(a) Applicability.--This section is applicable only to licensed racing entities that conduct thoroughbred racing.

(b) Race secretary.--The race secretary shall receive entries and declarations as an agent for the licensed racing entity for which the race secretary acts. The race secretary or an individual designated by the licensed racing entity may receive stakes, forfeits, entrance money, jockey fees and other fees, purchase money in claiming races and other money that can properly come into the race secretary's possession as an agent for the licensed racing entity for which the race secretary or designee is acting.

(c) Horsemen's Account.--A licensed racing entity shall maintain a separate account, to be known as a Horsemen's Account. Money owed to owners in regard to purses, stakes, rewards, claims and deposits shall be deposited into the Horsemen's Account. Funds in the account are recognized and denominated as being the sole property of owners. Deposited funds may not be commingled with funds of the licensed racing entity unless a licensed racing entity established an irrevocable clean letter of credit with an evergreen clause in favor of the organization which represents a majority of the owners and trainers racing with the licensed racing entity. The minimum amount of the credit must be the greater of $1,000,000 or 110% of the highest monthly balance in the Horsemen's Account in the immediate prior year. To calculate the monthly balance in the Horsemen's Account, the sum of the daily balances shall be divided by the number of days in the month. The evergreen clause must provide that:

(1) thirty days prior to the expiration of the letter of credit, the financial institution can elect not to renew the letter of credit;

(2) upon an election under paragraph (1), the financial institution must notify the designee of the organization that represents a majority of the owners and trainers racing with the licensed racing entity, by registered mail, return receipt requested, of the election not to renew; and

(3) the financial institution will honor the letter of credit for six months after expiration.

Purse money earned by owners shall be deposited by the licensed racing entity in the Horsemen's Account within 48 hours after the result of the race in which the money was earned has been declared official and the purse has been released by the commission.

(d) Accounting.--A licensed racing entity shall designate individuals authorized to receive and disburse funds from the Horsemen's Account. Individuals designated under this subsection shall be bonded to provide indemnity for malfeasance, nonfeasance and misfeasance. A certified copy of the bond shall be filed with the commission.

(e) Examination, access and records.--The Horsemen's Account and the investment and deposit schedules relating to the account are subject to examination, at reasonable times, by a designee of the organization which represents a majority of the owners and trainers racing with the licensed racing entity and by the commission. The individual designated under subsection (d) shall provide each owner with access, at reasonable times during a racing day, to the amount of funds in the Horsemen's Account credited to that owner. At the close of a horse race meeting, the designated individual shall mail to each owner a record of deposits, withdrawals and transfers affecting the amount of funds in the Horsemen's Account credited to that owner.

(f) Auditing and monthly statements.--The Horsemen's Account shall be audited annually and at any other time determined by the commission. Monthly statements shall be provided to the designee of the organization which represents a majority of the owners and trainers racing with the licensed racing entity and the commission.

(g) Interest.--Fifty percent of the money earned as interest on funds in the Horsemen's Account shall be paid to the organization that represents a majority of the owners and trainers racing with the licensed racing entity on a weekly basis. The amount is for the benefit of the horsemen as determined by the organization that represents the majority of the owners and trainers racing with the licensed racing entity. The remaining 50% of the interest earned is for the benefit of the licensed racing entity that has the responsibility to fund the costs associated with the administration of the fund. Interest each month must be earned in an amount equal to the Federal Reserve Discount Rate on the first day of the month.

Cross References. Section 9345 is referred to in section 9318 of this title.