S.F. 24 Section 1. Section 99F.1, Code 2015, is amended by adding 1 the following new subsections: 2 NEW SUBSECTION . 19A. “Promotional play” means wagers 3 conducted with tokens, chips, electronic credits, or other 4 forms of cashless wagering provided by the licensee without an 5 exchange of money as described in section 99F.9, subsection 3. 6 NEW SUBSECTION . 22. “Taxable gross receipts” means the 7 adjusted gross receipts less the total sums wagered through 8 promotional play. 9 Sec. 2. Section 99F.4A, subsection 6, Code 2015, is amended 10 to read as follows: 11 6. The adjusted taxable gross receipts received from 12 gambling games shall be taxed at the same rates and the 13 proceeds distributed in the same manner as provided in section 14 99F.11 . 15 Sec. 3. NEW SECTION . 99F.4E Moratorium for issuance of 16 licenses for gambling games. 17 1. For the period beginning January 1, 2016, and ending 18 December 31, 2025, the commission shall not issue a license to 19 conduct gambling games on an excursion gambling boat or at a 20 gambling structure or a pari-mutuel racetrack pursuant to this 21 chapter. 22 2. This section does not affect the validity of a license 23 issued by the commission pursuant to this chapter or this Act 24 before January 1, 2016, or the authority of the commission to 25 suspend, revoke, transfer, or renew a license issued before 26 January 1, 2016, pursuant to chapter 99D or this chapter. 27 Sec. 4. NEW SECTION . 99F.5A Supplemental distribution to 28 qualified sponsoring organizations. 29 For each license year, a qualified sponsoring organization 30 licensed to operate gambling games under this chapter shall 31 retain, as a supplemental distribution from the adjusted gross 32 receipts of the licensee, an amount representing fifty percent 33 of the difference between the wagering tax calculated for the 34 licensee under section 99F.11 using the definition of adjusted 35 -1- LSB 1011XS (4) 86 ec/nh 1/ 5

S.F. 24 gross receipts as provided in section 99F.1 and the wagering 1 tax for the licensee calculated on taxable gross receipts as 2 provided in section 99F.11 for each license year. 3 Sec. 5. Section 99F.11, subsection 1, Code 2015, is amended 4 to read as follows: 5 1. A tax is imposed on the adjusted taxable gross receipts 6 received each fiscal year from gambling games authorized under 7 this chapter at the rate of five percent on the first one 8 million dollars of adjusted taxable gross receipts and at the 9 rate of ten percent on the next two million dollars of adjusted 10 taxable gross receipts. 11 Sec. 6. Section 99F.11, subsection 2, unnumbered paragraph 12 1, Code 2015, is amended to read as follows: 13 The tax rate imposed each fiscal year on any amount of 14 adjusted taxable gross receipts over three million dollars 15 shall be as follows: 16 Sec. 7. Section 99F.11, subsection 2, paragraph b, 17 subparagraph (2), Code 2015, is amended to read as follows: 18 (2) If the licensee of the racetrack enclosure has been 19 issued a table games license during the fiscal year or prior 20 fiscal year and the adjusted gross receipts from gambling games 21 of the licensee in the prior fiscal year were one hundred 22 million dollars or more, twenty-two percent on adjusted taxable 23 gross receipts received prior to the operational date and 24 twenty-four percent on adjusted taxable gross receipts received 25 on or after the operational date. For purposes of this 26 subparagraph, the operational date is the date the commission 27 determines table games became operational at the racetrack 28 enclosure. 29 Sec. 8. Section 99F.11, subsection 3, paragraphs a, b, and 30 c, Code 2015, are amended to read as follows: 31 a. If the gambling excursion originated at a dock located 32 in a city, one-half of one percent of the adjusted taxable 33 gross receipts shall be remitted to the treasurer of the city 34 in which the dock is located and shall be deposited in the 35 -2- LSB 1011XS (4) 86 ec/nh 2/ 5

S.F. 24 general fund of the city. Another one-half of one percent of 1 the adjusted taxable gross receipts shall be remitted to the 2 treasurer of the county in which the dock is located and shall 3 be deposited in the general fund of the county. 4 b. If the gambling excursion originated at a dock located 5 in a part of the county outside a city, one-half of one percent 6 of the adjusted taxable gross receipts shall be remitted to 7 the treasurer of the county in which the dock is located and 8 shall be deposited in the general fund of the county. Another 9 one-half of one percent of the adjusted taxable gross receipts 10 shall be remitted to the treasurer of the Iowa city nearest to 11 where the dock is located and shall be deposited in the general 12 fund of the city. 13 c. Eight-tenths of one One and six-tenths percent of the 14 adjusted taxable gross receipts tax shall be deposited in the 15 county endowment fund created in section 15E.311 . 16 Sec. 9. Section 99F.11, subsection 3, paragraph d, 17 unnumbered paragraph 1, Code 2015, is amended to read as 18 follows: 19 Two-tenths of one percent of the adjusted taxable gross 20 receipts tax shall be allocated each fiscal year as follows: 21 Sec. 10. Section 99F.11, subsection 3, paragraph e, Code 22 2015, is amended to read as follows: 23 e. The remaining amount of the adjusted taxable gross 24 receipts tax shall be credited as provided in section 8.57, 25 subsection 5 . 26 Sec. 11. GAMBLING GAMES LICENSE ISSUANCE —— TERMS AND 27 CONDITIONS. 28 1. The racing and gaming commission shall grant a license 29 to conduct gambling games on a gambling structure pursuant to 30 the requirements of this section and chapter 99F by December 31 1, 2015. An application for a license to be granted under 32 this section shall be submitted by August 1, 2015, and shall 33 be limited to an application from a proposed licensee for 34 which the gambling structure at which gambling games are to 35 -3- LSB 1011XS (4) 86 ec/nh 3/ 5

S.F. 24 be conducted is to be located in a city with a population of 1 more than one hundred thousand and less than one hundred fifty 2 thousand in the latest preceding certified federal decennial 3 census and for which the governing body of the city has adopted 4 a resolution approving the submission of the application. 5 Notwithstanding any provision of chapter 99F to the contrary, 6 the initial license fee shall be waived for an applicant 7 submitting an application pursuant to the requirements of this 8 section. 9 2. A license to conduct gambling games issued pursuant to 10 this section shall provide that the premises of the licensee, 11 including the gaming floor, shall, notwithstanding any 12 provision of law to the contrary, be subject to the smoking 13 prohibition requirements of section 142D.3. 14 Sec. 12. COUNTY ENDOWMENT FUND ALLOCATION —— LEGISLATIVE 15 STUDY. It is the intent of the general assembly that the 16 legislative council establish an interim study committee during 17 the 2020 legislative interim to review and make recommendations 18 concerning the appropriate percentage of the wagering tax to be 19 distributed for deposit in the county endowment fund created 20 in section 15E.311. 21 EXPLANATION 22 The inclusion of this explanation does not constitute agreement with 23 the explanation’s substance by the members of the general assembly. 24 This bill concerns gambling games licensure under Code 25 chapter 99F and the wagering tax applied to gambling game 26 licensees under that Code chapter. 27 Code section 99F.1 is amended by adding two new definitions. 28 “Promotional play” is defined as wagers conducted with 29 tokens, chips, electronic credits, or other forms of cashless 30 wagering provided by the licensee without an exchange of money. 31 “Taxable gross receipts” is defined as adjusted gross receipts 32 less the total sums wagered through promotional play. 33 New Code section 99F.4E establishes a moratorium preventing 34 the racing and gaming commission from issuing a new license to 35 -4- LSB 1011XS (4) 86 ec/nh 4/ 5

S.F. 24 conduct gambling games on an excursion gambling boat, gambling 1 structure, or at a pari-mutuel racetrack for the period 2 beginning January 1, 2016, and ending December 31, 2025. 3 New Code section 99F.5A provides for a supplemental 4 distribution to a qualified sponsoring organization licensed 5 to operate gambling games equal to an amount representing 50 6 percent of the difference in the wagering tax paid by the 7 licensee based on calculating the tax on the taxable gross 8 receipts of the gambling game licensee instead of the adjusted 9 gross receipts as provided in the bill. 10 Code section 99F.11, providing for the wagering tax, is 11 amended to provide that the wagering tax is calculated on the 12 taxable gross receipts of a gambling game licensee instead of 13 the adjusted gross receipts. 14 Code section 99F.11 is further amended to increase, from 15 eight-tenths of a percent to one and six-tenths percent, the 16 amount of the adjusted gross receipts tax to be deposited in 17 the county endowment fund created in Code section 15E.311. The 18 bill further directs the legislative council to establish a 19 legislative study committee during the 2020 legislative interim 20 to examine the percentage of the adjusted gross receipts tax to 21 be deposited in the county endowment fund. 22 The bill requires the racing and gaming commission to grant 23 a license to conduct gambling games at a gambling structure 24 that is subject to the smoking prohibition requirements of 25 Code section 142D.3, by December 1, 2015. An application for 26 a license subject to the requirements of the bill shall be 27 submitted by August 1, 2015, and shall be limited to a proposed 28 licensee that will locate the gambling structure in a city 29 with a population of more than 100,000 and less than 150,000 30 and for which the governing body of the city has adopted a 31 resolution approving the submission of the application. The 32 bill also provides that the initial license fee shall be waived 33 for an applicant submitting an application for a gambling games 34 license pursuant to the requirements of the bill. 35 -5- LSB 1011XS (4) 86 ec/nh 5/ 5