S.F. _____ Section 1. Section 99D.5, subsection 5, paragraph a, 1 subparagraph (2), Code 2013, is amended to read as follows: 2 (2) Participate directly or indirectly as an owner, 3 owner-trainer, trainer of a horse or dog, or jockey of a horse 4 in a race meeting conducted in this state. 5 Sec. 2. Section 99D.7, subsection 5, paragraph b, Code 2013, 6 is amended to read as follows: 7 b. The commission shall, beginning January 1, 2012, regulate 8 the purse structure for all horse racing so that seventy-six 9 percent is designated for thoroughbred racing, fifteen and 10 one-quarter percent is designated for quarter horse racing, and 11 eight and three-quarter three-quarters percent is designated 12 for standardbred racing. The purse moneys designated for 13 standardbred racing may only be used to support standardbred 14 harness racing purses at the state fair, county fairs, or other 15 harness racing tracks approved by the commission, or for the 16 construction, maintenance , or repair of harness racing tracks 17 at the fairgrounds for such fairs or other harness racing 18 tracks approved by the commission. The horse racetrack in Polk 19 county shall not provide funding to support standardbred racing 20 at such county fairs that is not otherwise provided for in this 21 paragraph. 22 Sec. 3. Section 99D.11, subsection 6, paragraph c, 23 subparagraphs (3) and (4), Code 2013, are amended by striking 24 the subparagraphs and inserting in lieu thereof the following: 25 (3) To qualify for an advance deposit wagering operator 26 license, an entity other than the licensee of the horse 27 racetrack located in Polk county shall agree to deposit a 28 statewide source market fee of eight percent of the total 29 pari-mutuel handle wagered within the state through the entity. 30 The fees shall be deposited monthly into an account created 31 and administered jointly by the Iowa horsemen’s benevolent and 32 protective association, Iowa quarter horse racing association, 33 and the Iowa harness horsemen’s association, which account 34 shall be subject to an annual audit of the collection and 35 -1- LSB 2107SC (3) 85 ec/nh 1/ 5

S.F. _____ allocation of the fees received to be submitted to the 1 commission by the associations. Of the fees deposited, fifty 2 percent shall be designated for the horse purses created 3 pursuant to section 99D.7, subsection 5, and fifty percent 4 shall be designated for the licensee for the pari-mutuel 5 horse racetrack located in Polk county. The commission 6 shall establish such additional terms and conditions for the 7 issuance of an advance deposit wagering operator license as the 8 commission deems appropriate. 9 (4) The commission shall take such action as it deems 10 necessary to administer the conduct of advance deposit wagering 11 in this state, including taking such action as is authorized 12 by the federal Interstate Horseracing Act of 1978, 15 U.S.C. 13 § 3001 – 3007, and to ensure that all pari-mutuel wagering on 14 horse races by residents of the state occurs at a pari-mutuel 15 facility or through properly licensed advance deposit wagering 16 operators. The commission shall also impose a civil penalty 17 of up to five thousand dollars per violation on any individual 18 or entity, and up to ten thousand dollars per violation on any 19 licensee, who violates any provision of this chapter governing 20 advance deposit wagering. Civil penalties collected pursuant 21 to this subparagraph shall be deposited in the general fund of 22 the state. 23 Sec. 4. Section 99D.11, subsection 6, paragraph c, Code 24 2013, is amended by adding the following new subparagraph: 25 NEW SUBPARAGRAPH . (05) An advance deposit wagering 26 operator located in this state shall not solicit, accept, open, 27 or operate advance deposit wagering accounts for a person whose 28 principal residence is outside the state, including a resident 29 of a foreign jurisdiction, unless the operator has received a 30 license from the commission and is in good standing with the 31 commission, licensed pari-mutuel wagering on thoroughbred, 32 quarter horse, or standardbred horse racing is lawful in the 33 jurisdiction in which the person resides, and the advance 34 deposit wagering operator complies with the federal Interstate 35 -2- LSB 2107SC (3) 85 ec/nh 2/ 5

S.F. _____ Horseracing Act of 1978, 15 U.S.C. § 3001 – 3007, and the laws 1 of the jurisdiction which is the principal place of residence 2 of the person. 3 Sec. 5. Section 99D.11, subsection 6, paragraph c, 4 subparagraph (5), Code 2013, is amended to read as follows: 5 (5) For the purposes of this paragraph “c” , “advance deposit 6 wagering operator” means an advance deposit wagering operator 7 licensed by the commission who has entered into an agreement 8 with the licensee of the horse racetrack in Polk county and 9 the Iowa horsemen’s benevolent and protective association to 10 provide entity or person licensed to engage in advance deposit 11 wagering. 12 Sec. 6. Section 99D.24, subsection 3, Code 2013, is amended 13 to read as follows: 14 3. A person wagering or accepting a wager at any location 15 outside the wagering area or engaging in advance deposit 16 wagering in violation of the requirements of section 99D.11 is 17 subject to the penalties in section 725.7 . 18 Sec. 7. Section 99D.25A, subsection 2, Code 2013, is amended 19 to read as follows: 20 2. Phenylbutazone shall not be administered to a horse in 21 dosages which would result in concentrations of more than five 22 micrograms of the substance or its metabolites per milliliter 23 of blood. In races recognized as graded stakes races by the 24 Iowa horsemen’s benevolent and protective association, the 25 commission may establish restrictions on dosage amounts for 26 phenylbutazone which would result in concentrations of less 27 than five micrograms of the substance or its metabolites per 28 milliliter of blood. 29 EXPLANATION 30 This bill concerns pari-mutuel wagering and horse racing. 31 Code section 99D.5(5), relating to conflict of interest 32 provisions concerning the racing and gaming commission, is 33 amended to provide that a member of the commission or a holder 34 of an official’s license may participate indirectly as an owner 35 -3- LSB 2107SC (3) 85 ec/nh 3/ 5

S.F. _____ or trainer of a horse or dog, or jockey of a horse involved 1 in pari-mutuel wagering. The current prohibition on having a 2 direct interest in any of these activities is maintained. 3 Code section 99D.7(5), concerning purse moneys for horse 4 racing, is amended to allow purse moneys designated for 5 standardbred racing to be used for the construction of harness 6 racing tracks. 7 Code section 99D.11(6)(c), governing advance deposit 8 wagering, is amended. The bill strikes current law that 9 provides that an advance deposit wagering operator enter 10 into an agreement with the horse racetrack licensee and the 11 Iowa horsemen’s benevolent and protective association to 12 determine the applicable statewide source market fees and the 13 host fees to be paid by the operator in conducting advance 14 deposit wagering. The bill instead provides that to qualify 15 for an advance deposit wagering operator license, an entity 16 other than the licensee of the horse racetrack located in 17 Polk county shall agree to deposit a statewide source market 18 fee of 8 percent of the total pari-mutuel handle wagered in 19 the state through the state. The bill provides that the fees 20 be deposited in an account with 50 percent designated for 21 horse purses and 50 percent designated for the licensee for 22 the pari-mutuel horse racetrack located in Polk county. The 23 commission shall establish such additional terms and conditions 24 for the issuance of an advance deposit wagering operator 25 license as the commission deems appropriate. 26 Code section 99D.11(6)(c)(4), governing penalties for 27 advance deposit wagering violations, is amended by striking 28 the current provision providing that unauthorized advance 29 deposit wagering is a class “D” felony and replacing the 30 provision with civil penalties. The bill requires the racing 31 and gaming commission to take such action as it deems necessary 32 to administer the conduct of advance deposit wagering in this 33 state. In addition, the bill requires the commission to impose 34 a civil penalty of up to $5,000 per violation on any individual 35 -4- LSB 2107SC (3) 85 ec/nh 4/ 5

S.F. _____ or entity, and up to $10,000 per violation on any licensee, who 1 violates any provision governing advance deposit wagering. 2 Code section 99D.11(6)(c), new subparagraph (05), 3 establishes when an advance deposit wagering operator can 4 open accounts for nonresidents to engage in advance deposit 5 wagering. 6 Code section 99D.24, concerning penalties for violations of 7 Code chapter 99D, is amended to provide that a person engaging 8 in advance deposit wagering in violation of the requirements of 9 the Code chapter is subject to the penalties in Code section 10 725.7. 11 Code section 99D.25A is amended to allow the racing and 12 gaming commission to establish restrictions on dosage amounts 13 for phenylbutazone in races recognized as graded stakes races 14 by the Iowa horsemen’s benevolent and protective association. 15 -5- LSB 2107SC (3) 85 ec/nh 5/ 5