Bill Text: NJ A327 | 2022-2023 | Regular Session | Introduced
Bill Title: Requires New Jersey Racing Commission to adopt procedures to enforce internal controls; requires annual audit.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Engrossed - Dead) 2022-05-12 - Received in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee [A327 Detail]
Download: New_Jersey-2022-A327-Introduced.html
STATE OF NEW JERSEY
220th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2022 SESSION
Sponsored by:
Assemblyman RONALD S. DANCER
District 12 (Burlington, Middlesex, Monmouth and Ocean)
Assemblyman RALPH R. CAPUTO
District 28 (Essex)
Co-Sponsored by:
Assemblywoman Murphy
SYNOPSIS
Requires New Jersey Racing Commission to adopt procedures to enforce internal controls; requires annual audit.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning the internal controls of the New Jersey Racing Commission, amending P.L.2001, c.199, and amending and supplementing P.L.1940, c.17 (C.5:5-22 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 14 of P.L.1940, c.17 (C.5:5-34) is amended to read as follows:
14. No person shall be licensed in any capacity whatsoever by the Racing Commission or employed in any capacity whatsoever at any place, track or enclosure where a horse race meeting is permitted who has been convicted of a crime involving moral turpitude. Each person seeking licensure or employment shall submit to the executive director the person's name, address and written consent for a criminal history record background check to be performed. The applicant shall submit to being fingerprinted in accordance with applicable State and federal laws, rules and regulations. The commission shall implement monitoring to ensure licensees' fingerprints are updated and licensees are notified of renewals on a timely basis. The commission shall notify a licensee in writing that their fingerprints are due for renewal when the licensee files an application to renew their license for that calendar year. The commission shall suspend the racing licenses of all individuals who fail to update their fingerprints prior to expiration. The licensee shall not be permitted to participate or be re-licensed until fingerprints are updated by the commission in accordance with all applicable State and federal laws, rules and regulations, and proof of renewal is on file with the Racing Commission and recorded in the Racing Commission's system. The executive director is authorized to receive criminal history record information from the State Bureau of Identification in the Division of State Police and the Federal Bureau of Investigation consistent with applicable State and federal laws, rules and regulations. Upon receipt of such notification, the executive director shall make a determination regarding the person's eligibility for licensure or employment. The applicant shall bear the cost for the criminal history record background check, including all costs of administering and processing the check. The Division of State Police shall promptly notify the executive director in the event a current or prospective licensee or employee, who was the subject of a criminal history record background check pursuant to this section, is convicted of a crime or offense in this State after the date the background check was performed.
(cf: P.L.2003, c.199, s.2)
2. Section 17 of P.L.1940, c.17 (C.5:5-37) is amended to read as follows:
17. a. The commission shall appoint a State steward and two or more associate State stewards in the case of a running race meeting and a State steward, presiding judge, and two or more associate judges in the case of a harness race meeting, which stewards and judges shall meet qualifications and standards established by the commission in rules and regulations promulgated pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.); and a State veterinarian and such associate State veterinarians as the commission deems necessary, who shall be licensed or approved to practice in this State by the State Board of Veterinary Medical Examiners, to serve at each horse race meeting held under a permit issued under this act. These officials shall devote full-time to their duties during each meeting at which they serve; shall be in the unclassified service under Title 11A (Civil Service) of the New Jersey Statutes and serve at the pleasure of the commission; and shall, where practicable, be rotated among the running race and harness tracks as appropriate. The compensation of these officials shall be fixed by the commission and shall be paid weekly by the holder of a permit at whose horse race track the officials shall serve. These officials shall have full and free access to any portion of the space or enclosure where such horse race meeting is held and shall have such powers and duties as the commission may from time to time delegate to them under the provisions of this act.
b. The commission shall employ persons to supervise the operation of mutuels at each horse race meeting held under a permit issued pursuant to P.L.1940, c.17 (C.5:5-22 et seq.). These employees shall be in the unclassified service under Title 11A (Civil Service) of the New Jersey Statutes. The compensation of these employees shall be paid by the commission, which shall be reimbursed by the permitholders at whose racetracks these persons serve. Such compensation shall be computed based on the number of days that each person has worked at each track and shall be remitted to the commission on a monthly basis. The persons employed by the commission to supervise the operation of mutuels shall have full and free access to any portion of the space or enclosure where such horse race meeting is held and shall have such powers and duties as the commission may from time to time delegate to them under the provisions of P.L.1940, c.17 (C.5:5-22 et seq.).
c. The commission and the Department of Law and Public Safety Information Technology Unit shall monitor all employees who have access to use the New Jersey Racing Commission Licensing, Mutuels, and Breeder's system, which records revenue billed and collected, rulings and fines issued, and related horse data. The commission shall review, every six months, access privileges granted to employees who use the system to determine whether access rights are commensurate with the employees' job duties and classification. The commission shall develop and adopt a formal written policy establishing rules to grant and remove employee access privileges to the system. The written policy shall establish and document formal account creation, registration, and removal processes including a written or electronic request from an appropriate authorized manager. The executive director of the commission or his or her designee shall be designated as the person responsible for the oversight and administration of monitoring employee access privileges. The executive director shall document and implement internal controls sufficient to ensure the safe and proper access to the system and to mitigate the potential for fraud and abuse.
(cf: P.L.1992, c.120, s.2)
3. (New section) a. To maintain proper oversight of the general health of race horses and to observe trends in racing-related fatalities of race horses, verbal notification of the death of a race horse shall be reported to the State Steward or a New Jersey Racing Commission veterinarian within one hour of the race horse's death. The race horse's carcass shall not be removed without the written authorization of the State Steward or the Chief State Veterinarian, or their designee. To prevent the unauthorized removal of the remains of a deceased race horse and to ensure that complete and adequate information is provided to the commission, the carcass of a race horse that died on the racetrack shall be transported to a facility identified by the commission as qualified to conduct a post-mortem necropsy. The post-mortem necropsy shall be conducted by a qualified veterinarian on the remains of any race horse that died on the racetrack during racing or training, or which died within one hour after racing or training on a racetrack, to determine the cause of death.
b. An equine fatality report shall be submitted to the commission regarding any equine death occurring on the grounds of any licensed racetrack or approved off-track stabling facility. It shall be the responsibility of the trainer or custodian of the deceased animal to file the report which shall be complete in all particulars with the commission's State Steward or Chief State veterinarian within 48 hours of the equine death. The commission shall time stamp each equine fatality report upon receipt and review for completeness within three days of receipt of the report. The completed review of the report shall be signed by the executive director of the commission and each of the commissioners certifying the review.
c. The report shall be on forms prescribed by the commission and shall include the following information and any other information deemed necessary by the commission:
(1) Name and tattoo number of deceased equine or other registration identification such as freeze brands and microchips;
(2) Trainer of record;
(3) Owner of record and particulars regarding purchase of equine;
(4) Particulars as to time, date and place of death;
(5) Disclosure of any post-mortem examination;
(6) Attending veterinarian;
(7) Cause of death;
(8) Particulars as to removal of carcass; and
(9) Pertinent information regarding existing insurance coverage.
4. Section 48 of P.L.1940, c.17 (C.5:5-68) shall be amended as follows:
48. a. All moneys received by said commission under the provisions of this act shall be by it paid into the State treasury and, except as to moneys deposited in the New Jersey Horse Breeding and Development Account, or distributed as otherwise provided by law, shall be part of the free treasury funds.
b. The commission shall ensure that all revenues collected are deposited in a timely manner, properly recorded in the State accounting system, and accounted for in the Racing Commission's system and that State funds are deposited on the same day as received. All deposits are to be recorded in the State accounting system with dates that are consistent with the actual credit date to the State bank account.
The commission shall be responsible for retaining all documentation relating to deposits. The documentation shall include either the deposit slip or other appropriate documentation relating to electronic credit to the State bank account.
(1) For physical deposits, cash and checks, the date of entry of funds into the State accounting system shall correspond to the bank validation on the deposit slip.
(2) For electronic receipts such as wire transfers and Automated Clearing House credits, the date of entry of funds into the State accounting system will correspond to the actual date the funds are credited by the bank. The Office of Management and Budget shall advise the commission of the receipt of electronic funds.
(3) Networks shall be established to communicate information directly from the bank to the depository agency for high volume applications.
(4) Foreign checks shall be deposited separately and presented at the bank for collection. The exchange amount credited on the validated deposit slip shall be entered into the State accounting system. Foreign checks shall not be an acceptable form of payment and shall be discouraged
c. The commission shall manage the collection of unpaid and overdue amounts associated with fines, fees, penalties, and other assessments, other than non-tax debt, to ensure all efforts are expended to maximize revenue and operational efficiency. All fines imposed by the commission shall be paid by the due date indicated in the ruling . The commission shall make every effort to collect amounts due. If the fine is not paid, the licensee shall be suspended and placed on the security guide in the New Jersey Racing Commission Licensing, Mutuels, and Breeders system. The licensee shall not be permitted to participate or be re-licensed until the fine is collected by the commission. If the commission is not able to collect a debt within 90 days, the account shall be transferred to the Department of the Treasury, Division of Revenue and Enterprise Services, Cross Agency Collection and Services Bureau for further collection efforts.
d. All non-tax debt that is only on the records of the commission and the Division of Revenue and Enterprise Services and deemed uncollectible and eligible for write-off by the Division of Revenue and Enterprise Services shall be submitted to the Chief of the Division of Revenue and Enterprise Services, Cross Agency Collection and Services Bureau for final approval of removal of uncollectible non-tax debt from the commission's records. Those non-tax debts that appear in the State's general ledger shall be submitted to the Director of the Office of Management and Budget for final approval of removal. Once final approval has been obtained, those accounts may be removed from the record of the commission.
(cf: P.L.1971, c. 45, s. 2)
5. Section 27 of P.L.2001, c.199 (C.5:5-153) is amended to read as follows:
27. The commission shall establish and administer a separate fund to be known as the "New Jersey Racing Industry Special Fund" into which shall be deposited the sums dedicated to the fund by sections 19, 21 and 25 of this act. Money deposited in this special fund shall be disbursed monthly by the commission and used as follows:
a. 92% shall be distributed as follows:
(1) in the case of money deposited into the special fund from the off-track wagering facility located on the former site of the Atlantic City Race Course, or, if no off-track wagering facility exists on that former site, the off-track wagering facility located closest to that former site, 100% to permit holders conducting thoroughbred racing;
(2) except as provided in paragraph (1), 65% to permit holders conducting thoroughbred racing and 35% to permit holders conducting harness racing;
Of the allocations made pursuant to this subsection to permit holders conducting thoroughbred racing, specific distributions shall be made to the overnight thoroughbred purse account of each permit holder and for programs designed to aid the thoroughbred horsemen and the New Jersey Thoroughbred Horseman's Association. Expenditures for programs designed to aid the thoroughbred horsemen and the New Jersey Thoroughbred Horseman's Association shall not exceed 2.9% of such allocations. Distribution among thoroughbred permit holders shall be based on the following formula: total overnight thoroughbred purse distribution for each permit holder in the prior calendar year divided by the total overnight thoroughbred purse distribution of all permit holders in the prior calendar year. Notwithstanding the foregoing, the sum allocated to permit holders conducting thoroughbred races under this subsection may be distributed as provided by a contractual agreement authorized under section 12 of P.L.2013, c.266 (C.5:5-189).
Of the allocations made pursuant to this subsection to permit holders conducting standardbred racing, specific distributions shall be made to the overnight standardbred purse account of each permit holder and for programs designed to aid the standardbred horsemen and the Standardbred Breeders' and Owners' Association of New Jersey. Expenditures for programs designed to aid the standardbred horsemen and the Standardbred Breeders' and Owners' Association of New Jersey shall not exceed 5% of such allocations. Distribution among standardbred permit holders shall be based on the following formula: total overnight standardbred purse distribution for each permit holder in the prior calendar year divided by the total overnight standardbred purse distribution of all permit holders in the prior calendar year. Notwithstanding the foregoing, the sum allocated to permit holders conducting harness racing under this subsection may be distributed as provided by a contractual agreement authorized under section 11 of P.L.2013, c.266 (C.5:5-188).
b. 8% shall be distributed as follows:
(1) in the case of money deposited into the special fund from the off-track wagering facility located on the former site of the Atlantic City Race Course, or, if no off-track wagering facility exists on that former site, the off-track wagering facility located closest to that former site, 100% to thoroughbred funds; and
(2) except as provided in paragraph (1), 65% to thoroughbred funds and 35% to harness funds.
Of the amounts distributed to thoroughbred funds pursuant to this subsection, the following distributions shall apply: 94% to Thoroughbred Breeders and Stallions; 3% to Backstretch Benevolency; and 3% to Breeding and Development.
Of the amount distributed to harness funds pursuant to this subsection, the following distributions shall apply: 75% to Sire Stakes; 8% to Breeders and Stallions; 3.5% to Backstretch Benevolency; 10% to Health and Welfare; and 3.5% to Breeding and Development.
c. In the case of interfund transactions between the New Jersey Racing Industry Special Fund and the General Fund, the commission shall process the transaction with the assistance of the Department of Treasury.
(cf: P.L.2013, c.266, s.6.)
6. (New section) a. The commission, at the end of each fiscal year, shall cause to be made an audit to determine whether certain internal controls of the commission have been enforced. The audit shall include:
(1) an annual review, including findings and recommendations, made by the commission to ensure that all fingerprinting procedures are followed to determine whether licensees' fingerprints are recorded and updated in a timely manner in accordance with all applicable State and federal laws; licensees are notified of renewals in writing that their fingerprints are due for renewal when they file an application to renew their license for that calendar year; and licensees who fail to update their fingerprints have their licenses suspended and are not eligible to participate until their fingerprints are updated and proof of renewal is on file with the commission.
(2) an annual review, including findings and recommendations, made by the commission and the Department of Law and Public Safety Information Technology Unit verifying the findings of each six-month review of all employees' access privileges to the New Jersey Racing Commission Licensing, Mutuels, and Breeders system to ensure that all employees access privileges are authorized and commensurate with their job duties and classifications.
(3) an annual review, including findings and recommendations, of all equine fatality reports to ensure that they are complete and submitted in a timely manner to the commission during the fiscal year.
(4) an annual review, including findings and recommendations, made by the State Treasurer to ensure that all fiscal year revenues collected are deposited in a timely manner, properly recorded in the State accounting system, and accounted for in the Racing Commission system. The annual review shall ensure that all State funds are deposited on the same day as received and that all deposits are recorded in the State accounting system with dates that are consistent with the actual credit date to the State bank account.
(5) an annual review, including findings and recommendations, made by the commission and the Division of Revenue Enterprise Services in the Department of Treasury of the fines, fees, and penalties imposed and collected by the commission to ensure that the licenses of individuals who do not pay their fines are suspended and that unpaid fines after 90 days are transferred to the Division of Revenue Enterprise Services.
(6) an annual review, including findings and recommendations, made by the State Treasurer of all interfund transactions between the New Jersey Racing Industry Special Fund and the General Fund to ensure that all such transactions are processed and accounted for properly and with the assistance of the Department of Treasury
b. The executive director of the commission shall publish a report of the findings and recommendations of each of the individual reviews required to be included in the audit and an evaluation of those findings and recommendations and deliver it to each commissioner of the commission by December 30 of each fiscal year. The executive director of the commission and the commissioners shall certify that they have received the audit report within seven days of receipt.
c. The commissioners shall, within 60 days of receipt of the audit report, review the audit report, findings and recommendations, and evaluative comments; recommend actions they deem necessary to correct any identified deficiencies in internal controls; acknowledge in writing that they have read the audit report, findings and recommendations, and evaluative comments; and certify that it does not contain any untrue statement of a material fact or omission of a material fact that makes the statements misleading and that based on their knowledge, the audit presents all material aspects of the internal controls and operating results of the commission.
d. A corrective action plan of any identified deficiencies shall be completed under the direction of the executive director of the commission by April 30 of each fiscal year. Copies of the audit report, recommendations, and the corrective action plan shall be transmitted to the Attorney General's Office and the Legislature by May 15, of each fiscal year.
e. The audit report, recommendations, and corrective action plan shall be included in an appropriate section on the commission's website.
f. The costs for the annual audit shall be borne by the commission and shall not be passed through to the racetracks.
7. This act shall take effect immediately.
STATEMENT
This bill is in response to the comments and recommendations contained in the State Auditor's Report regarding a July 1, 2016 to March 31, 2020 review of selected programs of the New Jersey Racing Commission in the Department of Law and Public Safety.
The bill will establish procedures to enforce internal controls of the New Jersey Racing Commission. The bill will require an annual audit to ensure those procedures are followed. The bill requires the enforcement of internal control monitoring procedures to ensure that all licensees of the commission have their fingerprints taken and that all fingerprints are renewed in a timely manner and in accordance with all applicable State and federal laws; the racing licenses of all individuals who fail to update their fingerprints prior to expiration are suspended until their fingerprints are updated; all employees' access privileges to the New Jersey Racing Commission Licensing, Mutuels, and Breeders system are authorized and are commensurate with their job duties and classification; all equine fatality reports are complete and submitted in a timely manner to the commission during the fiscal year; all revenues are collected in a timely manner, properly recorded in the State accounting system, and accounted for in the New Jersey Racing Commission Licensing, Mutuels, and Breeders system; all fines and fees imposed on licensees are collected and licensees who do not pay their fines are suspended; and all interfund transactions between the New Jersey Racing Industry Special Fund and the General Fund are processed until their fingerprints are updated with the assistance of the Department of Treasury.
