(a) Establishment.--The State Horse Racing Commission is established as a commission within the Department of Agriculture to independently regulate the operations of horse racing, the conduct of pari-mutuel wagering and the promotion and marketing of horse racing in this Commonwealth in accordance with this chapter.

(b) Membership.--The commission shall consist of the following members:

(1) Four members appointed by the Governor as follows:

(i) One individual representing the thoroughbred horsemen's organizations in this Commonwealth selected from a list of at least 10 qualified individuals submitted by the thoroughbred horsemen's organizations.

(ii) One individual representing a thoroughbred breeder organization in this Commonwealth selected from a list of at least 10 qualified individuals submitted by a thoroughbred breeder organization.

(iii) One individual representing the standardbred horsemen's organizations in this Commonwealth selected from a list of at least 10 qualified individuals submitted by the standardbred horsemen's organizations.

(iv) One individual representing a standardbred breeder organization in this Commonwealth selected from a list of at least 10 qualified individuals submitted by a standardbred breeder organization.

(2) One member appointed by each of the following, none of whom shall be a member of a horsemen's organization or breeder organization:

(i) The President pro tempore of the Senate.

(ii) The Minority Leader of the Senate.

(iii) The Speaker of the House of Representatives.

(iv) The Minority Leader of the House of Representatives.

(3) The Secretary of Agriculture or the secretary's designee, who shall be a nonvoting ex officio member.

(4) One individual who is a licensed doctor of veterinary medicine in this Commonwealth, who shall not be a member of a horsemen's organization or a breeder organization, appointed by the Governor.

(5) Each appointing authority shall make its appointments within 30 days of the effective date of this section. Appointments to fill a vacancy shall be made within 10 days of the creation of the vacancy. An appointment shall not be final until receipt by the appointing authority of a background investigation of the appointee by the Pennsylvania State Police, which shall be completed within 30 days of the appointment. A person who has been convicted in a domestic or foreign jurisdiction of a felony, infamous crime, gambling offense or an offense related to fixing horse races or animal cruelty may not be appointed to the commission.

(6) The following shall apply to appointees, commissioners, employees and independent contractors:

(i) Each commissioner at the time of appointment must be at least 25 years of age and must have been a resident of this Commonwealth for a period of at least one year immediately preceding appointment. Each commissioner must remain a resident of this Commonwealth during the term of membership on the commission.

(ii) Except for the commissioner appointed under paragraph (3), a person may not be appointed a commissioner if the person is a public official or party officer as defined in 4 Pa.C.S. § 1512 (relating to financial and employment interests) in this Commonwealth or any of its political subdivisions.

(iii) Each commissioner, employee and independent contractor of the commission must sign an agreement not to disclose confidential information.

(iv) Except for a commissioner appointed under paragraph (1), a commissioner, employee or independent contractor of the commission or other agency having regulatory authority over horse racing under this chapter may not be employed, hold an office or position or be engaged in an activity which is incompatible with the position, employment or contract.

(v) A commissioner may not be paid or receive a fee or other compensation for any activity related to the duties or authority of the commission other than compensation and expenses provided by law.

(vi) A commissioner, employee or independent contractor of the commission may not participate in a hearing, proceeding or other matter in which the member, employee or independent contractor, or the immediate family thereof, has a financial interest in the subject matter of the hearing or proceeding or other interest that could be substantially affected by the outcome of the hearing or proceeding without first fully disclosing the nature of the interest to the commission and other persons participating in the hearing or proceeding. The commission shall determine if the interest is a disqualifying interest that requires the disqualification or nonparticipation of a commissioner, an employee or independent contractor.

(vii) At the time of appointment and annually thereafter, each commissioner shall disclose the existence of any financial interest in any applicant or licensed racing entity and in an affiliate, intermediary, subsidiary or holding company thereof held by the commissioner or known to be held by a commissioner's immediate family. The disclosure statement shall be filed with each director established under subsection (d)(2) and with the appointing authority for such commissioner and shall be open to inspection by the public at the office of the commission during the normal business hours of the commission and posted on the commission's Internet website for the duration of a commissioner's term and for two years after a commissioner leaves office.

(viii) (Reserved).

(ix) A commissioner, employee or bureau director of the commission may not directly or indirectly solicit, request, suggest or recommend to any applicant, licensed racing entity or an affiliate, intermediary, subsidiary or holding company thereof or to an employee or agent thereof, the appointment or employment of any person in any capacity by the applicant, licensed racing entity or an affiliate, intermediary, subsidiary or holding company thereof during the term of office or employment with the commission.

(x) Except for a commissioner appointed under paragraph (1), a commissioner may not accept employment with an applicant for a horse racing license, a licensed racing entity, or an affiliate, intermediary, subsidiary or holding company thereof, for a period of two years from the termination of the term of office.

(xi) A former commissioner may not appear before the commission in any hearing or proceeding or participate in any other activity on behalf of any applicant for a horse racing license, a licensed racing entity, or an affiliate, intermediary, subsidiary or holding company of an applicant or licensed racing entity, for a period of two years from the termination of term of office.

(xii) A commissioner or employee of the commission may not accept a complimentary service, place a wager or be paid any prize from any wager on a horse race at a racetrack or nonprimary location within this Commonwealth or at any other racetrack or nonprimary location outside this Commonwealth which is owned or operated by a licensed racing entity or any of its affiliates, intermediaries, subsidiaries or holding companies for the duration of the commissioner's or employee's term of office or employment. Nothing in this section shall be construed to prohibit a commissioner appointed under paragraph (1) from being awarded a purse or breeders' award for the commissioner's participation in horse racing.

(xiii) A commissioner who has been convicted during his term of office in a domestic or foreign jurisdiction of a felony, infamous crime, offense related to fixing or rigging horse races or gambling offense shall, upon conviction, be automatically removed from the commission and shall be ineligible to become a commissioner in the future.

(xiv) The following shall apply to an employee of the commission, who is not subject to a collective bargaining agreement, whose duties substantially involve licensing, enforcement, development of law, promulgation of regulations or development of policy relating to horse racing under this chapter or who has other discretionary authority which may affect or influence the outcome of an action, proceeding or decision under this chapter, including the director of a bureau:

(A) The individual may not, for a period of two years following termination of employment, accept employment with or be retained by an applicant for a horse racing license or a licensed racing entity or by an affiliate, intermediary, subsidiary or holding company of an applicant or a licensed racing entity.

(B) The individual may not, for a period of two years following termination of employment, appear before the commission in a hearing or proceeding or participate in activity on behalf of any applicant, licensee or licensed racing entity or on behalf of an affiliate, intermediary, subsidiary or holding company of any applicant, licensee or licensed racing entity.

(C) This subparagraph shall not apply to an employee subject to the jurisdiction of the Pennsylvania Supreme Court under section 10(c) of Article V of the Constitution of Pennsylvania.

(xv) Nothing under subparagraph (xiv) shall prevent a current or former employee of the commission from appearing before the commission in a hearing or proceeding as a witness or testifying as to a fact or information.

(xvi) The State Ethics Commission shall issue a written determination of whether a person is subject to subparagraph (xiv) upon the written request of the person or the person's employer or potential employer. A person that relies in good faith on a determination issued under this paragraph shall not be subject to any penalty for an action taken if all material facts set forth in the request for the determination are correct.

(xvii) The State Ethics Commission shall publish a list of all employment positions within the commission whose duties would subject the individuals in those positions to the provisions of subparagraph (xiv). The commission shall assist the State Ethics Commission in the development of the list, which shall be published by the State Ethics Commission in the Pennsylvania Bulletin biennially and posted by the commission on the commission's Internet website. Upon request, employees of the commission shall have a duty to provide the State Ethics Commission with adequate information to accurately develop and maintain the list. The State Ethics Commission may impose a civil penalty under 65 Pa.C.S. § 1109(f) (relating to penalties) upon an individual who fails to cooperate with the State Ethics Commission under this subparagraph. An individual who relies in good faith on the list published by the State Ethics Commission shall not be subject to any penalty for a violation of subparagraph (xiv).

(xviii) A commissioner may not solicit, request, suggest or recommend the employment by the commission of an immediate family member.

(xix) If a commissioner violates any provision of this section, the appointing authority may remove the person from the commission. A commissioner removed under this paragraph shall, for a period of five years following removal, be prohibited from future appointment to the commission and shall be prohibited from applying for a license or other authorization under this chapter and from becoming an independent contractor with the commission.

(xx) Except for a commissioner appointed under paragraph (1), a commissioner or employee of the commission may not directly or indirectly have an ownership interest in a race horse which is entered in a horse race meeting in this Commonwealth.

(7) A commissioner shall not be personally liable for any of the following:

(i) Obligations of the commission.

(ii) Actions which were within the scope of their office and made in good faith.

(b.1) Initial appointments to commission.--

(1) Appointees initially appointed under subsection (b) shall serve an initial term of two years and until their successors are appointed and qualified.

(2) An appointment to fill a vacancy created by a commissioner appointed in accordance with paragraph (1) shall be for the remainder of the unexpired term.

(b.2) Terms of office.--Upon the expiration of a term of a commissioner appointed under subsections (b) and (b.1), the following shall apply:

(1) The term of office of a gubernatorial appointee shall be three years and until a successor is appointed and qualified.

(2) The term of office of a legislative appointee shall be two years and until a successor is appointed and qualified.

(3) A legislative appointee shall serve no more than three full consecutive terms.

(4) A gubernatorial appointee shall serve no more than two full consecutive terms.

(5) An appointment to fill a vacancy shall be for the remainder of the unexpired term.

(6) A commissioner appointed to fill a vacancy under paragraph (3) may serve three full terms following the expiration of the term related to the vacancy.

(7) A commissioner appointed to fill a vacancy under paragraph (4) may serve two full terms following the expiration of the term related to the vacancy.

(c) Chairperson.--The governor shall appoint the chairperson of the commission.

(c.1) Compensation.--Commissioners shall be reimbursed for documented expenses incurred in the performance of their official duties and, except for commissioners appointed under subsection (b)(3), commissioners shall be paid $150 per diem.

(c.2) Meetings.--The commission shall meet at least once a month and at other times as the commission chairperson deems necessary. Public notice of the time and place of meetings of the commission shall be given in accordance with 65 Pa.C.S. Ch. 7 (relating to open meetings).

(d) Office of Horse Racing.--There is established within the commission an Office of Horse Racing.

(1) The office shall be comprised of the following:

(i) The Bureau of Thoroughbred Horse Racing shall have oversight over the conduct of thoroughbred horse racing in this Commonwealth.

(ii) The Bureau of Standardbred Horse Racing shall have oversight over the conduct of standardbred horse racing in this Commonwealth.

(2) There shall be a Director of the Bureau of Thoroughbred Horse Racing and a director of the Bureau of Standardbred Horse Racing to serve and report to the commission. The director of each bureau shall not be supervised by the Department of Agriculture. The commission shall assign the directors duties and responsibilities as required to fulfill the commission's obligations under this chapter or any other act. The commission may, by order, delegate duties and responsibilities to the bureau director as the commission determines necessary to discharge the day-to-day licensing, enforcement and administrative operations of the commission. The director of each bureau established in this section must meet all of the following requirements:

(i) Has either:

(A) been certified as a racing official; or

(B) has at least five years' experience in the management of a licensed racing entity or equivalent racing experience.

(ii) Any other criteria established by the commission.

(3) Each bureau established under this subsection shall have the following powers and duties:

(i) Evaluate and review all applicants and applications for a thoroughbred horse racing or standardbred horse racing license. A bureau under this section shall be prohibited from disclosing any portion of an evaluation to a commissioner prior to the decision relating to the applicant's suitability for licensure by the commission.

(ii) Inspect and monitor licensees and other persons regulated under this chapter for noncriminal violations, including potential violations referred to either bureau by the commission or other person.

(iii) Monitor horse racing operations to ensure compliance with this chapter.

(iv) Inspect and examine licensed racing entities and racetrack facilities.

(A) Inspections may include the review and reproduction of any document or record.

(B) Examinations may include the review of accounting, administrative and financial records, management control systems, procedures and other records.

(v) Refer possible criminal violation to law enforcement.

(vi) Cooperate in the investigation and prosecution of any criminal violation.

(vii) Issue administrative subpoenas to effectuate an inspection and review under this paragraph, administer oaths and take testimony as necessary for the administration of this chapter.

(e) Jurisdiction.--The commission shall have jurisdiction and regulatory authority over the following:

(1) Pari-mutuel wagering and other horse racing activities in this Commonwealth.

(2) A licensed person engaged in pari-mutuel horse racing activities.

(3) Out-of-competition drug testing, which shall include the random drug testing of any horse entered in a race, notwithstanding the physical location of the horse, stabled on the grounds or shipped into a licensed racing entity's facility.

(4) The conduct of horse racing in this Commonwealth.

(f) Voting.--

(1) Except as otherwise provided in this subsection, actions of the commission shall be subject to a simple majority vote of the commission.

(2) A qualified majority vote consisting of the two commissioners appointed under subsection (b)(1)(i) and (ii) and as many votes of the remaining voting commissioners as necessary to constitute a majority of those commissioners voting shall be required to:

(i) Approve, issue, deny or condition a license to conduct thoroughbred horse race meetings under section 9318 (relating to licenses for horse race meetings).

(ii) Adopt regulations governing thoroughbred horse race meetings under this section.

(iii) Employ a director of the Bureau of Thoroughbred Horse Racing under subsection (d)(2).

(3) A qualified majority vote consisting of the two commissioners appointed under subsection (b)(1)(iii) and (iv) and as many votes of the remaining voting commissioners as necessary to constitute a majority of those commissioners voting shall be required to:

(i) Approve, issue, deny or condition a license to conduct standardbred horse race meetings under section 9318.

(ii) Adopt rules and regulations governing standardbred horse race meetings under this section.

(iii) Employ a director of the Bureau of Standardbred Horse Racing under subsection (d)(2).

(4) Commissioners appointed under subsection (b)(1)(i) and (ii) shall be disqualified and must abstain from voting on any matter under paragraph (3).

(5) Commissioners appointed under subsection (b)(1)(iii) and (iv) shall be disqualified and must abstain from voting on any matter under paragraph (2).

(6) If one or more appointees under subsection (b)(1) is not participating in voting on any matter upon which they are otherwise eligible to vote under paragraph (2) or (3), the qualified majority shall consist of the remaining appointee under the respective subparagraph of subsection (b)(1) pursuant to which the nonparticipating commissioner has been appointed, if any, and as many commissioners as necessary to constitute a majority of those commissioners voting.

(g) Records.--The commission shall maintain at its office the following:

(1) All documents, digital or nondigital, provided to or filed with the commission relating to the regulation of horse racing and pari-mutuel wagering under this chapter. The commission may accept digital signatures on documents provided or filed, and documents may be designated as confidential in accordance with commission policy.

(2) A docket setting forth the names of all stockholders in a licensed racing entity. The docket shall be available for public inspection during normal business hours of the commission.

(3) The number of shares held by each stockholder.

(4) A complete record of proceedings of the commission relating to horse racing and pari-mutuel wagering.

(h) Rules and regulations.--The following shall apply:

(1) All rules and regulations promulgated under the former act of December 11, 1967 (P.L.707, No.331), referred to as the Pennsylvania Thoroughbred Horse Racing Law, or the former act of December 22, 1959 (P.L.1978, No.728), referred to as the Pennsylvania Harness Racing Law, shall remain in effect except to the extent that they are in direct conflict with this chapter. The commission may adopt, amend, revise or alter the rules and regulations as the commission deems necessary.

(2) The commission shall promulgate rules and regulations necessary for the administration and enforcement of this chapter. Except as provided in this paragraph and paragraph (3), regulations shall be promulgated in accordance with law.

(3) In order to facilitate the prompt implementation of this chapter, regulations promulgated by the commission shall be deemed temporary regulations which shall not expire for a period of three years following publication. Temporary regulations shall not be subject to:

(i) Sections 201, 202, 203, 204 and 205 of the act of July 31, 1968 (P.L.769, No.240), referred to as the Commonwealth Documents Law.

(ii) Sections 204(b) and 301(10) of the act of October 15, 1980 (P.L.950, No.164), known as the Commonwealth Attorneys Act.

(iii) The act of June 25, 1982 (P.L.633, No.181), known as the Regulatory Review Act.

(4) The commission's authority to promulgate temporary regulations under paragraph (3) shall expire three years after the effective date of this section. Regulations adopted after this period shall be promulgated as provided by law.

(i) Application.--The commission shall develop an application for applicants seeking a license to conduct horse racing under this chapter.

(j) Licenses.--Each license to conduct horse racing or any other activity under this chapter issued prior to January 1, 2017, shall remain in effect for the remainder of the term for which the license was issued unless revoked or suspended. Beginning January 1, 2017, a license shall be renewed or a new license shall be issued in accordance with this chapter.

(k) Report of commission.--Twelve months after the effective date of this section and every year on that date thereafter, the commission, through the Department of Agriculture, shall issue a report to the Governor and each member of the General Assembly on the general operation of the commission and each licensee's performance, including number and win per race and total gross revenue at each facility of a licensed racing entity during the previous year, all taxes, fees, fines and other revenues collected and, where appropriate, disbursed, the costs of operation of the commission, all hearings conducted and the results of the hearings and other information that the commission deems necessary and appropriate. Notwithstanding any other reporting requirements in 4 Pa.C.S. § 1211 (relating to reports of board), the Pennsylvania Gaming Control Board and the Department of Agriculture must jointly submit the report under this subsection relating to racing on an annual basis.

(l) Record of proceedings.--The commission shall cause to be made and kept a record of all proceedings held at public meetings of the commission. A verbatim transcript of those proceedings shall be prepared by the commission upon the request of any person and the payment by that person of the costs of preparation.

(m) Public records.--The commission shall annually post on its Internet website a list of all the itemized expenses of employees and commissioners that were or are to be reimbursed from the State Racing Fund. The list shall identify the nature of the expense, the employee, member or the agency and employee of the agency to which an expense is attributable. By October 1 of each year, a final report of all expenses described in this subsection for the preceding fiscal year shall be posted on the commission's Internet website and shall be submitted to the Appropriations Committee of the Senate, the Agriculture and Rural Affairs Committee of the Senate, the Appropriations Committee of the House of Representatives and the Agriculture and Rural Affairs Committee of the House of Representatives. Information posted on the Internet website under this subsection shall be financial records for the purposes of and subject to redaction under the act of February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law.

(n) Reimbursement.--The Department of Agriculture's provision of shared administrative services, shared staff and shared facilities to the commission must be reimbursed from the State Racing Fund and shall be limited to actual costs of providing the services, staff and facilities, including salaries, benefits and expenses of employees providing the shared administrative services. The Department of Agriculture must retain records regarding administrative shared services provided to the commission by a Department of Agriculture's employee.

Cross References. Section 9311 is referred to in sections 9301, 9317, 9319 of this title.