Minnesota Session Laws - 1988, Regular Session

  

                         Laws of Minnesota 1988 

                        CHAPTER 696-H.F.No. 2537 
           An act relating to horse racing; increasing the 
          minimum required purses; changing the date when the 
          racetrack must submit its financial statement to the 
          racing commission; allowing the breeders' fund to be 
          used to supplement purses for Minnesota horses racing 
          in nonrestricted races; decreasing the pari-mutuel tax;
          amending Minnesota Statutes 1986, sections 240.01, by 
          adding a subdivision; 240.13, subdivisions 4 and 6; 
          240.15, subdivisions 1, 2, 3, 4, and 6; and 240.18; 
          Minnesota Statutes 1987 Supplement, section 240.13, 
          subdivision 5. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 240.01, is 
amended by adding a subdivision to read: 
    Subd. 12.  [AVERAGE DAILY HANDLE.] "Average daily handle" 
means the total amount bet in all pari-mutuel pools at a 
licensed racetrack during the racing meeting divided by the 
number of days that horse racing was conducted at the racetrack 
during the racing meeting. 
    Sec. 2.  Minnesota Statutes 1986, section 240.13, 
subdivision 4, is amended to read:  
    Subd. 4.  [TAKEOUT; DISTRIBUTION OF WINNINGS.] A licensee 
conducting pari-mutuel betting must deduct from a straight 
pari-mutuel pool, before payments to holders of winning tickets, 
an amount equal to not more than 17 percent of the total money 
in that pool. The licensee must deduct from a multiple 
pari-mutuel pool, before payments to the holders of winning 
tickets, an amount equal to not more than 23 percent of the 
total money in that pool.  The remaining money in each pool must 
be distributed among the holders of winning tickets in a manner 
the commission by rule prescribes for each type of pool.  
Breakage must be computed on the basis of payoffs rounded down 
to the next lowest increment of 20 cents, with a minimum payoff 
of $2.20 on a $2 ticket, except that the licensee may reduce the 
minimum payoff to $2.10 on a $2 ticket if there is not a 
sufficient amount in a pool to make a minimum payoff of $2.20.  
    Sec. 3.  Minnesota Statutes 1987 Supplement, section 
240.13, subdivision 5, is amended to read:  
    Subd. 5.  [PURSES.] (a) From the amounts deducted from all 
pari-mutuel pools by a licensee, an amount equal to not less 
than five percent the following percentages of all money in all 
pools must be set aside by the licensee and used for purses for 
races conducted by the licensee, provided that a licensee may 
agree by contract with an organization representing a majority 
of the horsepersons racing the breed involved to set aside 
amounts in addition to the following percentages: 
     (1) For a licensee conducting a racing meeting with an 
average daily handle of $500,000 or less, four percent of the 
average daily handle times the number of racing days in that 
meeting. 
    (2) For a licensee conducting a racing meeting with an 
average daily handle of more than $500,000 but not more than 
$750,000, six percent of the average daily handle times the 
number of racing days in that meeting. 
    (3) For a licensee conducting a racing meeting with an 
average daily handle of more than $750,000, 8.4 percent of the 
first $1 million in average daily handle times the number of 
racing days in that meeting. 
     The commission may by rule provide for the administration 
and enforcement of this subdivision.  
    (b) From the money set aside for purses, the licensee shall 
pay to the horseperson's organization representing the majority 
of the horsepersons racing the breed involved and contracting 
with the licensee with respect to purses and the conduct of the 
racing meetings and providing representation, benevolent 
programs, benefits, and services for horsepersons and their 
on-track employees, an amount, sufficient to perform these 
services, as may be determined by agreement by the licensee and 
the horseperson's organization.  The amount paid may be deducted 
only from the money set aside for purses to be paid in races for 
the breed represented by the horseperson's organization.  With 
respect to racing meetings where more than one breed is racing, 
the licensee may contract independently with the horseperson's 
organization representing each breed racing. 
    (c) Notwithstanding sections 325D.49 to 325D.66, a 
horseperson's organization representing the majority of the 
horsepersons racing a breed at a meeting, and the members 
thereof, may agree to withhold horses during a meeting. 
    Sec. 4.  Minnesota Statutes 1986, section 240.13, 
subdivision 6, is amended to read:  
    Subd. 6.  [TELEVISED RACES.] The commission may by rule 
permit a class B or class D licensee to conduct on the premises 
of the licensed racetrack pari-mutuel betting on horse races run 
in other states and broadcast by television on the premises.  
All provisions of law governing pari-mutuel betting apply to 
pari-mutuel betting on televised races except as otherwise 
provided in this subdivision or in the commission's rules. 
Pari-mutuel pools conducted on such televised races may consist 
only of money bet on the premises and may not be commingled with 
any other pool off the premises, except that:  
    (a) the licensee may pay a fee to the person or entity 
conducting the race for the privileges of conducting pari-mutuel 
betting on the race, and 
    (b) the licensee may pay the costs of transmitting the 
broadcast of the race.  
    Pari-mutuel betting on a televised race may be conducted 
only on a racing day assigned by the commission.  The takeout 
and taxes on pari-mutuel pools on televised races are as 
provided for other pari-mutuel pools.  All televised races under 
this subdivision must comply with the Interstate Horse Racing 
Act of 1978 as found in United States Code, title 15, section 
3001 and the following relevant sections.  In lieu of the purse 
requirement established by section 240.13, subdivision 5, the 
licensee shall set aside for purses one-half of the take-out 
from the amount bet on televised races after the payment of fees 
and taxes.  For the purposes of purse distribution under section 
240.13, subdivision 5, the average daily handle shall not 
include amounts bet in pari-mutuel pools on televised races. 
    Sec. 5.  Minnesota Statutes 1986, section 240.15, 
subdivision 1, is amended to read:  
    Subdivision 1.  [TAXES IMPOSED.] (a) There is imposed on 
the total amount bet on all pari-mutuel pools on each racing day 
a tax at the following rates:  
    (1) For each racing day in a calendar year on which the 
total amount bet, together with the total amount bet at the same 
licensed racetrack in all previous racing days in the same 
calendar year does not exceed $48,000,000, 1-3/4 percent of the 
total amount bet in all pari-mutuel pools.  
    (2) For each racing day in a calendar year after the racing 
day on which the total amount bet in all pari-mutuel pools at 
the same licensed racetrack in the same calendar year exceeds 
$48,000,000, six percent of the total amount bet in all 
pari-mutuel pools rate of six percent of the total amount 
withheld from all pari-mutuel pools by the licensee, including 
breakage and amounts withheld under section 240.13, subdivision 
4. 
    In addition to the above tax, the licensee must designate 
and pay to the commission a tax of one percent of the total 
amount bet on each racing day, for deposit in the Minnesota 
breeders fund, at the following rates:  
    (1) For racing days on which the state tax under clause 
(a)(1) is 1-3/4 percent, one-half percent of the total amount 
bet in all pari-mutuel pools.  
    (2) For racing days on which the state tax under clause 
(a)(2) is six percent, one percent of the total amount bet in 
all pari-mutuel pools.  
    The taxes imposed by this clause must be paid from the 
amounts permitted to be withheld by a licensee under section 
240.13, subdivision 4.  
    (b) The commission shall impose on each paid admission to 
each licensed racetrack on a racing day a tax of 40 cents.  It 
may impose an additional admissions tax of not more than ten 
cents on each paid admission at any a licensed racetrack on a 
racing day if:  
    (1) the additional tax is requested by a local unit of 
government within whose borders the track is located;  
    (2) a public hearing is held on the request; and 
    (3) the commission finds that the local unit of government 
requesting the additional tax is in need of its revenue to meet 
extraordinary expenses caused by the racetrack.  
    Sec. 6.  Minnesota Statutes 1986, section 240.15, 
subdivision 2, is amended to read:  
    Subd. 2.  [PAYMENT.] The licensee must remit the tax to the 
commission or its representative within seven days of the day on 
which it was collected.  In addition to the tax and at that time 
the licensee must pay to the commission or its representative a 
sum equal to one-half the total breakage for each racing day 
during the period for which the tax is paid.  The payments must 
be accompanied by a detailed statement of the remittance on a 
form the commission prescribes.  The commission may by rule 
provide for the direct deposit of required payments in the 
commission's account in a financial institution within the state 
and for determining the time of applicability of different tax 
rates under subdivision 1.  
    Sec. 7.  Minnesota Statutes 1986, section 240.15, 
subdivision 3, is amended to read:  
    Subd. 3.  [TAX EXCLUSIVE.] The tax imposed by subdivision 1 
is in lieu of any tax or license fee, other than taxes on real 
property, imposed by a political subdivision and in lieu of any 
other sales or excise tax imposed by the state on racetrack 
admissions or pari-mutuel pools or pari-mutuel ticket sales. 
    Sec. 8.  Minnesota Statutes 1986, section 240.15, 
subdivision 4, is amended to read:  
    Subd. 4.  [REPORTS.] Within 100 days of the end of a racing 
meeting each calendar year a licensee subject to the tax imposed 
by subdivision 1 must file with the commission a certified 
statement of financial report disclosing receipts from all 
sources during the racing meeting and of expenses and 
disbursements, itemized on a form the commission prescribes 
after consultation with the state auditor, showing the 
licensee's net revenues from all sources.  The 
statement financial report must be prepared by a an independent 
certified public accountant in accordance with generally 
accepted auditing standards.  
     Sec. 9.  Minnesota Statutes 1986, section 240.15, 
subdivision 6, is amended to read:  
    Subd. 6.  [DISPOSITION OF PROCEEDS.] The commission shall 
distribute all money received under this section, and all money 
received from license fees and fines it collects, as follows: 
all money designated for deposit in the Minnesota breeders fund 
must be paid into that fund for distribution under section 
240.18.  Revenue from an additional admissions tax imposed under 
subdivision 1 must be paid to the local unit of government at 
whose request it was imposed, at times and in a manner the 
commission determines.  All other revenues received under this 
section by the commission, and all license fees, fines, and 
other revenue it receives, must be paid to the state treasurer 
for deposit in the general fund. 
    Sec. 10.  Minnesota Statutes 1986, section 240.18, is 
amended to read:  
    240.18 [BREEDERS' FUND.] 
    The commission shall establish a Minnesota breeders' fund 
with the money paid to it under section 240.15, subdivision 1.  
The commission, after paying the current costs of administering 
the fund, shall apportion the remaining net proceeds into 
categories corresponding with the various breeds of horses which 
are racing at licensed Minnesota racetracks in proportion to 
each category's contribution to the fund and distribute the 
available net proceeds in each category as follows: 
    (1) With respect to available money apportioned in the 
thoroughbred and quarterhorse categories twenty percent of the 
available money in the fund must be expended as grants for 
equine research and related education at public institutions of 
post-secondary learning within the state.  
    (2) After deducting the amount for (1), the balance of the 
available proceeds shall be apportioned into categories 
corresponding with the various breeds of horses which are racing 
at licensed Minnesota racetracks, in proportion to each 
category's contribution to the fund.  The available funds in 
each category may be expended by the commission to:  
    (a) supplement purses for races held exclusively for 
Minnesota-bred, or Minnesota-foaled horses, or Minnesota-owned 
horses until January 1, 1988, and for Minnesota-bred and 
Minnesota-foaled horses after that date and supplement purses 
for Minnesota-bred or Minnesota-foaled horses racing in 
nonrestricted races in that category;  
    (b) pay breeders' or owners' awards to the breeders or 
owners of Minnesota-bred horses in that category which win money 
at licensed racetracks in the state; and 
    (c) provide other financial incentives to encourage the 
horse breeding industry in Minnesota. 
     (3) With respect to the available money apportioned in the 
standardbred category, twenty percent must be expended as 
follows: 
    (a) one-half of that amount to supplement purses for 
standardbreds at nonpari-mutuel racetracks in the state; 
    (b) one-fourth of that amount for the development of 
nonpari-mutuel standardbred tracks in the state; and 
    (c) one-fourth of that amount as grants for equine research 
and related education at public institutions of post-secondary 
learning in the state. 
    (4) After deducting the amount for paragraph (3), the 
balance of the available proceeds in the standardbred category 
must be expended by the commission to: 
    (a) supplement purses for races held exclusively for 
Minnesota-bred and Minnesota-foaled standardbreds; 
    (b) pay breeders or owners awards to the breeders or owners 
of Minnesota-bred standardbreds which win money at licensed 
racetracks in the state; and 
    (c) provide other financial incentives to encourage the 
horse breeding industry in Minnesota. 
    The commission shall adopt rules governing the distribution 
of the fund.  The commission may establish advisory committees 
to advise it on the distribution of money under this section, 
provided that the members of an advisory committee shall serve 
without compensation. 
     Sec. 11.  [EFFECTIVE DATE.] 
    Sections 1 to 10 are effective the day following final 
enactment. 
    Approved April 28, 1988