5-107

5-107. Nature of racing meeting permits;
application for permit; cash deposit; return; bond; conditions and
priorities for satisfaction of bond

A. Permits to conduct racing meetings are deemed to be personal in nature, are
nontransferable and shall terminate upon a substantial change of ownership of the
permittee. The sale or transfer of twenty-five per cent or more of the equity of a
permittee shall be considered a substantial change of ownership. Nothing in this
subsection shall be construed so as to cause the termination of a permit upon the death
of the permittee, or if a corporation, the death of a shareholder thereof, during the
period for which such permit was granted.

B. Every applicant making application for a permit to hold a racing meeting shall
file an application with the commission. The commission shall promulgate rules and
regulations regarding application procedures. The application shall include:

1. The full name and address of the applicant, and if a corporation, the name of
the state under which it is incorporated. If such applicant is an association or
corporation, the residence addresses of the members of the association and the names of
all directors of the corporation shall be included, and the stock certificate records of
such applicant shall be made available to the department upon request of the
director. The department shall be notified within ten days of the election of any new
officer or director of a permittee, and the identity of every person who acquires ten per
cent or more of a permittee's equity or interest. Each new officer, director or
substantial owner shall furnish all information requested by the department to facilitate
approval of his participation in racing in this state.

2. The exact location where it is desired to conduct or hold a racing meeting.

3. A statement as to whether or not the racing plant is owned or leased, and if
leased, the name and residence of the fee owner, or if a corporation, the names and
addresses of the directors of the corporation.

4. A complete financial statement and balance sheet of the person, corporation or
other business entity making such application, completed and certified by a certified
public accountant. In the case of applications for renewal of dog racing meeting permits
which were in existence before May 5, 1972, such financial statement and balance sheet
shall be on a calendar year basis. In the case of applications for renewal of horse or
harness racing meeting permits which were in existence before May 5, 1972, such financial
statement and balance sheet shall be on a fiscal year basis. In the case of all new
permit applications made from and after May 5, 1972, and renewal applications of such
permits, such financial statement and balance sheet shall be on either a calendar year or
fiscal year basis, at the discretion of the department. In addition, the application
shall identify any guarantors or any indebtedness of the applicant, and the department
shall be provided, upon request, with a statement from a certified public accountant
certifying that the net worth of any guarantor or guarantors is at least equal to the
amount of the unpaid indebtedness so guaranteed. Applications for racing meetings
operated by county fair racing associations are exempt from this paragraph.

5. A complete list of all management and concession contracts in effect at the time
of the application, copies of which shall be furnished to the department upon
request. If the applicant is granted a permit he shall further be required, upon the
request of the department, to submit a complete list of all subsequent management and
concession contracts, and copies of such contracts shall be submitted to the department
upon request.

6. Such other relevant and material information pertaining to the application as
the department may require.

C. Not less than ten days prior to the commencement of a commercial racing meeting,
the permittee shall submit to the department a cash deposit in such amount, but not to
exceed five thousand dollars, as the director deems necessary to insure payment of fees
and the amount due the state as the percentage of pari-mutuel receipts payable to the
state as prescribed by law. Upon termination of the racing meeting, the deposit shall be
returned to the applicant, less any fees or pari-mutuel receipts remaining unpaid.

D. In addition to the cash deposit and prior to the issuance of a racing meeting
permit, the applicant shall deposit with the department a bond payable to the state for
the benefit of the state and any person covered by this section, in such amount, but not
to exceed one hundred thousand dollars in the case of dog racing meeting permittees, and
not to exceed three hundred thousand dollars in the case of horse or harness racing
meeting permittees, as the director deems necessary, with a surety or sureties to be
approved by the department and the attorney general and conditioned in accordance with
the following order of priorities:

1. That the permittee shall first faithfully pay to the state the percentage of the
pari-mutuel receipts, as applicable, prescribed by law and all taxes due to the state.

2. That thereafter the permittee shall pay to the owner thereof all funds held by
the permittee for the account of such owner, including purses won, if such owner is or
has been licensed by the department.

3. That thereafter the permittee shall pay all salaries and wages due to the
employees of such permittee in connection with the conduct of the racing meeting.

4. That thereafter the permittee shall pay all amounts due to the breeder of any
horse or dog for a breeder's award.

E. Any person, including the state, claiming against the bond may maintain an
action at law against the permittee and the surety or sureties, and the surety or
sureties may be sued upon the bond in successive actions until the penal sum thereof is
exhausted. If it appears that there is more than one claim upon such bond or if it
appears that the state may have an interest therein, the state or any other claimant may
move the court in which such actions are filed to intervene or to consolidate such
actions to determine the priority order of claims in accordance with subsection D. No
suit may be commenced upon the bond after the expiration of one year following the day of
the closing of the racing meeting during which any act or failure to act giving rise to a
claim against the bond shall arise.

F. The bond prescribed by this section shall be effective for the period of the
racing permit granted by the commission, and the liability of the surety for all claims
shall be limited to the face amount of the bond. If the surety desires to make payment
without awaiting court action, the amount of any bond filed in compliance with this
chapter shall be reduced to the extent of any payments made by such surety in good faith
thereunder. Any such payment shall be based first upon the priority of claim order as
established by subsection D and thereafter upon the priority of the date the written
claims are received by the surety prior to court action.