Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 5-104.01, Arizona Revised Statutes, is amended to read:
5-104.01. Audits and special investigations
A. The department shall require that an annual financial audit be conducted of each permittee licensed under this chapter. The department may also require a financial audit from any concessionaire licensed under this article. The department may, for any audit required by this section, require a permittee or concessionaire to supply a certified audit to the department. The commission shall adopt rules that require each permittee to select an accounting firm approved by the auditor general to conduct the annual financial audit when a certified audit is required. Audits performed pursuant to this section shall be conducted in accordance with auditing standards established by the auditor general.
B. All permittees and licensees subject to the financial audit as prescribed by this section shall afford reasonable and needed facilities and make returns and exhibits to the department or audit firm in the form and at the time prescribed by the department. The auditor representing the department shall have access to all information, records, pari‑mutuel betting devices and equipment necessary to conduct electronic data processing and other audits and reviews. The computer software and other proprietary information and records obtained by the auditor are not subject to disclosure and are exempt from title 39, chapter 1.
C. The commission may reduce the number of racing days of a permittee or revoke the permit or license of a person who knowingly fails or refuses to make the prescribed returns or exhibits or give information as required.
D. The department may expend monies for the purpose of special investigations of permittees or licensees to determine compliance with this chapter or the rules issued pursuant to this chapter.
E. The department may require that the audit and investigation of a permittee and licensee include any person who has a substantial interest, as defined in section 38‑502, in the permittee or licensee.
F. This section does not apply to The county in which a racing meeting operated by a county fair association takes place shall conduct the audit of the racing meeting.
Sec. 2. Section 5-106, Arizona Revised Statutes, is amended to read:
5-106. Supervisor of mutuels; pari‑mutuel auditors; other employees; stewards
A. The director shall appoint a supervisor of mutuels, security personnel and as many other employees as may be necessary for the enforcement of the laws of this state and the rules relating to racing.
B. The director shall determine which employees shall give bond to the state for the faithful performance of their respective duties in an amount as the department shall prescribe. The cost of providing the bonds shall be a charge against the state.
C. The compensation of employees shall be as determined pursuant to section 38‑611.
D. The director shall keep a record of all proceedings and preserve all books, documents and papers of the commission and department.
E. The supervisor of mutuels shall monitor the wagering and the pari‑mutuel departments at all racing meetings and additional wagering facilities and shall enter into no other employment or contracts of employment involving racing or pari‑mutuel wagering either within or without the state during days of racing in the state.
F. The security personnel appointed by the director shall assist in keeping the peace at all racing meetings and additional wagering facilities, shall enforce all laws of the state relating to racing and all rules of the commission and shall perform other duties as the commission or director shall prescribe and in the discharge of their duties shall have the authority of peace officers.
G. The director shall establish a security section charged with the responsibility for investigative matters relating to the proper conduct of racing and pari‑mutuel wagering including barring undesirables from racing, undercover investigations, fingerprinting persons licensed by the department and reviewing license applications. The person in charge of the security section shall have at least five years of experience in law enforcement or in conducting or supervising investigations in some aspect of racing law enforcement.
H. If on investigation by the department there is substantial evidence indicating that the security at any track or additional wagering facility is not satisfactory, the director may order the permittee to remedy the deficiency. If after ten days following the order the permittee has not remedied the deficiency, the department may institute its own security personnel program until the deficiency in security is remedied and may charge the permittee the actual costs incurred therefor. The permittee may petition the department for a hearing at any time to review the necessity of the department further maintaining its own security personnel.
I. Persons employed by the department as investigators must have training in a general investigation course, including instruction in appropriate Arizona law, conducted or approved by the director.
J. For each horse or harness racing meeting, the director, with the approval of the commission, shall employ two persons qualified as stewards. For each horse or harness racing meeting, the permittee, with the approval of the commission, shall employ one person qualified and licensed by the department as a steward. An applicant who wishes to be licensed or employed as a steward by the department for a commercial horse or harness racing meeting must be certified as a steward by a national organization approved by the department. The director shall designate one of the two stewards employed by the department pursuant to this section as chief steward for each horse or harness racing meeting. The director shall designate the remaining stewards as assistant stewards. For each horse or harness racing meeting conducted by a county fair racing association, the director, with the approval of the commission, shall may employ three persons qualified as stewards. The director shall may designate one of the three stewards as chief steward for each horse or harness racing meeting conducted by a county fair racing association, and shall may designate the remaining stewards as assistant stewards.
Sec. 3. Section 5-107.02, Arizona Revised Statutes, is amended to read:
5-107.02. Qualification for eligibility of racing meeting operator; Arizona quarter horse racing circuit; application; single permit
A. No A person, association or corporation is not eligible to operate a racing meeting with a permit issued under this chapter unless he the person, association or corporation is an owner or the lessee of the track named in the permit. A permit shall not be issued to any corporation or association unless the corporation or association in its application for the permit has specifically named the manager who will operate the racing meeting, has supplied the department with all relevant information concerning this manager including his the manager's relationship with the corporation or association, any previous experience in the racing field, and any other relevant and material information the commission may have requested, and has obtained the commission's approval of the manager so named in the application.
B. The department shall establish an application process and shall award a single permit for an Arizona quarter horse racing circuit.
Sec. 4. Section 5-110, Arizona Revised Statutes, is amended to read:
5-110. Racing days, times and allocations; emergency transfer; county fairs; charity days
A. Permits for horse or harness racing meetings shall be approved and issued for substantially the same dates allotted to permittees for the same type of racing during the preceding year or for other dates that permittees request, provided that, in the event there is a conflict in dates requested between two or more permittees in the same county for the same kind of racing, the permittee whose application is for substantially the same dates as were allotted to the permittee in the preceding year shall be entitled to have preference over other permittees. In the event two or more permittees have agreed that the dates to be allotted to each of them each year shall be alternated from one year to the next, the commission shall recognize their agreement and those permittees may be accorded preference over any other permittee as to those dates to be allotted to those permittees on an alternating basis. Except as otherwise provided, the commission shall allot dates to the respective permittees after giving due consideration to all of the factors involved and the interests of permittees, the public and this state.
B. The commission may require by the terms of any permit that the permittee offer such number of races during any racing meeting as the commission shall determine, provided that the permittee shall be permitted to offer at least the same number of races each day as offered in the prior year. The commission shall require each horse racing permittee to conduct for a period of thirty days a number of races equal to an average of at least two races for each day of racing exclusively for quarter horses. If, in the opinion of the commission, the permittee is offering acceptable quarter horse races but an honest effort is not being put forth to fill these races by the horsemen, the commission may rescind the two race per day quarter horse requirement.
C. Live racing and wagering on simulcast races shall be permissible in either daytime or nighttime. Unless otherwise agreed by written contract that is submitted to the department between all the permittees in the same county, there shall be no wagering on simulcast dog races before 4:15 p.m., mountain standard time, on the same day that there is live daytime horse or harness racing in any county in which commercial horse or harness racing has been conducted before February 1, 1971. The hours during which any other harness or horse racing is to be conducted shall be determined by the commission. The application for a permit shall state the exact days on which racing will be held and the time of day during which racing will be conducted.
D. If the commission determines that an emergency has obligated or may obligate a permittee to discontinue racing at a location, the commission may authorize the permittee to transfer racing for the number of days lost to any other location.
E. A racing meeting, when operated by a county fair racing association or under lease during the county fair to any individual, corporation or association, shall not come under the limitation placed on days of racing in this section.
F. The department shall be the judge of whether a county fair racing meeting is being operated pursuant to this section. A county fair racing meeting conducted by an individual, corporation or association, other than the properly authorized county fair racing association, shall come under the general provisions of this article the same as a commercial meeting. Notwithstanding this subsection, a county fair racing meeting, whether conducted by a county fair racing association or by an individual, corporation or association other than a county fair racing association, is exempt from the requirement prescribed in section 5‑111 to pay to the state a percentage of the pari‑mutuel pool collected at the meeting.
G. The commission may allow a permittee, in addition to the days specified in this permit, to operate up to three racing days during any one meeting as charity days. From the amount deducted from the total handled in the pari‑mutuel pool on charity days, the permittee shall deduct an amount equal to the purses and the cost of conducting racing on these days, and shall donate the balance to nonprofit organizations and corporations that benefit the general public, that are engaged in charitable, benevolent and other like work and that are selected by the permittee and approved by the department. In no event shall the amount given to charity from charity racing days be less than the amount that otherwise would have gone to this state as the state's share on a noncharity racing day.
H. Notwithstanding any other law, live dog racing shall not be conducted in this state after December 31, 2016. This subsection does not apply to nonprofit organizations that host lure coursing or similar events that test a dog's ability, stamina and breeding or training for such events. Notwithstanding any other provision of this article, any dog racing permittee that offered live dog racing in 2016 or that has offered live dog racing in eight out of ten calendar years from 1980 to 1990 in counties that have a population of less than five hundred thousand persons shall be considered as operating a racetrack enclosure for all purposes under this article and shall not be authorized or required to conduct live racing as a condition of that permittee's racing permit. Any permittee qualified under this subsection may conduct advance deposit wagering, wagering at additional wagering facilities that are owned or leased by that permittee and wagering on telecasts of races conducted at racetrack enclosures within this state or at racetrack enclosures outside this state without offering live racing at that permittee's racetrack enclosure.
Sec. 5. 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 and, in counties having a population of less than five hundred thousand persons or at least one million five hundred thousand persons, at those additional facilities that are owned or leased by a permittee, that are approved by the commission and that are used by a permittee for handling wagering as part of the pari‑mutuel system of the commercial live‑racing permittee. In all other counties, wagering may also be conducted at additional facilities that are owned or leased by a commercial live‑racing permittee who is licensed to conduct live racing in those counties or, until January 1, 2019, who has the consent of all commercial permittees currently licensed to conduct live racing in those counties, and that are used by a permittee for handling wagering and as part of the pari‑mutuel system of the commercial live-racing permittee. Beginning January 1, 2019, consent of commercial permittees licensed to conduct live racing in those counties is not required. From and after December 31, 2016, any agreement concerning simulcasting that is executed between a permittee that conducted live dog racing in 2016 and a horse racing facility that is located in a county with a population of more than three million persons shall provide that twenty percent of the commission fee paid to a permittee that conducted live dog racing in 2016 under that agreement be distributed to the recognized horsemen's association that represents horsemen participating in race meets in this state. 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 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 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 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 shall be limited in the same manner as actual live racing in that county. For the purpose of subsection B 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 a permit for horse or harness racing, the permittee that conducts
the meeting may deduct up to and including twenty‑five percent of the
total amount handled in the regular pari‑mutuel pools and, at the
permittee's option, may deduct up to and including thirty percent of the total
amount handled in the exacta, daily double, quinella and other wagering pools
involving two horses, and up to and including thirty‑five percent of the
total amount handled in the trifecta or other wagering pools involving more
than two horses in one or more races. The amounts if deducted shall be
distributed as prescribed in subsection C of this section and section 5‑111.02
for horse or harness racing permittees.
C. During the period of a permit for horse or harness racing, the state shall receive two percent of the gross amount of the first one million dollars $1,000,000 of the daily pari‑mutuel pools and five percent of the gross amount exceeding one million dollars $1,000,000 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 B of this section. Of the amount retained by the permittee, 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 percent shall be used for purses. Unless otherwise agreed by written contract, fifty percent 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 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 that are received from simulcasting and 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.
D. 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 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 B of this section. All county fair racing meetings, whether conducted by county fair racing associations under 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 C of this section and are also exempt from the provisions of section 5‑111.01.
E. Monies from charity racing days are exempt from the state percentage of the pari‑mutuel pool prescribed in this section.
F. Sums held by a permittee for payment of unclaimed pari‑mutuel tickets are exempt from the revised Arizona unclaimed property act, title 44, chapter 3.
G. 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.
Sec. 6. Title 5, chapter 1, article 1, Arizona Revised Statutes, is amended by adding sections 5-113.02 and 5-119, to read:
5-113.02. Arizona quarter horse racing circuit fund; distributions; exemption
A. The Arizona quarter horse racing circuit fund is established. The department shall ADMINISTER the fund. Monies in the fund are continuously APPROPRIATED. The department shall distribute monies in the fund as follows:
1. not more than $100,000 each fiscal year on a first-come, first‑served basis to the county fair racing association of any county that conducts a county fair racing meeting. Monies allocated pursuant to this paragraph may be used only for capital improvements or purses. The department may disburse these monies to a county fair racing association only if the county or the county fair racing association matches at least forty percent of the disbursement with monies from sources other than this state.
2. After the allocations made pursuant to paragraph 1 of this subsection and subject to available monies, not more than $100,000 each fiscal year to counties or the county fair racing association of any county that conducts a county fair racing meeting to pay operating expenses, solicit sponsorships and comply with audit and other financial compliance requirements.
B. The Arizona quarter horse racing circuit fund is exempt from the provisions of section 35‑190 relating to lapsing of appropriations until from and after June 30, 2023.
5-119. Arizona quarter horse racing circuit coordinating council; duties
A. The Arizona quarter horse racing circuit coordinating council is established consisting of one member appointed by each county board of supervisors. The members of the council shall select a chairperson. members of the council are not eligible to receive compensation and are not eligible to receive reimbursement for expenses pursuant to title 38, chapter 4, article 2.
B. The council shall:
1. Coordinate with each county and county fair racing association to promote an arizona quarter horse racing circuit in conjunction with each participating county fair.
2. Beginning with the 2021 racing season, develop a coordinated racing schedule among participating county fair racing associations at county fair facilities.
3. advise the department concerning establishing an application process and awarding a single permit for an Arizona quarter horse racing circuit as required by section 5‑107.02.
4. Advise the department on allocating monies in the Arizona quarter horse racing circuit fund established by section 5-113.02.
Sec. 7. Delayed repeal
Section 5‑119, Arizona Revised Statutes, as added by this act, is repealed from and after June 30, 2023.
Sec. 8. Appropriations; Arizona quarter horse racing circuit fund; fiscal years 2020-2021, 2021‑2022 and 2022‑2023
The sum of $1,000,000 is appropriated from the state general fund in each of fiscal years 2020-2021, 2021-2022 and 2022-2023 to the Arizona quarter horse racing circuit fund established by section 5-113.02, Arizona Revised Statutes, as added by this act.
Sec. 9. Arizona quarter horse racing circuit fund; exception
Notwithstanding section 5‑113.02, subsection A, paragraph 1, as added by this act, in fiscal year 2022‑2023 the department of gaming may distribute more than $100,000 to the county fair racing association of a county that conducts a county fair racing meeting.