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HB-5498, As Passed Senate, February 15, 2006

SUBSTITUTE FOR

HOUSE BILL NO. 5498

A bill to amend 1995 PA 279, entitled

"Horse racing law of 1995,"

by amending section 20 (MCL 431.320), as amended by 2000 PA 471.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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

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

such horses by residents of this state to provide for sufficient

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

licensed race meetings in this state; to promote the positive

growth and development of high quality horse racing and other

equine competitions in this state as a business and entertainment

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

the substantial agricultural and commercial benefits of the horse

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

intent and purpose of the legislature to further this policy by the

provisions of this act and annual appropriations to administer this

act and adequately fund the agriculture and equine industry

programs established by this section.

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

treasurer under this act shall be paid promptly into the state

treasury and placed in the Michigan agriculture equine industry

development fund created in subsection (3).

(3) The Michigan agriculture equine industry development fund

is created in the department of treasury. The Michigan agriculture

equine industry development fund shall be administered by the

director of the department of agriculture with the assistance and

advice of the racing commissioner.

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

equine industry development fund except as appropriated by the

legislature. Money appropriated by the legislature for the Michigan

agriculture equine industry development fund shall be expended by

the director of the department of agriculture with the advice and

assistance of the racing commissioner to provide funding for the

general fund as provided in subsection (17) and agriculture and

equine industry development programs as provided in subsections (5)

to ~~(12)~~ (11).

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

fair programs:

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

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

mutuel racetracks. Purse supplements for overnight races at fairs

paid pursuant to this subsection may not exceed the lowest purse

offered for overnight races of the same breed at any licensed race

meeting in this state during the previous year.

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

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

equipment rental during fairs; ground improvement; constructing,

maintaining, and repairing buildings; and making the racetrack more

suitable and safe for racing at fairs.

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

after January 1, 1992, and sired by a standardbred stallion

registered with the Michigan department of agriculture that was

leased or owned by a resident or residents of this state and that

did not serve a mare at a location outside of this state from

February 1 through July 31 of the calendar year in which the

conception occurred. A foal that is born on or after January 1,

2002 of a mare owned by a nonresident of this state and that is

conceived outside of this state from transported semen of a

stallion registered with the Michigan department of agriculture is

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

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

agent for receiving funds as the holding agent for stakes and

futurities is paid a transport fee as determined by the Michigan

department of agriculture and administered by the Michigan harness

horsemen's association.

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

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

promulgate rules establishing which premiums are eligible for

payment and a dollar limit for all eligible payments.

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

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

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

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

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

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

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

a standardbred stallion registered with the Michigan department of

agriculture that was leased or owned by a resident or residents of

this state and that did not serve a mare at a location outside of

this state from February 1 through July 31 of the calendar year in

which the conception occurred. To be eligible, each mare shall be

registered with the Michigan department of agriculture. A foal that

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

nonresident of this state and that is conceived outside of this

state from transported semen of a stallion registered with the

Michigan department of agriculture is eligible for Michigan tax-

supported races only if, in the year that the foal is conceived,

the Michigan department of agriculture's agent for receiving funds

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

fee as determined by the Michigan department of agriculture and

administered by the Michigan harness horsemen's association.

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

fairs to provide training and stabling facilities for standardbred

harness horses.

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

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

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

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

department of agriculture may allot funds for a photo finish system

and a mobile starting gate. The director of the department of

agriculture shall allot funds for the conducting of tests, the

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

other samples from horses, and the taking of blood alcohol tests on

drivers, jockeys, and starting gate employees, for those races

described in this subdivision. The department may require a driver,

jockey, or starting gate employee to submit to a breathalyzer test,

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

of alcohol or a controlled substance. ~~as defined in section 7104~~

~~of the public health code, 1978 PA 368, MCL 333.7104.~~ If the

results of a test show that a person has more than .05% of alcohol

in his or her blood, or has present in his or her body a controlled

substance, the person shall not be permitted to continue in his or

her duties on that race day and until he or she can produce, at his

or her own expense, a negative test result.

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

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

races.

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

simulcast horse races in Michigan shall be placed in a special

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

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

3-year-old Michigan sired standardbred horses at licensed harness

race meetings in this state. As used in this subdivision, "Michigan

sired standardbred horses" means standardbred horses conceived

after January 1, 1992 and sired by a standardbred stallion

registered with the Michigan department of agriculture that was

leased or owned by a resident or residents of this state and that

did not serve a mare at a location outside of this state from

February 1 through July 31 of the calendar year in which the

conception occurred. A foal that is born on or after January 1,

2002 of a mare owned by a nonresident of this state and that is

conceived outside of this state from transported semen of a

stallion registered with the Michigan department of agriculture is

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

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

agent for receiving funds as the holding agent for stakes and

futurities is paid a transport fee as determined by the Michigan

department of agriculture and administered by the Michigan harness

horsemen's association.

(6) The following amounts shall be paid to thoroughbred

programs:

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

to supplement the purses for races to be conducted exclusively for

Michigan bred horses.

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

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

horses.

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

thoroughbred horses for each time Michigan bred thoroughbred horses

win at a licensed race meeting in this state.

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

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

races.

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

simulcast horse races in Michigan shall be placed in a special

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

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

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

thoroughbred race meetings in this state and awards for owners of

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

"Michigan sired thoroughbred horses" means thoroughbred horses

sired by a stallion registered with the department of agriculture

that was leased or owned exclusively by a resident or residents of

this state and that did not serve a mare at a location outside of

this state during the calendar year in which the service occurred.

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

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

from horses and licensed persons and for the conducting of tests

described in section 16(4)(b).

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

programs:

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

exclusively for Michigan bred quarter horses.

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

registered quarter horse races offered by fairs.

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

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

or licensed race meeting in this state.

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

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

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

races described in this subsection and for the conducting of tests

described in section 16(4)(b).

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

means that term as defined in ~~R 285.817.1(j)~~ R 285.817.1 of the

Michigan administrative code. Each mare and stallion shall be

registered with the director of the department of agriculture.

(8) The following amounts shall be paid for Appaloosa

programs:

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

exclusively for Michigan bred Appaloosa horses.

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

registered Appaloosa horse races offered by fairs.

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

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

race meeting in this state.

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

revenue received from Appaloosa horse racing to pay for the

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

other samples from horses and licensed persons and the taking of

blood alcohol tests on jockeys for those races described in this

subsection and for the conducting of tests described in section

16(4)(b).

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

horse" means that term as defined in ~~R 285.817.1(k)~~ R 285.819.1

of the Michigan administrative code. Each mare and stallion shall

be registered with the director of the department of agriculture.

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

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

exclusively for Michigan bred Arabian horses.

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

registered Arabian horse races offered by fairs.

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

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

racetrack in this state.

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

horse racing to pay for the collection and laboratory analysis of

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

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

races described in this subsection and for the conducting of tests

described in section 16(4)(b).

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

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

285.822.1(i) of the Michigan administrative code. Each mare and

stallion shall be registered with the director of the department of

agriculture.

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

programs:

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

conducted exclusively for Michigan bred American paint horses.

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

registered American paint horse races offered by fairs.

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

paint horses for each time a Michigan bred American paint horse

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

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

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

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

races described in this subsection and for the conducting of tests

described in section 16(4)(b).

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

horse" means ~~that term as defined by the department of agriculture~~

~~by rules promulgated under this section~~ a Michigan-bred paint

horse as that term is defined in R 285.823.1 of the Michigan

administrative code.

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

industry research, planning, and development grant fund program:

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

persons affiliated with a university or governmental research

agency or institution or other private research entity approved by

the racing commissioner, which are beneficial to the horse racing

and breeding industry in this state.

(b) ~~Money appropriated and allotted to this fund shall not~~

~~revert to the general fund and shall be carried forward from year~~

~~to year until disbursed to fund grants for research projects~~

~~beneficial to the industry.~~ A sum to fund the development,

implementation, and administration of new programs that promote the

proper growth and development of the horse racing and breeding

industry in this state and other valuable equine-related commercial

and recreational activities in this state.

(12) ~~(c)~~ As used in ~~this~~ subsection (11), "equine

research" means the study, discovery and generation of accurate and

reliable information, findings, conclusions, and recommendations

that are useful or beneficial to the horse racing and breeding

industry in this state through improvement of the health of horses;

prevention of equine illness and disease, and performance-related

accidents and injuries; improvement of breeding technique and

racing performance; and compilation and study of valuable and

reliable statistical data regarding the size, organization, and

economics of the industry in this state; and strategic planning for

the effective promotion, growth, and development of the industry in

this state.

~~(12) A sum to fund the development, implementation, and~~

~~administration of new programs that promote the proper growth and~~

~~development of the horse racing and breeding industry in this state~~

~~and other valuable equine related commercial and recreational~~

~~activities in this state.~~

(13) Subject to subsection (17), money appropriated and

allotted to the Michigan agriculture equine industry development

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

forward from year to year until disbursed to fund grants for

research projects beneficial to the industry.

(14) ~~(13)~~ A percentage of the Michigan agriculture equine

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

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

act shall be deposited in the compulsive gaming prevention fund

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

PA 70, MCL 432.253.

(15) ~~(14)~~ The director of the department of agriculture

shall promulgate rules pursuant to the administrative procedures

act of 1969, 1969 PA 306, MCL 24.201 to 24.328, to implement this

section. The rules promulgated under this subsection shall do all

of the following:

(a) Prescribe the conditions under which the Michigan

agriculture equine industry development fund and related programs

described in subsections (1) to ~~(12)~~ (13) shall be funded.

(b) Establish conditions and penalties regarding the programs

described in subsections (5) to (12).

this section.

(16) ~~(15)~~ Funds under the control of the department of

agriculture in this section shall be disbursed under the rules

promulgated pursuant to subsection ~~(14)~~ (15). All funds under the

control of the department of agriculture approved for purse