Senate File 2362 - Introduced SENATE FILE 2362 BY COMMITTEE ON APPROPRIATIONS (SUCCESSOR TO SSB 3223) A BILL FOR An Act relating to pari-mutuel racetracks, including by 1 providing for live dog racing at pari-mutuel dog racetracks, 2 providing for alternative licensure for dog racetracks, and 3 establishing fees, and including effective date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 6228SV (1) 85 ec/nh

S.F. 2362 Section 1. Section 99D.2, subsection 9, Code 2014, is 1 amended to read as follows: 2 9. “Racetrack enclosure” means all real property utilized 3 for the conduct of a race meeting, including the racetrack, 4 grandstand, concession stands, offices, barns, kennels and 5 barn areas, employee housing facilities, parking lots, and 6 any additional areas designated by the commission. “Racetrack 7 enclosure” also means all real property utilized by a licensee 8 under this chapter who is not required to conduct live racing 9 pursuant to the requirements of section 99D.9A, on which 10 pari-mutuel wagering on simultaneously telecast horse or dog 11 races may be conducted and lawful gambling is authorized and 12 licensed as provided in this chapter and chapter 99F. 13 Sec. 2. NEW SECTION . 99D.9A Dog racetrack licensure —— 14 discontinuance of live racing requirement —— fees. 15 1. Upon written notification to the commission by September 16 1, 2014, and agreement to comply with the requirements of this 17 section, a licensee authorized to operate a pari-mutuel dog 18 racetrack and to conduct gambling games pursuant to section 19 99F.6 as of January 1, 2014, may, as of the live racing 20 cessation date, continue to maintain a license as provided 21 in this section for purposes of conducting gambling games 22 and pari-mutuel wagering on simultaneously telecast horse or 23 dog races without the requirement of scheduling performances 24 of live races at the dog racetrack. For purposes of this 25 section, the “live racing cessation date” is October 31, 2014, 26 for the licensee of the pari-mutuel dog racetrack located in 27 Dubuque county, and December 31, 2015, for the licensee of the 28 pari-mutuel dog racetrack located in Pottawattamie county. 29 2. Upon the live racing cessation date of a licensee, all 30 of the following shall occur: 31 a. The commission shall determine what portion of the 32 unexpended moneys in the dog racing promotion fund created in 33 section 99D.12 is attributable to the licensee as of the live 34 racing cessation date of the licensee and shall transfer those 35 -1- LSB 6228SV (1) 85 ec/nh 1/ 22

S.F. 2362 moneys to the Iowa greyhound pari-mutuel racing fund created 1 in section 99D.9B. 2 b. Any agreement which was approved by the commission for 3 dog purse supplement payments for live racing by the licensee 4 shall be terminated. 5 c. Within thirty days after the live racing cessation date 6 of the licensee of the pari-mutuel dog racetrack located in 7 Pottawattamie county, the kennel owners and operators and 8 greyhound owners shall, at their expense, remove all of their 9 property including the greyhounds from the racetrack. 10 3. a. To maintain a license under this chapter to conduct 11 gambling games and pari-mutuel wagering on simultaneously 12 telecast horse or dog races without the requirement of 13 scheduling performances of live dog races, or to maintain a 14 license under section 99F.4A, subsection 9, the licensee as of 15 the date a payment under this subsection is due shall ensure 16 payment of the live racing cessation fee to the commission for 17 deposit in the Iowa greyhound pari-mutuel racing fund created 18 in section 99D.9B, as required by this subsection. 19 b. Except as provided in paragraph “c” , the live racing 20 cessation fee shall be paid and determined as follows: 21 (1) For the licensee authorized to conduct gambling games in 22 Dubuque county pursuant to a license issued pursuant to section 23 99F.4A, subsection 9, the payment of one million dollars by 24 January 1, 2015, and one million dollars each succeeding 25 January 1 for six consecutive calendar years. 26 (2) For the pari-mutuel dog racetrack located in 27 Pottawattamie county, the payment of nine million two hundred 28 eighty-five thousand eight hundred dollars by January 1, 2016, 29 and nine million two hundred eighty-five thousand seven hundred 30 dollars each succeeding January 1 for six consecutive calendar 31 years. 32 c. (1) If the licensee at the pari-mutuel racetrack located 33 in Pottawattamie county as of January 1, 2014, fails to have 34 the licensee’s license renewed, the licensee’s obligation to 35 -2- LSB 6228SV (1) 85 ec/nh 2/ 22

S.F. 2362 make any further payments as provided in this subsection shall 1 cease. However, the commission shall not issue a license to a 2 subsequent or successor licensee at the pari-mutuel racetrack 3 located in Pottawattamie county until all remaining unpaid 4 installments of the live racing cessation fee required under 5 this subsection are paid. 6 (2) If the licensee issued a license under section 99F.4A, 7 subsection 9, fails to have the license renewed, the licensee’s 8 obligation to make any further payments as provided in this 9 subsection shall cease. However, the commission shall not 10 issue a license to a subsequent or successor licensee under 11 section 99F.4A, subsection 9, until all remaining installments 12 of the live racing cessation fee required under this subsection 13 are paid. 14 (3) If the manager of the pari-mutuel racetrack located 15 in Pottawattamie county as of January 1, 2014, pursuant to 16 a management contract with the licensee, ceases to be the 17 manager of the racetrack, the licensee’s obligation to make any 18 further payments as provided in this subsection shall cease. 19 However, the commission shall not approve a management contract 20 with the licensee for a subsequent or successor manager until 21 all remaining installments of the live racing cessation fee 22 required under this subsection are paid. 23 4. Upon written notification to the commission by the 24 licensee of the pari-mutuel dog racetrack located in Dubuque 25 county as provided in subsection 1, all of the following shall 26 occur: 27 a. The licensee shall be authorized to maintain a license 28 issued to the licensee by the commission to conduct gambling 29 games pursuant to the requirements of section 99F.4A, 30 subsection 9. 31 b. The licensee shall maintain a license under this chapter 32 until December 31, 2014. The licensee shall, until the live 33 racing cessation date of the licensee, conduct pari-mutuel 34 wagering on live dog races and shall, until December 31, 2014, 35 -3- LSB 6228SV (1) 85 ec/nh 3/ 22

S.F. 2362 be authorized to simultaneously telecast horse or dog races as 1 provided by an agreement to conduct live racing during the 2014 2 calendar year. 3 5. a. The licensee of the pari-mutuel dog racetrack located 4 in Pottawattamie county who is not required to conduct live 5 racing pursuant to the requirements of this section shall do 6 all of the following: 7 (1) Remain licensed under this chapter and pursuant 8 to section 99F.4A as a pari-mutuel dog racetrack licensed 9 to conduct gambling games and pari-mutuel wagering on 10 simultaneously telecast horse or dog races. 11 (2) Continue to pay the annual license fee and regulatory 12 fee as a pari-mutuel dog racetrack licensed to conduct gambling 13 games pursuant to the requirements of section 99F.4A. 14 (3) Comply with all other applicable requirements of 15 this chapter and chapter 99F except for those requirements 16 concerning live dog racing. 17 b. However, nothing in this chapter shall require the 18 licensee of the pari-mutuel dog racetrack in Pottawattamie 19 county to conduct pari-mutuel wagering on simultaneously 20 telecast horse or dog races to remain licensed under this 21 chapter or to conduct gambling games without the requirement of 22 scheduling performances of live dog races. 23 6. a. Compliance with the requirements of this section 24 and the establishment of the Iowa greyhound pari-mutuel racing 25 fund in section 99D.9B shall constitute a full satisfaction of 26 and discharge from any and all liability or potential liability 27 of a licensee authorized to conduct gambling games in Dubuque 28 county pursuant to section 99F.4A, subsection 9, the licensee 29 of the pari-mutuel dog racetrack located in Pottawattamie 30 county, and the Iowa greyhound association which may arise out 31 of either of the following: 32 (1) The discontinuance of live dog racing or simulcasting. 33 (2) Distributions made or not made from the Iowa greyhound 34 pari-mutuel racing fund created in section 99D.9B or the purse 35 -4- LSB 6228SV (1) 85 ec/nh 4/ 22

S.F. 2362 escrow fund created in the arbitration decision issued in 1 December 1995 with regard to the purse supplements to be paid 2 at the pari-mutuel dog racetrack in Pottawattamie county. 3 b. Compliance with the requirements of this section and 4 establishment of the Iowa greyhound pari-mutuel racing fund in 5 section 99D.9B shall immunize a licensee authorized to conduct 6 gambling games in Dubuque county pursuant to a license issued 7 pursuant to section 99F.4A, subsection 9, the licensee of the 8 pari-mutuel dog racetrack located in Pottawattamie county, and 9 the Iowa greyhound association and their respective officers, 10 directors, employees, board members, and agents against claims 11 of liability as described in paragraph “a” made by any person 12 or entity. 13 Sec. 3. NEW SECTION . 99D.9B Iowa greyhound pari-mutuel 14 racing fund. 15 1. An Iowa greyhound pari-mutuel racing fund is created in 16 the state treasury under the control of the racing and gaming 17 commission. 18 2. The fund shall consist of all of the following: 19 a. Moneys in the dog racing promotion fund created in 20 section 99D.12 that were deposited in the fund from a dog 21 racetrack licensee that is no longer required to conduct live 22 dog races pursuant to section 99D.9A. 23 b. Moneys deposited in the fund from the live racing 24 cessation fee established in section 99D.9A. 25 3. a. Fifty percent of the moneys deposited in the fund 26 shall first be distributed to the Iowa greyhound association 27 for deposit in the escrow account established by the Iowa 28 greyhound association pursuant to the requirements of section 29 99D.9C, provided the Iowa greyhound association is licensed 30 under this chapter to conduct pari-mutuel wagering on live dog 31 races or simultaneously telecast horse or dog races pursuant to 32 the requirements of section 99D.9C, by December 15, 2014. 33 b. Moneys remaining in the fund following distribution to 34 the Iowa greyhound association as provided in this subsection 35 -5- LSB 6228SV (1) 85 ec/nh 5/ 22

S.F. 2362 shall be under the sole control of the commission. The 1 commission shall determine the method by which moneys remaining 2 in the fund will be distributed. The commission may consider 3 objective evidence, including purse payments to greyhound 4 industry participants for the period beginning January 1, 2010, 5 and ending December 31, 2014, in determining the method of 6 distribution. The commission may hire an expert to assist 7 in the task of making distributions from the fund. The 8 commission may distribute moneys from the fund to greyhound 9 industry participants, to no-kill animal adoption agencies 10 to facilitate care for and adoption of greyhounds no longer 11 racing as a result of the discontinuance of live racing, 12 and to kennel owners and operators and greyhound owners for 13 costs incurred in removing property from the dog racetrack 14 located in Pottawattamie county as required by section 99D.9A, 15 subsection 2, paragraph “c” . Prior to adoption of any formula 16 for distribution, the commission shall allow for input from 17 greyhound industry participants. The distribution decisions of 18 the commission shall be final. The commission may use moneys 19 in the fund to pay its direct and indirect administrative 20 expenses incurred in administering the fund, including the 21 hiring of experts to assist in the commission’s distribution 22 determination. 23 4. Section 8.33 does not apply to moneys in the fund. 24 Notwithstanding section 12C.7, subsection 2, interest or 25 earnings on moneys deposited in the fund shall be credited to 26 the fund. 27 5. The commission shall adopt rules to administer this 28 section. 29 Sec. 4. NEW SECTION . 99D.9C Alternative dog racetrack and 30 simulcasting licensure —— live racing —— lease agreement with 31 gambling games licensee. 32 1. a. The Iowa greyhound association may submit an 33 application to the commission for a license under this 34 chapter to conduct pari-mutuel wagering on live dog races 35 -6- LSB 6228SV (1) 85 ec/nh 6/ 22

S.F. 2362 or simultaneously telecast horse or dog races, subject 1 to the requirements of this section. Unless inconsistent 2 with the requirements of this section, the Iowa greyhound 3 association shall comply with all requirements for submitting 4 an application for a license under this chapter. If an 5 application is submitted by October 1, 2014, the commission 6 shall, subject to the requirements of section 99D.9 and this 7 section, determine whether to approve the application for a 8 license by December 1, 2014. 9 b. If the commission approves an application for a license 10 submitted by the Iowa greyhound association pursuant to section 11 99D.9 and this section, the terms and conditions of the license 12 shall, notwithstanding any provision of law to the contrary, 13 authorize the licensee to conduct pari-mutuel wagering on 14 live dog races or simultaneously telecast horse or dog races 15 conducted at a racetrack enclosure located in Dubuque county 16 subject to the requirements of a lease agreement entered into 17 pursuant to the requirements of this section. The terms and 18 conditions of the license shall also authorize the licensee 19 to conduct pari-mutuel wagering on simultaneously telecast 20 horse or dog races at the facility of a licensee authorized 21 to conduct gambling games under chapter 99F pursuant to an 22 agreement with the licensee of that facility as authorized by 23 this section. A licensee issued a license pursuant to this 24 section shall comply with all requirements of this chapter 25 applicable to licensees unless otherwise inconsistent with the 26 provisions of this section. 27 2. a. The Iowa greyhound association shall establish an 28 escrow fund under its control for the receipt and deposit 29 of moneys transferred to the Iowa greyhound association 30 pursuant to section 99D.9B. The Iowa greyhound association 31 shall use moneys in the escrow fund to pay all reasonable 32 and necessary costs and fees associated with conducting live 33 racing and pari-mutuel wagering on simultaneously telecast 34 horse or dog races, including but not limited to regulatory and 35 -7- LSB 6228SV (1) 85 ec/nh 7/ 22

S.F. 2362 administrative fees, capital improvements, purse supplements, 1 operational costs, obligations pursuant to any purse supplement 2 agreement as amended and approved by the commission, payment 3 of rents for leased facilities and costs of maintenance of 4 leased facilities, payment for products and services provided 5 by the licensee authorized to conduct gambling games in Dubuque 6 county pursuant to section 99F.4A, subsection 9, costs to 7 maintain the license, costs for posting a bond as required by 8 section 99D.10, and administrative costs and fees incurred 9 in connection with the pursuit of the continuation of live 10 greyhound racing. 11 b. However, if the Iowa greyhound association is not 12 licensed to conduct pari-mutuel wagering on live dog races 13 or simultaneously telecast horse or dog races subject to the 14 requirements of this section or fails to conduct live dog 15 racing during any calendar year beginning on or after January 16 1, 2015, the Iowa greyhound association shall transfer any 17 unused moneys in the escrow fund to the commission for deposit 18 in the Iowa greyhound pari-mutuel racing fund created in 19 section 99D.9B and shall receive no further distributions from 20 the fund created in section 99D.9B. The commission shall 21 require that an annual audit be conducted and submitted to 22 the commission, in a manner determined by the commission, 23 concerning the operation of the escrow fund. 24 3. a. A license issued pursuant to this section shall 25 authorize the licensee to enter into an agreement with any 26 licensee authorized to conduct gambling games under chapter 27 99F to conduct, without the requirement to conduct live 28 horse or dog races at the facility, pari-mutuel wagering on 29 simultaneously telecast horse or dog races at the facility of 30 the licensee authorized to conduct gambling games under chapter 31 99F. A licensee under this section shall enter into no more 32 than one agreement per county to conduct pari-mutuel wagering 33 on simultaneously telecast horse or dog races with a licensee 34 authorized to conduct gambling games under chapter 99F. 35 -8- LSB 6228SV (1) 85 ec/nh 8/ 22

S.F. 2362 b. If a lease agreement entered into with the city of 1 Dubuque pursuant to this section is terminated or is not 2 renewed or extended, the licensee authorized to conduct 3 gambling games in Dubuque county pursuant to a license issued 4 pursuant to section 99F.4A, subsection 9, shall be authorized 5 to enter into an agreement with a licensee issued a license 6 pursuant to this section to conduct pari-mutuel wagering on 7 simultaneously telecast horse or dog races at the facility of 8 the licensee as provided by this subsection. 9 c. If the Iowa greyhound association is licensed as provided 10 in this section and ceases to conduct live dog racing, all 11 revenue generated from an agreement to simultaneously telecast 12 horse or dog races as authorized by this subsection shall be 13 used solely for the purpose of supplementing Iowa-whelped dogs 14 racing at out-of-state facilities. 15 4. a. Upon written request by the Iowa greyhound 16 association to the city of Dubuque by July 8, 2014, the city of 17 Dubuque shall be authorized to enter into an initial five-year 18 lease agreement with a single option to renew the lease for 19 an additional five years with the Iowa greyhound association 20 beginning January 1, 2015, to permit the Iowa greyhound 21 association to conduct pari-mutuel wagering on live dog races 22 and simultaneously telecast horse or dog races at the dog 23 racetrack located in Dubuque county. The lease agreement shall 24 be contingent upon the Iowa greyhound association obtaining a 25 license pursuant to the requirements of this section. 26 b. The lease agreement shall provide for the following: 27 (1) An annual lease payment of one dollar during the initial 28 five-year lease for the racetrack enclosure, which includes the 29 racetrack, kennels, grandstand, and space for a new simulcast 30 facility, and one five-year renewal of the lease agreement at a 31 fair market rental rate. 32 (2) Employees at the racetrack enclosure involved in 33 pari-mutuel wagering as of the live racing cessation date, as 34 provided in section 99D.9A, shall be offered employment by the 35 -9- LSB 6228SV (1) 85 ec/nh 9/ 22

S.F. 2362 Iowa greyhound association at the racetrack. 1 (3) Existing collective bargaining agreements concerning 2 employees at the racetrack shall be honored. 3 (4) Live dog racing requirements. The requirements shall 4 provide that the Iowa greyhound association conduct, for 5 calendar year 2015, no fewer than sixty live race days with 6 nine live races per day during the racing season, and for 7 calendar year 2016 and subsequent calendar years covered by the 8 lease agreement, no fewer than ninety-five live race days with 9 nine live races per day during each racing season. However, 10 upon mutual agreement by the parties subject to approval by 11 the commission, the number of race days for one or more live 12 racing seasons may be reduced so long as the Iowa greyhound 13 association conducts a minimum number of live races and racing 14 days during that season. 15 (5) Termination provisions, to include termination of the 16 agreement on January 1 of the year following the calendar year 17 in which live dog racing as required by the agreement was not 18 conducted by the Iowa greyhound association. 19 (6) Terms concerning contracts entered into for the conduct 20 of pari-mutuel wagering at the racetrack prior to the live 21 racing cessation date, as provided in section 99D.9A, at the 22 racetrack. 23 (7) Any other related items concerning the conduct of 24 pari-mutuel wagering at the dog racetrack and the operation of 25 the dog racetrack facility. 26 c. (1) If the parties are unable to reach agreement on 27 any of the terms of the initial lease agreement by October 1, 28 2014, or to reach agreement on the fair market rental rate 29 for purposes of the one five-year lease renewal by June 30, 30 2018, if the Iowa greyhound association requests arbitration 31 concerning the renewal by June 18, 2018, the disputed terms 32 of the lease shall be determined by binding arbitration 33 in accordance with the rules of the American arbitration 34 association as of the date for arbitration. A request for 35 -10- LSB 6228SV (1) 85 ec/nh 10/ 22

S.F. 2362 arbitration shall be in writing and a copy of the request 1 shall be delivered to the other party. The parties shall each 2 select one arbitrator and the two arbitrators shall choose 3 a third arbitrator to complete the three-person arbitration 4 panel. Each party shall deliver its final offer on each of 5 the disputed items to the other party within fourteen days 6 after the request for arbitration. After consultation with 7 the parties, the arbitrators shall set a time and place for an 8 arbitration hearing. The parties may continue to negotiate 9 all offers until an agreement is reached or a decision is 10 rendered by the arbitrators. For purposes of determining the 11 fair market rental rate for purposes of the one five-year 12 lease renewal, either party may argue, and present arguments 13 and evidence, that the renewal lease rental rate should be 14 based upon the market value of similarly situated undeveloped 15 land, or upon its use as a greyhound track. The submission 16 of the disputed items to the arbitrators shall be limited to 17 those items upon which the parties have not reached agreement. 18 However, the arbitrators shall have no authority to extend the 19 term of the lease agreement beyond the initial five-year term 20 or the one five-year renewal. 21 (2) The arbitrators shall render a decision within 22 fifteen days after the hearing. The arbitrators shall give 23 written explanation for the decision and the decision of the 24 arbitrators shall be final and binding on the parties, and any 25 decision of the arbitrators may be entered in any court having 26 competent jurisdiction. The decision by the arbitrators and 27 the items agreed upon by the parties shall be deemed to be 28 the lease agreement between the parties and such final lease 29 agreement shall not be subject to the approval of the governing 30 body of the city of Dubuque, the Iowa greyhound association, 31 the commission, or any other government body. Each party to 32 the arbitration shall bear its own expenses, including attorney 33 fees, and the parties shall share equally the filing and other 34 administrative fees of the American arbitration association and 35 -11- LSB 6228SV (1) 85 ec/nh 11/ 22

S.F. 2362 the expenses of the arbitrators. 1 Sec. 5. Section 99D.10, Code 2014, is amended to read as 2 follows: 3 99D.10 Bond of licensee. 4 A licensee licensed under section 99D.9 , including a 5 licensee issued a license subject to the requirements of 6 section 99D.9C, shall post a bond to the state of Iowa before 7 the license is issued in a sum as the commission shall fix, 8 with sureties to be approved by the commission. The bond shall 9 be used to guarantee that the licensee faithfully makes the 10 payments, keeps its books and records and makes reports, and 11 conducts its racing in conformity with sections 99D.6 through 12 99D.23 and the rules adopted by the commission. The bond 13 shall not be canceled by a surety on less than thirty days’ 14 notice in writing to the commission. If a bond is canceled 15 and the licensee fails to file a new bond with the commission 16 in the required amount on or before the effective date of 17 cancellation, the licensee’s license shall be revoked. The 18 total and aggregate liability of the surety on the bond is 19 limited to the amount specified in the bond. 20 Sec. 6. Section 99D.11, subsection 6, paragraph b, Code 21 2014, is amended to read as follows: 22 b. (1) The commission may authorize the licensee to 23 simultaneously telecast within the racetrack enclosure or at 24 the facility of a licensee authorized to conduct gambling games 25 under chapter 99F , for the purpose of pari-mutuel wagering, a 26 horse or dog race licensed by the racing authority of another 27 state. It is the responsibility of each licensee to obtain 28 the consent of appropriate racing officials in other states as 29 required by the federal Interstate Horseracing Act of 1978, 30 15 U.S.C. § 3001 – 3007, to televise races for the purpose of 31 conducting pari-mutuel wagering. 32 (2) A licensee may also obtain the permission of a person 33 licensed by the commission to conduct horse or dog races in 34 this state to televise races conducted by that person for the 35 -12- LSB 6228SV (1) 85 ec/nh 12/ 22

S.F. 2362 purpose of conducting pari-mutuel racing wagering . However, 1 arrangements made by a licensee to televise any race for the 2 purpose of conducting pari-mutuel wagering are subject to the 3 approval of the commission, and the commission shall select the 4 races to be televised. The races selected by the commission 5 shall be the same for all licensees approved by the commission 6 to televise races for the purpose of conducting pari-mutuel 7 wagering. The Except for a licensee that is not obligated to 8 schedule performances of live races pursuant to section 99D.9A, 9 or a licensee issued a license subject to the requirements 10 of section 99D.9C, the commission shall not authorize the 11 simultaneous telecast or televising of and a licensee shall 12 not simultaneously telecast or televise any horse or dog race 13 for the purpose of conducting pari-mutuel wagering unless the 14 simultaneous telecast or televising is done at the racetrack of 15 a licensee that schedules no less than sixty performances of 16 nine live races each day of the season. 17 (3) For purposes of the taxes imposed under this chapter , 18 races televised by a licensee for purposes of pari-mutuel 19 wagering shall be treated as if the races were held at the 20 racetrack of by the licensee. Notwithstanding any contrary 21 provision in this chapter , the commission may allow a licensee 22 to adopt the same deductions as those of the pari-mutuel 23 racetrack from which the races are being simultaneously 24 telecast. 25 Sec. 7. Section 99D.20, Code 2014, is amended to read as 26 follows: 27 99D.20 Audit of licensee operations. 28 Within ninety days after the end of each calendar year, 29 the licensee , including a licensee issued a license subject 30 to the requirements of section 99D.9C, shall transmit to 31 the commission an audit of the financial transactions and 32 condition of the licensee’s operations conducted under this 33 chapter . Additionally, within ninety days after the end of 34 the licensee’s fiscal year, the licensee shall transmit to 35 -13- LSB 6228SV (1) 85 ec/nh 13/ 22

S.F. 2362 the commission an audit of the licensee’s total racing and 1 gaming operations, including an itemization of all expenses and 2 subsidies. All audits shall be conducted by certified public 3 accountants authorized to practice in the state of Iowa under 4 chapter 542 who are selected by the board of supervisors of the 5 county in which the licensee operates. 6 Sec. 8. Section 99F.1, subsection 21, Code 2014, is amended 7 to read as follows: 8 21. “Racetrack enclosure” means all real property utilized 9 for the conduct of a race meeting, including the racetrack, 10 grandstand, concession stands, offices, barns, kennels and 11 barn areas, employee housing facilities, parking lots, and 12 any additional areas designated by the commission. “Racetrack 13 enclosure” also means all real property utilized by a licensee 14 under chapter 99D who is not required to conduct live racing 15 pursuant to the requirements of section 99D.9A, on which 16 pari-mutuel wagering on simultaneously telecast horse or dog 17 races may be conducted and lawful gambling is authorized and 18 licensed as provided in this chapter. 19 Sec. 9. Section 99F.4A, Code 2014, is amended by adding the 20 following new subsection: 21 NEW SUBSECTION . 9. a. Upon application, the commission 22 shall issue a license to the licensee of the pari-mutuel 23 dog racetrack located in Dubuque county as of the effective 24 date of this provision of this Act to conduct gambling games 25 at a gambling structure subject to the provisions of this 26 chapter and rules adopted pursuant to this chapter relating 27 to gambling. The licensee shall not be required to pay 28 any additional fees or be assessed any additional costs 29 for issuance of the license pursuant to this subsection and 30 shall be exempt, for purposes of the initial issuance of a 31 license under this subsection, from further investigation and 32 examination for a license to conduct gambling games pursuant to 33 this chapter. 34 b. To maintain a license pursuant to this subsection on 35 -14- LSB 6228SV (1) 85 ec/nh 14/ 22

S.F. 2362 or after July 1, 2014, the licensee shall provide written 1 notification to the commission by September 1, 2014, as 2 provided in section 99D.9A, subsection 1, pay the live racing 3 cessation fee as provided in section 99D.9A, and otherwise 4 comply with the requirements of section 99D.9A applicable to 5 the licensee. In addition, the licensee shall pay the annual 6 license fee as specified in section 99F.5 and regulatory fee as 7 a licensee authorized to conduct gambling games on a gambling 8 structure and shall otherwise be required to comply with all 9 requirements of this chapter applicable to a gambling games 10 licensee not otherwise inconsistent with the requirements of 11 this subsection. 12 Sec. 10. Section 99F.6, subsection 4, paragraph b, Code 13 2014, is amended to read as follows: 14 b. (1) The commission shall authorize the licensees 15 licensee of the pari-mutuel dog racetracks racetrack located 16 in Dubuque county and Black Hawk county to conduct gambling 17 games as provided in section 99F.4A if the licensees schedule 18 licensee schedules at least one hundred thirty performances 19 of twelve live races each day during a season of twenty-five 20 weeks. For the pari-mutuel dog racetrack located in 21 Pottawattamie county, the commission shall authorize the 22 licensee to conduct gambling games as provided in section 23 99F.4A if the licensee schedules at least two hundred ninety 24 performances of twelve live races each day during a season 25 of fifty weeks. The However, the requirement to schedule 26 performances of live races for purposes of conducting gambling 27 games under this chapter shall not apply to a licensee as of 28 the live racing cessation date of the licensee as provided in 29 section 99D.9A. 30 (2) If a pari-mutuel dog racetrack authorized to conduct 31 gambling games as of January 1, 2014, is required to schedule 32 performances of live races for purposes of conducting gambling 33 games under this chapter during any calendar year, the 34 commission shall approve an annual contract to be negotiated 35 -15- LSB 6228SV (1) 85 ec/nh 15/ 22

S.F. 2362 between the annual recipient of the dog racing promotion fund 1 and each dog racetrack licensee to specify the percentage or 2 amount of gambling game proceeds which shall be dedicated to 3 supplement the purses of live dog races. The parties shall 4 agree to a negotiation timetable to insure no interruption 5 of business activity. If the parties fail to agree, the 6 commission shall impose a timetable. If the two parties cannot 7 reach agreement, each party shall select a representative and 8 the two representatives shall select a third person to assist 9 in negotiating an agreement. The two representatives may 10 select the commission or one of its members to serve as the 11 third party. Alternately, each party shall submit the name 12 of the proposed third person to the commission who shall then 13 select one of the two persons to serve as the third party. All 14 parties to the negotiations, including the commission, shall 15 consider that the dog racetracks were built to facilitate the 16 development and promotion of Iowa greyhound racing dogs in this 17 state and shall negotiate and decide accordingly. 18 Sec. 11. TRANSITION PROVISIONS —— PURSE SUPPLEMENTS. The 19 annual contract under section 99F.6, subsection 4, paragraph 20 “b”, specifying the percentage or amount of gambling game 21 proceeds which shall be dedicated to supplement the purses of 22 live dog races conducted during the calendar year beginning 23 January 1, 2014, at the pari-mutuel dog racetrack located in 24 Pottawattamie county shall be extended to apply to live dog 25 races conducted at the dog racetrack located in Pottawattamie 26 county during the calendar year beginning January 1, 2015. 27 Sec. 12. EFFECTIVE UPON ENACTMENT. The following 28 provision or provisions of this Act, being deemed of immediate 29 importance, take effect upon enactment: 30 1. The section of this Act amending section 99F.4A. 31 EXPLANATION 32 The inclusion of this explanation does not constitute agreement with 33 the explanation’s substance by the members of the general assembly. 34 This bill relates to the conduct of live dog racing at 35 -16- LSB 6228SV (1) 85 ec/nh 16/ 22

S.F. 2362 pari-mutuel dog racetracks authorized to conduct gambling 1 games. 2 Code section 99D.2, which provides definitions for 3 pari-mutuel wagering, is amended to provide that a racetrack 4 enclosure also includes real property utilized for purposes 5 of conducting pari-mutuel wagering on simultaneously telecast 6 horse or dog races and for lawful gambling authorized and 7 licensed as provided by Code chapters 99D and 99F. 8 New Code section 99D.9A allows a licensee authorized to 9 operate a pari-mutuel dog racetrack and to conduct gambling 10 games as of January 1, 2014, to, upon written notification 11 to the racing and gaming commission by September 1, 2014, 12 discontinue performances of live dog races as of the live 13 racing cessation date of the licensee and to maintain a license 14 for purposes of conducting gambling games and, if applicable, 15 pari-mutuel wagering on simultaneously telecast horse or dog 16 races. The bill provides that the live racing cessation 17 date is October 31, 2014, for the licensee of the racetrack 18 in Dubuque county, and December 31, 2015, for the licensee 19 of the racetrack in Pottawattamie county. Upon the live 20 racing cessation date, the racing and gaming commission shall 21 transfer any unexpended moneys in the dog racing promotion fund 22 attributable to the licensee to an Iowa greyhound pari-mutuel 23 racing fund created in the bill, and any agreement for dog 24 purse supplement payments for live racing shall be terminated. 25 In addition, the bill provides that greyhound and kennel owners 26 shall, within 30 days of the live racing cessation date, 27 remove all of their property including the greyhounds from the 28 racetrack located in Pottawattamie county. The bill provides 29 that each licensee, upon the applicable live racing cessation 30 date, shall commence paying a new live racing cessation fee for 31 deposit in the Iowa greyhound pari-mutuel racing fund. The 32 new Code section sets the total live racing cessation fee for 33 the pari-mutuel dog racetrack located in Dubuque county at $7 34 million, payable in $1 million installments each January 1 for 35 -17- LSB 6228SV (1) 85 ec/nh 17/ 22

S.F. 2362 seven consecutive years beginning January 1, 2015. For the 1 pari-mutuel dog racetrack located in Pottawattamie county, the 2 total live racing cessation fee is $65 million, payable in 3 installments over seven consecutive years beginning January 1, 4 2016. The bill provides that the obligation to pay the fee 5 ceases if either licensee, or the manager of the facility in 6 Pottawattamie county, who was the licensee or manager as of 7 January 1, 2014, is no longer the licensee or manager of the 8 facility, and that prior to issuing a license to a successor 9 licensee or entering into a new management agreement, all 10 remaining unpaid installments of the fee shall be paid. 11 The bill provides that the licensee of the racetrack 12 located in Dubuque county shall be authorized to maintain a 13 license under Code section 99F.4A, as provided in the bill, to 14 conduct gambling games on a gambling structure and to conduct 15 simulcast wagering until December 31, 2014. The licensee of 16 the racetrack located in Pottawattamie county shall remain 17 licensed under Code chapter 99D, shall not be required to 18 conduct live dog racing for purposes of conducting gambling 19 games, and shall be authorized, but not required, to conduct 20 pari-mutuel wagering on simultaneously telecast horse or dog 21 races without a live racing requirement. The new Code section 22 further provides that compliance with the requirements of 23 the Code section and the establishment of the Iowa greyhound 24 pari-mutuel racing fund constitute a full satisfaction of and 25 discharge from any liability of the licensees and the Iowa 26 greyhound association arising out of the discontinuance of live 27 dog racing as provided in the bill. 28 New Code section 99D.9B establishes an Iowa greyhound 29 pari-mutuel racing fund under the control of the racing 30 and gaming commission. The fund shall consist of moneys 31 transferred from the dog racing promotion fund, and moneys 32 from the live racing cessation fee established in new Code 33 section 99D.9A. Of the moneys deposited in the fund, 50 34 percent shall be distributed to the Iowa greyhound association 35 -18- LSB 6228SV (1) 85 ec/nh 18/ 22