SF 2101 (LSB 5191XS (8) 91)

SENATE FILE 2101

BY  DICKEY

A BILL FOR

An Act relating to the distribution of gambling games and sports wagering receipts for nonprofit purposes, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 99F.6, subsection 4, paragraph a, subparagraph (2), Code 2026, is amended to read as follows:
   (2)  (a)  A qualified sponsoring organization licensed to operate gambling games under this chapter shall distribute the receipts of all gambling games, less reasonable expenses, charges, taxes, fees, and deductions allowed under this chapter, as winnings to players or participants or shall distribute the receipts for educational, civic, public, charitable, patriotic, or religious uses as defined in section 99B.1. A qualified sponsoring organization shall provide that any organization exempt from federal income taxes under section 501(c)(19) of the Internal Revenue Code, as defined in section 422.3, shall be eligible for a distribution of adjusted gross receipts for educational, civic, public, charitable, patriotic, or religious uses as required by this subparagraph. However, a licensee to conduct gambling games under this chapter shall, unless an operating agreement for an excursion gambling boat otherwise provides, distribute at least three percent of the adjusted gross receipts and, if applicable, three-quarters of one percent of sports wagering net receipts for each license year for educational, civic, public, charitable, patriotic, or religious uses as defined in section 99B.1, as provided in subparagraph division (b). However, if a licensee who is also licensed to conduct pari-mutuel wagering at a horse racetrack has unpaid debt from the pari-mutuel racetrack operations, the first receipts of the gambling games operated within the racetrack enclosure less reasonable operating expenses, taxes, and fees allowed under this chapter shall be first used to pay the annual indebtedness.
   (b)  (i)  A licensee making a required distribution for educational, civic, public, charitable, patriotic, or religious uses pursuant to subparagraph division (a) shall distribute the moneys, including moneys from gambling games and sports wagering receipts contributed by persons who are not residents of Iowa, on a pro rata basis for use in each Iowa county whose residents contributed to the gambling games or sports wagering receipts of the licensee.
   (ii)  To determine the share of the moneys to be distributed for use in each Iowa county, the licensee shall transmit to the department of revenue a report of the counties of residence of all persons known to the licensee to have contributed to the gambling games or sports wagering receipts of the licensee and the amount each such person contributed to the receipts of the licensee. The licensee shall gather information for the report from data players have given to the licensee, including for participation in rewards programs. Within sixty days of receipt of a report, the department of revenue shall inform the licensee of the percentage of the distribution to be made for use in each Iowa county, which shall be based on the amount of contributions from the residents of a given Iowa county in comparison to the total amount of contributions from residents of Iowa who contributed to such receipts of the licensee.
   (iii)  If the distribution for use in an Iowa county would amount to less than three percent of the total distribution, or if the licensee does not receive a suitable application from an organization for use of the distribution in the county, the licensee may retain the moneys dedicated to distribution for use in the county for a period not to exceed three years.
   (iv)  If a licensee does not receive a suitable application for use of a distribution in a county within the three-year period, the licensee shall transfer the moneys dedicated to distribution for use in the county to the department of revenue for deposit in the county’s account in the county endowment fund created pursuant to section 15E.311.
   (v)  A licensee may make a distribution under this subparagraph division (b) to the department of revenue for deposit in the county’s account in the county endowment fund created pursuant to section 15E.311.
    Sec. 2.  APPLICABILITY.  This Act applies to gambling games and sports wagering receipts collected in a fiscal year beginning on or after the effective date of this Act.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to the allocation of required nonprofit distributions of gambling games and sports wagering receipts. Under current law, most licensees are required to distribute at least 3 percent of the licensee’s adjusted gross receipts from gambling games and three-quarters of 1 percent of net receipts from sports wagering to organizations dedicated to civic, public, charitable, patriotic, or religious uses. The bill requires these distributions to be made on a pro rata basis for use in Iowa counties whose residents are known to the licensee to have contributed to the gambling games and sports wagering receipts of the licensee.
   To calculate the percentage of a distribution that will be made for use in each Iowa county, the bill requires the licensee to transmit to the department of revenue (department) the counties of residence of all persons known to the licensee to have contributed to the gambling games or sports wagering receipts of the licensee and the amount each such person contributed to the receipts of the licensee. The licensee shall gather information for the report from data players have given to the licensee, including for participation in a rewards program. The department shall then inform the licensee of the percentage of the distribution to be made for use in each Iowa county, based on the amount of contributions from residents of the county. If the distribution within a county would amount to less than 3 percent of the total distribution, or if the licensee does not receive a suitable application from an organization for use in a county, the licensee may retain the moneys dedicated to distribution for use in that county for a period not to exceed three years. After three years, the bill requires a licensee to transfer the moneys to the department for deposit in the county’s account in the county endowment fund if the licensee does not receive a suitable application from an organization for use in that county. The bill also allows licensees to make distributions under the bill to a county’s account in the county endowment fund.
   The bill applies to gambling games and sports wagering receipts collected in a fiscal year beginning on or after the effective date of the bill.