HORSE RACING COMMISSION

[Filed July 23, 2020, 8:33 a.m.]

Preproposal statement of inquiry was filed as WSR 20-11-023.

Title of Rule and Other Identifying Information: WAC 260-49-070 distribution of source market fees.

Hearing Location(s): On September 11, 2020, at 9:30 a.m.

Video conference via Zoom or Auburn City Council Chambers, 25 West Main, Auburn, WA 98002.

Dependent on gathering limits, method of meeting will be determined at a later date and posted on www.whrc.wa.gov.

Date of Intended Adoption: September 11, 2020.

Submit Written Comments to: Douglas L. Moore, 6326 Martin Way, Suite 209, Olympia, WA 98516, email doug.moore@whrc.state.wa.us, fax 360-549-6461, by September 4, 2020.

Assistance for Persons with Disabilities: Melanie Bowdish, phone 360-459-6462, fax 360-459-6461, email melanie.bowdish@whrc.state.wa.us, by September 4, 2020.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: To stabilize the Washington horse racing commission (WHRC) operating account by increasing the percentage of the source market fee received until other funding is obtained.

Reasons Supporting Proposal: With the COVID-19 pandemic and the closure of Off Track Betting's and Emerald Downs for live in-state wagering from March to June, WHRC revenue has decreased substantially, while expenses remain consistent. Online wagering thorough [through] the advance deposit wagering firms has increased greatly but WHRC does not receive any revenue from out-of-state residents who wager on Emerald Downs. In order to maintain a fund balance required by office of financial management, WHRC must increase in revenue to protect its ability to remain in operation therefore allowing live racing and simulcasting to continue.

Statutory Authority for Adoption: RCW 67.16.020.

Rule is not necessitated by federal law, federal or state court decision.

Name of Agency Personnel Responsible for Drafting, Implementation, and Enforcement: Douglas L. Moore, 6326 Martin Way, Suite 209, Olympia, WA 98516, 360-459-6462.

A school district fiscal impact statement is not required under RCW 28A.305.135.

A cost-benefit analysis is not required under RCW 34.05.328.

The proposed rule does not impose more-than-minor costs on businesses. Following is a summary of the agency's analysis showing how costs were calculated. Not business related.

AMENDATORY SECTION(Amending WSR 11-17-056, filed 8/15/11, effective 9/15/11)

WAC 260-49-070Distribution of source market fee.

(1) A source market fee shall be paid monthly, unless otherwise directed by the commission, for the source market fee area on all accounts that have Washington as the principal residence address.

(2) The authorized advance deposit wagering service provider shall, at least monthly, unless otherwise directed by the commission, distribute the total source market fee as follows:

(a) Ninety percent of the total source market fee directly to the class 1 racing association and the remaining ten percent directly to the commission.

(b) The class 1 racing association shall ((distribute))submit monthly two and one-half percent of the total source market fee to the commission to be deposited into the Washington bred owners' bonus fund ((and)).

(c) The class 1 racing association shall distribute two and one-half percent of the total source market fee to the Washington bred breeder award account as provided in RCW 67.16.175.

(((c)))(d) The class 1 racing association and the recognized horsemen's organization shall negotiate a separate agreement for contributions to the purse account from the source market fee and submit the agreement for review and approval by the commission. The class 1 racing association shall distribute the horsemen's share of the source market fee in accordance with the horseman's agreement.

(((d) The commission shall distribute two and one-half percent of the total source market fee to the Washington bred owners' bonus fund and breeder award account and seven and one-half percent of the total source market fee to the commission's operating account.))

(3) The commission shall annually review the distribution of the source market fee. Any changes to the distribution shall be adopted by rule.