Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 5-101, Arizona Revised Statutes, is amended to read:
5-101. Definitions
In this article, unless the context otherwise requires:
1. "Additional wagering facility" means a facility which that is not the enclosure in which authorized racing takes place but which that meets the requirements of section 5‑111, subsection A and is used by a permittee for handling pari‑mutuel wagering.
2. "Advance deposit wagering" means a form of pari-mutuel wagering that allows a person to deposit monies in advance in an account with an advance deposit provider and use the monies to pay for pari-mutuel wagering on live or simulcast racing that the advance deposit pari-mutuel wagering permittee accepts or makes.
3. "Advance deposit wagering provider" means a betting system or multijurisdictional wagering provider that is located outside this state and that is authorized to conduct advance deposit wagering pursuant to this article.
2. 4. "Applicant" means a person, partnership, association or corporation placing before the department an application for a permit or license.
3. 5. "Association" means a body of persons, corporations, partnerships or associations, united and acting together without a charter from the state for the prosecution of some common enterprise.
4. 6. "Commercial horse racing" means horse racing conducted other than by a county fair association.
5. 7. "Commission" means the Arizona racing commission.
6. 8. "Concessionaire" means a person, partnership, association or corporation that offers goods or services for sale to the public, a permittee or a licensee at an enclosure in which authorized racing takes place or an additional wagering facility.
7. 9. "County fair facility" means any place, enclosure or track constructed in accordance with a permit issued by the commission for the purpose of running county fair horse racing dates as well as any commercial dates for horse racing that may be awarded by the commission in reference to such a the location.
8. 10. "County fair racing association" means an association duly authorized by the board of supervisors to conduct a county fair racing meeting for the benefit of the county.
9. 11. "Dark day simulcast" means a simulcast received on a day when there are no posted races conducted at the enclosure in which authorized racing takes place.
10. 12. "Department" means the Arizona department of racing.
11. 13. "Desensitized" means that a horse's or dog's legs upon arrival at the receiving barn, saddling paddock or lockout kennel do not respond appropriately to tests for feeling administered by an official veterinarian.
12. 14. "Director" means the director of the Arizona department of racing.
13. 15. "Dog racing" means racing in which greyhound dogs chase a mechanical lure.
14. 16. "Entered" means that a horse or dog has been registered with an authorized racing official as a participant in a specified race and has not been withdrawn prior to presentation of the horse or dog for inspection and testing as provided in section 5‑105.
15. 17. "Financial interest" means any direct pecuniary interest.
16. 18. "Firm" means a business unit or enterprise that transacts business.
17. 19. "Handle" means the total amount of money contributed to all pari‑mutuel pools by bettors.
18. 20. "Harness racing" means horse racing in which the horses are harnessed to a sulky, carriage or similar vehicle and driven by a driver.
19. 21. "Horse racing" means racing in which horses are mounted and ridden by jockeys. For purposes of county fair racing meetings, "horse racing" means racing in which horses or mules are mounted and ridden by jockeys.
20. 22. "License" means the license issued by the department to each employee or other person participating in any capacity in a racing meeting, including officials and employees of the pari‑mutuel department.
21. 23. "Pari‑mutuel wagering" means a system of betting which that provides for the distribution among the winning patrons of at least the total amount wagered less the amount withheld under state law.
22. 24. "Permit" means a permit for a racing meeting issued under the provisions of this article.
23. 25. "Racing meeting" means a number of days of racing allotted by the commission in one permit.
24. 26. "Simulcast" means the telecast shown within this state of live audio and visual signals of horse, harness or dog races conducted at an out‑of‑state track or the telecast shown outside this state of live audio and visual signals of horse, harness or dog races originating within this state for the purpose of pari‑mutuel wagering.
27. "Source market fee" means the fee that an advance deposit wagering provider pays to a commercial live-racing permittee in the state where the advance deposit wagering customer resides.
28. "Telephone" means any device that a person uses for voice communications in connection with the services of a telephone company, whether the voice communications are transmitted in analog, digital or any other form.
25. 29. "Undesirable" includes known bookmakers, touts, persons convicted of a violation of any provision of this article or of any law prohibiting bookmaking or any other illegal forms of wagering, or any other person whose presence would, in the opinion of the director, be inimical to the interests of the state.
26. 30. "Week" means seven consecutive days beginning on Monday and ending on Sunday, mountain standard time.
Sec. 2. Section 5-101.01, Arizona Revised Statutes, is amended to read:
5-101.01. Arizona department of racing; preemption; director; qualifications; term; deputy director; conflict of interest
A. There is established an Arizona department of racing. The legislature finds and determines that horse and dog racing is a matter of statewide concern and that this chapter, any rules adopted by the racing commission and any administrative actions taken by the Arizona department of racing, the director of the Arizona department of racing or the racing commission preempt all local laws and ordinances relating to horse and dog racing.
B. The governor shall appoint a director of the department pursuant to section 38‑211. The director serves at the pleasure of the governor. To be eligible for appointment as director, a person must have a minimum of five years of experience in business and administration and shall not have a financial interest in a racetrack or in the racing industry in this state during his appointment. The governor may appoint an acting director if there is a vacancy in the office.
C. The commission may establish the position of deputy director of the department.
D. The positions of director and deputy director, if applicable, are exempt from title 41, chapter 4, articles 5 and 6. Persons holding the positions of director and deputy director, if applicable, are eligible to receive compensation pursuant to section 38‑611.
E. The provisions of title 38, chapter 3, article 8, relating to conflict of interest, apply to the director and all other employees of the department.
F. Neither the director, any employee of the department nor any member of the immediate family of the director or other employee of the department may:
1. Have any pecuniary interest in a racetrack in this state or in any kennel, stable, compound or farm licensed under this chapter.
2. Wager money at a racetrack enclosure or additional wagering facility in this state or wager money on the results of any race held at a racetrack enclosure in this state.
3. Hold more than a five per cent interest in any entity doing business with a racetrack in this state.
4. Have any interest, whether direct or indirect, in a license issued pursuant to this chapter or in a licensee, facility or entity that is involved in any way with pari‑mutuel wagering. For the purposes of this paragraph, "interest" includes employment.
G. Failure to comply with subsection F of this section is grounds for dismissal.
H. For the purposes of subsection F of this section, "immediate family" means a spouse or children who regularly reside in the household of the director or other employee of the department.
Sec. 3. Section 5-111, Arizona Revised Statutes, is amended to read:
5-111. Wagering percentage to permittee and state; exemptions
A. The commission shall prescribe rules governing wagering on races under the system known as pari‑mutuel wagering. Wagering shall be conducted by a permittee only by pari‑mutuel wagering and only on the dates for which racing or dark day simulcasting has been authorized by the commission. Wagering for a licensed racing meeting shall be conducted by a commercial live-racing permittee only within an enclosure in which authorized racing takes place and, in counties having a population of less than five hundred thousand persons or at least one million five hundred thousand persons, as shown by the most recent United States decennial census, at those additional facilities which that are owned or leased by a permittee, that are approved by the commission and which that are used by a permittee for handling wagering as part of the pari‑mutuel system and pool of the permittee at the enclosure where the authorized racing is conducted of the commercial live‑racing permittee. In all other counties, wagering may also be conducted at additional facilities which that are owned or leased by a commercial live‑racing permittee who is licensed to conduct live racing in those counties or who has the consent of all commercial permittees currently licensed to conduct live racing in those counties and which that are used by a permittee for handling wagering and as part of the pari‑mutuel system and pool of the permittee at the enclosure where the authorized racing is conducted of the commercial live-racing permittee. If the additional facilities have not been used for authorized racing before their use for handling wagering, a permittee shall not use the facilities for handling wagering before receiving approval for such use by the governing body of the city or town, if located within the corporate limits, or by the board of supervisors, if located in an unincorporated area of the county. A permittee may televise the races any live or simulcast races received at the permittee's racing enclosure to the additional facilities at the times the races are conducted or received at the permittee's enclosure. For the purpose of section 5‑110, subsection C only, a race upon on which wagering is permitted under this subsection shall be deemed to also occur at the additional facility in the county in which the additional facility is located, and as such shall be limited in the same manner as actual live racing in such that county. For the purpose of subsections B and C of this section, the wagering at the additional facility shall be deemed to occur in the county in which the additional facility is located.
B. During the period of any permit for dog racing in any county, the state shall receive five and one‑half per cent of all monies handled in the pari‑mutuel pool operated by the permittee, to be paid daily during the racing meeting. In all counties having a population of one million five hundred thousand persons or more, according to the most recent United States decennial census, four and three‑quarters per cent of the gross amount of monies handled in a pari‑mutuel pool shall be deducted from the pari‑mutuel pool and shall be deposited daily into a trust account for the payment of purse amounts. In counties having a population of less than one million five hundred thousand persons according to the most recent United States decennial census, four per cent of the gross amount of monies handled in a pari‑mutuel pool shall be deducted from the pari‑mutuel pool and shall be deposited daily in a trust account for the payment of purse amounts. In addition, twenty‑five per cent of any reduction in pari‑mutuel taxes each year resulting from the application of the hardship tax reduction credit determined pursuant to subsection I of this section shall be deposited in the trust account for supplementing purse amounts in an equitable manner over the racing meeting as determined by the commission. Notwithstanding any other provision of this subsection, the percentage paid by a permittee to the state does not apply to monies handled in a pari‑mutuel pool for wagering on simulcasts of out‑of‑state races. During a week in which a permittee conducts live racing at the permittee's racetrack enclosure, the permittee shall deduct from monies handled in a pari‑mutuel pool for wagering on simulcasts of out‑of‑state races and deposit daily in a trust account for the payment of purse amounts the same percentage of the pari‑mutuel pool as is deducted for purses for live races unless otherwise agreed by written contract. Unless otherwise agreed by written contract, if the commission reasonably determines that live racing will not be conducted within one calendar year at a racetrack enclosure, the permittee shall deduct from monies handled in a pari‑mutuel pool for wagering on simulcasts of out‑of‑state races and deposit daily in a trust account to supplement purses of any dog track where live racing is conducted within a one hundred mile radius. The supplementing provided by this subsection shall be in the most equitable manner possible as determined by the commission. The permittee shall allocate the funds in the trust account and pay purse amounts at least biweekly. The permittee may, at the permittee's discretion, may pay additional amounts to augment purses from the amounts received by the permittee under this subsection.
C. During the period of a permit for horse, harness or dog racing, the permittee which that conducts such the meeting may deduct up to and including twenty‑five per cent of the total amount handled in the regular pari‑mutuel pools and may, at the permittee's option, may deduct up to and including thirty per cent of the total amount handled in the exacta, daily double, quinella and other wagering pools involving two horses or dogs, and up to and including thirty‑five per cent of the total amount handled in the trifecta or other wagering pools involving more than two horses or dogs in one or more races. The amounts if deducted shall be distributed as prescribed in subsection D of this section and section 5‑111.02 for horse or harness racing permittees. For dog racing permittees, unless otherwise agreed by written contract, the permittee shall allocate to purses from amounts wagered on live racing conducted in this state an amount equal to fifty per cent of any amounts that are deducted pursuant to this subsection in excess of twenty per cent of the total amount handled in the regular pari‑mutuel pools, twenty‑one per cent of the total amount handled in the exacta, daily double, quinella and other wagering pools involving two dogs or twenty‑five per cent of the total amount handled in the trifecta or other wagering pools involving more than two dogs in one or more races. For dog racing permittees the percentages prescribed in subsection B of this section shall be distributed to the state and to the trust account for payment of purse amounts and the permittee shall receive the balance. If the dog racing permittee has made capital improvements, the distribution to the state shall be adjusted as provided in section 5‑111.03. Monies deposited in the trust account for payment of purses pursuant to this subsection shall be in addition to amounts deposited pursuant to subsection B of this section.
D. During the period of a permit for horse or harness racing, the state shall receive two per cent of the gross amount of the first one million dollars of the daily pari‑mutuel pools and five per cent of the gross amount exceeding one million dollars of the daily pari‑mutuel pools. Notwithstanding any other provision of this subsection, the percentage paid by a permittee to the state does not apply to monies handled in a pari‑mutuel pool for wagering on simulcasts of out‑of‑state races. The permittee shall retain the balance of the total amounts deducted pursuant to subsection C of this section. Of the amount retained by the permittee, less minus the amount payable to the permittee for capital improvements pursuant to section 5‑111.02, breakage distributed to the permittee pursuant to section 5‑111.01 and other applicable state, county and city transaction privilege or other taxes, unless otherwise agreed by written contract, fifty per cent shall be used for purses. Unless otherwise agreed by written contract, fifty per cent of the revenues received by the permittee from simulcasting races as provided in section 5‑112, net of costs of advertising, shall be utilized as a supplement to the general purse structure. All amounts which that are deducted from the pari‑mutuel pool for purses pursuant to this section and sections 5‑111.01, 5‑112 and 5‑114 and revenues which that are received from simulcasting and which that are to be used as a supplement to the general purse structure pursuant to this subsection shall be deposited daily into a trust account for the payment of purse amounts.
E. Any county fair racing association may apply to the commission for one racing meeting each year and the commission shall set the number of days and the dates of such the meetings. A racing meeting conducted under this subsection shall be operated in such manner so that all profits accrue to the county fair racing association, and the county fair racing association may deduct from the pari‑mutuel pool the same amount as prescribed in subsection C of this section. All county fair racing meetings, whether conducted by county fair racing associations under the provisions of this subsection or by an individual, corporation or association other than a county fair racing association, are exempt from the payment to the state of the percentage of the pari‑mutuel pool prescribed by subsection D of this section and are also exempt from the provisions of section 5‑111.01.
F. Monies from charity racing days are exempt from the state percentage of the pari‑mutuel pool prescribed in this section.
G. Sums held by a permittee for payment of unclaimed pari‑mutuel tickets are exempt from the provisions of the revised Arizona unclaimed property act, title 44, chapter 3.
H. All of the amounts received by a permittee from the gross amount of monies handled in a pari‑mutuel pool and all amounts held by a permittee for payment of purses pursuant to this section and sections 5‑111.01, 5‑112 and 5‑114 are exempt from the provisions of title 42, chapter 5.
I. On August 1 of each year, a permittee is eligible for a hardship tax credit pursuant to this subsection. For purposes of this subsection, "permittee" shall include any person who has succeeded to the interest of a permittee and who is authorized to conduct racing at the facility for which the permit was issued. The department shall determine the amount of any hardship tax credit as follows:
1. Determine the percentage decrease in pari‑mutuel wagering by determining the percentage decrease in pari‑mutuel wagering between the base period amount and the amount of pari‑mutuel wagering in the previous fiscal year at the racetrack and the additional wagering facilities operated by the permittee. The base period amount is the highest total annual pari‑mutuel wagering at the racetrack and all additional wagering facilities as reported to the department for fiscal year 1989‑1990, 1990‑1991, 1991‑1992, 1992‑1993 or 1993‑1994.
2. Determine the permittee's hardship tax credit by multiplying the total pari‑mutuel tax due as a result of wagering at the racetrack and all additional wagering facilities for the previous fiscal year before applying any hardship tax credit amount by the percentage decrease in pari‑mutuel wagering determined pursuant to paragraph 1 of this subsection and multiplying the result by three.
3. The permittee's pari‑mutuel tax due as otherwise determined under subsections B and D of this section shall be reduced for the current period and any future periods by an amount equal to the amount of the hardship tax credit determined pursuant to this subsection. The hardship tax credit is in addition to any other tax exemptions, rebates and credits.
Sec. 4. Section 5-112, Arizona Revised Statutes, is amended to read:
5-112. Wagering legalized; simulcasting of races; unauthorized wagering prohibited; classification; report
A. Except
as provided in subsection K of this section, section 5‑101.01, subsection
F and title 13, chapter 33, any person within the enclosure of a racing meeting
held pursuant to this article may wager on the results of a race held at the
meeting or televised to the racetrack enclosure by simulcasting pursuant to
this section by contributing money to a pari‑mutuel pool operated by the
permittee as provided by this article.
B. The department, upon on request by a permittee, may grant permission for electronically-televised simulcasts of horse, harness or dog races to be received by the permittee. In counties having a population of one million five hundred thousand persons or more according to the most recent United States decennial census, the simulcasts shall be received at the racetrack enclosure where a horse, harness or dog racing meeting is being conducted, provided that the simulcast may only be received during, immediately before or immediately after a minimum of nine posted races for that racing day. In counties having a population of five hundred thousand persons or more but less than one million five hundred thousand persons according to the most recent United States decennial census, the simulcasts shall be received at the racetrack enclosure where a horse, harness or dog racing meeting is being conducted provided that the simulcast may only be received during, immediately before or immediately after a minimum of four posted races for that racing day. In all other counties, the simulcasts shall be received at a racetrack enclosure at which authorized racing has been conducted, whether or not posted races have been offered for the day the simulcast is received. The simulcasts shall be limited to horse, harness or dog races. The simulcasts shall be limited to the same type of racing as authorized in the permit for live racing conducted by the permittee. The department, upon on request by a permittee, may grant permission for the permittee to transmit the live race from the racetrack enclosure where a horse, harness or dog racing meeting is being conducted to a facility or facilities in another state. All simulcasts of horse or harness races shall comply with the interstate horseracing act of 1978 (P.L. 95‑515; 92 Stat. 1811; 15 United States Code chapter 57). All forms of pari‑mutuel wagering shall be allowed on horse, harness or dog races, whether or not televised by simulcasting. All monies wagered by patrons on these horse, harness or dog races shall be computed in the amount of money wagered each racing day for purposes of section 5‑111.
C. Notwithstanding subsection B of this section, in counties having a population of one million five hundred thousand persons or more according to the most recent United States decennial census, simulcasts may be received at the racetrack enclosure, and the permittee may offer pari‑mutuel wagering on the simulcast racing at any additional wagering facility used by a permittee for handling wagering as provided in section 5‑111, subsection A during a permittee's racing meeting as approved by the commission, whether or not the simulcasts are televised to the additional wagering facilities and whether or not posted races have been conducted on the day the simulcast is received, if:
1. For horse and harness racing, the permittee's racing permit requires the permittee to conduct a minimum of one hundred fifty‑six days of live racing with an average of nine posted races on an average of five racing days each week at the permittee's racetrack enclosure during the period beginning on October 1 and ending on the first full week in May, unless otherwise agreed in writing by the permittee and the recognized horsemen's organization that represents the horsemen participating in the race meet at the racetrack enclosure, subject to approval by the department.
2. For dog racing, the permittee is required to conduct a minimum of ten posted races on each of four days each week for forty‑one weeks during a calendar year at the permittee's racetrack enclosure.
D. Notwithstanding subsection B of this section, in counties having a population of seven hundred thousand persons or more but less than one million five hundred thousand persons according to the most recent United States decennial census, simulcasts may be received at the racetrack enclosure, and the permittee may offer pari‑mutuel wagering on the simulcast racing at any additional wagering facility used by a permittee for handling wagering as provided in section 5‑111, subsection A during a permittee's racing meeting as approved by the commission, whether or not the simulcasts are televised to the additional wagering facilites and whether or not posted races have been conducted on the day the simulcast is received, subject to the following conditions:
1. For horse and harness racing, the permittee may conduct wagering on dark day simulcasts for twenty days, provided the permittee conducts a minimum of seven posted races on each of the racing days mandated in the permittee's commercial racing permit. In order to conduct wagering on dark day simulcasts for more than twenty days, the permittee is required to conduct a minimum of seven posted races on one hundred forty racing days at the permittee's racetrack enclosure.
2. For dog racing, the permittee is required to conduct a minimum of nine posted races on each of one hundred days during a calendar year at the permittee's racetrack enclosure, unless a lesser number is otherwise agreed to by written contract entered into by February 1 of each year by a permittee and a majority of licensed persons then participating in a greyhound racing meeting as greyhound racing kennel owners.
E. In an emergency and upon on a showing of good cause by a permittee, the commission may grant an exception to the minimum racing day requirements of subsections C and D of this section.
F. The minimum racing day requirements of subsections C and D of this section shall be computed by adding all racing days, including any county fair racing days operated in accordance with section 5‑110, subsection F, allotted to the permittee's racetrack enclosure in one or more racing permits and all racing days allotted to the permittee's racetrack enclosure pursuant to section 5‑110, subsection H.
G. Simulcast signals or teletracking of simulcast signals does not prohibit live racing or teletracking of that live racing in any county at any time.
H. Except as provided in subsection K of this section, section 5‑101.01, subsection F and title 13, chapter 33, any person within a racetrack enclosure or an additional facility authorized for wagering pursuant to section 5‑111, subsection A may wager on the results of a race televised to the facility pursuant to section 5‑111, subsection A by contributing to a pari‑mutuel pool operated as provided by this article.
I. Notwithstanding subsection B of this section, the department, in counties having a population of one million five hundred thousand persons or more according to the most recent United States decennial census and on request by a permittee for one day each year, may grant permission for simulcasts to be received without compliance with the minimum of nine posted races requirement.
J. Except as provided in this article and in title 13, chapter 33, all forms of wagering or betting on the results of a race, including but not limited to buying, selling, cashing, exchanging or acquiring a financial interest in pari‑mutuel tickets, except by operation of law, whether the race is conducted in this state or elsewhere, are illegal.
K. A permittee shall not knowingly permit a person who is under twenty‑one years of age to be a patron of the pari‑mutuel system of wagering.
L. Except as provided in title 13, chapter 33, any person who violates this article with respect to any wagering or betting, whether the race is conducted in or outside this state, is guilty of a class 6 felony.
M. Simulcasting may only be authorized for the same type of racing authorized by a permittee's live racing permit.
N. In addition to pari‑mutuel wagering otherwise authorized by this chapter, a commercial live-racing permittee may conduct advance deposit wagering as approved by the commission. The commission also may allow advance deposit wagering by an advance deposit wagering provider if a racing authority in the state where the advance deposit wagering provider is located approves the advance deposit wagering provider and, for horse racing, if the advance deposit wagering provider annually secures the approval of the commercial live horse racing permittees in a county where the advance deposit wagering provider or commercial live-racing permittee accepts advance deposit wagers for horse racing and of the organization that represents the majority of owners and trainers at each of the commercial live horse racing enclosures in each county or, for dog racing, if the advance deposit wagering provider secures the approval of each commercial live dog racing permittee in this state. An advance deposit wagering provider that the commission approves shall pay source market fees on wagers placed on horse racing from this state to commercial live horse racing permittees in this state. The advance deposit wagering provider shall divide the source market fees on horse racing wagers on the basis of the proportion of the permittees' total live and simulcast handle during the previous year and the advance deposit wagering provider shall pay source market fees on wagers on dog racing from the county in which the live or simulcast racing is conducted to the commercial live racing permittee in that county. The advance deposit wagering provider shall divide the source market fees on dog racing from wagering in any other county on the basis of the proportion of total live and simulcast handle of the live dog racing permittees during the previous year.
O. The commission may issue a permit to authorize an advance deposit wagering provider to accept advance deposit wagering on racing from persons in this state. The procedures for the approval of the permit must be similar to the procedures for the approval of racing permits under this article, subject to the following requirements:
1. The commission shall issue an advance deposit wagering permit only if the state agency that regulates racing in the state where the advance deposit wagering provider is located approves the permittee or provider to conduct advance deposit wagering.
2. An advance deposit wagering provider may accept advance deposit pari-mutuel wagers from natural persons in this state on racing conducted by a commercial live-racing permittee in this state or on racing conducted outside this state if the commercial live-racing permittee in this state at a racetrack enclosure in a county where live horse or live dog racing has been conducted for a period of at least forty days per year for at least twelve consecutive years beginning after 1992 or at a new racetrack enclosure in the same county that replaced the previously existing racetrack enclosure on which advance deposit wagering is accepted or that conducts a racing program with the same type of racing on which the advance deposit wagering is accepted, enters into an agreement with the advance deposit wagering provider providing for the payment of a source market fee that is agreed to by the commercial live-racing permittee on all advanced deposit wagering.
3. An advance deposit wagering provider shall pay source market fees in an amount that is agreed to by the commercial live-racing permittee on all advance deposit wagering by persons in this state on the same type of racing the commercial live-racing permittee conducts. Source market fees from wagers by persons in this state through an advance deposit wagering provider shall be allocated as provided in paragraph 7 of this subsection to a commercial live horse racing permittee at a racetrack enclosure in a county where live horse racing has been conducted for a period of at least forty days per year for at least twelve consecutive years beginning after 1992 or at a new racetrack enclosure in the same county that replaced the previously existing racetrack enclosure during the period of time that the commercial live-racing permittee conducts a racing program. Source market fees for dog racing from wagering through the advance deposit wagering provider from persons wagering in a county shall be allocated as provided in paragraph 7 of this subsection to a commercial live dog racing permittee at a racetrack enclosure in a county where live dog racing has been conducted for a period of at least forty days per year for at least twelve consecutive years beginning after 1992 or at a new racetrack enclosure in the same county that replaced the previously existing racetrack enclosure. Source market fees from wagers by persons in this state in all other counties for pari‑mutuel wagering on dog racing through an advance deposit wagering provider shall be divided between the commercial dog racing permittees in proportion to each permittee's live dog racing handle in this state if the permittee has consented to allowing advance deposit wagering to occur in the county in which the permittee operates a racetrack enclosure and shall be allocated as provided in paragraph 7 of this subsection.
4. Advance deposit wagering agreements that are executed between permittees in this state must contain the same or substantially equivalent terms and conditions, including provisions for revenue sharing, as the terms and conditions contained in simulcasting agreements that are executed between those same permittees.
5. The advance wagering provider shall transmit daily a percentage determined by the department of the gross revenues generated by advance deposit wagers to the department for deposit in the racing regulation fund established by section 5‑113.01.
6. The advance deposit wagering provider shall file the consent provided for in this subsection with the commission, and the consent is valid for a period of at least one year.
7. The source market fees are allocated, after deductions, as provided for in section 5-111, subsection B for dog racing or section 5-111, subsection D for horse racing for any fees or payments to the state, county and city for taxes or other fees, in the same manner as the proceeds of live or simulcast pari-mutuel wagering as provided in section 5-111, subsection B for dog racing and section 5-111, subsection D for horse racing. From the source market fees from advance deposit wagering on horse racing allocated for purses as provided in section 5‑111, subsection D, five per cent is paid to the department for deposit in the Arizona breeders award fund account for distributions for Arizona bred horses as provided in section 5‑114.
P. The owner of the advance deposit wagering account may make an advance deposit pari-mutuel wager only by telephone or by current telephone technologies that the internet offers.
Q. Only the advance deposit wagering provider may make an advance deposit wager, pursuant to wagering instructions the owner of the monies issues by telephone. The advance deposit wagering provider shall ensure the identification of the owner of the account by using methods and technologies approved by the commission. Any advance deposit wagering provider that accepts wagering instructions on races that are conducted in this state, or accepts wagering instructions originating in this state, shall provide a daily report that contains a full accounting and verification of the source of the wagers made, including the postal zip code of the source of the wagers and all pari-mutuel data, in a form and manner that is approved by the commission. All reasonable costs associated with the creation, provision and transfer of the data is the responsibility of the advance deposit wagering provider.
N. R. Any person other than a permittee or any advance deposit wagering provider who is approved by the commission under this article and who accepts a wager or who bets on the results of a race, whether the race is conducted in or outside this state, including buying, selling, cashing, exchanging or acquiring a financial interest in a pari-mutuel ticket from a person in this state outside of a racing enclosure or an additional wagering facility that is approved by the commission and that is located in this state is guilty of a class 6 felony.
O. S. Pursuant to section 13-108, a pari-mutuel wager or a bet placed or made by a person in this state is deemed for all purposes to occur in this state.
P. T. The department and the attorney general shall enforce subsections N R and O S of this section and shall submit an annual report that summarizes these enforcement activities to the governor, the speaker of the house of representatives and the president of the senate. The department and the attorney general shall provide a copy of this report to the secretary of state.
Sec. 5. Section 5-113, Arizona Revised Statutes, is amended to read:
5-113. Disposition of revenues and monies; funds; committee
A. All revenues derived from permittees, permits and licenses as provided by this article shall be deposited, pursuant to sections 35‑146 and 35‑147, in the racing regulation fund established by section 5‑113.01, and all monies transferred pursuant to section 44‑313, subsection A up to one million two hundred thousand dollars shall be deposited in amounts determined by the commission in the Arizona breeders' award fund established by subsection F of this section and in the county fair racing fund established by subsection I of this section. The commission shall further allocate all monies deposited in the Arizona breeders' award fund pursuant to this subsection to support incentives as authorized by subsection F of this section for thoroughbred and quarter horse breeds only.
B. The Arizona county fairs racing betterment fund is established under the jurisdiction of the department. The department shall distribute monies from the fund to the county fair association or county fair racing association of each county conducting a county fair racing meeting in such a proportion as that the department deems necessary for the promotion and betterment of county fair racing meetings. All expenditures from the fund shall be made on claims approved by the department. In order to be eligible for distributions from the fund, a county fair association must provide the department with an annual certification in the form required by the department supporting expenditures made from the fund. Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund.
C. The county fairs livestock and agriculture promotion fund is established under the control of the governor and shall be used for the purpose of promoting the livestock and agricultural resources of the state and for the purpose of conducting an annual Arizona national livestock fair by the Arizona exposition and state fair board to further promote livestock resources. The direct expenses less receipts of the livestock fair shall be paid from this fund, but such this payment shall not exceed thirty per cent of the receipts of the fund for the preceding fiscal year. Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund. All expenditures from the fund shall be made upon claims approved by the governor, as recommended by the livestock and agriculture committee, for the promotion and betterment of the livestock and agricultural resources of this state. The livestock and agriculture committee is established and shall be composed of the following members, at least three of whom are from counties that have a population of less than five hundred thousand persons, appointed by the governor:
1. Three members representing county fairs.
2. One member representing Arizona livestock fairs.
3. One member representing the university of Arizona college of agriculture.
4. One member representing the livestock industry.
5. One member representing the farming industry.
6. One member representing the governor's office.
7. One member representing the Arizona state fair conducted by the Arizona exposition and state fair board.
8. One member representing the general public.
D. The governor shall appoint a chairman from the members. Terms of members shall be four years.
E. Members of the committee are not eligible to receive compensation but are eligible to receive reimbursement for expenses pursuant to title 38, chapter 4, article 2.
F. The Arizona breeders' award fund is established under the jurisdiction of the department. The department shall distribute monies from the fund to the breeder, or the breeder's heirs, devisees or successors, of every winning horse or greyhound foaled or whelped in this state, as defined by section 5‑114, in a manner and in an amount established by rules of the commission to protect the integrity of the racing industry and promote, improve and advance the quality of race horse and greyhound breeding within this state. The department may contract with a breeders' association to provide data, statistics and other information necessary to enable the department to carry out the purposes of this subsection. Persons who are not eligible to be licensed under section 5‑107.01 or persons who have been refused licenses under section 5‑108 are not eligible to participate in the Arizona greyhound breeders' award fund. Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund. For the purposes of this subsection, "breeder" means the owner or lessee of the dam of the animal at the time the animal was foaled or whelped.
G. The Arizona stallion award fund is established under the jurisdiction of the department to promote, improve and advance the quality of stallions in this state. The department shall distribute monies from the fund to the owner or lessee, or the owner's or lessee's heirs, devisees or successors, of every Arizona stallion whose certified Arizona bred offspring, as prescribed in section 5‑114, finishes first, second or third in an eligible race in this state. The department may contract with a breeders' association to provide data, statistics and other information necessary to enable the department to carry out the purposes of this subsection. Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund. The commission shall adopt rules pursuant to title 41, chapter 6 to carry out the purposes of this subsection. The rules shall prescribe at a minimum:
1. The manner and procedure for distribution from the fund, including eligibility requirements for owners and lessees.
2. Subject to availability of monies in the fund, the amount to be awarded.
3. The requirements for a stallion registered with the jockey club, Lexington, Kentucky or with the American quarter horse association, Amarillo, Texas to be certified as an Arizona stallion.
4. The types and requirements of races for which an award may be made.
H. The greyhound and retired racehorse adoption fund is established. The department shall administer the fund and maintain separate accounts for greyhound adoptions and retired racehorse adoptions. All revenues derived from license fees collected from dog breeders, racing kennels and other operations where greyhounds are raised for the purpose of dog racing pursuant to section 5‑104, subsection F shall be deposited, pursuant to sections 35‑146 and 35‑147, in the greyhound adoption account of the fund. All revenues derived from retired racehorse adoption surcharges collected pursuant to section 5‑104, subsection G shall be deposited, pursuant to sections 35‑146 and 35‑147, in the retired racehorse adoption account of the fund. The department shall distribute monies from the fund to provide financial assistance to nonprofit enterprises approved by the commission to promote the adoption of former racing greyhounds as domestic pets and to promote the adoption of retired racehorses pursuant to section 5‑104, subsection G in a manner and in an amount established by rules of the commission. Balances remaining in the fund at the end of a fiscal year do not revert to the state general fund.
I. The county fair racing fund is established. The department shall administer the fund. Monies in the fund are continuously appropriated. The department shall use fund monies for the administration of county fair racing. Any monies remaining unexpended unspent in the fund at the end of the fiscal year in excess of seventy‑five thousand dollars shall revert to the state general fund.
J. The agricultural consulting and training trust fund is established for the exclusive purpose of implementing, continuing and supporting the agricultural consulting and training program established by section 3‑109.01. The director of the Arizona department of agriculture shall administer the trust fund as trustee. The state treasurer shall accept, separately account for and hold in trust any monies deposited in the state treasury, which are considered to be trust monies as defined in section 35‑310 and which shall not be commingled with any other monies in the state treasury except for investment purposes. On notice from the director, the state treasurer shall invest and divest any trust fund monies deposited in the state treasury as provided by sections 35‑313 and 35‑314.03, and monies earned from investment shall be credited to the trust fund. The beneficiary of the trust is the agricultural consulting and training program established by section 3‑109.01. Surplus monies, including balances remaining in the trust fund at the end of a fiscal year, do not revert to the state general fund.
Sec. 6. Section 44-313, Arizona Revised Statutes, is amended to read:
44-313. Deposit of monies
A. Except as otherwise provided in this section or section 44‑314, the department shall deposit, pursuant to sections 35‑146 and 35‑147, in the state general fund all monies received pursuant to this chapter, including the proceeds from the sale of abandoned property pursuant to section 44‑312, except that:
1. The first two million dollars of the monies shall be deposited each fiscal year in the seriously mentally ill housing trust fund established by section 41‑3955.01.
2. The second two million five hundred thousand dollars of the monies shall be deposited in the housing trust fund established by section 41-3955.
3. The next twenty‑four million five hundred thousand dollars of the monies shall be deposited each fiscal year in the department of revenue administrative fund established by section 42‑1116.01.
4. The next one million two hundred thousand dollars of the monies shall be deposited each fiscal year in the Arizona breeders' award fund established in section 5‑113, subsection F and the county fair racing fund established in section 5‑113, subsection I as allocated by the racing commission.
B. The department shall deposit monies from unclaimed shares and dividends of any corporation incorporated under the laws of this state in the permanent state school fund pursuant to article XI, section 8, Constitution of Arizona.
C. The department shall deposit monies from unclaimed victim restitution payments in the victim compensation and assistance fund established by section 41‑2407 for the purpose of establishing, maintaining and supporting programs that compensate and assist victims of crime.
D. The department shall retain in a separate trust fund at least one hundred thousand dollars from which the department shall pay claims.
E. Before making the deposit, the department shall record the name and last known address of each person who appears from the holders' reports to be entitled to the property and the name and last known address of each insured person or annuitant and beneficiary. The department shall also record the policy or contract number of each policy or contract of an insurance company that is listed in the report, the name of the company and the amount due. The department shall make the record available for public inspection during reasonable business hours.
Sec. 7. Regulatory wagering assessment; reduction
Beginning on the effective date of this act, the Arizona department of racing shall reduce, over a time period determined by the department, by an amount that offsets the amounts received by the department from advanced deposit wagering revenues, the regulatory wagering assessment that is payable from amounts deducted from pari‑mutuel pools by the permittee, in addition to the amounts the permittee is authorized to deduct in section 5‑111, subsection C, Arizona Revised Statutes, from amounts wagered on all live and simulcast races from in‑state and out‑of‑state wagering authorized by the Arizona department of racing to the permittee.
Sec. 8. Exemption from rulemaking
For the purposes of this act, the Arizona department of racing is exempt from the rulemaking requirements of title 41, chapter 6, Arizona Revised Statutes, for one year after the effective date of this act, except that the department shall file the rules pursuant to title 41, chapter 6, Arizona Revised Statutes, hold at least one public hearing and file the rules with the secretary of state.