutuel wagering.--All forms of pari-mutuel
wagering described in section 9335 (relating to pari-mutuel pool
distribution) shall be allowed on a horse race to be simulcasted
under this section.
(d) Regulations.--The commission may promulgate regulations
on wagering and the operation of horse racing.
(e) Computation of money wagered.--The money wagered by a
patron on a horse race must be computed in the amount of money
wagered each racing day for purposes of taxation under section
9334 (relating to State Racing Fund and tax rate).
(f) Definition.--As used in this section, the term "racing
day" consists of a minimum of eight live races, except at
thoroughbred tracks on Breeders' Cup Event Day.
§ 9345. Commingling.
(a) Applicability.--This section is applicable only to
licensed racing entities that conduct thoroughbred racing.
(b) Race secretary.--The race secretary shall receive
entries and declarations as an agent for the licensed racing
entity for which the race secretary acts. The race secretary or
an individual designated by the licensed racing entity may
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receive stakes, forfeits, entrance money, jockey fees and other
fees, purchase money in claiming races and other money that can
properly come into the race secretary's possession as an agent
for the licensed racing entity for which the race secretary or
designee is acting.
(c) Horsemen's Account.--A licensed racing entity shall
maintain a separate account, to be known as a Horsemen's
Account. Money owed to owners in regard to purses, stakes,
rewards, claims and deposits shall be deposited into the
Horsemen's Account. Funds in the account are recognized and
denominated as being the sole property of owners. Deposited
funds may not be commingled with funds of the licensed racing
entity unless a licensed racing entity established an
irrevocable clean letter of credit with an evergreen clause in
favor of the organization which represents a majority of the
owners and trainers racing with the licensed racing entity. The
minimum amount of the credit must be the greater of $1,000,000
or 110% of the highest monthly balance in the Horsemen's Account
in the immediate prior year. To calculate the monthly balance in
the Horsemen's Account, the sum of the daily balances shall be
divided by the number of days in the month. The evergreen clause
must provide that:
(1) thirty days prior to the expiration of the letter of
credit, the financial institution can elect not to renew the
letter of credit;
(2) upon an election under paragraph (1), the financial
institution must notify the designee of the organization that
represents a majority of the owners and trainers racing with
the licensed racing entity, by registered mail, return
receipt requested, of the election not to renew; and
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(3) the financial institution will honor the letter of
credit for six months after expiration.
Purse money earned by owners shall be deposited by the licensed
racing entity in the Horsemen's Account within 48 hours after
the result of the race in which the money was earned has been
declared official and the purse has been released by the
commission.
(d) Accounting.--A licensed racing entity shall designate
individuals authorized to receive and disburse funds from the
Horsemen's Account. Individuals designated under this subsection
shall be bonded to provide indemnity for malfeasance,
nonfeasance and misfeasance. A certified copy of the bond shall
be filed with the commission.
(e) Examination, access and records.--The Horsemen's Account
and the investment and deposit schedules relating to the account
are subject to examination, at reasonable times, by a designee
of the organization which represents a majority of the owners
and trainers racing with the licensed racing entity and by the
commission. The individual designated under subsection (d) shall
provide each owner with access, at reasonable times during a
racing day, to the amount of funds in the Horsemen's Account
credited to that owner. At the close of a horse race meeting,
the designated individual shall mail to each owner a record of
deposits, withdrawals and transfers affecting the amount of
funds in the Horsemen's Account credited to that owner.
(f) Auditing and monthly statements.--The Horsemen's Account
shall be audited annually and at any other time determined by
the commission. Monthly statements shall be provided to the
designee of the organization which represents a majority of the
owners and trainers racing with the licensed racing entity and
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the commission.
(g) Interest.--Fifty percent of the money earned as interest
on funds in the Horsemen's Account shall be paid to the
organization that represents a majority of the owners and
trainers racing with the licensed racing entity on a weekly
basis. The amount is for the benefit of the horsemen as
determined by the organization that represents the majority of
the owners and trainers racing with the licensed racing entity.
The remaining 50% of the interest earned is for the benefit of
the licensed racing entity that has the responsibility to fund
the costs associated with the administration of the fund.
Interest each month must be earned in an amount equal to the
Federal Reserve Discount Rate on the first day of the month.
§ 9346. Standardbred horse racing purse money.
A licensed racing entity that conducts standardbred horse
racing must place on deposit with the commission by March 1 of
each year an irrevocable letter of credit equivalent to its
average weekly purse total from the immediate prior year. The
commission shall hold the letter of credit in trust for the
standardbred horsemen racing at that licensed racing entity's
horse race meeting if the purse checks are not issued or
insufficient funds are available to cover the purse checks.
SUBCHAPTER C
ADDITIONAL LICENSING REQUIREMENTS FOR LICENSED
RACING ENTITY, SECONDARY PARI-MUTUEL ORGANIZATION,
TOTALISATOR AND RACING VENDORS
Sec.
9351. General license requirements.
9352. Licensing costs and fees.
9353. License application procedures.
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9354. Oral presentation by applicant.
9355. Additional information.
9356. Operations.
9357. Transfers of licenses.
9358. Duration of license.
9359. Penalties and enforcement.
§ 9351. General license requirements.
(a) New application.--A licensed racing entity or secondary
pari-mutuel organization seeking to offer electronic wagering to
individuals within this Commonwealth must apply to the
commission for a license by submitting a completed license
application. Except for a licensed racing entity the license
shall take effect and the secondary pari-mutuel organization may
begin operations after approval by the commission.
(a.1) Application.--A totalisator service provider or racing
vendor, as determined by the commission, seeking to provide
those services within this Commonwealth must apply to the
commission for a license by submitting a completed application.
(b) Renewal applications.--
(1) A license for a totalisator or racing vendor must be
renewed annually in accordance with this chapter.
(2) An electronic wagering license issued to a licensed
racing entity or a secondary pari-mutuel organization shall
be renewed annually. An electronic wagering renewal
application shall be submitted on or before 120 days before
the expiration of the license term. If the application is
approved by the commission, the license renewal shall take
effect January 1.
§ 9352. Licensing costs and fees.
Costs and fees are as follows:
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(1) The applicant shall pay all costs incurred by the
commission in reviewing an application for an initial
license, including legal and investigative costs and the cost
of other necessary outside professionals and consultants in
accordance with the following:
(i) Except for a licensed racing entity, as an
initial payment for these costs, the applicant shall
submit, along with a license application, a cashier's
check or certified check payable to the commission in the
amount of $50,000.
(ii) Any portion of the payment not required to
complete the investigation shall be refunded to the
applicant within 20 days of the granting, withdrawal or
rejection of the initial license application.
(iii) To the extent additional costs will be
necessary, the applicant shall submit a cashier's check
or certified check payable to the commission in an amount
reasonably requested by the commission within 10 days of
receipt of the request. Failure to submit an additional
requested payment shall result in suspension of the
processing of the license application and may result in
denial of the license.
(2) An applicant for a renewal license shall pay all
reasonable costs incurred by the commission in reviewing a
renewal license, including legal and investigative costs and
the cost of other necessary outside professionals and
consultants in accordance with the following:
(i) The applicant shall submit a cashier's check or
certified check payable to the commission in an amount
reasonably requested by the commission within 10 days of
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receipt of request.
(ii) Failure to submit the payment shall result in
suspension of the processing of renewing the license and
may result in denial of the license.
(3) Initial license fee:
(i) The fee for an electronic wagering license under
section 9351(a) (relating to general license
requirements) shall be $500,000. If an applicant that is
also a Category 1 slot machine licensee or its corporate
successor or affiliate paid the license fee under 4
Pa.C.S. § 1209 (relating to slot machine license fee),
the fee required under this paragraph shall be deemed
paid. A fee paid under this paragraph shall be deposited
in the State Racing Fund, or, in the case of a deemed
payment, transferred to the State Racing Fund upon
certification of the Secretary of the Budget.
(ii) The fee for an initial totalisator or racing
vendor license under section 9351(a.1) shall be $25,000
and shall be deposited in the State Racing Fund.
(4) License renewal fee:
(i) The fee for an electronic wagering license
renewal under section 9351(b)(2) shall be $100,000. If an
existing licensee under this section that is also a
Category 1 slot machine licensee or its corporate
successor or an affiliate paid the license fee under 4
Pa.C.S. § 1209, the fee required under this paragraph
shall be deemed paid. A license renewal may not be issued
until receipt of the license renewal fee. The license fee
shall be deposited into the State Racing Fund, or, in the
case of a deemed payment, it shall be transferred to the
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State Racing Fund.
(ii) The fee for the renewal of a totalisator or
racing vendor license under section 9351(b)(1) shall be
$5,000 and shall be deposited in the State Racing Fund.
(5) The commission shall be reimbursed for any
additional costs required to implement and enforce this
chapter.
(6) Beginning two years following the effective date of
this paragraph, the commission may annually increase a fee,
charge or cost provided for under this section by an amount
not to exceed an annual cost-of-living adjustment calculated
by applying the percentage change in the Consumer Price Index
for All Urban Consumers (CPI-U) for the Pennsylvania, New
Jersey, Delaware and Maryland area for the most recent 12-
month period for which figures have been officially reported
by the United States Department of Labor, Bureau of Labor
Statistics, immediately prior to the date the adjustment is
due to take effect.
§ 9353. License application procedures.
(a) Application for license.--An application for an initial
or renewal license shall be in the form and manner prescribed by
the commission in accordance with this chapter. The commission
may deny a license to an applicant that provides false or
misleading information on or omits material information from the
application. The application shall include all of the following:
(1) The applicant's legal name.
(2) The location of the applicant's principal office.
(3) The name, address and date of birth of each
principal with a 5% or greater share of ownership or
beneficial interest in the applicant.
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(4) Audited financial statements for the last three
years or, if the applicant does not have audited financial
statements, financial and other pertinent information as
required by the commission to determine that the applicant is
financially capable of operating as a going concern and
protecting accounts.
(5) A detailed plan of how the wagering system will
operate. The commission may require changes in the proposed
plan of operations as a condition of granting a license.
There shall not be subsequent material changes in the plan of
operations unless ordered by the commission or until approved
by the commission after receiving a written request.
(6) A list of all personnel processing wagers on races
made by residents of this Commonwealth. This list shall be
kept current and be provided to the commission upon request.
(7) Copies of all documents required under this
subsection by the commission.
(b) Review.--In reviewing an application, the commission may
consider any information, data, report, finding or other factor
available that it considers important or relevant to the
determination of whether the applicant is qualified to hold a
license, including all of the following:
(1) The integrity of the applicant and its principals,
including:
(i) Whether the applicant or its principals are
unsuitable.
(ii) Whether the applicant or its principals have
been a party to litigation over business practices,
disciplinary actions over a business license or refusal
to renew a license.
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(iii) Whether the applicant or its principals have
been a party to proceedings in which unfair labor
practices, discrimination or violation of government
regulations pertaining to racing or gaming laws was an
issue or bankruptcy proceedings.
(iv) Whether the applicant or its principals have
failed to satisfy judgments, orders or decrees.
(v) Whether the applicant or its principals have
been delinquent in filing tax reports or remitting taxes.
(2) The quality of physical facilities and equipment.
(3) The financial ability of the applicant to conduct
wagering.
(4) The protections provided to safeguard accounts,
including a certification from the licensee's chief financial
officer that account funds will not be commingled with other
funds as required under this chapter.
(5) The management ability of the applicant and its
principals.
(6) Compliance of the applicant with applicable
statutes, charters, ordinances and administrative
regulations.
(7) The efforts of the applicant to promote, develop and
improve the horse racing industry in this Commonwealth.
(8) The efforts of the applicant to safeguard and
promote the integrity of pari-mutuel wagering in this
Commonwealth.
(9) The economic impact of the applicant upon the
Commonwealth.
§ 9354. Oral presentation by applicant.
(a) Application.--The application presentation shall be in
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accordance with all of the following:
(1) The commission may require an applicant to make an
oral presentation prior to the ruling in order to clarify or
otherwise respond to questions concerning the application as
a condition to the issuance or renewal of a license.
(2) The presentation shall be limited to the information
contained in the applicant's application and any supplemental
information relevant to the commission's determination of the
applicant's suitability.
(3) The admission as evidence of the supplemental
information shall be subject to the discretion of the
commission.
(b) Incomplete application.--If the commission deems an
applicant's application incomplete and does not accept it for
filing, the applicant shall not be entitled to make an oral
presentation.
§ 9355. Additional information.
The commission may request additional information from an
applicant if the additional information would assist the
commission in deciding whether to issue or renew a license,
including all of the following:
(1) Copies of any documents used by the applicant in
preparing the application.
(2) A list of each contract between the applicant and a
third party related to operations. The commission may review
the contracts at any time upon request.
§ 9356. Operations.
(a) Prior to operating requirements.--Before doing business
in this Commonwealth all of the following are required of a
licensee:
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(1) Be qualified to do business in this Commonwealth.
(2) Submit a copy of each document required to be filed
with the Department of Revenue and each document related to
an audit or investigation by any Federal, State or local
regulatory agency to the commission.
(3) Remit to the commission a copy of each document
required to be filed with any Federal, State or local
regulatory agency.
(b) Requirements.--
(1) A licensee shall submit quarterly reports to the
commission providing amounts wagered by residents in this
Commonwealth and amounts wagered on races in this
Commonwealth.
(2) A licensee shall enter into an agreement with each
licensed racing entity in this Commonwealth on whose races
the licensee offers wagering regarding payment of host fees
and any other applicable fees, costs or payments of any kind
to be paid to the licensed racing entity. The licensed racing
entity and the applicable horsemen's organization shall
negotiate a separate agreement for contributions to the purse
account.
(3) A licensee shall not commingle account funds with
other funds.
(4) A licensee shall provide quarterly financial
statements to the commission for the first calendar year of
operation if the licensee does not have audited financial
statements for the last three years as referenced in section
9353(a)(4) (relating to license application procedures).
(5) A licensee shall use and communicate pari-mutuel
wagers to a totalisator licensed by the commission.
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(6) A licensee shall operate and communicate with the
totalisator in such a way as not to provide or facilitate a
wagering advantage based on access to information and
processing of wagers by account holders relative to
individuals who wager at licensed racing entities or
simulcast facilities.
(7) All personnel processing wagers made by residents of
this Commonwealth shall be licensed by the commission.
(8) Accounts shall only be accepted in the name of an
individual and shall not be transferable. Only individuals
who have established accounts with a licensee may wager
through a licensee.
(9) Each account holder shall provide personal
information as the licensee and the commission require,
including all of the following:
(i) Name.
(ii) Principal residence address.
(iii) Telephone number.
(iv) Social Security number.
(v) Date of birth.
(vi) Other information necessary for account
administration.
(10) The information supplied by the account holder
shall be verified by the licensee using means acceptable to
the commission. A secondary pari-mutuel organization must
verify that the account holder does not reside within the
primary market area of a licensed racing entity.
(11) The licensee shall provide each account holder a
secure personal identification code and password to be used
by the account holder to confirm the validity of every
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account transaction.
(12) An employee or agent of the licensee shall not
disclose any confidential information except as follows:
(i) To the commission.
(ii) To the account holder as required by this
chapter.
(iii) To the licensee and its affiliates.
(iv) To the licensed racing entity as required by
the agreement between the licensee and the licensed
racing entity.
(v) As otherwise required by law.
(13) The licensee shall provide each account holder a
copy of account holder rules and the terms of agreement and
other information and materials that are pertinent to the
operation of the account.
(14) The licensee may refuse to establish an account if
it is found that any of the information supplied is false or
incomplete or for any other reason the licensee deems
sufficient.
(15) Each account shall be administered in accordance
with the account holder rules and the terms of agreement
provided to account holders, including:
(i) Placing of wagers.
(ii) Deposits to accounts.
(iii) Credits to accounts.
(iv) Debits to accounts.
(v) Refunds to accounts.
(vi) Withdrawals from accounts.
(vii) Minimum deposit requirements.
(viii) Fees per wager.
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(ix) Rebates.
(16) Each licensee shall have protocols in place and
shall publicize to its account holders when the wagers are
excluded from a host racetrack's wagering pool. These
protocols shall include an immediate electronic mail message
to affected account holders and immediate posting on the
licensee's publicly accessible Internet website.
(17) A licensee shall maintain complete records of the
application and the opening of an account for the life of the
account plus two additional years. A licensee shall also
maintain complete records of the closing of an account for
two years after closing. These records shall be provided to
the commission upon request.
(18) A licensee shall maintain complete records of all
transactions, including deposits, credits, debits, refunds,
withdrawals, fees, wagers, rebates and earnings for two
years. These records shall be provided to the commission upon
request.
(19) All wagering conversations, transactions or other
wagering communications, verbal or electronic, shall be
recorded by means of the appropriate electronic media and the
tapes or other records of the communications shall be kept by
the licensee for a period of two years. These tapes and other
records shall be made available to the commission upon
request.
(20) The recording of the confirmation of the
transaction, as reflected in the voice or other data
recording, shall be deemed to be the actual wager regardless
of what was recorded by the totalisator.
(21) A licensee shall not accept wagers if its recording
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system is not operable.
(22) The commission may monitor the equipment and staff
and review the records of a licensee and any of the
transactions conducted by the licensee with regards to wagers
made by residents of this Commonwealth.
(23) A licensee may suspend or close any account for
violation of the account holder rules and the terms of
agreement or any other reason it deems sufficient, if the
licensee returns to the account holder all money then on
deposit within seven calendar days.
§ 9357. Transfers of licenses.
A transfer of licenses shall be done in accordance with the
following:
(1) A license issued under this chapter shall not be
transferable or assignable.
(2) A substantial change in ownership in a licensee
shall result in termination of the license unless prior
written approval has been obtained from the commission. A
request for approval of a substantial change in ownership
shall be made on a form designated by the commission. Upon
receipt of all required information, the commission shall, as
soon as practicable, make a determination whether to
authorize and approve the substantial change in ownership.
(3) Notice of a nominal change in ownership shall be
filed with the commission within 15 days of the execution of
the documents upon which the proposed nominal change in
ownership will be based.
(4) For purposes of paragraph (3), notice is not
required for any of the following:
(i) A nominal change in ownership if the licensee is
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a publicly traded corporation.
(ii) The transfer of an ownership interest in a
licensed racing entity, whether substantial or nominal,
direct or indirect, if by a publicly traded corporation,
and if the beneficial ownership transferred is acquired
by an individual who holds the voting securities of the
publicly traded corporation for investment purposes only.
(5) Any attempt to effect a substantial change in
ownership under this section if not done so in writing shall
be considered void by the commission.
§ 9358. Duration of license.
A license issued under this chapter shall be valid for one
calendar year for which the license is issued.
§ 9359. Penalties and enforcement.
All of the following apply:
(1) The commission shall have all of the rights, powers
and remedies necessary to carry out this chapter and to
ensure compliance with this chapter, including revocation,
suspension or modification of a license and the imposition of
fines under section 9325 (relating to power of commission to
impose fines).
(2) With respect to an individual or entity that offers
pari-mutuel wagering to residents of this Commonwealth
without a license issued by the commission, the commission
may take the measures deemed necessary, including referral to
the appropriate regulatory and law enforcement authorities
for civil action or criminal penalties.
(3) Upon the finding of a violation by a secondary pari-
mutuel organization or totalisator of this chapter or of a
commission regulation or order or upon the finding of
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unlicensed electronic or advanced deposit account wagering by
an individual or entity, the commission may impose a fine as
authorized under section 9325.
SUBCHAPTER D
COMPLIANCE
Sec.
9361. Tax compliance requirement.
§ 9361. Tax compliance requirement.
(a) Applicant.--An applicant must be tax compliant to be
eligible for a license issued under this chapter. Upon receipt
of an application for a license, the commission shall request
the Department of Revenue to conduct a tax compliance review of
the applicant.
(b) Licensees.--A licensee must be tax compliant to be
eligible for renewal of a license issued under this chapter.
Prior to renewing a license, the commission shall request the
Department of Revenue to conduct a tax compliance review of the
licensee.
(c) Commissioners and commission employees.--An individual
must be tax compliant to be eligible to serve as a commissioner
or to be employed by the commission. Commissioners and
commission employees shall be subject to an annual tax
compliance review to ensure they are tax compliant. This
subsection may not apply to commission employees subject to a
collective bargaining agreement.
(d) Contractors.--Each contractor of the commission shall be
subject to an annual tax compliance review to ensure that the
contractor is tax compliant.
(e) Review.--The tax compliance review under subsections (a)
and (b) and the annual tax compliance review under subsections
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(c) and (d) must be performed on the dates as determined by the
commission.
(f) Definitions.--For purposes of this section, the
following words and phrases shall have the following meanings:
"Tax compliant." Being current with all applicable
Commonwealth tax filing and reporting obligations for any
applicable tax year and current with payment of any balance of
tax, interest or penalty due the Commonwealth as determined by
the Department of Revenue for an applicable tax year.
"Tax compliance review." The process by which the Department
of Revenue determines whether an individual or entity is tax
compliant.
SUBCHAPTER E
MEDICATION RULES AND ENFORCEMENT PROVISIONS
Sec.
9371. Mandatory requirements for medication rules.
9372. Establishment of Pennsylvania Race Horse Testing Program.
9373. Equipment, supplies and facilities.
9374. Costs of enforcement of medication rules or regulations.
§ 9371. Mandatory requirements for medication rules.
(a) Regulations for medication.--When a licensed racing
entity conducts a horse race meeting with pari-mutuel wagering,
the commission shall have in effect rules or regulations to
control the use and administration of any medication and the use
and administration of any device that affects the performance of
a race horse. The commission may establish permitted tolerance
levels and therapeutic dose allowances for all medication to be
used or administered to a race horse. The commission shall adopt
a comprehensive schedule of equine drugs, medications,
therapeutic substances or metabolic derivatives which are
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authorized to be administered to race horses, including
tolerance levels. In order to properly determine the schedule of
drugs and the tolerance levels under this subsection, the
commission may conduct research or contract with a vendor to
conduct the research. The commission may consult with the
Pennsylvania Board of Veterinary Medicine, academic institutes
and associations representing the majority of the horse owners
and experts.
(b) Penalty.--The commission shall establish in their rules
or regulations penalty provisions for the violation of these
rules or regulations.
§ 9372. Establishment of Pennsylvania Race Horse Testing
Program.
(a) Establishment.--There is hereby established the
Pennsylvania Race Horse Testing Program. The program shall be
administered by the commission. All costs of the program shall
be paid by the appropriations allocated under section 9374
(relating to costs of the enforcement of medication rules or
regulations).
(b) Purpose.--The purposes of the Pennsylvania Race Horse
Testing Program are to analyze samples for the presence in race
horses of any medication, to develop techniques, equipment and
procedures, to collect and test for the presence of medication
in race horses, to ascertain permitted tolerance levels or
therapeutic dose allowances for medication, to offer
consultation and advice to the public on all issues regarding
the medication of race horses and to conduct research in
medication issues involving race horses.
§ 9373. Equipment, supplies and facilities.
The costs of all equipment, supplies and facilities, except
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holding barns or stables, to be located at race horse meeting
facilities, grounds or enclosures or at other locations
designated by the management committee shall be paid by the
commission.
§ 9374. Costs of enforcement of medication rules or
regulations.
(a) Authorization.--Beginning July 1, 2016, and each year
thereafter, the General Assembly shall authorize the transfer of
funds from the Pennsylvania Race Horse Development Fund to the
State Racing Fund to provide for each cost associated with the
collection and research of and testing for medication, which
shall include the cost of necessary personnel, equipment,
supplies and facilities, except holding barns or stables, to be
located at horse race facilities, grounds or enclosures or at
other locations designated by the commission. All such costs
shall be reviewed and approved by the commission. The transfer
shall be made in 52 equal weekly installments during the fiscal
year before any other distribution from the Pennsylvania Race
Horse Development Fund.
(b) Expiration.--Subsection (a) shall expire at 11:59 p.m.
on June 30, 2020. After June 30, 2020, all costs for the
Pennsylvania Race Horse Testing Program and the collection and
testing of samples for any manner of medication shall be paid by
the commission.
Section 5. Repeals are as follows:
(1) The General Assembly declares that the repeal under
paragraph (2) is necessary to effectuate the addition of 3
Pa.C.S. Ch. 93.
(2) Article XXVIII-D of the act of April 9, 1929
(P.L.177, No.175), known as The Administrative Code of 1929,
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is repealed.
Section 6. The addition of 3 Pa.C.S. Ch. 93 is a
continuation of Article XXVIII-D of the act of April 9, 1929
(P.L.177, No.175), known as The Administrative Code of 1929. The
following apply:
(1) Except as otherwise provided in 3 Pa.C.S. Ch. 93,
all activities initiated under Article XXVIII-D of The
Administrative Code of 1929 shall continue and remain in full
force and effect and may be completed under 3 Pa.C.S. Ch. 93.
Orders, regulations, rules and decisions which were made
under Article XXVIII-D of The Administrative Code of 1929 and
which are in effect on the effective date of section 5(2) of
this act shall remain in full force and effect until revoked,
vacated or modified under 3 Pa.C.S. Ch. 93. Contracts,
obligations and collective bargaining agreements entered into
under Article XXVIII-D of The Administrative Code of 1929 are
not affected nor impaired by the repeal of Article XXVIII-D
of The Administrative Code of 1929.
(2) Except as set forth in paragraph (3), any difference
in language between 3 Pa.C.S. Ch. 93 and Article XXVIII-D of
The Administrative Code of 1929 is intended only to conform
to the style of the Pennsylvania Consolidated Statutes and is
not intended to change or affect the legislative intent,
judicial construction or administration and implementation of
Article XXVIII-D of The Administrative Code of 1929.
(3) Paragraph (2) does not apply to the addition of 3
Pa.C.S. § 9336(b), (b.1), (c), (d), (d.1) and (e).
Section 7. The following shall apply:
(1) The addition of 3 Pa.C.S. § 9336(b), (c), (d), (e)
(1) and (f) shall apply retroactively to February 23, 2016.
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(2) The addition of 3 Pa.C.S. § 9336(b.1), (d.1) and (e)
(2) shall apply January 1, 2017.
Section 8. This act shall take effect immediately.
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