Bill Text: MI SB0396 | 2021-2022 | 101st Legislature | Engrossed
Bill Title: Gaming: horse racing; pari-mutuel wagering on horse races run in the past; allow, and modify certain licensing procedures. Amends secs. 2, 12, 14, 17, 19, 20, 20a & 22 of 1995 PA 279 (MCL 431.302 et seq.) & repeals seq. 19b of 1995 PA 279 (MCL 431.319b).
Spectrum: Bipartisan Bill
Status: (Engrossed - Dead) 2021-11-02 - Referred To Committee On Regulatory Reform [SB0396 Detail]
Download: Michigan-2021-SB0396-Engrossed.html
Substitute For
SENATE BILL NO. 396
A bill to amend 1995 PA 279, entitled
"Horse racing law of 1995,"
by amending sections 2, 8, 9, 10, 12, 14, 17, 19, 20, 20a, and 22 (MCL 431.302, 431.308, 431.309, 431.310, 431.312, 431.314, 431.317, 431.319, 431.320, 431.320a, and 431.322), sections 2, 10, 12, and 14 as amended by 2016 PA 271 and sections 8, 9, 17, 19, 20, and 22 as amended and section 20a as added by 2019 PA 153, and by adding sections 15a and 16a; and to repeal acts and parts of acts.
the people of the state of michigan enact:
(a) "Affiliate" means, except as provided in section 16a, a person who, directly or indirectly, controls, is controlled by, or is under common control with; is in a partnership or joint venture relationship with; or is a co-shareholder of a corporation, co-member of a limited liability company, or co-partner in a limited liability partnership with a person who holds or applies for a race meeting or track license under this act. For purposes of this subdivision, a controlling interest is a pecuniary interest of more than 15%.
(b) "Breaks" means the cents over any multiple of 10 otherwise payable to a patron on a wager of $1.00.
(c) "Certified horsemen's organization" means an organization that is registered with the office of racing commissioner in a manner and form required by the racing commissioner and that can demonstrate all of the following:
(i) The organization's capacity to supply horses.
(ii) The organization's ability to assist a race meeting licensee in conducting the licensee's racing program.
(iii) The organization's ability to monitor and improve physical conditions and controls for individuals and horses participating at licensed race meetings.
(iv) The organization's ability to protect the financial interests of the individuals participating at licensed race meetings.
(d) "Commissioner" or "racing commissioner" means the executive director of the Michigan gaming control board appointed under section 4 of the Michigan gaming control Gaming Control and revenue act, Revenue Act, 1996 IL 1, MCL 432.204, who is ordered under Executive Reorganization Order No. 2009-31, MCL 324.99919, to perform all the functions and exercise the powers performed and exercised by the racing commissioner before that position was abolished.
(e) "Controlled substance" means that term as defined in section 7104 of the public health code, 1978 PA 368, MCL 333.7104.
(f) "Day of operation" means a period of 24 hours beginning at 12 noon and ending at 11:59 a.m. the following day.
(g) "Drug" means any of the following:
(i) A substance intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in humans or other animals.
(ii) A substance, other than food, intended to affect the structure or condition or any function of the body of humans or other animals.
(iii) A substance intended for use as a component of a substance specified in subparagraph (i) or (ii).
(h) "Fair" means a county, district, or community fair or a state fair.
(i) "Foreign substance" means a substance, or its metabolites, that does not exist naturally in an untreated horse or, if natural to an untreated horse, exists at an unnaturally high physiological concentration as a result of having been administered to the horse.
(j) "Full card simulcast" means an entire simulcast racing program of 1 or more race meeting licensees located in this state, or an entire simulcast racing program of 1 or more races simulcasted from 1 or more racetracks located outside of this state.
(k) "Horsemen's simulcast purse account" means an account maintained with a financial institution and managed by a designated agent as described in section 19 to receive and distribute money as provided in this act.
(l) "Member of the immediate family" means the spouse, child, parent, or sibling.
(m) "Net commission" means the amount determined under section 17(3), after first deducting from the licensee's statutory commission the applicable state tax on wagering due and payable under section 22 and the actual verified fee paid by the licensee to the sending host track to receive the simulcast signal.
(n) "Office of the racing commissioner" means the horse racing section of the horse racing, audit, and gaming technology division of the Michigan gaming control board created by section 4 of the Michigan gaming control Gaming Control and revenue act, Revenue Act, 1996 IL 1, MCL 432.204, which operates under the direction of the executive director of the Michigan gaming control board, to which Executive Reorganization Order No. 2009-31, MCL 324.99919, transferred all of the authority, powers, duties, functions, records, personnel, property, unexpended balances of appropriations, allocations, or other funds of the office of racing commissioner that previously existed under this act and that was abolished by that executive reorganization order.
(o) "Pari-mutuel" and "pari-mutuel wagering" mean the form or system of gambling in which the winner or winners divide the total amount of money bet, after deducting the net commission.a method of wagering in which 1 or more patrons wager on 1 or more live horse races, whether run in the past or to be run in the future. A wager must be placed in 1 or more wagering pools, and wagers on different races or sets of races may be pooled together. Patrons may establish odds or payouts, and winning patrons share in the amounts wagered, including any carryover amounts plus any amounts provided by a race meeting licensee less any deductions required. Pools may be paid out incrementally over time. Pari-mutuel and pari-mutuel wagering do not include wagering with a video lottery terminal that must be authorized under the McCauley-Traxler-Law-Bowman-McNeely lottery act, 1972 PA 239, MCL 432.1 to 432.47, or another law of this state.
(p) "Pari-mutuel racing supplier" means a person that the racing commissioner has identified under the rules promulgated by the racing commissioner as requiring a license to provide equipment, goods, or services that directly affect wagering, play, and results of pari-mutuel wagering on horse races run in the past.
(q) (p) "Person" means an individual, firm, partnership, corporation, association, or other legal entity.
(r) (q) "Purse pool" means an amount of money allocated or apportioned to pay prizes for horse races and from which payments may be made to certified horsemen's organizations as provided in this act.
(s) (r) "Standardbred" means a horse registered with the United States Trotting Association that races on designated gaits of pace or trot.
(t) (s) "Thoroughbred" means a thoroughbred, quarter, paint, Arabian, or other breed horse. Thoroughbred does not include a standardbred.
(u) (t) "Veterinarian" means an individual licensed to practice veterinary medicine under part 188 of the public health code, 1978 PA 368, MCL 333.18801 to 333.18838, or under a state or federal law applicable to the individual.
Sec. 8. (1) The racing commissioner may issue the following general classes of licenses:
(a) Occupational licenses issued to individuals participating in, involved in, or otherwise having to do with horse racing, pari-mutuel wagering, or simulcasting at a licensed race meeting in this state.
(b) Race meeting licenses issued annually for the succeeding year to persons to conduct live horse racing, simulcasting, and pari-mutuel wagering on the results of live and simulcast horse races at a licensed race meeting in this state under this act.
(c) Track licenses issued to persons to maintain or operate a racetrack at which 1 or more race meeting licensees may conduct licensed race meetings in this state.
(d) Third-party facilitator licenses issued to persons that have contracts with race meeting licensees to facilitate wagering on live and simulcast racing. The racing commissioner shall establish the terms and conditions and the appropriate fee for a third-party facilitator license subject to all of the following:
(i) The third-party facilitator must have a joint contract with all race meeting licensees and certified horsemen's organizations in this state.
(ii) The third-party facilitator must comply with consumer protections, as determined by the racing commissioner, to protect the public.
(iii) The third-party facilitator must cooperate in any audit necessary to comply with section 23.
(iv) The racing commissioner must have received from each race meeting licensee both a letter of intent and a certification that the race meeting licensee assumes and acknowledges responsibility for all conduct of its third-party facilitator.
(v) The third-party facilitator must comply with the conditions and suitability standards under section 10(1)(e) and (f) and rules promulgated under this act.
(vi) The license must terminate or expire when any of the following occur:
(A) On the date and at the time set by the racing commissioner in the license.
(B) When the third-party facilitator's joint contract expires or is terminated as to any race meeting licensee or certified horsemen's organization.
(C) If the license is suspended or revoked by the racing commissioner.
(2) The racing commissioner shall not issue a race meeting license to a person if the person is licensed to conduct a licensed race meeting at another licensed racetrack in this state and the person has a controlling interest in or co-ownership of the other licensed racetrack.
(e) Pari-mutuel racing supplier licenses to persons to provide equipment, goods, or services that directly affect wagering, play, and results of pari-mutuel wagering on horse races run in the past.
(2) Subject to subsection (1)(d), the racing commissioner may issue a third-party facilitator license to an internet sports betting platform provider that holds a sports betting supplier license issued under section 8 of the lawful sports betting act, 2019 PA 149, MCL 432.408. As used in this subsection, "internet sports betting platform provider" means that term as defined in section 3 of the lawful sports betting act, 2019 PA 149, MCL 432.403.
(3) If, after the effective date of the amendatory act that added this subsection, December 20, 2019, the racing commissioner issues a race meeting license to a person that has, after January 1, 2018, held a race meeting license but that will be conducting all or part of its race meeting under the new license at a different racetrack than under the previous licenses, the person shall not conduct pari-mutuel wagering at a licensed racetrack that is within 35 30 miles of another licensed racetrack at which 1 or more race meeting licensees may conduct pari-mutuel wagering.
(4) If, after the effective date of the amendatory act that added this subsection, December 20, 2019, the racing commissioner issues a race meeting license to a person that has not held a race meeting license before the effective date of the amendatory act that added this subsection, December 20, 2019, the person shall not conduct pari-mutuel wagering at a licensed racetrack that is within 50 40 miles of another licensed racetrack at which 1 or more race meeting licensees may conduct conducted pari-mutuel wagering in 2021.
Sec. 9. (1) The racing commissioner shall issue, without further application, a track license to any person holding a valid track license under former 1980 PA 327, and maintaining or operating a licensed horse racetrack as of January 9, 1996 at which wagering by pari-mutuel methods on the results of horse racing has been conducted by a race meeting licensee. After the effective date of the amendatory act that added this sentence, the racing commissioner may issue, without further application, a track license to a local unit of government that holds or has previously held a track license issued under this act.
(2) A track license, once issued, is valid only as long as the annual license fee is paid, or until the track license is voluntarily surrendered or is revoked as provided in this act or the rules promulgated under this act.
(3) An applicant for a track license shall submit an application that is in writing, that demonstrates to the racing commissioner that the applicant has satisfactory financial responsibility, that shows the location of the racetrack or of the proposed racetrack, and that is accompanied by substantially detailed plans and specifications for the racecourse, paddock, grandstand, stable barns, racetrack buildings, fences, electrical service and lighting, plumbing, parking, and other facilities and improvements. The application must include the name and address of the applicant, if the applicant is a corporation, the place of its incorporation, and any other information required by the rules promulgated under this act. On the applicant's filing of the application and payment of the license fee, the racing commissioner shall investigate the applicant and the racetrack or proposed racetrack as the racing commissioner considers necessary. If the racing commissioner determines that the applicant and the racetrack satisfy the requirements of this act and the rules promulgated under this act, the racing commissioner shall grant a license for the racetrack, designating in the license the county or other municipality in which the licensed racetrack will be or is located. If the racing commissioner determines that the applicant or the racetrack, or both, do not comply with this act and the rules promulgated under this act, the racing commissioner shall deny the license. However, the racing commissioner may grant a license to an applicant, including, but not limited to, an applicant that has previously applied and been denied, after the annual deadline for 2022, 2023, and 2024 if the racing commissioner determines that the applicant and the racetrack satisfy all of the other requirements of this act and the rules promulgated under this act. The action of the racing commissioner in denying a track license may be reviewed by the circuit court under section 631 of the revised judicature act of 1961, 1961 PA 236, MCL 600.631.
(4) A track license may be transferred to a new owner of a racetrack with the consent of the racing commissioner.
(5) After a track license is issued under this section, the racing commissioner may impose a fine or suspend or revoke the license if the holder of the license, after reasonable notice from the racing commissioner, does not make necessary improvements, additions, or corrections to the licensed premises, fixtures, or equipment as determined and required by the racing commissioner; if the holder of the license violates or is no longer in compliance with the requirements of this act or the rules promulgated under this act; or if the licensed premises are not used to conduct a licensed race meeting for 2 consecutive years. In addition to the suspension or revocation of the license, the racing commissioner may impose a fine or bring an action in circuit court seeking an order of the court requiring the licensee to make reasonable and necessary racetrack improvements or additions as determined by the commissioner if the licensee fails to make improvements or corrections that comply with the applicable construction code or local ordinances. In suspending or revoking a track license, the racing commissioner shall comply with the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328. The action of the racing commissioner is subject to appeal.
(6) The racing commissioner shall not issue a track license under this section if the new license would result in harmful competition among existing racetracks.
(7) The racing commissioner shall keep all information, records, interviews, reports, statements, memoranda, or other data supplied to or used by the racing commissioner in the course of the review or investigation of an application for a track license or renewal of a track license confidential. The materials described in this subsection are exempt from disclosure under section 13 of the freedom of information act, 1976 PA 442, MCL 15.243.
Sec. 10. (1) A person that desires to conduct a thoroughbred or standardbred race meeting, or a combination of these race meetings, with pari-mutuel wagering on the results of live and simulcast horse races under this act shall apply each year to the racing commissioner for a race meeting license in the manner and form required by the racing commissioner. The application must be filed with the racing commissioner before September 1 of the preceding year. The racing commissioner shall make an application, after it is filed, available for public inspection during regular business hours. The application must be in writing and give the name and address of the applicant, and, if the applicant is a corporation or partnership, state the place of the applicant's incorporation or partnership and the names and addresses of all corporate directors, officers, shareholders, and partners. The application must also do all of the following:
(a) Specify the licensed racetrack at which the proposed race meeting will be held.
(b) Specify whether the applicant requests or will request to conduct simulcasting at the proposed race meeting and, if so, demonstrate the applicant's ability to conduct simulcasting in accordance with this act.
(c) Specify the horse breed for which the applicant desires to conduct live racing at the proposed race meeting, and the days on which the applicant proposes to conduct live horse racing at the race meeting.
(d) Specify the time period during which the applicant requests to be licensed during the calendar year immediately following the date of application.
(e) Demonstrate to the racing commissioner that the applicant and all persons associated with the applicant who hold any beneficial or ownership interest in the business activities of the applicant or who have power or ability to influence or control the business decisions or actions of the applicant satisfy all of the following requirements:
(i) Are persons of good character, honesty, and integrity.
(ii) Possess sufficient financial resources and business ability and experience to conduct the proposed race meeting.
(iii) Do not pose a threat to the public interest of this state or to the security and integrity of horse racing or pari-mutuel wagering on the results of horse races in this state.
(f) Provide any other information required by the rules promulgated under this act or by the racing commissioner.
(2) Upon the filing of the application for a race meeting license, the racing commissioner shall conduct an investigation of the applicant and the application to determine whether the applicant, application, and proposed race meeting comply with the licensing requirements for a race meeting license under this act and the rules promulgated under this act.
(3) The racing commissioner may issue a race meeting license for 2022, 2023, or 2024 to a person who does not meet the annual deadline for submitting the application, including, but not limited to, an applicant that has previously applied and been denied, if the racing commissioner determines that the applicant, application, and proposed race meeting comply with all of the other licensing requirements for a race meeting under this act and the rules promulgated under this act.
(4) Each year the racing commissioner shall not issue more than 3 race meeting licenses. Subject to subsection (2), each year the racing commissioner shall issue a race meeting license to an applicant under subsection (1) that held a race meeting license in the preceding year.
(5) The racing commissioner shall keep all information, records, interviews, reports, statements, memoranda, or other data supplied to or used by the racing commissioner in the course of the review or investigation of an application for a race meeting license or renewal of a race meeting license confidential. The materials described in this subsection are exempt from disclosure under section 13 of the freedom of information act, 1976 PA 442, MCL 15.243.
Sec. 12. (1) An applicant for a license to conduct a thoroughbred race meeting shall apply to conduct not fewer than 30 days of live thoroughbred racing during its proposed race meeting. Except during the opening and closing week of a race meeting, the applicant shall apply to conduct live racing not fewer than 2 days per week, with not fewer than 8 live horse races programmed, and shall conduct live racing programs on the days allocated by the racing commissioner. The commissioner shall allocate not fewer than 10 days of live horse racing to a race meeting licensee with not fewer than 6 programmed live races per allocated day.
(2) An applicant for a license to conduct a standardbred race meeting shall apply to conduct not fewer than 30 days of live standardbred harness horse racing during its proposed race meeting. Except during the opening and closing week of a race meeting, the applicant shall apply to conduct live horse racing not fewer than 2 days per week, with not fewer than 8 live horse races programmed, and shall conduct live racing programs on the days awarded. The commissioner shall allocate not fewer than 10 days of live horse racing to a race meeting licensee with not fewer than 6 programmed live races per allocated day.
(3) If a race meeting licensee is unable to program and conduct 8 live horse races on a racing date awarded to the licensee because there are fewer than 5 entries in a race, the licensee shall not conduct any simulcasting or pari-mutuel wagering on that day without the written consent of the certified horsemen's organization with which it has a contract.
(4) If a race meeting licensee is unable to conduct racing on a live racing date awarded to the licensee or fewer than 8 live horse races on an awarded live racing date because of a labor dispute, fire, adverse weather conditions, or other causes beyond the race meeting licensee's control, the race meeting licensee is considered to have conducted those races or that race date for purposes of this act and is not precluded from conducting any simulcasts or pari-mutuel wagering because of the licensee's inability to conduct those live races or that race date.
(5) Intertrack simulcast races that a race meeting licensee contracts to receive from other racetracks that are canceled for any of the reasons described in subsection (4) are offered to the public for purposes of this act.
(6) If an entire race meeting or the balance of a race meeting and racing dates awarded to a licensee cannot be raced because of an act of God or significant physical damage to the licensed racetrack at which the race meeting was licensed to be conducted caused by fire or some other catastrophe, the racing commissioner may transfer those dates to another race meeting licensee upon application of the substitute licensee if the substitute licensee satisfies the requirements for licensure under this act and demonstrates that it has or will have a legal or contractual right to the use of a different licensed racetrack facility on the racing dates in question, and all race meeting licensees that will be conducting live racing on those dates within 50 miles of the substitute racetrack consent to the transfer.
(7) Notwithstanding anything in this act to the contrary, if the racing commissioner determines that 1 or more of the conditions listed in subsection (8) apply and the contracted certified horsemen's organization is in agreement, the racing commissioner may amend an existing race meeting license and simulcast permit to allow the licensee to continue simulcasting or conducting pari-mutuel wagering during the remaining period of the race meeting license. An amended license under this section may be issued by the racing commissioner at any time, including at the time of the initial issuance of the race meeting license for the upcoming year during which it is valid.
(8) The racing commissioner may issue an order amending a race meeting license under subsection (7) if he or she determines that the licensee is capable of conducting simulcast horse racing or pari-mutuel wagering in accordance with this act and that 1 or more of the following conditions exist:
(a) There is inadequate horse supply for the licensee to conduct a live race meeting of at least 10 days with 6 races per day.
(b) There is inadequate funding of live racing purses to support the licensee's conducting of a live race meeting of at least 10 days with 6 races per day.
(c) There is no certified horsemen's organization operating in this state.
(9) In order to obtain an amended license issued under subsection (7) and satisfy the live racing requirements of this act, the licensee must have a written contract with a certified horsemen's organization to pay a percentage of its net commission from simulcasting or from conducting pari-mutuel wagering to the live racing purse pool at another racetrack licensed under this act during the period when the amended license issued under subsection (7) is in effect. Unless otherwise provided in the written contract between the licensee and the certified horsemen's organization, the payment must be not less than 25% of net commission from simulcasting or from conducting pari-mutuel wagering if only 1 certified horsemen's organization has a contract for live race days in this state for the calendar year. If both certified horsemen's organizations have a contract for live race dates in this state for the calendar year, the payment must be not more than 40% of the net commission from simulcasting or from conducting pari-mutuel wagering.
(10) Subsections (7) to (9) apply only to amendments to a race meeting license for the purpose of allowing simulcast-only operations or pari-mutuel wagering-only and are not limitations on or requirements for other race meeting license amendments the racing commissioner may approve or deny.
(11) Notwithstanding anything in this act to the contrary, if a race meeting licensee and the certified horsemen's organization with which the licensee has a contract jointly request that the licensee be allowed to conduct a live race meeting with fewer than 8 races per day, the racing commissioner shall approve the request and issue an order amending the license accordingly.
Sec. 14. (1) Before November 1 of the year preceding the year for which applications are made, the racing commissioner shall grant or deny each application for a race meeting license, allocate or deny the dates, for which application has been made, on which pari-mutuel wagering on live races may be conducted at each licensed race meeting in this state, and shall also determine whether the applicant may simulcast under section 18 during the calendar year for which the license is issued. The racing commissioner may grant a race meeting license for any time period up to 1 year during which the licensee may conduct live and simulcast horse races with pari-mutuel wagering on the results of the races.
(2) Subject to section 12(4), all simulcasting or pari-mutuel wagering authorized by the racing commissioner must be conditioned on the holder of the license conducting not fewer than 8 live horse races on each live racing date allocated in the holder's race meeting license, unless this requirement is waived in writing by both the racing commissioner and the certified horsemen's organization with which the licensee has contracted.
(3) The racing commissioner shall not issue a race meeting license to an organization organized for a charitable purpose or organized for the purpose of distributing its profits or income to charitable organizations.
(4) Except as provided in section 12(4), (5), and (6), if after the issuance of a race meeting license the racing commissioner determines on further investigation that the holder of a race meeting license has not met, or will be unable to meet, the requirements of the license, the racing commissioner may impose a fine or suspend or revoke the race meeting license, or both, for all or part of the remainder of the time period for which the license was granted. Before making the required determination to impose a fine or suspend or revoke a race meeting license under this subsection, the racing commissioner shall consider whether the race meeting licensee's inability or failure to meet the requirements of its license is due to a cause beyond the control of the race meeting licensee.
(5) Any action taken by the racing commissioner under subsection (4) becomes effective 10 days after the holder of the race meeting license receives written notice unless the commissioner finds that the public health, safety, or welfare requires emergency action and immediate effect of the commissioner's order.
(6) A denial of a race meeting license under subsection (3) may be appealed to the circuit court for judicial review under section 631 of the revised judicature act of 1961, 1961 PA 236, MCL 600.631. A suspension or revocation of a race meeting license may be appealed under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
(7) Each applicant issued a race meeting license shall maintain an interest bearing account used exclusively to deposit all money due to horsemen's purse pools under this act. All money due to this account must be deposited within a reasonable time after receipt by the race meeting licensee. The name of the depository and the identification number of the account must be designated in each race meeting license application and all interest earned by the account must be credited to the purse pool and deposited in the account.
Sec. 15a. (1) A race meeting licensee shall provide to the racing commissioner a monthly report regarding its operation of pari-mutuel wagering on horse races run in the past under this act to include all of the following:
(a) Total amount of wagers received.
(b) Payouts.
(c) Free play redeemed.
(d) Deductions.
(e) Adjusted gross receipts, as defined in section 22.
(2) The racing commissioner shall provide the report under subsection (1) to the department of treasury, the state budget office on request, and the house and senate fiscal agencies on request. In addition, the department of treasury and the state budget office may request additional information from the race meeting licensee that is directly related to, and for the purposes of verification of, the financial data provided under subsection (1)(a) and (b), which must be provided not later than 60 days after the request. Any information provided under this section is confidential and proprietary and is exempt from disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.
Sec. 16a. (1) The racing commissioner may issue a pari-mutuel racing supplier license to a pari-mutuel racing supplier. A person that is not licensed under this section shall not provide equipment, goods, software, or services as a pari-mutuel racing supplier to a race meeting licensee.
(2) On application by an interested person, the racing commissioner may issue a provisional pari-mutuel racing supplier license to an applicant for a pari-mutuel racing supplier license. A provisional license issued under this subsection allows the applicant for the pari-mutuel racing supplier license to conduct business with a race meeting licensee before the pari-mutuel racing supplier license is issued to the applicant. A provisional license issued under this subsection expires on the date provided by the racing commissioner.
(3) A pari-mutuel racing supplier license issued under subsection (1) is valid for the 2-year period after the date of issuance. A pari-mutuel racing supplier license is renewable after the initial 2-year period for additional 1-year periods if the racing commissioner determines that the pari-mutuel racing supplier continues to meet eligibility and suitability standards.
(4) A person may apply to the racing commissioner for a pari-mutuel racing supplier license as provided in this act and the rules promulgated under this act.
(5) Except as otherwise provided in this section, an application under this section must be made on forms provided by the racing commissioner and include the information required by the racing commissioner.
(6) An application under this section must be accompanied by a nonrefundable application fee in an amount to be determined by the racing commissioner, not to exceed $5,000.00. The racing commissioner may assess additional fees for the cost related to the licensure investigation.
(7) The racing commissioner shall keep all information, records, interviews, reports, statements, memoranda, or other data supplied to or used by the racing commissioner in the course of the review or investigation of an application for a pari-mutuel racing supplier license or renewal of a pari-mutuel racing supplier license confidential. The materials described in this subsection are exempt from disclosure under section 13 of the freedom of information act, 1976 PA 442, MCL 15.243.
(8) A pari-mutuel racing supplier shall pay a license fee of $5,000.00 to the racing commissioner at the time an initial pari-mutuel racing supplier license is issued to the pari-mutuel racing supplier and $2,500.00 each year after the initial license is issued.
(9) After deducting the actual costs of administering this section, the racing commissioner shall deposit any remaining amount from application and license fees paid under this section into the Michigan agriculture equine industry development fund created under section 20.
(10) An institutional investor that holds for investment purposes only less than 25% of the equity of an applicant under this section is exempt from the licensure requirements of this act.
(11) The racing commissioner shall promulgate rules under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, to provide for equipment to conduct wagering on the results of live horse races run in the past. A pari-mutuel racing supplier shall not sell, lease, or otherwise provide equipment to a race meeting licensee that does not comply with the requirements of rules promulgated under this subsection.
(12) As used in this section:
(a) "Affiliate" includes a partnership, a joint venture, a co-shareholder of a corporation, a co-member of a limited liability company, or a co-partner in a limited liability partnership that has more than a 5% ownership interest in the applicant and is not involved in the pari-mutuel racing supplier operation.
(b) "Applicant" includes an affiliate, director, or managerial employee of the applicant that performs the function of principal executive officer, principal operations officer, or principal accounting officer, or a person who holds more than 5% ownership interest in the applicant.
(c) "Institutional investor" means a person that is any of the following:
(i) A retirement fund administered by a public agency for the exclusive benefit of federal, state, or local public employees.
(ii) An employee benefit plan or pension fund that is subject to the employee retirement income security act of 1974, Public Law 93-406.
(iii) An investment company registered under the investment company act of 1940, 15 USC 80a-1 to 80a-64.
(iv) A collective investment trust organized by a bank under 12 CFR part 9.
(v) A closed end investment trust.
(vi) A chartered or licensed life insurance company or property and casualty insurance company.
(vii) A chartered or licensed financial institution.
(viii) An investment advisor registered under the investment advisers act of 1940, 15 USC 80b-1 to 80b-21.
(ix) Any other person that the racing commissioner determines through rulemaking should be considered to be an institutional investor for reasons consistent with this act.
Sec. 17. (1) The pari-mutuel system of wagering on the results of horse races as permitted by this act is not unlawful. All forms of pari-mutuel wagering, including, but not limited to, pari-mutuel wagering on horse races run in the past, must be conducted under a race meeting license preapproved by the racing commissioner by rule or written order of the commissioner.
(2) If pari-mutuel wagering is used at a race meeting, a totalisator or other device that is equal in accuracy and clearness to a totalisator and approved by the racing commissioner must be used. The odds display of the totalisator or other device must be placed in full view of the patrons.
(3) Subject to section 18(3), each holder of a race meeting license shall retain as his or her commission on all forms of straight wagering 17% of all money wagered involving straight wagering on the results of live and simulcast horse races conducted at the licensee's race meetings. Subject to section 18(3), each holder of a race meeting license shall retain as his or her commission on all forms of multiple wagering without the written permission of the racing commissioner not more than 28% and with the written permission of the racing commissioner not more than 35% of all money wagered involving any form of multiple wagering on the results of live and simulcast horse races conducted at the licensee's race meeting. Except as otherwise provided by contract, 50% of all commissions from wagering on the results of live racing at the racetrack where the live racing was conducted must be paid to the horsemen's purse pool at the racetrack where the live racing was conducted. As used in this subsection:
(a) "Straight wagering" means a wager made on the finishing position of a single specified horse in a single specified race.
(b) "Multiple wagering" means a wager made on the finishing positions of more than 1 horse in a specified race or the finishing positions of 1 or more horses in more than 1 specified race.
(4) All breaks must be retained by the race meeting licensee and paid directly to the city or township in which the racetrack is located as a fee for services provided under section 21. This subsection does not apply to breaks on wagers on the outcomes of live horse races run in the past.
(5) Payoff prices of tickets of a higher denomination must be calculated as even multiples of the payoff price for a $1.00 wager. Each holder of a race meeting license shall distribute to the persons holding winning tickets, as a minimum, a sum not less than $1.10 calculated on the basis of each $1.00 deposited in a pool, except that each race meeting licensee may distribute a sum of not less than $1.05 to persons holding winning tickets for each $1.00 deposited in a minus pool. As used in this subsection, "minus pool" means any win, place, or show pool in which the payout would exceed the total value of the pool.
(6) A holder of a race meeting license shall not knowingly permit a person less than 18 years of age to be a patron of the pari-mutuel wagering conducted or supervised by the holder.
(7) Any act or transaction relative to pari-mutuel
wagering on the results of live or simulcast horse races may be conducted
by a race meeting licensee under this act for the race meeting licensee to must comply with the auditing requirements of
section 23. A person shall not provide messenger service for the placing of a
bet for another person who is not a patron. However, this subsection does not
prevent simulcasting or intertrack or interstate common pool wagering inside or
outside this state as permitted by this act or the rules promulgated under this
act.
(8) Any form of pari-mutuel wagering on the results of live or simulcast horse races must only be conducted or operated by a race meeting licensee, which may use its contracted licensed third-party facilitators, as determined and approved by the racing commissioner. The race meeting licensee is responsible for all conduct of its third-party facilitators. All wagers must be placed by persons within this state and may be placed only in person at a licensed race meeting or electronically through a licensed third-party facilitator. A race meeting licensee or licensed third-party facilitator A licensed third-party facilitator that is not an internet sports betting platform provider that holds a sports betting supplier license issued under section 8 of the lawful sports betting act, 2019 PA 149, MCL 432.308, or a race meeting licensee shall not solicit, offer, accept, or process wagers on or in connection with other gaming or gambling products, including, but not limited to, slot machines and casino table games. As used in this subsection, "internet sports betting platform provider" means that term as defined in section 3 of the lawful sports betting act, 2019 PA 149, MCL 432.403.
(9) A person that does not hold a race meeting license or a third-party facilitator license that solicits or accepts wagers on the results of live or simulcast horse races from individuals in this state is guilty of a felony punishable by imprisonment for not more than 5 years or a fine of not more than $10,000.00, or both. Each act of solicitation or wager that is accepted in violation of this section is a separate offense.
(10) Only a race meeting licensee or its contracted licensed third-party facilitator may process, accept, offer, or solicit wagers on the results of live or simulcast horse races as determined and approved by the racing commissioner.
(11) All of the following apply to pari-mutuel wagering on the outcome of a live horse race run in the past:
(a) The racing commissioner shall not allow a holder of a race meeting license to conduct pari-mutuel wagering on the outcome of live horse races run in the past at a licensed racetrack unless the legislative body for the local unit of government in which the licensed racetrack is located has adopted an ordinance authorizing the activities surrounding the conduct of pari-mutuel wagering on the outcome of live horse races run in the past at the licensed racetrack.
(b) The racing commissioner shall not allow a holder of a race meeting license to conduct pari-mutuel wagering on the outcome of live horse races run in the past at a licensed racetrack located in a county that is specifically designated by name as part of a competitive market area in a tribal compact as of January 1, 2022 or, if the tribal compact does not provide for a competitive market area, located within 40 miles of a building in which the tribe conducts class III gaming under a tribal compact as of January 1, 2022, unless the tribe and holder of the race meeting license have entered into a contract that provides for the use of these wagers.
(c) The holder of the race meeting license shall not allow more than 1,500 terminals to be used to place pari-mutuel wagers on the outcome of live horse races run in the past. The terminals must be located at the licensed racetrack where the license holder conducts its race meeting.
(d) A winning payout placed on the outcome of a live horse race or races run in the past must not be less than the amount wagered.
(e) The race meeting licensee may give free play allowance credits. The annual value of free play allowance credits must not exceed 15% of the total amount wagered after the payout of prizes. As used in this subdivision, "free play allowance credits" means a specific dollar amount that may be used by a player to place a pari-mutuel wager on the result of a horse race run in the past without paying any other consideration.
(f) The racing commissioner shall allow the race meeting licensee to conduct wagering on the outcome of a live horse race run in the past during any hours that the race meeting licensee is allowed to conduct wagering on simulcast horse races.
(g) The race meeting licensee shall conduct wagering on the outcome of a live horse race run in the past only using equipment purchased or leased from a licensed pari-mutuel racing supplier.
(h) The race meeting licensee shall allow the racing commissioner, the employees and agents of the racing commissioner, and employees and agents of the department of state police and the department of attorney general to investigate and inspect the equipment by which the race meeting licensee conducts wagering on the outcome of live horse races run in the past.
(i) The racing commissioner may seize equipment by which the race meeting licensee conducts wagering on the outcome of live horse races run in the past at any time if the racing commissioner determines the equipment violates requirements of this act or rules promulgated under this act.
(12) (11) As used in this section: , "act
(a) "Act or transaction relative to pari-mutuel wagering on the results of live or simulcast horse races" means those steps taken by a race meeting licensee to accept a wager and process it within the ordinary course of its business and in accordance with this act.
(b) "Terminal" means a self-service totalisator machine or other mechanical equipment used by a patron to place a wager on a live horse race, whether run in the past or to be run in the future.
Sec. 19. (1) Subject to subsection (2), a race meeting licensee shall pay an amount equal to not less than 25% and not more than 40% of the net commission generated at the licensee's race meeting to a site-specific horsemen's purse account. Money paid into a horsemen's purse account under this act must be deposited in a depository designated by the participating certified horsemen's organizations and distributed by their designated agent as follows:
(a) For purses for live horse races at a licensed race meeting in this state.
(b) Each year, all certified horsemen's organizations that participate in a live race meeting may receive an amount approved by order of the racing commissioner to use for general expenses. Beginning on January 1 and ending on December 31 of each year, the certified horsemen's organization is entitled to not less than 5% of the site-specific horsemen's purse account as ordered by the racing commissioner.
(2) A race meeting licensee shall pay the net commission
generated from wagering on live and simulcast racing through the race meeting
licensee's third-party facilitator to the pari-mutuel horse racing disbursement
account. On the first day of each month after the effective date of the
amendatory act that added this subsection, Beginning
January 1, 2020, and on the first day of each month after that date, money
paid into the pari-mutuel horse racing disbursement account must be distributed
as follows:
(a) Fifty percent to be divided equally to each certified horsemen's organization.
(b) Fifty percent to be divided equally to each track
race meeting licensee.
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 this state. It is the intent 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) Except for money generated from the tax on wagers processed through licensed third-party facilitators operating under this act under section 22, and the tax on pari-mutuel wagering under section 22(3), money received by the racing commissioner and the state treasurer under this act must 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 must be administered by the director of the department of agriculture and rural development with the assistance and advice of the racing commissioner.
(4) Money must not be expended from the Michigan agriculture equine industry development fund except as appropriated by the legislature. Money appropriated by the legislature from the Michigan agriculture equine industry development fund must be expended by the director of the department of agriculture and rural development with the advice and assistance of the racing commissioner to provide funding for agriculture and equine industry development programs as provided in subsections (5) to (11).
(5) The following amounts must be paid to standardbred and fair programs:
(a) A sum not to exceed 75% 85% of the purses for standardbred harness horse races offered by fairs and races at licensed pari-mutuel racetracks. Purse supplements paid under this subdivision for overnight races at fairs for which Michigan sired, Michigan bred, or Michigan owned harness horses are eligible must be $1,000.00. However, if the average purse offered for maiden overnight races of the same breed at any licensed race meeting in this state during the previous year as calculated by the department of agriculture and rural development was less than $1,000.00, purse supplements for overnight races at fairs paid under this subdivision must not exceed that average purse.
(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.
(c) A sum to be allotted From the amount appropriated from the fund for purses and supplements – fairs/licensed tracks:
(i) 30% for paying purses and other associated costs for overnight races at fairs for which Michigan sired, Michigan bred, or Michigan owned harness horses are eligible.
(ii) 70% for paying special purses and other associated costs at fairs on 2-year-old and 3-year-old standardbred harness horses conceived after January 1, 1992, that is Michigan bred, or that is sired by a standardbred stallion registered with the department of agriculture and rural development, 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 department of agriculture and rural development is eligible for Michigan tax-supported races only if, in the year that the foal is conceived, the department of agriculture and rural development's agent for receiving funds as the holding agent for stakes and futurities is paid a transport fee as determined by the department of agriculture and rural development and administered by the Michigan Harness Horsemen's Association.
(d) A sum to pay not more than 75% 85% of an eligible cash premium paid by a fair or exposition. The commission of agriculture and rural development 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% 20% 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 department of agriculture and rural development 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 must be registered with the department of agriculture and rural development. 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 department of agriculture and rural development is eligible for Michigan tax-supported races only if, in the year that the foal is conceived, the department of agriculture and rural development's agent for receiving funds as the holding agent for stakes and futurities is paid a transport fee as determined by the department of agriculture and rural development and administered by the Michigan Harness Horsemen's Association.
(f) A sum not to exceed $4,000.00 $12,000.00 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 must be hired by the fair's administrative body with the advice and approval of the racing commissioner. The director of the department of agriculture and rural development may allot funds for a photo finish system and a mobile starting gate. The director of the department of agriculture and rural development 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. 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 is not 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% 0.5% of all money wagered on live and simulcast horse races in this state must be placed in a special standardbred sire stakes fund each year, 100% of which must 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 department of agriculture and rural development 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 department of agriculture and rural development is eligible for Michigan tax-supported races only if, in the year that the foal is conceived, the department of agriculture and rural development's agent for receiving funds as the holding agent for stakes and futurities is paid a transport fee as determined by the department of agriculture and rural development and administered by the Michigan Harness Horsemen's Association.
(6) The following amounts must 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.
(c) A sum to pay breeders' awards in an amount not to exceed 10% 20% 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% 0.5% of all money wagered on live and simulcast horse races in this state must be placed in a special thoroughbred sire stakes fund each year. Money placed in the special thoroughbred sire stakes fund and remaining in the fund at the close of the fiscal year does not lapse to the Michigan agriculture equine industry development fund or to the general fund of this state, but remains in the special thoroughbred sire stakes fund. However, money that has been in the special thoroughbred sire stakes fund for 5 or more state fiscal years after the state fiscal year in which the amendatory act that added subparagraph (i) was enacted lapses to the Michigan agriculture equine industry development fund at the end of the fifth state fiscal year if a thoroughbred race meeting has not been licensed and conducted in this state before the end of the fifth state fiscal year. Money in the special thoroughbred sire stakes fund must be used as follows:
(i) Unless subparagraph (ii) applies, the money must be used as follows:
(A) Fifty percent 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.
(B) Fifty percent to provide awards to Michigan sired thoroughbred horses that run races at thoroughbred race meetings regardless of where the race meeting is held.
(ii) If a thoroughbred race meeting has not been licensed and conducted in this state before the end of the fifth state fiscal year after the fiscal year in which the amendatory act that added subparagraph (i) was enacted into law, 100% of which must 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 and rural development 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.
(7) The following amounts must 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.
(c) A sum to pay breeders' awards in an amount not to exceed 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) As used in this subsection, "Michigan bred quarter horse" means Michigan bred quarter horse as that term is defined in R 285.817.1 of the Michigan Administrative Code. Each mare and stallion must be registered with the director of the department of agriculture and rural development.
(8) The following amounts must 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.
(c) A sum to pay breeders' awards in an amount not to exceed 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) As used in this subsection, "Michigan bred Appaloosa horse" means a Michigan bred Appaloosa horse as that term is defined in R 285.819.1 of the Michigan Administrative Code. Each mare and stallion must be registered with the director of the department of agriculture and rural development.
(9) The following amounts must 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.
(c) A sum to pay breeders' awards in an amount not to exceed 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) As used in this subsection, "Michigan bred Arabian horse" means a Michigan bred horse as that term 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 and rural development.
(10) The following sums must be paid for American paint horse programs:
(a) A sum to supplement the 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.
(c) A sum to pay breeders' awards in an amount not to exceed 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) As used in this subsection, "Michigan bred American paint horse" means a Michigan bred paint horse as that term is defined in R 285.823.1 of the Michigan Administrative Code.
(7) (11) The following amounts must 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) 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.
(8) (12) As used in subsection (11), (7), "equine industry 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.
(9) (13) An amount must be allotted annually to the racing commissioner that is sufficient to pay for the collection and laboratory analysis of urine, saliva, blood, and other samples from horses and licensed individuals involved in horse racing on which pari-mutuel wagers are made and for the conducting of tests described in section 16(4).
(10) (14) Money appropriated and allotted to the Michigan agriculture equine industry development fund must not revert to the general fund and must be carried forward from year to year until disbursed to fund grants for research projects beneficial to the industry.
(11) (15) A percentage of the Michigan agriculture equine industry development fund that is equal to 1/15 of 1% of the gross wagers made each year in each of the racetracks licensed under this act must be deposited in the compulsive gaming prevention fund created in section 3 of the compulsive gaming prevention act, 1997 PA 70, MCL 432.253.
(12) (16) The director of the department of agriculture and rural development 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 must 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 (14) (10) must be funded.
(b) Establish conditions and penalties regarding the programs described in subsections (5) to (12).(8).
(c) Develop and maintain informational programs related to this section.
(13) (17) Funds under the control of the department of agriculture and rural development in this section must be disbursed under the rules promulgated under subsection (16). (12). All funds under the control of the department of agriculture and rural development approved for purse supplements and breeders' awards must be paid by the state treasurer not later than 45 days from the date of the race.
(14) (18) Purses paid under this section must be based on actual purses awarded in a race. If the actual purses awarded are less than the purse supplement amount requested by a fair or licensed pari-mutuel racetrack at the time they applied to the department of agriculture and rural development for the purse supplement, the purse supplement paid must be the lesser amount.
(15) (19) If the amount allocated to the Michigan agriculture equine industry development fund under this act or any other source exceeds $8,000,000.00 the maximum allocation amount in a fiscal year, the amount in excess of $8,000,000.00 the maximum allocation amount must be allocated to the pari-mutuel horse racing disbursement account under section 19. As used in this subsection, "maximum allocation amount" means the sum of the following in 1 fiscal year:
(a) $10,000,000.00. The state treasurer shall adjust the figure described in this subdivision by an amount determined by the state treasurer at the end of each calendar year to reflect the cumulative annual percentage change in the Consumer Price Index. However, the figure described in this subdivision must not exceed $13,000,000.00. As used in this subdivision, "Consumer Price Index" means the most comprehensive index of consumer prices available for this state from the Bureau of Labor Statistics of the United States Department of Labor.
(b) $2,000,000.00 for each race meeting license issued under that act after the effective date of the amendatory act this added this subdivision.
Sec. 20a. (1) The tax imposed under section 22 on wagers processed through licensed third-party facilitators operating under this act must be allocated as follows:
(a) Ninety percent to be deposited in the Michigan agriculture and equine industry development fund created under section 20.
(b) Ten percent to the horse racing advisory commission created in section 6a to be expended as provided in section 6a(12)(d).
(2) The tax imposed on pari-mutuel wagering under section 22(3) must be allocated as follows:
(a) Forty-five percent to the state school aid fund created under section 11 of article IX of the state constitution of 1963.
(b) Thirteen percent to the city or township in which the racetrack at which the race meeting is held is located.
(c) Twenty-five percent to the Michigan agriculture equine industry development fund created under section 20.
(d) Thirteen percent to a city in this state with a population of more than 450,000.
(e) Four percent to the horse racing advisory commission created under section 6a to be expended as provided in section 6a(12)(d).
Sec. 22. (1) A licensed racetrack shall pay a license fee to the racing commissioner of $1,000.00 $50,000.00 annually.
(2) Each holder of a race meeting license shall pay to the state treasurer, from the holder's commission, as follows:
(a) A tax in the amount of 3.5% of money wagered on live racing and interstate and intertrack simulcast races conducted at the holder's licensed race meetings.
(b) A tax in the amount of 1% of wagers processed through licensed third-party facilitators operating under this act.
(3) By eliminating the pari-mutuel wagering tax on live racing programs and altering the calculation of the tax on simulcast horse racing, it is not the intent of the legislature to diminish the funding and appropriations for the Michigan agriculture equine industry development fund and related programs described in section 20. The pari-mutuel tax alteration effected by this section is intended to generally allow for the improvement of the pari-mutuel horse racing and breeding industry in this state by increasing purses at licensed race meetings and making additional pari-mutuel revenues available for capital improvements at licensed racetracks in this state.
(3) A race meeting licensee that conducts pari-mutuel wagering on the results of live horse races that are run in the past shall pay to the state treasurer a tax in the amount of 19% of the adjusted gross receipts in a manner and time as required by the racing commissioner. As used in this subsection:
(a) "Adjusted gross receipts" means the gross receipts less winnings paid on pari-mutuel wagers on the results of live horse races that are run in the past.
(b) "Gross receipts" means the total of all sums including valid or invalid checks, currency, tokens, coupons, vouchers, or instruments of monetary value, and free play allowance credits given under section 17, whether collected or uncollected, received by a race meeting licensee from pari-mutuel wagering on the results of live horse races that are run in the past, including all entry fees assessed for tournaments or other contests, less a deduction for uncollectible receivables not to exceed the uncollectible amounts owed as a result of wagers placed on pari-mutuel wagering on the result of live horse races that are run in the past or 4% of the total gross receipts, whichever is less.
Enacting section 1. Section 19b of the horse racing law of 1995, 1995 PA 279, MCL 431.319b, is repealed.
