Senate Engrossed
equine economic improvement fund
State of Arizona
Senate
Fifty-seventh Legislature
First Regular Session
2025
SENATE BILL 1126
AN ACT
amending section 5-113, Arizona Revised Statutes; amending title 5, chapter 1, article 1, arizona revised statutes, by adding section 5-113.02; amending sections 5-1212 and 5-1318, arizona revised statutes; relating to horse racing.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 5-113, Arizona Revised Statutes, is amended to read:
START_STATUTE5-113. 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. 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 a proportion 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 MINUS receipts of the livestock fair, shall be paid from this fund, but this payment shall not exceed thirty percent 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 on 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 CHAIRPERSON 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. five percent of the annual revenue of the fantasy sportS contest fund EStablished bysection 5-1212 and five percent of the monthly revenue of the event wagering fund established by section 5-1318 shall be deposited, pursuant to sections 35-146 and 35-147, in the Arizona breeders' award fund. 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 prescribed 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 shall distribute $25,000 annually from the Arizona Breeders' award fund to the retired racehorse adoption fund established by subsection H of this section. 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. five percent of the annual revenue of the fantasy sports contest fund ESTABLISHED by section 5-1212 shall be deposited, pursuant to sections 35-146 and 35-147, annually in the Arizona stallion award fund. 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 shall distribute $25,000 annually from the Arizona stallion award fund to the retired racehorse adoption fund established by subsection H of this section. 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 retired racehorse adoption fund is established. The department shall administer 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 fund. The fund also consists of any monies contributed to the fund by a nonprofit organization pursuant to subsection K of this section. The department shall distribute monies from the fund to provide financial assistance to nonprofit enterprises approved by the commission 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 unspent in the fund at the end of the fiscal year in excess of $75,000 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 pursuant to 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 pursuant to 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.
K. One percent of the in-state handle, none of which shall come from the amount paid to bettors, shall be allocated to the department on a monthly basis for distribution to a nonprofit organization that represents a majority of the horse breeders in this state, that maintains a financial bond and that has previously contracted with the department to provide data, statistics and other information. The nonprofit organization that receives monies pursuant to this subsection shall establish a separate fund for the receipt of these monies that shall be designated as the Arizona horse breeders' fund. The nonprofit organization shall add monies to purses and provide purse awards for the Arizona bred horses that finish in first, second or third place in races held in this state, provide awards to the breeders, owners or lessees or the breeders', owners' or lessees' heirs, devisees or successors, of the dams and sires whose certified Arizona bred offspring finish in first, second or third place in races held in this state and contribute not more than $25,000 of these monies each year to the retired racehorse adoption fund established by subsection H of this section. The nonprofit organization may spend a portion of these monies for administrative costs. For the purposes of this subsection, the breeder of a thoroughbred horse shall be considered the owner of the broodmare at the time that the foal is dropped. The nonprofit organization shall submit an annual report to the governor, the president of the senate and the speaker of the house of representatives that provides a detailed summary of the monies distributed pursuant to this subsection, including the amount spent for administrative costs. The nonprofit organization shall provide a copy of this report to the commission and the secretary of state. For the purposes of this subsection, "in-state handle" means the total amount of monies contributed on live races in this state to all pari-mutuel pools by bettors plus the total amount of monies contributed by bettors in this state on simulcast races that originate outside this state. END_STATUTE
Sec. 2. Title 5, chapter 1, article 1, Arizona Revised Statutes, is amended by adding section 5-113.02, to read:
START_STATUTE5-113.02. Equine economic improvement fund; exemption
a. The equine economic improvement fund is established consisting of monies deposited pursuant to sections 5-1212 and 5-1318 or from any other source. The department shall administer the fund.
B. on or before August 1 of each year, The department shall annually distribute monies in the equine economic improvement fund as follows:
1. $25,000 to the retired racehorse adoption fund established by section 5-113, subsection H.
2. Any monies remaining in the equine economic improvement fund after the distribution pursuant to paragraph 1 of this subsection to a recognized nonprofit horsemen's organization that has represented the horsemen participating in racing meetings since 1988.
C. Monies in the fund are CONTINUOUSLY appropriated and are exempt from the provisions of section 35-190 relating to lapsing of appropriations. END_STATUTE
Sec. 3. Section 5-1212, Arizona Revised Statutes, is amended to read:
START_STATUTE5-1212. Fantasy sports contest fund
A. The fantasy sports contest fund is established consisting of monies deposited pursuant to section 5-1211 or from any other source. The department shall administer the fund. Monies in the fund are subject to legislative appropriation.
B. On notice from the department, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.
c. the department shall annually transfer THE FOLLOWING from tHE fantasy sports contest fund:
1. fIVE PERCENT OF THE annual REVENUE DEPOSITED IN THE fantasy sports contest FUND TO tHE arizona BREEDERS' AWARD FUND ESTABLISHED by SECTION 5-113, SUBSECTION F.
2. fIVE PERCENT OF THE annual REVENUE DEPOSITED IN THE fantasy sports contest FUND TO THE aRIZONA STALLION AWARD FUND ESTABLISHED by SECTION 5-113, SUBSECTION G.
3. fIVE PERCENT OF THE annual REVENUE DEPOSITED IN THE fantasy sports contest FUND TO THE EQUINE ECONOMIC IMPROVEMENT FUND ESTABLISHED by SECTION 5-113.02.
C. d. The department may spend not more than ten percent of monies on the department's annual costs of regulating and enforcing this chapter unless otherwise provided by the legislature. At the end of each fiscal year, any revenues collected in excess of the amount appropriated from the fantasy sports contest fund shall be transferred to the state general fund. END_STATUTE
Sec. 4. Section 5-1318, Arizona Revised Statutes, is amended to read:
START_STATUTE5-1318. Fees; event wagering fund
A. The department shall establish a fee for the privilege of operating event wagering. In determining the fee, the department shall consider the highest percentage of revenue share that an Indian tribe pays to this state pursuant to the tribal-state gaming compact. The fee may not exceed ten percent of the event wagering operator's adjusted gross event wagering receipts. The event wagering operator or designee has the option to choose either the cash accrual or modified accrual basis method of accounting for purposes of calculating the amount of the fee owed by the event wagering operator or designee. The fees required pursuant to this section are due and payable to the department not later than the twenty-fifth day of the month following the calendar month in which the adjusted gross event wagering receipts were received and the obligation was accrued.
B. The event wagering fund is established consisting of monies deposited pursuant to this chapter or from any other source. The department shall administer the fund. Except as otherwise provided in this chapter, the department shall deposit, pursuant to sections 35-146 and 35-147, all monies collected under this chapter in the event wagering fund. On or before the twenty-fifth of each month, ninety seventy-five percent of the monies deposited in the event wagering fund from the previous month shall be transferred to the state general fund, ten percent of the monies deposited in the event wagering fund from the previous month shall be transferred to the equine economic improvement fund established BY section 5-113.02 and five percent of the monies deposited in the event wagering fund from the previous month shall be TRANSFERRED to the ARIZONA breeders' award fund established BY section 5-113, subsection f. On notice from the department, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.
C. Unless otherwise determined by the legislature, the department may spend not more than ten percent of monies on the department's annual costs of regulating and enforcing this chapter. END_STATUTE