SSB 1157 (LSB 1774XC (5) 91)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON DAWSON)

A BILL FOR

An Act concerning the regulation and support of leisure activities, including by providing for gambling games and sports wagering enforcement, license fees, tax rates, and the use of associated revenue, establishing the Iowa major events and tourism program and fund, modifying the sports tourism marketing and infrastructure program, making appropriations, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
GAMBLING GAMES AND SPORTS WAGERING

    Section 1.  Section 8.57I, subsection 3, Code 2025, is amended to read as follows:
   3.  a.  Moneys in the sports wagering receipts fund in a fiscal year shall be used as directed by the general assembly.
   b.  For the fiscal year beginning July 1, 2026, and each fiscal year thereafter, there is appropriated from the sports wagering receipts fund to the public safety equipment fund created in section 80.48 eight million dollars. Subsections 4 and 5 do not apply to moneys appropriated under this paragraph.
    Sec. 2.  Section 80.43, subsection 1, Code 2025, is amended to read as follows:
   1.  A gaming enforcement revolving fund is created in the state treasury under the control of the department. The fund shall consist of fees collected and deposited into the fund paid by licensees pursuant to section 99D.14, subsection 2, paragraph “b”, fees and costs paid by applicants pursuant to section 99E.4, subsection 4, and fees paid by licensees pursuant to section 99F.10, subsection 4, paragraph “b” any other moneys appropriated to, transferred to, or deposited in the fund. All costs for agents and officers plus any direct support costs for such agents and officers of the division of criminal investigation’s racetrack, excursion boat, gambling structure, and internet fantasy sports contests, as defined in section 99E.1, enforcement activities shall be paid from the fund as provided in appropriations made for this purpose by the general assembly.
    Sec. 3.  Section 99D.14, subsection 2, paragraph a, subparagraph (1), Code 2025, is amended to read as follows:
   (1)  A licensee shall pay a regulatory fee to be charged as provided in this section. In determining the regulatory fee to be charged as provided under this section, the commission shall use the amount appropriated to the commission plus the cost of salaries for no more than three special agents assigned pursuant to the provisions of section 80.25A, for each racetrack that has not been issued a table games license under chapter 99F or no more than three special agents assigned pursuant to the provisions of section 80.25A, for each racetrack that has been issued a table games license under chapter 99F, plus any direct and indirect support costs for the division of criminal investigation’s duties pursuant to chapters 99D, 99E, and 99F, and section 80.25A, as the basis for determining the amount of revenue to be raised from the regulatory fee.
    Sec. 4.  Section 99D.14, subsection 2, paragraphs b, e, and f, Code 2025, are amended by striking the paragraphs.
    Sec. 5.  Section 99D.14, subsection 2, paragraph d, Code 2025, is amended to read as follows:
   d.  The aggregate amount of the regulatory fee assessed under paragraph “a” during each fiscal year shall be reduced by an amount equal to the unexpended moneys from the previous fiscal year that were deposited into the gaming regulatory revolving funds fund established in sections 80.43 and section 99F.20 during that previous fiscal year.
    Sec. 6.  Section 99F.5, subsection 2, Code 2025, is amended to read as follows:
   2.  The annual license fee to operate an excursion gambling boat shall be based on the passenger-carrying capacity including crew, for which the excursion gambling boat is registered. For a gambling structure, the annual license fee shall be based on the capacity of the gambling structure. The annual fee shall be five ten dollars per person capacity.
    Sec. 7.  Section 99F.10, subsection 4, paragraph a, Code 2025, is amended to read as follows:
   a.  In determining the license fees and state regulatory fees to be charged as provided under section 99F.4 and this section, the commission shall use as the basis for determining the amount of revenue to be raised from the license fees and regulatory fees the amount appropriated to the commission plus the cost of salaries for no more than three special agents for each excursion gambling boat or gambling structure as assigned pursuant to the provisions of section 80.25A, plus any direct and indirect support costs for the division of criminal investigation’s duties pursuant to chapters 99D, 99E, and 99F, and section 80.25A.
    Sec. 8.  Section 99F.10, subsection 4, paragraphs b, d, f, and g, Code 2025, are amended by striking the paragraphs.
    Sec. 9.  Section 99F.10, subsection 4, paragraph e, Code 2025, is amended to read as follows:
   e.  The aggregate amount of the regulatory fee assessed under paragraph “a” during each fiscal year shall be reduced by an amount equal to the unexpended moneys from the previous fiscal year that were deposited into the gaming regulatory revolving funds fund established in section 80.43 or 99F.20 during that previous fiscal year.
    Sec. 10.  Section 99F.10, subsection 5, Code 2025, is amended by striking the subsection.
    Sec. 11.  Section 99F.11, subsection 1, Code 2025, is amended to read as follows:
   1.  A tax is imposed on the adjusted gross receipts received each fiscal year from gambling games authorized under this chapter at the rate of five percent on the first one million dollars of adjusted gross receipts and at the rate of ten percent on the next two million dollars of adjusted gross receipts. following rates:
   a.  If the licensee is an excursion gambling boat or gambling structure, twenty-two percent.
   b.  If the licensee is a racetrack enclosure conducting gambling games, twenty-four and one hundred twenty-five thousandths percent, regardless of whether the licensee has been issued a table games license.
    Sec. 12.  Section 99F.11, subsection 2, Code 2025, is amended by striking the subsection.
    Sec. 13.  Section 99F.11, subsection 3, paragraph a, Code 2025, is amended to read as follows:
   a.  Notwithstanding any provision of this section to the contrary, the tax rate imposed on a licensee each fiscal year on any amount of promotional play receipts on gambling games included as adjusted gross receipts shall be determined by multiplying the adjusted percentage by the wagering tax applicable to the licensee pursuant to subsection 2 1.
    Sec. 14.  Section 99F.11, subsection 4, Code 2025, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  0e.  For the fiscal year beginning July 1, 2026, and each fiscal year thereafter, the remaining amount of the adjusted gross receipts tax shall be credited to the gaming enforcement revolving fund created in section 80.43 until the amount credited to the fund under this paragraph equals the amount appropriated from the fund by the general assembly for the fiscal year to the department of public safety for direct support costs for agents and officers of the division of criminal investigation’s excursion gambling boat, gambling structure, and racetrack enclosure enforcement activities, including salaries, support, maintenance, miscellaneous purposes, and full-time equivalent positions.
    Sec. 15.  Section 99F.11, subsection 5, paragraph a, Code 2025, is amended to read as follows:
   a.  A tax is imposed on the sports wagering net receipts received each fiscal year by a licensed operator from sports wagering authorized under this chapter at the rate of six and three-quarters nine percent.
    Sec. 16.  EFFECTIVE DATE.  This division of this Act takes effect January 1, 2026.
DIVISION II
IOWA MAJOR EVENTS AND TOURISM PROGRAM AND FUND

    Sec. 17.  NEW SECTION.  15G.1  Definitions.
   As used in this chapter, unless the context otherwise requires:
   1.  “Authority” means the economic development authority.
   2.  “Board” means the same as defined in section 15.102.
   3.  “Entity” means an Iowa nonprofit organization established to promote economic development and tourism in an area.
   4.  “Event” means a tourism-oriented athletic contest, convention, music festival, or art festival.
   5.  “Financial assistance” means assistance provided only from the moneys, rights, and assets legally available to the authority and includes but is not limited to assistance in the form of grants.
   6.  “Fund” means the Iowa major events and tourism fund established in section 15G.4.
   7.  “Program” means the Iowa major events and tourism program established in section 15G.2.
    Sec. 18.  NEW SECTION.  15G.2  Iowa major events and tourism program —— purpose.
   1.  The authority shall establish and administer the Iowa major events and tourism program to provide financial assistance to eligible entities that support events in this state, or support events involving a geographic region that includes this state, and the event generates large attendance, significant publicity, and has a measurable economic impact on this state.
   2.  The program shall be administered for the purpose of awarding financial assistance to an eligible entity for any of the following purposes:
   a.  To pay for or reimburse the costs incurred by the entity to apply or bid for selection as the site for the event.
   b.  To pay for or reimburse the costs incurred by the entity to plan or to conduct the event, including any fees charged by a site selection organization as a prerequisite to hosting the event, including but not limited to hosting fees, sanctioning fees, participation fees, operational fees, or bid fees.
    Sec. 19.  NEW SECTION.  15G.3  Program —— application, review, eligibility, and funding.
   1.  An application for financial assistance under the program shall be submitted to the authority. For each application that meets the eligibility criteria under subsection 2, the authority shall conduct a staff evaluation of the application and forward the application and staff evaluation to the board.
   2.  a.  The authority shall establish eligibility criteria for the program by rule. The eligibility criteria must include all of the following:
   (1)  The entity must currently be involved in the bidding and selection process for the event for which the entity submits an application.
   (2)  The entity’s application under subsection 1 must include an economic analysis of the event that includes but is not limited to all of the following:
   (a)  Projected hotel and motel room occupancies during the event.
   (b)  Projected number of event attendees from this state, other states, and other countries.
   b.  Notwithstanding paragraph “a”, an entity shall be deemed eligible for the program if any of the following apply:
   (1)  After a highly competitive bidding and selection process involving potential sites not located in this state, a location in Iowa has been selected for the entity’s event.
   (2)  This state serves as the sole site for the entity’s event.
   (3)  The sole site for the entity’s event is a geographic region that includes this state and one or more contiguous states.
   3.  When evaluating an application, the authority shall consider, at a minimum, all of the following:
   a.  The potential impact of the event on the local, regional, and state economies.
   b.  The event’s potential to attract visitors from this state, other states, and other countries.
   c.  The amount of positive advertising or media coverage the event may generate.
   d.  The quality, size, and scope of the event.
   e.  The ratio of public-to-private investment required for the event.
   4.  a.  (1)  Upon review of the staff evaluation, the board shall make the final funding decision on each application and may approve, deny, defer, or modify each application, in the board’s discretion, to fund as many events as possible with the moneys available. The board and the authority may negotiate with an eligible applicant regarding the details of the applicant’s proposed event and the amount and terms of any financial assistance. In making final funding decisions pursuant to this subsection, the board and the authority shall be exempt from chapter 17A.
   (2)  An application and staff evaluation forwarded to the board under subsection 1 shall remain eligible for consideration by the board under subparagraph (1) for up to two years from the date of receipt of the application by the board.
   b.  In order to be awarded financial assistance under the program, an applicant must demonstrate the ability to provide matching moneys for the event that equal at least fifty percent of the award of financial assistance. 
    Sec. 20.  NEW SECTION.  15G.4  Iowa major events and tourism fund.
   1.  a.  The authority shall establish an Iowa major events and tourism fund pursuant to section 15.106A, subsection 1, paragraph “o”, for purposes of providing financial assistance as described in this chapter. The fund may be administered as a revolving fund and shall consist of any moneys transferred to the fund and any moneys appropriated by the general assembly for purposes of this chapter.
   b.  (1)  Notwithstanding section 8.33, moneys in the fund that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the fiscal year following the succeeding fiscal year.
   (2)  Moneys encumbered or obligated pursuant to financial assistance awarded under section 15G.3, subsection 4, shall be disbursed by the authority within five calendar years from the date of encumbrance or obligation, or the moneys shall revert to the state treasury and shall be credited to the funds from which the appropriations were made as provided in section 8.33.
   c.  Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys deposited in the fund shall be credited to the fund.
   2.  a.  Moneys in the fund are appropriated to the authority for purposes of providing financial assistance under the program. The authority shall not use more than five percent of the moneys in the fund at the beginning of each fiscal year for purposes of administrative costs, technical assistance, and other program support.
   b.  An entity that is awarded financial assistance pursuant to this chapter is not eligible to receive financial assistance under the sports tourism infrastructure program pursuant to chapter 15F, subchapter IV.
    Sec. 21.  APPROPRIATION —— SPORTS WAGERING RECEIPTS FUND.  There is appropriated from the sports wagering receipts fund created in section 8.57I to the economic development authority for the fiscal year beginning July 1, 2025, and ending June 30, 2026, the following amount, or so much thereof as is necessary, to be used for the purposes designated:
   For deposit in the Iowa major events and tourism fund established in section 15G.4, as enacted by this division of this Act:
   ...................................................................... $ 15,000,000
DIVISION III
SPORTS TOURISM MARKETING PROGRAM AND FUND —— REPEAL

    Sec. 22.  Section 15F.401, subsection 1, paragraph a, Code 2025, is amended to read as follows:
   a.  The authority shall establish, and, at the direction of the board, shall administer a sports tourism marketing and infrastructure program to provide financial assistance for projects that promote sporting events or for infrastructure projects supporting sporting events for organizations of accredited colleges and universities, professional sporting events, and other sporting events in the state.
    Sec. 23.  Section 15F.401, subsection 1, paragraph b, Code 2025, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (03)  “Fund” means the sports tourism infrastructure program fund established in section 15F.404.
    Sec. 24.  Section 15F.401, subsection 2, paragraph a, subparagraph (1), Code 2025, is amended by striking the subparagraph.
    Sec. 25.  Section 15F.401, subsection 2, paragraph a, subparagraph (2), Code 2025, is amended to read as follows:
   (2)  A city or county in the state or a public entity that is a convention and visitors bureau or a district may apply to the authority for financial assistance from the sports tourism infrastructure program fund created in section 15F.404 for an infrastructure project that actively and directly supports sporting events for accredited colleges and universities, professional sporting events, and other sporting events in the area served by the city, county, or public entity. However, financial assistance shall not be provided to an applicant from the sports tourism infrastructure program fund created in section 15F.404 for infrastructure projects located in a reinvestment district as defined and approved by the authority pursuant to section 15J.4 or to applicants that have received a rebate of sales tax imposed and collected by retailers pursuant to section 423.4, subsection 5.
    Sec. 26.  Section 15F.401, subsection 4, paragraph b, Code 2025, is amended to read as follows:
   b.  An applicant under the program shall not receive financial assistance from the sports tourism marketing program fund created in section 15F.403 or the sports tourism infrastructure program fund created in section 15F.404 in an amount exceeding fifty percent of the total cost of the project.
    Sec. 27.  Section 15F.401, subsection 5, Code 2025, is amended to read as follows:
   5.  The board shall make final funding decisions on each application and may approve, deny, defer, or modify applications for financial assistance under the sports tourism marketing and infrastructure program, in its discretion, in order to fund as many projects with the moneys available as possible. The board and the authority may negotiate with applicants regarding the details of projects and the amount and terms of any award. The total amount of financial assistance provided to an applicant from the sports tourism marketing program fund created in section 15F.403 in any one fiscal year shall not exceed five hundred thousand dollars. In making final funding decisions pursuant to this subsection, the board and the authority are exempt from chapter 17A. 
    Sec. 28.  Section 15F.401, subsection 6, Code 2025, is amended by striking the subsection and inserting in lieu thereof the following:
   6.  A city, county, or public entity shall not use financial assistance received under the program from the fund as reimbursement for completed projects.
    Sec. 29.  Section 15F.402, subsections 1 and 2, Code 2025, are amended to read as follows:
   1.  Applications for assistance under the sports tourism marketing and infrastructure program established in section 15F.401 shall be submitted to the authority. For those applications that meet the eligibility criteria, the authority shall forward the applications to the board and provide a staff review analysis and evaluation to the sports tourism program review committee referred to in subsection 2 and to the board.
   2.  A review committee composed of five members of the board shall review sports tourism marketing and infrastructure program applications forwarded to the board and make recommendations regarding the applications to the authority. 
    Sec. 30.  Section 15F.404, subsection 2, paragraph a, Code 2025, is amended to read as follows:
   a.  Moneys in the fund are appropriated to the authority for purposes of providing financial assistance to cities, counties, and eligible public entities under the sports tourism marketing and infrastructure program established and administered pursuant to this subchapter.
    Sec. 31.  REPEAL.  Section 15F.403, Code 2025, is repealed.
    Sec. 32.  TRANSFER OF MONEYS.  On the effective date of this division of this Act, any moneys remaining in the sports tourism marketing program fund established in section 15F.403, Code 2025, are transferred to the Iowa major events and tourism fund established in section 15G.4, as enacted by 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 concerns the regulation and support of leisure activities.
   GAMBLING GAMES AND SPORTS WAGERING. Under current law, the tax rate imposed on sports wagering net receipts of a licensed operator is 6.75 percent, which is deposited in the sports wagering receipts fund. The bill increases the rate to 9 percent. For FY 2026-2027 and each fiscal year thereafter, the bill appropriates $8 million from the sports wagering receipts fund to the public safety equipment fund, which is used by the department of public safety (DPS) for purchase, maintenance, and replacement of equipment. The bill exempts the appropriated moneys from the sports wagering receipts fund reporting requirements under current law, as current law already requires DPS to report on the use of moneys in the public safety equipment fund.
   Under current law, to determine the license fees and regulatory fees to be charged in accordance with Code sections 99D.14 and 99F.10, the state racing and gaming commission (commission) must use the amount appropriated to the commission plus the gaming enforcement costs of DPS’s division of criminal investigation. The portion of the fees associated with such enforcement costs is deposited in the gaming enforcement revolving fund to be annually appropriated by the general assembly to DPS for gaming enforcement. The bill strikes the portion of the fees that is based on DPS enforcement costs, and the associated deposit in the gaming enforcement revolving fund. The bill does not amend the fees associated with DPS costs for fingerprinting, national criminal history check requirements, and background investigations for licenses to conduct internet fantasy sports contests (Code section 99E.4(4)).
   Under current law, the annual license fee to operate an excursion gambling boat or gambling structure is $5 per person capacity. The bill increases the rate to $10 per person capacity.
   Under current law, a tax is imposed on the adjusted gross receipts received each fiscal year from excursion gambling boats, gambling structures, and racetrack enclosures conducting gambling games. The rate is 5 percent on the first $1 million and 10 percent on the next $2 million. Over $3 million, the tax rate is 22 percent for an excursion gambling boat or gambling structure, and between 22 and 24 percent for a racetrack enclosure based on the existence of an excursion gambling boat or gambling structure in the same county, whether the racetrack enclosure has been issued a table games license, and whether adjusted gross receipts reached $100 million.
   The bill eliminates this tax rate structure and imposes a tax of 22 percent for an excursion gambling boat or gambling structure, and 24.125 percent for a racetrack enclosure, on all adjusted gross receipts each fiscal year.
   For FY 2026-2027 and each fiscal year thereafter, prior to the remaining amount of the adjusted gross receipts tax being credited to the rebuild Iowa infrastructure fund as provided under current law, an amount is credited to the gaming enforcement revolving fund up to the amount appropriated by the general assembly to DPS for gaming enforcement from that fund for that fiscal year.
   This division of the bill takes effect January 1, 2026.
   IOWA MAJOR EVENTS AND TOURISM PROGRAM AND FUND. The bill requires the economic development authority (authority) to establish an Iowa major events and tourism program (program) and an Iowa major events and tourism fund (fund), and to administer the program.
   The purpose of the program is to provide financial assistance including but not limited to grants to an entity supporting an event in this state, or an event involving a geographic region that includes this state, and the event generates large attendance, significant publicity, and measurable economic impact on this state. The financial assistance includes payment or reimbursement of costs incurred by the entity to apply or bid for selection as the site event, to plan or conduct the event, and to pay or reimburse any related fees including hosting fees, sanctioning fees, participation fees, operational fees, and bid fees.
   The bill defines “entity” to mean an Iowa nonprofit organization established to promote economic development and tourism in an area. The bill defines “event” to mean a tourism-oriented athletic contest, convention, music festival, or art festival.
   The bill requires the authority to establish eligibility criteria for the program by rule. The eligibility criteria must include the requirement that the entity be currently involved in the bidding and selection process for the event the application is based upon; and that the entity must submit an economic analysis of the event with the entity’s application that includes but is not limited to projected hotel and motel room occupancies, and the projected number of attendees the event attracts from this state, other states, and other countries.
   An application is deemed to meet all eligibility criteria if the state is selected as the event site after a highly competitive bidding and selection process involving sites in other states, if this state serves as the sole site for the event, or if the sole site for the event involves a geographic region that includes this state and one or more contiguous states.
   If an entity’s application meets the eligibility criteria established in the bill, the staff of the authority must perform an evaluation of the application and forward the application and evaluation to the economic development authority board (board). In evaluating an application, the bill requires the authority to consider the impact on the economy, the potential to attract visitors, advertising and media coverage, public-to-private investment ratios, and the quality, size, and scope of the event.
   Upon review of the staff evaluation, the board may approve, deny, defer, or modify the application. The bill allows the board and the authority to negotiate with the entity regarding the details of the event and the amount and terms of the financial assistance.
   An application remains eligible for consideration by the board for up to two years from the date of receipt of the application by the board.
   The bill requires applicants to demonstrate the ability to provide matching funds equal to at least 50 percent of the financial assistance awarded to the applicant.
   The bill requires the authority to establish a fund for the purposes of providing financial assistance under the program. The authority may administer the fund as a revolving fund. Moneys in the fund that are encumbered or obligated pursuant to financial assistance awarded under the program shall be disbursed by the authority within five years of the date of encumbrance or obligation, or the moneys shall revert to the state treasury. Moneys in the fund are appropriated to the authority to provide financial assistance to an entity under the program.
    An entity that is awarded financial assistance pursuant to the bill is not eligible to receive financial assistance under the sports tourism infrastructure program.
   For FY 2025-2026, the bill appropriates $15 million from the sports wagering receipts fund to the Iowa major events and tourism fund.
   SPORTS TOURISM MARKETING PROGRAM AND FUND —— REPEAL. The bill modifies the sports tourism marketing and infrastructure program by repealing the sports tourism marketing program and fund. The bill retains the sports tourism infrastructure program and fund. Upon the effective date of the division, the bill transfers the remaining moneys in the sports tourism marketing program fund to the Iowa major events and tourism fund.