As Introduced

127th General Assembly
Regular Session
2007-2008
H. B. No. 118


Representative Seitz 

Cosponsors: Representatives Blessing, McGregor, J., Uecker, Schneider, Driehaus, Stewart, D., Chandler, Domenick, Adams, Otterman, Yuko, Combs, Skindell, Webster, Brinkman, Distel, Book 


A BILL
To amend sections 3769.03, 3769.08, 3769.083, 1
3769.085, and 3769.088 and to enact sections 2
3769.0811, 3769.0812, and 3769.0813 of the Revised 3
Code to authorize wagering at a track on horse 4
races that are telecast via an instant racing 5
system and to levy a tax on amounts wagered in 6
this manner.7


BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1.  That sections 3769.03, 3769.08, 3769.083, 8
3769.085, and 3769.088 be amended and sections 3769.0811, 9
3769.0812, and 3769.0813 of the Revised Code be enacted to read as 10
follows:11

       Sec. 3769.03.  The state racing commission shall prescribe12
the rules and conditions under which horse racing may be conducted 13
and may issue, deny, suspend, diminish, or revoke permits to 14
conduct horse racing as authorized by sections 3769.01 to 3769.14 15
of the Revised Code. The commission may impose, in addition to any 16
other penalty imposed by the commission, fines in an amount not to 17
exceed ten thousand dollars on any permit holder or any other 18
person who violates the rules or orders of the commission. The 19
commission may prescribe the forms of wagering that are 20
permissible, the number of races, the procedures on wagering, and 21
the wagering information to be provided to the public.22

       The commission may require totalizator equipment to display23
the amount of wagering in each wagering pool. The commission shall 24
initiate safeguards as necessary to account for the amount of 25
money wagered at each track in each wagering pool. It may require 26
permit holders to install equipment that will provide a complete 27
check and analysis of the functioning of any computers and require 28
safeguards on their performance. The commission shall require all 29
permit holders, except those holding state fair, county fair, or 30
other fair permits, to provide a photographic recording, approved 31
by the commission, of the entire running of all races conducted by 32
the permit holder.33

       The state racing commission may issue, deny, suspend, or34
revoke licenses to those persons engaged in racing and to those35
employees of permit holders as is in the public interest for the36
purpose of maintaining a proper control over horse-racing37
meetings. The commission, as is in the public interest for the 38
purpose of maintaining proper control over horse-racing meetings, 39
also may rule any person off a permit holder's premises. License 40
fees shall include registration fees and shall be set by the 41
commission. Each license issued by the commission, unless revoked 42
for cause, shall be for the period of one year from the first day 43
of January of the year in which it is issued, except as otherwise44
provided in section 3769.07 of the Revised Code. Applicants for45
licenses issued by the commission shall submit their fingerprints46
to the commission, and the commission may forward the fingerprints47
to the federal bureau of investigation or, to any other agency, or48
to both, for examination.49

       There is hereby created in the state treasury the state50
racing commission operating fund. All license fees established and 51
collected by the commission pursuant to this section, and the52
amounts specified in divisions (B) and (C) of section 3769.08 and,53
division (A)(6) of section 3769.087, and division (C)(2) of 54
section 3769.0813 of the Revised Code, shall be paid into the 55
state treasury to the credit of the fund. Moneys in the fund shall 56
be expended by the commission to defray its operating costs, 57
salaries and expenses, and the cost of administering and enforcing 58
this chapter.59

       The commission may deny a permit to any permit holder that60
has defaulted in payments to the public, employees, or the61
horsemen and may deny a permit to any successor purchaser of a62
track for as long as any of those defaults have not been satisfied 63
by either the seller or purchaser.64

       The commission shall deny a permit to any permit holder that 65
has defaulted in payments to the state or has defaulted in66
payments required under section 3769.089 or, 3769.0810, or 67
3769.0813 of the Revised Code and shall deny a permit to any 68
successor purchaser of a track for as long as those defaults have 69
not been satisfied by either the seller or purchaser.70

       Any violation of this chapter, of any rule of racing adopted 71
by the commission, or of any law or rule with respect to racing in 72
any jurisdiction shall be sufficient reason for a refusal to issue 73
a license, or a suspension or revocation of any license issued, 74
pursuant to this section.75

       With respect to the issuance, denial, suspension, or76
revocation of a license to a participant in horse racing, the77
action of the commission shall be subject to Chapter 119. of the78
Revised Code.79

       The commission may sue and be sued in its own name. Any 80
action against the commission shall be brought in the court of 81
common pleas of Franklin county. Any appeal from a determination 82
or decision of the commission rendered in the exercise of its 83
powers and duties under this chapter shall be brought in the court 84
of common pleas of Franklin county.85

       The commission, biennially, shall make a full report to the86
governor of its proceedings for the two-year period ending with87
the thirty-first day of December preceding the convening of the88
general assembly and shall include its recommendations in the 89
report. The commission, semiannually, on the thirtieth day of 90
June and on the thirty-first day of December of each year, shall 91
make a report and accounting to the governor.92

       Sec. 3769.08.  (A) Any person holding a permit to conduct a93
horse-racing meeting may provide a place in the race meeting94
grounds or enclosure at which the permit holder may conduct and95
supervise the pari-mutuel system of wagering by patrons of legal96
age on the live racing programs and simulcast racing programs97
conducted by the permit holder.98

       The pari-mutuel method of wagering upon the live racing99
programs and simulcast racing programs held at or conducted within100
such race track, and at the time of such horse-racing meeting, or101
at other times authorized by the state racing commission, shall102
not be unlawful. No other place, except that provided and103
designated by the permit holder and except as provided in section104
3769.26 of the Revised Code, nor any other method or system of105
betting or wagering, except the pari-mutuel system, shall be used106
or permitted by the permit holder; nor, except as provided in107
section 3769.089, 3769.0812, or 3769.26 of the Revised Code, shall 108
the pari-mutuel system of wagering be conducted by the permit 109
holder on any races except the races at the race track, grounds, 110
or enclosure for which the person holds a permit. EachExcept as 111
provided in section 3769.0813 of the Revised Code, each permit 112
holder may retain as a commission an amount not to exceed eighteen 113
per cent of the total of all moneys wagered.114

       The pari-mutuel wagering authorized by this section is115
subject to sections 3769.25 to 3769.28 of the Revised Code, with 116
the exception that pari-mutuel wagering conducted under section 117
3769.0812 of the Revised Code is not subject to those sections.118

       (B) At the close of each racing day, each permit holder119
authorized to conduct thoroughbred racing, out of the amount120
retained on that day by the permit holder, shall pay by check,121
draft, or money order to the tax commissioner, as a tax, a sum122
equal to the following percentages of the total of all moneys123
wagered on live racing programs on that day and shall separately124
compute and pay by check, draft, or money order to the tax125
commissioner, as a tax, a sum equal to the following percentages126
of the total of all money wagered on simulcast racing programs on127
that day:128

       (1) One per cent of the first two hundred thousand dollars129
wagered, or any part of that amount;130

       (2) Two per cent of the next one hundred thousand dollars131
wagered, or any part of that amount;132

       (3) Three per cent of the next one hundred thousand dollars133
wagered, or any part of that amount;134

       (4) Four per cent of all sums over four hundred thousand135
dollars wagered.136

       Except as otherwise provided in section 3769.089 of the137
Revised Code, each permit holder authorized to conduct138
thoroughbred racing shall use for purse money a sum equal to fifty139
per cent of the pari-mutuel revenues retained by the permit holder140
as a commission after payment of the state tax under this 141
division. This fifty per cent payment shall be in addition to the 142
purse distribution from breakage specified in this section.143

       Subject to division (M) of this section, from the moneys paid144
to the tax commissioner by thoroughbred racing permit holders,145
one-half of one per cent of the total of all moneys so wagered on146
a racing day shall be paid into the Ohio fairs fund created by147
section 3769.082 of the Revised Code, one and one-eighth per cent148
of the total of all moneys so wagered on a racing day shall be149
paid into the Ohio thoroughbred race fund created by section150
3769.083 of the Revised Code, and one-quarter of one per cent of151
the total of all moneys wagered on a racing day by each permit152
holder shall be paid into the state racing commission operating153
fund created by section 3769.03 of the Revised Code. The required154
payment to the state racing commission operating fund does not155
apply to county and independent fairs and agricultural societies.156
The remaining moneys may be retained by the permit holder, except157
as provided in this section with respect to the odd cents158
redistribution. Amounts paid into the PASSPORT fund shall be used159
solely for the support of the PASSPORT program as determined in160
appropriations made by the general assembly. If the PASSPORT161
program is abolished, the amount that would have been paid to the162
PASSPORT fund under this chapter shall be paid to the general163
revenue fund of the state. As used in this chapter, "PASSPORT164
program" means the PASSPORT program created under section 173.40165
of the Revised Code.166

       The total amount paid to the Ohio thoroughbred race fund167
under this section and division (A) of section 3769.087 of the168
Revised Code shall not exceed by more than six per cent the total169
amount paid to this fund under this section and that section170
during the immediately preceding calendar year.171

       Each year, the total amount calculated for payment into the172
Ohio fairs fund under this division, division (C) of this section,173
and division (A) of section 3769.087 of the Revised Code shall be174
an amount calculated using the percentages specified in this175
division, division (C) of this section, and division (A) of176
section 3769.087 of the Revised Code.177

       A permit holder may contract with a thoroughbred horsemen's178
organization for the organization to act as a representative of179
all thoroughbred owners and trainers participating in a180
horse-racing meeting conducted by the permit holder. A181
"thoroughbred horsemen's organization" is any corporation or182
association that represents, through membership or otherwise, more183
than one-half of the aggregate of all thoroughbred owners and184
trainers who were licensed and actively participated in racing185
within this state during the preceding calendar year. Except as186
otherwise provided in this paragraph, any moneys received by a187
thoroughbred horsemen's organization shall be used exclusively for188
the benefit of thoroughbred owners and trainers racing in this189
state through the administrative purposes of the organization,190
benevolent activities on behalf of the horsemen, promotion of the191
horsemen's rights and interests, and promotion of equine research.192
A thoroughbred horsemen's organization may expend not more than an193
aggregate of five per cent of its annual gross receipts, or a194
larger amount as approved by the organization, for dues,195
assessments, and other payments to all other local, national, or196
international organizations having as their primary purposes the197
promotion of thoroughbred horse racing, thoroughbred horsemen's198
rights, and equine research.199

       (C) Except as otherwise provided in division (B) of this200
section, at the close of each racing day, each permit holder201
authorized to conduct harness or quarter horse racing, out of the202
amount retained that day by the permit holder, shall pay by check,203
draft, or money order to the tax commissioner, as a tax, a sum204
equal to the following percentages of the total of all moneys205
wagered on live racing programs and shall separately compute and206
pay by check, draft, or money order to the tax commissioner, as a207
tax, a sum equal to the following percentages of the total of all208
money wagered on simulcast racing programs on that day:209

       (1) One per cent of the first two hundred thousand dollars210
wagered, or any part of that amount;211

       (2) Two per cent of the next one hundred thousand dollars212
wagered, or any part of that amount;213

       (3) Three per cent of the next one hundred thousand dollars214
wagered, or any part of that amount;215

       (4) Four per cent of all sums over four hundred thousand216
dollars wagered.217

       Except as otherwise provided in division (B) and subject to218
division (M) of this section, from the moneys paid to the tax219
commissioner by permit holders authorized to conduct harness or220
quarter horse racing, one-half of one per cent of all moneys221
wagered on that racing day shall be paid into the Ohio fairs fund;222
from the moneys paid to the tax commissioner by permit holders223
authorized to conduct harness racing, five-eighths of one per cent224
of all moneys wagered on that racing day shall be paid into the225
Ohio standardbred development fund; and from the moneys paid to226
the tax commissioner by permit holders authorized to conduct227
quarter horse racing, five-eighths of one per cent of all moneys228
wagered on that racing day shall be paid into the Ohio quarter229
horse development fund.230

       (D) In addition, subject to division (M) of this section,231
beginning on January 1, 1996, from the money paid to the tax232
commissioner as a tax under this section and division (A) of233
section 3769.087 of the Revised Code by harness horse permit234
holders, one-half of one per cent of the amount wagered on a235
racing day shall be paid into the Ohio standardbred development236
fund. Beginning January 1, 1998, theThe payment to the Ohio237
standardbred development fund required under this division does238
not apply to county agricultural societies or independent239
agricultural societies.240

       The total amount paid to the Ohio standardbred development241
fund under this division, division (C) of this section, and242
division (A) of section 3769.087 of the Revised Code and the total243
amount paid to the Ohio quarter horse development fund under this244
division and division (A) of that section shall not exceed by more245
than six per cent the total amount paid into the fund under this246
division, division (C) of this section, and division (A) of247
section 3769.087 of the Revised Code in the immediately preceding248
calendar year.249

       (E) Subject to division (M) of this section, from the money250
paid as a tax under this chapter by harness and quarter horse251
permit holders, one-quarter of one per cent of the total of all252
moneys wagered on a racing day by each permit holder shall be paid253
into the state racing commission operating fund created by section254
3769.03 of the Revised Code. This division does not apply to255
county and independent fairs and agricultural societies.256

       (F) Except as otherwise provided in section 3769.089 of the257
Revised Code, each permit holder authorized to conduct harness258
racing shall pay to the harness horsemen's purse pool a sum equal259
to fifty per cent of the pari-mutuel revenues retained by the260
permit holder as a commission after payment of the state tax under 261
division (C) of this section. This fifty per cent payment is to be 262
in addition to the purse distribution from breakage specified in 263
this section.264

       (G) In addition, each permit holder authorized to conduct265
harness racing shall be allowed to retain the odd cents of all266
redistribution to be made on all mutualmutuel contributions 267
exceeding a sum equal to the next lowest multiple of ten.268

       Forty per cent of that portion of that total sum of such odd269
cents shall be used by the permit holder for purse money for Ohio270
sired, bred, and owned colts, for purse money for Ohio bred271
horses, and for increased purse money for horse races. Upon the272
formation of the corporation described in section 3769.21 of the273
Revised Code to establish a harness horsemen's health and274
retirement fund, twenty-five per cent of that portion of that275
total sum of odd cents shall be paid at the close of each racing276
day by the permit holder to that corporation to establish and fund 277
the health and retirement fund. Until that corporation is formed, 278
that twenty-five per cent shall be paid at the close of each 279
racing day by the permit holder to the tax commissioner or the tax 280
commissioner's agent in the county seat of the county in which the 281
permit holder operates race meetings. The remaining thirty-five 282
per cent of that portion of that total sum of odd cents shall be283
retained by the permit holder.284

       (H) In addition, each permit holder authorized to conduct285
thoroughbred racing shall be allowed to retain the odd cents of286
all redistribution to be made on all mutuel contributions287
exceeding a sum equal to the next lowest multiple of ten. Twenty288
per cent of that portion of that total sum of such odd cents shall289
be used by the permit holder for increased purse money for horse290
races. Upon the formation of the corporation described in section291
3769.21 of the Revised Code to establish a thoroughbred horsemen's292
health and retirement fund, forty-five per cent of that portion of293
that total sum of odd cents shall be paid at the close of each294
racing day by the permit holder to that corporation to establish295
and fund the health and retirement fund. Until that corporation is 296
formed, that forty-five per cent shall be paid by the permit297
holder to the tax commissioner or the tax commissioner's agent in298
the county seat of the county in which the permit holder operates299
race meetings, at the close of each racing day. The remaining300
thirty-five per cent of that portion of that total sum of odd301
cents shall be retained by the permit holder.302

       (I) In addition, each permit holder authorized to conduct303
quarter horse racing shall be allowed to retain the odd cents of304
all redistribution to be made on all mutuel contributions305
exceeding a sum equal to the next lowest multiple of ten, subject306
to a tax of twenty-five per cent on that portion of the total sum307
of such odd cents that is in excess of two thousand dollars during308
a calendar year, which tax shall be paid at the close of each309
racing day by the permit holder to the tax commissioner or the tax310
commissioner's agent in the county seat of the county within which311
the permit holder operates race meetings. Forty per cent of that312
portion of that total sum of such odd cents shall be used by the313
permit holder for increased purse money for horse races. The314
remaining thirty-five per cent of that portion of that total sum315
of odd cents shall be retained by the permit holder.316

       (J)(1) To encourage the improvement of racing facilities for317
the benefit of the public, breeders, and horse owners, and to318
increase the revenue to the state from the increase in pari-mutuel319
wagering resulting from those improvements, the taxes paid by a320
permit holder to the state as provided for in this chapter shall321
be reduced by three-fourths of one per cent of the total amount322
wagered for those permit holders who make capital improvements to323
existing race tracks or construct new race tracks. The percentage324
of the reduction that may be taken each racing day shall equal325
seventy-five per cent of the taxes levied under divisions (B) and326
(C) of this section and section 3769.087 of the Revised Code, and327
division (F)(2) of section 3769.26 of the Revised Code, as328
applicable, divided by the calculated amount each fund should329
receive under divisions (B) and (C) of this section and section330
3769.087 of the Revised Code, and division (F)(2) of section331
3769.26 of the Revised Code and the reduction provided for in this332
division. If the resulting percentage is less than one, that333
percentage shall be multiplied by the amount of the reduction334
provided for in this division. Otherwise, the permit holder shall335
receive the full reduction provided for in this division. The336
amount of the allowable reduction not received shall be carried337
forward and applied against future tax liability. After any338
reductions expire, any reduction carried forward shall be treated339
as a reduction as provided for in this division.340

       If more than one permit holder is authorized to conduct341
racing at the facility that is being built or improved, the cost342
of the new race track or capital improvement shall be allocated343
between or among all the permit holders in the ratio that the344
permit holders' number of racing days bears to the total number of345
racing days conducted at the facility.346

       A reduction for a new race track or a capital improvement347
shall start from the day racing is first conducted following the348
date actual construction of the new race track or each capital349
improvement is completed and the construction cost has been 350
approved by the state racing commission, unless otherwise provided 351
in this section. A reduction for a new race track or a capital352
improvement shall continue for a period of twenty-five years for353
new race tracks and for fifteen years for capital improvements if354
the construction of the capital improvement or new race track355
commenced prior to March 29, 1988, and for a period of ten years356
for new race tracks or capital improvements if the construction of 357
the capital improvement or new race track commenced on or after358
March 29, 1988, but before the effective date of this amendment359
June 6, 2001, or until the total tax reduction reaches seventy per360
cent of the approved cost of the new race track or capital361
improvement, as allocated to each permit holder, whichever occurs362
first. A reduction for a new race track or a capital improvement363
approved after the effective date of this amendmentJune 6, 2001,364
shall continue until the total tax reduction reaches one hundred365
per cent of the approved cost of the new race track or capital366
improvement, as allocated to each permit holder.367

       A reduction granted for a new race track or a capital368
improvement, the application for which was approved by the racing369
commission after March 29, 1988, but before the effective date of370
this amendmentJune 6, 2001, shall not commence nor shall the371
ten-year period begin to run until all prior tax reductions with372
respect to the same race track have ended. The total tax reduction 373
because of capital improvements shall not, during any one year,374
exceed for all permit holders using any one track three-fourths of 375
one per cent of the total amount wagered, regardless of the number 376
of capital improvements made. Several capital improvements to a 377
race track may be consolidated in an application if the state378
racing commission approved the application prior to March 29, 379
1988. No permit holder may receive a tax reduction for a capital 380
improvement approved by the racing commission on or after March 381
29, 1988, at a race track until all tax reductions have ended for 382
all prior capital improvements approved by the racing commission 383
under this section or section 3769.20 of the Revised Code at that 384
race track. If there are two or more permit holders operating 385
meetings at the same track, they may consolidate their 386
applications. The racing commission shall notify the tax 387
commissioner when the reduction of tax begins and when it ends.388

       Each fiscal year the state racing commission shall submit a389
report to the tax commissioner, the office of budget and390
management, and the legislative service commission. The report 391
shall identify each capital improvement project undertaken under 392
this division and in progress at each race track, indicate the 393
total cost of each project, state the tax reduction that resulted 394
from each project during the immediately preceding fiscal year, 395
estimate the tax reduction that will result from each project 396
during the current fiscal year, state the total tax reduction that397
resulted from all such projects at all race tracks during the398
immediately preceding fiscal year, and estimate the total tax399
reduction that will result from all such projects at all race400
tracks during the current fiscal year.401

       (2) In order to qualify for the reduction in tax, a permit402
holder shall apply to the state racing commission in such form as 403
the commission may require and shall provide full details of the 404
new race track or capital improvement, including a schedule for405
its construction and completion, and set forth the costs and406
expenses incurred in connection with it. The racing commission 407
shall not approve an application unless the permit holder shows 408
that a contract for the new race track or capital improvement has 409
been let under an unrestricted competitive bidding procedure, 410
unless the contract is exempted by the controlling board because 411
of its unusual nature. In determining whether to approve an412
application, the racing commission shall consider whether the new413
race track or capital improvement will promote the safety, 414
convenience, and comfort of the racing public and horse owners and 415
generally tend towards the improvement of racing in this state.416

       (3) If a new race track or capital improvement is approved by417
the state racing commission and construction has started, the tax 418
reduction may be authorized by the commission upon presentation of419
copies of paid bills in excess of one hundred thousand dollars or420
ten per cent of the approved cost, whichever is greater. After the421
initial authorization, the permit holder shall present copies of422
paid bills. If the permit holder is in substantial compliance with 423
the schedule for construction and completion of the new race track424
or capital improvement, the racing commission may authorize the425
continuation of the tax reduction upon the presentation of the 426
additional paid bills. The total amount of the tax reduction427
authorized shall not exceed the percentage of the approved cost of 428
the new race track or capital improvement specified in division429
(J)(1) of this section. The racing commission may terminate any430
tax reduction immediately if a permit holder fails to complete the431
new race track or capital improvement, or to substantially comply 432
with the schedule for construction and completion of the new race433
track or capital improvement. If a permit holder fails to complete 434
a new race track or capital improvement, the racing commission 435
shall order the permit holder to repay to the state the total 436
amount of tax reduced. The normal tax paid by the permit holder 437
shall be increased by three-fourths of one per cent of the total438
amount wagered until the total amount of the additional tax439
collected equals the total amount of tax reduced.440

       (4) As used in this sectiondivision:441

       (a) "Capital improvement" means an addition, replacement, or442
remodeling of a structural unit of a race track facility costing443
at least one hundred thousand dollars, including, but not limited444
to, the construction of barns used exclusively for the race track445
facility, backstretch facilities for horsemen, paddock facilities,446
new pari-mutuel and totalizator equipment and appurtenances to447
that equipment purchased by the track, new access roads, new448
parking areas, the complete reconstruction, reshaping, and449
leveling of the racing surface and appurtenances, the installation 450
of permanent new heating or air conditioning, roof replacement or 451
restoration, installations of a permanent nature forming a part of 452
the track structure, and construction of buildings that are 453
located on a permit holder's premises. "Capital improvement" does 454
not include the cost of replacement of equipment that is not455
permanently installed, ordinary repairs, painting, and maintenance456
required to keep a race track facility in ordinary operating457
condition.458

       (b) "New race track" includes the reconstruction of a race459
track damaged by fire or other cause that has been declared by the 460
state racing commission, as a result of the damage, to be an 461
inadequate facility for the safe operation of horse racing.462

       (c) "Approved cost" includes all debt service and interest463
costs that are associated with a capital improvement or new race464
track and that the state racing commission approves for a tax 465
reduction under division (J) of this section.466

       (5) The state racing commission shall not approve an 467
application for a tax reduction under this section if it has 468
reasonable cause to believe that the actions or negligence of the 469
permit holder substantially contributed to the damage suffered by 470
the track due to fire or other cause. The racing commission shall 471
obtain any data or information available from a fire marshal, law 472
enforcement official, or insurance company concerning any fire or 473
other damage suffered by a track, prior to approving an 474
application for a tax reduction.475

       (6) The approved cost to which a tax reduction applies shall 476
be determined by generally accepted accounting principles and 477
verified by an audit of the permit holder's records upon478
completion of the project by the state racing commission, or by an479
independent certified public accountant selected by the permit480
holder and approved by the commission.481

       (K) No other license or excise tax or fee, except as provided 482
in sections 3769.01 to 3769.14 of the Revised Code, shall be 483
assessed or collected from such licensee by any county, township, 484
district, municipal corporation, or other body having power to 485
assess or collect a tax or fee. That portion of the tax paid under 486
this section by permit holders for racing conducted at and during 487
the course of an agricultural exposition or fair, and that portion 488
of the tax that would have been paid by eligible permit holders 489
into the PASSPORT fund as a result of racing conducted at and 490
during the course of an agricultural exposition or fair, shall be 491
deposited into the state treasury to the credit of the horse492
racing tax fund, which is hereby created for the use of the493
agricultural societies of the several counties in which the taxes494
originate. The state racing commission shall determine eligible 495
permit holders for purposes of the preceding sentence, taking into 496
account the breed of horse, the racing dates, the geographic 497
proximity to the fair, and the best interests of Ohio racing. On 498
the first day of any month on which there is money in the fund, 499
the tax commissioner shall provide for payment to the treasurer of 500
each agricultural society the amount of the taxes collected under 501
this section upon racing conducted at and during the course of any 502
exposition or fair conducted by the society.503

       (L) From the tax paid under this section by harness track504
permit holders, the tax commissioner shall pay into the Ohio505
thoroughbred race fund a sum equal to a percentage of the amount506
wagered upon which the tax is paid. The percentage shall be507
determined by the tax commissioner and shall be rounded to the508
nearest one-hundredth. The percentage shall be such that, when509
multiplied by the amount wagered upon which tax was paid by the510
harness track permit holders in the most recent year for which511
final figures are available, it results in a sum that512
substantially equals the same amount of tax paid by the tax513
commissioner during that year into the Ohio fairs fund from taxes514
paid by thoroughbred permit holders. This division does not apply515
to county and independent fairs and agricultural societies.516

       (M) Twenty-five per cent of the taxes levied on thoroughbred 517
racing permit holders, harness racing permit holders, and quarter 518
horse racing permit holders under this section, division (A) of519
section 3769.087 of the Revised Code, and division (F)(2) of520
section 3769.26 of the Revised Code shall be paid into the521
PASSPORT fund. The tax commissioner shall pay any money remaining, 522
after the payment into the PASSPORT fund and the reductions 523
provided for in division (J) of this section and in section 524
3769.20 of the Revised Code, into the Ohio fairs fund, Ohio 525
thoroughbred race fund, Ohio standardbred development fund, Ohio 526
quarter horse fund, and state racing commission operating fund as 527
prescribed in this section and division (A) of section 3769.087 of 528
the Revised Code. The tax commissioner shall thereafter use and529
apply the balance of the money paid as a tax by any permit holder530
to cover any shortage in the accounts of such funds resulting from531
an insufficient payment as a tax by any other permit holder. The532
moneys received by the tax commissioner shall be deposited weekly533
and paid by the tax commissioner into the funds to cover the total534
aggregate amount due from all permit holders to the funds, as535
calculated under this section and division (A) of section 3769.087536
of the Revised Code, as applicable. If, after the payment into the537
PASSPORT fund, sufficient funds are not available from the tax538
deposited by the tax commissioner to pay the required amounts into 539
the Ohio fairs fund, Ohio standardbred development fund, Ohio 540
thoroughbred race fund, Ohio quarter horse fund, and the state 541
racing commission operating fund, the tax commissioner shall542
prorate on a proportional basis the amount paid to each of the 543
funds. Any shortage to the funds as a result of a proration shall 544
be applied against future deposits for the same calendar year when 545
funds are available. After this application, the tax commissioner 546
shall pay any remaining money paid as a tax by all permit holders547
into the PASSPORT fund. This division does not apply to permit548
holders conducting racing at and during the course of an 549
agricultural exposition or fair as described in division (K) of 550
this section.551

       Sec. 3769.083.  (A) As used in this section:552

       (1) An "accredited Ohio thoroughbred horse" means a horse553
conceived in this state and born in this state which is both of 554
the following:555

       (a) Born of a mare that is domiciled in this state at the556
time of the horse's conception, that remains continuously in the 557
state through the date on which the horse is born, and that is558
registered as required by the rules of the state racing559
commission;560

       (b) By a stallion that stands for breeding purposes only in 561
this state in the year in which the horse is conceived, and that 562
is registered as required by the rules of the commission.563

       (2) An "Ohio foaled horse" means a horse registered as564
required by the rules of the state racing commission which is 565
either of the following:566

       (a) A horse born of a mare that enters this state before 567
foaling and remains continuously in this state until the horse is 568
born;569

       (b) A thoroughbred foal produced within the state by any570
broodmare shipped into the state to foal and be bred to a571
registered Ohio stallion. To qualify this foal as an Ohio foaled572
horse, the broodmare shall remain in this state one year 573
continuously after foaling or continuously through foaling to the 574
cover of the Ohio stallion, whichever is sooner. All horses 575
previously registered as Ohio conceived and foaled shall be 576
considered as Ohio foaled horses effective January 1, 1976.577

       Any thoroughbred mare may leave this state for periods of578
time for purposes of activities such as veterinary treatment or579
surgery, sales purposes, breeding purposes, racing purposes, and 580
similar activities if permission is granted by the state racing 581
commission and the mare is returned to this state immediately upon 582
the conclusion of the requested activity.583

       (3) "Horse," "stallion," "mare," or "foal" means a horse of 584
the thoroughbred breed as distinguished from a horse of the585
standard breed or any other breed, and "race" means a race for586
thoroughbred horses conducted by a permit holder of the state 587
racing commission.588

       (4) "Horse" includes animals of all ages and of both sexes.589

       (B) There is hereby created in the state treasury the Ohio590
thoroughbred race fund, to consist of moneys paid into it pursuant 591
to sections 3769.08 and, 3769.087, and 3769.0813 of the Revised 592
Code. All investment earnings on the cash balances in the fund 593
shall be credited to it. Moneys to the credit of the fund shall be 594
distributed on order of the state racing commission. The 595
commission, with the advice and assistance of the Ohio 596
thoroughbred racing advisory committee, shall use the fund, except 597
as provided in divisions (C)(2) and (3) and (D) of this section, 598
to promote races and provide purses for races for horses in the 599
following classes:600

       (1) Accredited Ohio thoroughbred horses;601

       (2) Ohio foaled horses.602

       Not less than ten nor more than twenty-five per cent of the603
total money to be paid from the fund for all types of races shall604
be allocated to races restricted to accredited Ohio thoroughbred605
horses. The commission may combine the classes of horses described 606
in divisions (B)(1) and (2) of this section in one race, except in 607
stakes races.608

       (C)(1) Each permit holder conducting thoroughbred races shall 609
schedule races each week for horses in the classes named in610
division (B) of this section; the number of the races shall be611
prescribed by the state racing commission. The commission, 612
pursuant to division (B) of this section, shall prescribe the 613
class or classes of the races to be held by each permit holder 614
and, with the advice of the Ohio thoroughbred racing advisory 615
committee, shall fix the dates and conditions of the races and the 616
amount of moneys to be paid from the Ohio thoroughbred race fund 617
to be added in each race to the minimum purse established by the 618
permit holder for the class of race held.619

       (2) The commission, with the advice of the Ohio thoroughbred 620
racing advisory committee, may provide for stakes races to be run 621
each year, and fix the number of stakes races and the time, place, 622
and conditions under which each shall be run. The commission shall 623
fix the amount of moneys to be paid from the Ohio thoroughbred 624
race fund to be added to the purse provided for each stakes race 625
by the permit holder, except that, in at least four stakes races 626
each year, the commission shall require, if four stakes races can 627
be arranged, that the permit holder conducting the stakes race 628
provide no less than fifteen thousand dollars for the purse for 629
the stakes race, and the commission shall provide moneys from the 630
fund to be added to the purse in an amount equal to or greater 631
than the amount provided by the permit holder. The commission may632
require a nominating, sustaining, and entry fee not to exceed one633
per cent of the money added from the fund for each horse in any 634
stakes race, which fee shall be added to the purse for the race.635

       Stakes races where money is added from the Ohio thoroughbred 636
race fund shall be open only to accredited Ohio thoroughbred 637
horses and Ohio foaled horses. Twenty-five per cent of the total 638
moneys to be paid from the fund for stakes races shall be 639
allocated to races for only accredited Ohio thoroughbred horses. 640
The commission may require a nominating, sustaining, and entry 641
fee, not to exceed one per cent of the money added from the fund, 642
for each horse in any of these stakes races. These fees shall be 643
accumulated by the commission and shall be paid out by the 644
commission at its discretion as part of the purse money for 645
additional races.646

       (3) The commission may pay from the Ohio thoroughbred race 647
fund to the breeder of a horse of class (1) or (2) of division (B) 648
of this section winning first, second, or third prize money of a 649
purse for a thoroughbred race an amount not to exceed fifteen per 650
cent of the first, second, or third prize money of the purse. For 651
the purposes of this division, the term "breeder" shall be defined 652
by rule of the commission.653

       The commission also may provide for stallion owners' awards654
in an amount equal to not less than three nor more than ten per655
cent of the first, second, or third place share of the purse. The 656
award shall be paid to the owner of the stallion, provided that657
the stallion was standing in this state as provided in division 658
(A)(1)(b) of this section at the time the horse placing first, 659
second, or third was conceived.660

       (D) The state racing commission may provide for the 661
expenditure of moneys from the Ohio thoroughbred race fund in an 662
amount not to exceed in any one calendar year ten per cent of the 663
total amount received in the account that year to provide for 664
research projects directed toward improving the breeding, raising, 665
racing, and health and soundness of thoroughbred horses in the 666
state and toward education or promotion of the industry. Research 667
for which the moneys from the fund may be used may include, but 668
shall not be limited to, studies of pre-race blood testing, 669
post-race testing, improvement of the breed, and nutrition.670

       (E) The state racing commission shall appoint qualified 671
personnel as may be required to supervise registration of horses 672
under the terms of this section, to determine the eligibility of 673
horses for accredited Ohio thoroughbred races, Ohio foaled races, 674
and the stakes races authorized by division (C)(2) of this 675
section, and to assist the Ohio thoroughbred racing advisory 676
committee and the commission in determining the conditions, class, 677
and quality of the race program to be established under this 678
section so as to carry out the purposes of this section. The 679
personnel shall serve at the pleasure of the commission, and 680
compensation shall be fixed by the commission. The compensation of 681
the personnel and necessary expenses shall be paid out of the Ohio 682
thoroughbred race fund.683

       The commission shall adopt rules as are necessary to carry 684
out this section and shall administer the stakes race program and 685
other races supported by the Ohio thoroughbred race fund in a 686
manner best designed to aid in the development of the thoroughbred 687
horse industry in the state, to upgrade the quality of horse 688
racing in the state, and to improve the quality of horses 689
conceived and foaled in the state.690

       Sec. 3769.085. (A) There is hereby created in the state691
treasury the Ohio standardbred development fund, to consist of692
moneys paid into it pursuant to sectionsections 3769.08 and 693
3769.0813 of the Revised Code and any fees assessed for or on 694
behalf of the Ohio sires stakes races. All fees so assessed shall 695
be exempt from the requirements of divisions (D) and (M) of that696
section 3769.08 of the Revised Code. All investment earnings on 697
the cash balance in the fund shall be credited to the fund. Moneys 698
to the credit of the fund shall be distributed on order of the699
state racing commission with the approval of the Ohio standardbred700
development commission.701

       (B) The Ohio standardbred development commission shall 702
consist of three members, all to be residents of this state 703
knowledgeable in breeding and racing, to be appointed by the 704
governor with the advice and consent of the senate. One member 705
shall be a standardbred breeder, and one member shall be a706
standardbred owner. Of the initial appointments, one member shall707
be appointed for a term ending June 30, 1977, and two members708
shall be appointed for terms ending June 30, 1979. Thereafter,709
appointments for other than unexpired terms shall be for four710
years. Terms shall begin the first day of July and end the711
thirtieth day of June. Any member appointed to fill a vacancy712
occurring prior to the expiration of the term for which the713
member's predecessor was appointed shall hold office for the714
remainder of that term. Any member shall continue in office715
subsequent to the expiration date of the member's term until a716
successor takes office. Members shall receive no compensation,717
except that they shall be paid actual and necessary expenses from 718
the Ohio standardbred development fund. The state racing 719
commission also shall be reimbursed from the fund for actual 720
expenses approved by the development commission. The development 721
commission may elect one member to serve as secretary.722

       (C) Upon application not later than the first day of December723
from the harness tracks conducting races with pari-mutuel724
wagering, other than agricultural expositions and fairs, the Ohio 725
standardbred development commission, after a hearing and not later 726
than the twentieth day of January, shall allocate and approve all 727
available moneys for colt races for two-year-old and 728
three-year-old colts and fillies, both trotting and pacing. 729
Separate races for fillies shall be provided at each age and gait. 730
Up to five races and a championship race shall be scheduled for 731
each of the eight categories of age, sex, and gait. The 732
allocations shall take into account the time of year that racing 733
colts is feasible, the equity and continuity of the proposed dates 734
for racing events, and the amounts to be added by the tracks, 735
looking to the maximum benefit for those participating in the 736
races. Representatives of the tracks and the Ohio harness 737
horsemen's association shall be given an opportunity to be heard 738
before the allocations are made. No races shall be contested 739
earlier than the first day of May or later than the first day of 740
November; all permit holders operating extended pari-mutuel 741
meetings between those dates shall be entitled to at least three 742
races. No funds for a race shall be allocated to and paid to a 743
permit holder by the development commission unless the permit 744
holder adds at least twenty-five per cent to the amount allocated 745
by the development commission, and not less than five thousand 746
dollars to each race.747

       Colts and fillies eligible to the races shall be only those748
sired by a standardbred stallion that was registered with the749
state racing commission and stood in the state the entire breeding 750
season of the year the colt or filly was conceived.751

       If the development commission concludes that sufficient funds752
are available to add aged races without reducing purse levels of753
the colt and filly races, the development commission may allocate754
funds to four-year-old and up races of each sex and gait with Ohio755
eligibility required as set forth in this section.756

       (D) The state racing commission may allocate an amount not to757
exceed five per cent of the total Ohio standardbred development758
fund available in any one calendar year to research projects759
directed toward improving the breeding, raising, racing, and760
health and soundness of horses in the state and toward education761
or promotion of the industry.762

       Sec. 3769.088.  (A) If any permit holder required by this763
chapter to pay the taxes levied by sections 3769.08, 3769.087,764
3769.0813, 3769.26, and 3769.28 of the Revised Code fails to pay 765
the taxes, the tax commissioner may make an assessment against the766
permit holder based upon any information in the commissioner's767
possession.768

       A penalty of up to fifteen per cent may be added to the769
amount of every assessment made under this section. The770
commissioner may adopt rules providing for the imposition and771
remission of penalties added to assessments made under this772
section.773

       The commissioner shall give the party assessed written notice774
of the assessment in the manner provided in section 5703.37 of the 775
Revised Code. With the notice, the commissioner shall provide776
instructions on how to petition for reassessment and request a777
hearing on the petition.778

       (B) Unless the party assessed files with the tax commissioner 779
within sixty days after service of the notice of assessment, 780
either personally or by certified mail, a written petition for 781
reassessment signed by the party assessed or that party's782
authorized agent having knowledge of the facts, the assessment 783
becomes final, and the amount of the assessment is due and payable 784
from the party assessed to the commissioner. The petition shall785
indicate the objections of the party assessed, but additional786
objections may be raised in writing if received by the787
commissioner prior to the date shown on the final determination.788
If the petition has been properly filed, the commissioner shall789
proceed under section 5703.60 of the Revised Code.790

       (C) After an assessment becomes final, if any portion of the791
assessment remains unpaid, including accrued interest, a certified792
copy of the tax commissioner's entry making the assessment final793
may be filed in the office of the clerk of the court of common794
pleas in the county in which the place, track, or enclosure for795
which the permit was issued is located or the county in which the796
party assessed resides or has its principal place of business. If797
the party assessed maintains no place of business in this state798
and is not a resident of this state, the certified copy of the799
entry may be filed in the office of the clerk of the court of800
common pleas of Franklin county.801

       Immediately upon the filing of the entry, the clerk shall802
enter a judgment for the state against the party assessed in the803
amount shown on the entry. The judgment may be filed by the clerk804
in a loose-leaf book entitled "special judgments for state horse805
racing tax," and shall have the same effect as other judgments.806
Execution shall issue upon the judgment upon the request of the807
tax commissioner, and all laws applicable to sales on execution808
shall apply to sales made under the judgment.809

       The portion of the assessment not paid within sixty days810
after the day the assessment was issued shall bear interest at the811
rate per annum prescribed by section 5703.47 of the Revised Code812
from the day the tax commissioner issues the assessment until the813
day the assessment is paid. Interest shall be paid in the same814
manner as the tax and may be collected by the issuance of an815
assessment under this section.816

       (D) All money collected by the tax commissioner under this817
section shall be treated as revenue arising from the taxes imposed818
by sections 3769.08, 3769.087, 3769.0813, 3769.26, and 3769.28 of 819
the Revised Code.820

       Sec. 3769.0811. As used in sections 3769.0811 to 3769.0813 of 821
the Revised Code:822

       (A) "Instant racing system" means a telecast, for pari-mutuel 823
wagering purposes, of audio and visual signals of horse races 824
previously conducted at facilities inside or outside this state, 825
that is to a place, track, or enclosure for which a permit is 826
issued under section 3769.06 of the Revised Code, and that is 827
displayed on individual viewing terminals.828

       (B) "Permit holder" has the same meaning as in section 829
3769.25 of the Revised Code.830

       (C) "Permit holder's commission" means an amount that does 831
not exceed twelve per cent of the total of all moneys wagered on a 832
racing day on horse races telecast via an instant racing system to 833
a permit holder's place, track, or enclosure for which a permit is 834
issued under section 3769.06 of the Revised Code.835

       Sec. 3769.0812. (A) Upon written request by any permit836
holder, the state racing commission shall authorize the permit 837
holder to operate on racing days an instant racing system at the 838
permit holder's place, track, or enclosure for which the permit is 839
issued under section 3769.06 of the Revised Code.840

       (B) Each permit holder that receives an authorization may841
install and operate individual viewing terminals at the permit 842
holder's place, track, or enclosure to implement an instant racing 843
system. A permit holder shall design and operate the instant 844
racing system so that a person is not able to fast-forward the 845
last ten seconds of any telecast.846

       Sec. 3769.0813. (A) The moneys wagered on horse races 847
telecast via an instant racing system on a racing day shall be 848
separated from the moneys wagered on live horse races conducted 849
at, and on other horse races simulcast to, the permit holder's 850
place, track, or enclosure on that racing day. Each permit holder 851
shall retain a permit holder's commission from the former moneys.852

       (B) At the close of each racing day, the permit holder shall 853
pay by check, draft, or money order to the state tax commissioner, 854
as a tax, an amount equal to twenty per cent of the permit 855
holder's commission. The moneys wagered on horse races telecast 856
via an instant racing system are subject only to this tax and not 857
to any tax levied under section 3769.08 or 3769.087 or division 858
(E) of section 3769.089 of the Revised Code.859

       (C) The amount of the permit holder's commission that remains860
after the payment to the state tax commissioner of the tax levied 861
under division (B) of this section is the permit holder's net 862
commission. The net commission shall be allocated in the following863
manner:864

       (1)(a) The permit holder shall pay an amount equal to 865
nineteen per cent of the net commission to the permit holder's 866
purse account.867

        (b) The Ohio division of the horsemen's benevolent and 868
protective association may direct that up to fifty per cent of the 869
net commission that is paid to the permit holder's purse account 870
under division (C)(1)(a) of this section may be designated for 871
either of the following:872

       (i) Horsemen's health and benevolence programs;873

       (ii) Payment into the Ohio thoroughbred race fund created by 874
section 3769.083 of the Revised Code.875

       (c) The Ohio harness horsemen's association may direct that 876
up to fifty per cent of the net commission that is paid to the 877
permit holder's purse account under division (C)(1)(a) of this 878
section may be designated for any of the following:879

       (i) Horsemen's health and benevolence programs;880

       (ii) Payment into the Ohio standardbred development fund 881
created by section 3769.085 of the Revised Code;882

       (iii) Payment into the Ohio fairs fund created by section 883
3769.082 of the Revised Code.884

       (2) The permit holder shall pay an amount not to exceed one 885
per cent of the net commission, as determined by rule of the state 886
racing commission, into the state racing commission operating fund 887
created by section 3769.03 of the Revised Code, as an888
administrative fee.889

       (3) The permit holder shall retain the balance of the net 890
commission that remains after paying the amounts described in891
divisions (C)(1) and (2) of this section.892

       Section 2.  That existing sections 3769.03, 3769.08, 893
3769.083, 3769.085, and 3769.088 of the Revised Code are hereby 894
repealed.895