AN ACT relating to the Kentucky Horse Racing and Gaming Corporation and declaring an emergency.

Amend various sections of KRS Chapters 230 and 238, relating to the Kentucky Horse Racing and Gaming Corporation, to define "Kentucky quarter horse purse fund," "proof of wagers," "unclaimed pari-mutuel winning ticket," and "unredeemed pari-mutuel voucher"; confirm the corporation's jurisdiction over racing and gaming entities; require an annual audit of the corporation by a qualified auditing entity and reduce audits by the Auditor of Public Accounts to once every four years; grant the corporation flexibility in promulgating administrative regulations; authorize the corporation to participate in state agency master agreements; prohibit banning or reducing charitable games or charitable gaming activities approved as of July 1, 2025; create staggered initial terms for members of the corporation's board of directors; add two board members, one representing charitable gaming and the other representing the quarter horse industry; appoint all three charitable gaming board members immediately; make those associated with the corporation subject to KRS Chapter 11A, but state that KRS Chapter 230 will control if there is a conflict; permit the board to remove the corporation president; establish qualifications of the corporation's chief financial officer; require the Office of Charitable Gaming to make formal recommendations to the president on charitable gaming matters; combine racing and charitable gaming security and investigators into one group; allow investigators to acquire criminal justice training certification under KRS Chapter 15; establish to corporation's authority over all aspects of charitable gaming, including its employees, agency structure, licensing, and administrative regulations; create a new section of KRS Chapter 230 to direct state financial officers to transfer existing moneys and future receipts to designated accounts; create a new section of KRS Chapter 230 to allow the corporation to control the disbursement of unredeemed pari-mutuel voucher funds held by tracks; create new sections of KRS Chapter 230 to set up quarter horse development and purse funds; amend KRS 230.400, 230.445, 230.446, 230.770, 230.800, 230.802, and 230.804 to modify all equine development, breeder incentive, and purse funds into corporation accounts, with at least 90% of each fund going directly to the fund's primary purpose; allow the corporation to use up to 10% from each fund for its administration and operation; remove quarter horses from all paint horse, Appaloosa, and Arabian funds; amend KRS 230.811 to pay sports wagering license fees directly to the corporation; amend KRS 230.817 to allow the corporation to use up to 10% from the sports wagering administration fund for its administration and operation; require quarterly and annual reports on the status of the sports wagering administration fund; distribute sports wagering funds as they are received; create a new section of KRS Chapter 238 to maintain existing excess charitable gaming licenses; revoke excess licenses after the licensee's commission of listed offenses; amend KRS 238.535 to exempt public or private elementary and secondary schools from charitable gaming licensure; maintain reporting, records retention, and net receipt requirements; amend KRS 238.570 to remove the corporation's ability to adjust the charitable gaming fee; amend KRS 18A.115 to exempt all corporation employees from the classified service; amend KRS 238.550 to allow charitable organizations to make bank deposits up to five days after a charitable event; make technical corrections; amend KRS 68.182, 91.202, 92.282, 138.510, 230.374, 230.3771, 238.536, and 238.540 to conform; repeal KRS 230.270, 238.520, and 238.522; direct the corporation to evaluate and propose its licensing structure to the Interim Joint Committee on Licensing and Occupations by October 1, 2025; make sections relating to the corporation board and funds effective immediately and all other sections effective July 1, 2025; EMERGENCY.