BILL REQ. #:  Z-0759.6 

Read first time 01/14/2004.   Referred to Committee on Commerce & Trade.

     AN ACT Relating to the management of moneys by the Washington horse racing commission; amending RCW 67.16.010, 67.16.102, and 67.16.105; reenacting and amending RCW 43.79A.040; adding new sections to chapter 67.16 RCW; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   A new section is added to chapter 67.16 RCW to read as follows:
     Upon making a determination that an individual or licensee has violated a commission rule, the board of stewards may assess a fine, suspend or revoke a person's license, or any combination of these penalties. The commission must adopt by rule standard penalties for a rules violation. All fines collected must be deposited in the Washington horse racing commission class C purse fund account, created in section 4 of this act, and used as authorized in RCW 67.16.105(3).

NEW SECTION.  Sec. 2   A new section is added to chapter 67.16 RCW to read as follows:
     The Washington horse racing commission Washington bred owners' bonus fund account is created in the custody of the state treasurer. All receipts collected by the commission under RCW 67.16.102(1) must be deposited into the account. Expenditures from the account may be used only as authorized in RCW 67.16.102. Only the secretary of the commission or the secretary's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

NEW SECTION.  Sec. 3   A new section is added to chapter 67.16 RCW to read as follows:
     The Washington horse racing commission operating account is created in the custody of the state treasurer. All receipts collected by the commission under RCW 67.16.105(2) must be deposited into the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for operating expenses of the commission. Investment earnings from the account must be distributed to the Washington horse racing commission class C purse fund account, created in section 4 of this act, pursuant to RCW 43.79A.040.

NEW SECTION.  Sec. 4   A new section is added to chapter 67.16 RCW to read as follows:
     The Washington horse racing commission class C purse fund account is created in the custody of the state treasurer. All receipts from RCW 67.16.105(3) must be deposited into the account. Expenditures from the account may be used only for the purposes provided in RCW 67.16.105(3). Only the secretary of the commission or the secretary's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

Sec. 5   RCW 67.16.010 and 1991 c 270 s 1 are each amended to read as follows:
     ((Unless the context otherwise requires, words and phrases as used herein shall mean:)) The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Commission" shall mean the Washington horse racing commission, hereinafter created.
     (2) "Parimutuel machine" shall mean and include both machines at the track and machines at the satellite locations, that record parimutuel bets and compute the payoff.
     (3) "Person" shall mean and include individuals, firms, corporations and associations.
     (4) "Race meet" shall mean and include any exhibition of thoroughbred, quarter horse, paint horse, appaloosa horse racing, arabian horse racing, or standard bred harness horse racing, where the parimutuel system is used.
     ((Singular shall include the plural, and the plural shall include the singular; and words importing one gender shall be regarded as including all other genders.))
     (5) "Stewards" or "board of stewards" means the persons appointed by the secretary of the commission who are responsible for the proper conduct of a race meet in accordance with this chapter and the rules of racing adopted by the commission.

Sec. 6   RCW 67.16.102 and 2001 c 53 s 1 are each amended to read as follows:
     (1) Notwithstanding any other provision of chapter 67.16 RCW to the contrary the licensee shall withhold and shall pay daily to the commission, in addition to the percentages authorized by RCW 67.16.105, one percent of the gross receipts of all parimutuel machines at each race meet which sums shall, at the end of each meet, be paid by the commission to the licensed owners of those horses finishing first, second, third and fourth Washington bred only at each meet from which the additional one percent is derived in accordance with an equitable distribution formula to be promulgated by the commission prior to the commencement of each race meet: PROVIDED, That nothing in this section shall apply to race meets which are nonprofit in nature, are of ten days or less, and have an average daily handle of less than one hundred twenty thousand dollars((: PROVIDED, That)).
     (2) The additional one percent ((of the gross receipts of all parimutuel machines at each race meet and the amount retained by the commission as specified in RCW 67.16.100(1))) specified in subsection (1) of this section shall be deposited ((daily in a time deposit)) by the commission ((and)) in the Washington horse racing commission Washington bred owners' bonus fund account created in section 2 of this act. The interest derived ((therefrom)) from this account shall be distributed annually on an equal basis to those race courses at which independent race meets are held which are nonprofit in nature and are of ten days or less((: PROVIDED, That)). Prior to receiving a payment under this ((section)) subsection any new race course shall meet the qualifications set forth in this section for a period of two years((: PROVIDED, FURTHER, That said)). All funds distributed ((funds)) under this subsection shall be used for the purpose of maintaining and upgrading the respective racing courses and equine quartering areas of said nonprofit meets.
     (3) The commission shall not permit the licensees to take into consideration the benefits derived from this section in establishing purses.
     (((2))) (4) The commission is authorized to pay at the end of the calendar year one-half of the one percent collected from a new licensee under subsection (1) of this section for reimbursement of capital construction of that new licensee's new race track for a period of fifteen years. This reimbursement does not include interest earned on that one-half of one percent and such interest shall continue to be collected and disbursed as provided in RCW 67.16.101 and subsection (1) of this section.

Sec. 7   RCW 67.16.105 and 2003 1st sp.s. c 27 s 1 are each amended to read as follows:
     (1) Licensees of race meets that are nonprofit in nature and are of ten days or less shall be exempt from payment of a parimutuel tax.
     (2) Licensees that do not fall under subsection (1) of this section shall withhold and pay to the commission daily for each authorized day of parimutuel wagering the following applicable percentage of all daily gross receipts from its in-state parimutuel machines:
     (a) If the gross receipts of all its in-state parimutuel machines are more than fifty million dollars in the previous calendar year, the licensee shall withhold and pay to the commission daily 1.30 percent of the daily gross receipts; and
     (b) If the gross receipts of all its in-state parimutuel machines are fifty million dollars or less in the previous calendar year, the licensee shall withhold and pay to the commission daily 1.803 percent of the daily gross receipts.
     (3) In addition to those amounts in subsection (2) of this section, a licensee shall forward one-tenth of one percent of the daily gross receipts of all its in-state parimutuel machines to the commission for payment to those nonprofit race meets as set forth in RCW 67.16.130 and subsection (1) of this section, but said percentage shall not be charged against the licensee. Payments to nonprofit race meets under this subsection shall be distributed on a pro rata per-race-day basis and used only for purses at race tracks that have been operating under RCW 67.16.130 and subsection (1) of this section for the five consecutive years immediately preceding the year of payment. The commission shall transfer funds generated under subsection (2) of this section equal to the difference between:
     (a)(i) Funds collected under this subsection (3);
     (ii) Interest earned from the Washington horse racing commission operating account created in section 3 of this act; and
     (iii) Fines imposed by the board of stewards in a calendar year; and
     (b) Three hundred thousand dollars((,));
and distribute that amount under this subsection (3).
     (4) Beginning July 1, 1999, at the conclusion of each authorized race meet, the commission shall calculate the mathematical average daily gross receipts of parimutuel wagering that is conducted only at the physical location of the live race meet at those race meets of licensees with gross receipts of all their in-state parimutuel machines of more than fifty million dollars. Such calculation shall include only the gross parimutuel receipts from wagering occurring on live racing dates, including live racing receipts and receipts derived from one simulcast race card that is conducted only at the physical location of the live racing meet, which, for the purposes of this subsection, is "the handle." If the calculation exceeds eight hundred eighty-six thousand dollars, the licensee shall within ten days of receipt of written notification by the commission forward to the commission a sum equal to the product obtained by multiplying 0.6 percent by the handle. Sums collected by the commission under this subsection shall be forwarded on the next business day following receipt thereof to the state treasurer to be deposited in the fair fund created in RCW 15.76.115.

Sec. 8   RCW 43.79A.040 and 2003 c 403 s 9, 2003 c 313 s 10, 2003 c 191 s 7, 2003 c 148 s 15, 2003 c 92 s 8, and 2003 c 19 s 12 are each reenacted and amended to read as follows:
     (1) Money in the treasurer's trust fund may be deposited, invested, and reinvested by the state treasurer in accordance with RCW 43.84.080 in the same manner and to the same extent as if the money were in the state treasury.
     (2) All income received from investment of the treasurer's trust fund shall be set aside in an account in the treasury trust fund to be known as the investment income account.
     (3) The investment income account may be utilized for the payment of purchased banking services on behalf of treasurer's trust funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasurer or affected state agencies. The investment income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.
     (4)(a) Monthly, the state treasurer shall distribute the earnings credited to the investment income account to the state general fund except under (b) and (c) of this subsection.
     (b) The following accounts and funds shall receive their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The Washington promise scholarship account, the college savings program account, the Washington advanced college tuition payment program account, the agricultural local fund, the American Indian scholarship endowment fund, the students with dependents grant account, the basic health plan self-insurance reserve account, the contract harvesting revolving account, the Washington state combined fund drive account, the Washington international exchange scholarship endowment fund, the developmental disabilities endowment trust fund, the energy account, the fair fund, the fruit and vegetable inspection account, the game farm alternative account, the grain inspection revolving fund, the juvenile accountability incentive account, the law enforcement officers' and fire fighters' plan 2 expense fund, the local tourism promotion account, the produce railcar pool account, the rural rehabilitation account, the stadium and exhibition center account, the youth athletic facility account, the self-insurance revolving fund, the sulfur dioxide abatement account, the children's trust fund, ((and)) the investing in innovation account, the Washington horse racing commission Washington bred owners' bonus fund account, the Washington horse racing commission class C purse fund account, and the Washington horse racing commission operating account (earnings from the Washington horse racing commission operating account must be credited to the Washington horse racing commission class C purse fund account). However, the earnings to be distributed shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
     (c) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The advanced right of way revolving fund, the advanced environmental mitigation revolving account, the city and county advance right-of-way revolving fund, the federal narcotics asset forfeitures account, the high occupancy vehicle account, the local rail service assistance account, and the miscellaneous transportation programs account.
     (5) In conformance with Article II, section 37 of the state Constitution, no trust accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION.  Sec. 9   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.