Section 71IAC4-2-7. Purse monies

   (a) An association, its officers, director, officials, and employees shall ensure that distributions for purses mandated by IC 4-31, IC 4-35, 71 IAC 12, and contracts with any horsemen's association are made as provided for by statute. With the exception of purse money that it may owe as a result of the sale (export) of its simulcast signal, the association shall insure that any purse monies that it is obligated by statute regulation or contract to pay are deposited, before the fifteenth day of each month, based upon wagering from the previous month at the association's race tracks and/or off-track betting facilities, into the appropriate horse industry trust purse account as set forth herein. With respect to purse monies that an association is contractually obligated to pay as a result of a contract with a horsemen's association for the sale (export) of its simulcast signal, the association shall deposit those funds into the appropriate account as set forth herein within five (5) days of receipt or settlement by the association.

  (b) An association is required to deposit and maintain the funds referenced in subsection (a) of this rule [subsection (a)] in separate horse industry trust purse accounts for each of the three (3) breeds racing at Indiana pari-mutuel facilities (standardbred, thoroughbred, and quarter horse). The funds deposited and maintained in those three (3) separate horse industry trust purse accounts shall be held and maintained separate from each other and separate from all other funds held and maintained by the association. The comingling [sic] of these funds with any other funds held or maintained by the association is strictly prohibited. This provision notwithstanding, an association may advance funds to a horse industry trust purse account from an operational account in order to make payment of purses that have been earned, and then receive reimbursement as soon as there are available funds in that horse industry trust purse account.

  (c) The association shall issue a purse fund activity report (for each of the three (3) breeds racing in Indiana) no later than the fifteenth day of each month. Each report shall include a summary of both the prior month's activity as well as the year-to-date amounts deposited and dispersed from each horse industry trust purse account. The report shall include an itemized statement of receipts and expenditures for the prior month and shall be electronically delivered both to the horsemen's association representing the owners and trainers of a particular breed and to the commission. The format of the report is subject to the approval of the commission or its executive director.

  (d) The association shall also provide no later than the fifteenth day of each month a copy of the bank statement for each horse industry trust purse account referenced herein to the commission and the horsemen's association representing the owners and trainers of the breed that benefits from the monies contained in that horse industry trust purse account.

  (e) Any breach of the obligations or requirements of this section or the requirements set forth in IC 4-35-7-12, including any misuse, misdirection, or misappropriation of funds specifically referenced in IC 4-35-7-12, may be considered a violation of this article and may subject the association and its officers, directors, and employees to penalties that may include, but are not limited to:

(1) the issuance of a warning to the association;

(2) the imposition of a civil penalty upon the association up to but not to exceed one million dollars ($1,000,000);

(3) the suspension of a permit issued under IC 4-31-5 to conduct a pari-mutuel wagering horse racing meeting in Indiana; or

(4) any other sanction that may be imposed by the commission.

  (f) Subject to the review and approval of the commission, any association and any horsemen's association may contract for additional provisions governing a horse industry trust purse account specified in this section, but only to the extent that such contractual provisions are consistent with, and do not conflict with, the rules set forth in this section and 71 IAC 11-1-12.

  (g) The association shall file an annual audit or review, prepared by an independent certified public accountant, for each horse industry trust purse account. The filing is due no later than March 31 after the close of the calendar year. The commission, upon showing of good cause, may extend the time for filing. The audit or review in a format and according to the standards approved by the commission. The cost of the audit or review, absent exceptional circumstances, shall be borne by the purse trust accounts, and the cost shall be allocated thirty-three and one-third percent (33 1/3%) to standardbred, thirty-three and one-third percent (33 1/3%) to thoroughbred, and thirty-three and one-third percent (33 1/3%) to quarter horse up to a total cost (per association) of ten thousand dollars ($10,000) with any additional amounts to be paid by the association that is filing the audit or review.

  (h) The effective date of this section will be November 15, 2009. To the extent that an unfunded liability of the association to the purse account of one (1) or more of the breeds identified in this section has accrued prior to the effective date, those monies are due to be paid by the association to a particular horse industry trust account on or before July 1, 2010. (Indiana Horse Racing Commission; 71 IAC 4-2-7; emergency rule filed Oct 29, 2009, 11:33 a.m.: 20091104-IR-071090870ERA, eff Oct 26, 2009 [IC 4-22-2-37.1 establishes the effectiveness of an emergency rule upon filing with the Publisher. LSA Document #09-870(E) was filed with the Publisher October 29, 2009.]; emergency rule filed Mar 3, 2011, 11:50 a.m.: 20110309-IR-071110100ERA; readopted filed Nov 26, 2013, 11:25 a.m.: 20131225-IR-071130345RFA)