BILL REQ. #:  S-1769.1 

READ FIRST TIME 02/22/13.   

     AN ACT Relating to supporting youth programs through agricultural fairs and the horse racing industry; and amending RCW 15.76.100, 67.70.240, 15.76.115, 67.16.280, 67.16.105, 67.16.050, and 67.16.170.

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

Sec. 1   RCW 15.76.100 and 2012 c 221 s 1 are each amended to read as follows:
     It is hereby declared that it is in the public interest to hold agricultural fairs, including the exhibition of livestock and agricultural produce of all kinds, as well as related arts and manufactures; including products of the farm home and educational contest, displays, and demonstrations designed to train youth and to promote the welfare of farm people and rural living. The legislature further finds that providing a dedicated source of revenues for state allocations to the fair fund supports these important training opportunities for youth. Fairs qualifying ((hereunder shall be)) under this section are eligible for allocations from the state fair fund and for capital funding when appropriated to the department of agriculture, as provided in this chapter.

Sec. 2   RCW 67.70.240 and 2011 c 352 s 3 are each amended to read as follows:
     (1) The moneys in the state lottery account ((shall)) must be used only:
     (((1))) (a) For the payment of prizes to the holders of winning lottery tickets or shares;
     (((2))) (b) For purposes of making deposits into the reserve account created by RCW 67.70.250 and into the lottery administrative account created by RCW 67.70.260;
     (((3))) (c) For purposes of making deposits into the education construction fund created in RCW 43.135.045 and the Washington opportunity pathways account created in RCW 28B.76.526. On and after July 1, 2010, all deposits not otherwise obligated under this section ((shall)) must be placed in the Washington opportunity pathways account. Moneys in the state lottery account deposited in the Washington opportunity pathways account are included in "general state revenues" under RCW 39.42.070;
     (((4))) (d) For distribution to a county for the purpose of paying the principal and interest payments on bonds issued by the county to construct a baseball stadium, as defined in RCW 82.14.0485, including reasonably necessary preconstruction costs. Three million dollars ((shall)) must be distributed under this subsection during calendar year 1996. During subsequent years, such distributions ((shall)) must equal the prior year's distributions increased by four percent. Distributions under this subsection ((shall)) must cease when the bonds issued for the construction of the baseball stadium are retired, but not more than twenty years after the tax under RCW 82.14.0485 is first imposed;
     (((5))) (e) For distribution to the stadium and exhibition center account, created in RCW 43.99N.060. Subject to the conditions of RCW 43.99N.070, six million dollars ((shall)) must be distributed under this subsection during the calendar year 1998. During subsequent years, such distribution ((shall)) must equal the prior year's distributions increased by four percent. No distribution may be made under this subsection after December 31, 1999, unless the conditions for issuance of the bonds under RCW 43.99N.020(2) are met. Distributions under this subsection ((shall)) must cease when the bonds are retired, but not later than December 31, 2020;
     (((6))) (f) For transfer to the veterans innovations program account. The net revenues received from the sale of the annual Veteran's Day lottery raffle conducted under RCW 67.70.500 must be deposited into the veterans innovations program account created in RCW 43.60A.185 for purposes of serving veterans and their families. For purposes under this subsection, "net revenues" means all revenues received from the sale of veteran lottery raffle tickets less the sum of the amount paid out in prizes and the actual administration expenses of the lottery solely related to the veteran lottery raffle;
     (((7))) (g) For the purchase and promotion of lottery games and game-related services; ((and
     (8))) (h) For the payment of agent compensation; and
     (i) For distribution to the state fair fund created in RCW 15.76.115 and the horse racing commission operating account created in RCW 67.16.280. Five million dollars must be distributed under this subsection during calendar year 2013, as follows: (A) Two million five hundred thousand dollars to the state fair fund established under RCW 15.76.115; and (B) two million five hundred thousand dollars to the horse racing commission operating account established under RCW 67.16.280. During subsequent years, such distributions must equal the prior year's distributions increased by two percent. No distribution may be made under this subsection (1)(i) after June 30, 2023.
     (2) The office of financial management ((shall)) must require the allotment of all expenses paid from the account and ((shall)) must report to the ways and means committees of the senate and house of representatives any changes in the allotments.

Sec. 3   RCW 15.76.115 and 2011 1st sp.s. c 50 s 926 are each amended to read as follows:
     (1) The fair fund is created in the custody of the state treasury.
     (2) As of the effective date of this section until July 30, 2023, all moneys received by the department of agriculture for the purposes of this fund ((and from RCW 67.16.105(7) shall)) must be deposited into the fair fund. ((At the beginning of fiscal year 2002))
     (3) As of June 30, 2023, and each fiscal year thereafter, the state treasurer ((shall)) must transfer into the fair fund from the general fund the sum of two million dollars((, except for fiscal year 2011 the state treasurer shall transfer into the fair fund from the general fund the sum of one million one hundred three thousand dollars, and except during fiscal year 2012 and fiscal year 2013 the state treasurer shall transfer into the fair fund from the general fund the sum of one million seven hundred fifty thousand dollars each fiscal year)).
     (4) Expenditures from the fund may be used only for assisting fairs in the manner provided in this chapter. Only the director of agriculture or the director's designee may authorize expenditures from the fund. The fund is subject to allotment procedures under chapter 43.88 RCW, but no appropriation is required for expenditures.

Sec. 4   RCW 67.16.280 and 2011 c 12 s 2 are each amended to read as follows:
     (1) 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) and 67.70.240(1)(i) must be deposited into the account. The commission must separately account for the funds it collects under RCW 67.70.240(1)(i) as the "horse industry support funds"; however, two hundred fifty thousand dollars of the annual funds collected under RCW 67.70.240(1)(i) must be allocated to nonprofit race meets as set forth in RCW 67.16.130 and 67.16.105(1). The commission has the authority to receive such gifts, grants, and endowments from public or private sources as may be made from time to time in trust or otherwise for the use and purpose of regulating or supporting ((nonprofit race)) meets as set forth in RCW 67.16.130 and ((67.16.105(1))) 67.16.170; such gifts, grants, and endowments must also be deposited into the account and expended according to the terms of such gift, grant, or endowment. Moneys in the account may be spent only after appropriation. ((Except as provided in subsection (2) of this section, expenditures from the account may be used only for operating expenses of the commission. Investment earnings from the account will be retained in the Washington horse racing commission operating account, pursuant to RCW 43.79A.040.)) Expenditures to the nonprofit race meets must be as set forth in subsection (2) of this section. Expenditures of the horse industry support funds may be used for: Operating expenses of the commission; providing educational opportunities at horse racing facilities for children involved in 4-H and other horse owners involved in training; increasing the size of purses at race meets other than nonprofit race meets; maintaining and upgrading racing facilities; and marketing and equine industry educational expenses related to race meets other than nonprofit race meets.
     (2) In order to provide funding in support of the legislative findings in RCW 67.16.101 (1) through (3), and to provide additional necessary support to the nonprofit race meets beyond the funding provided by RCW 67.16.101(4) and 67.16.102(2), the commission is authorized to spend up to three hundred thousand dollars per fiscal year from its operating account for the purposes of developing the equine industry, ((maintaining and upgrading racing facilities)) including increasing purses, insurance, providing educational opportunities at horse racing facilities for children involved in 4-H and other horse owners involved in training, and assisting equine health research. When determining how to allocate the funds available for these purposes, the commission must give first consideration to uses that regulate and assist the nonprofit race meets and equine health research. These expenditures may occur only when sufficient funds remain for the continued operations of the horse racing commission.

Sec. 5   RCW 67.16.105 and 2011 c 12 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 are exempt from payment of a parimutuel tax.
     (2) Licensees that do not fall under subsection (1) of this section must withhold and pay to the commission daily for each authorized day of parimutuel wagering, excluding authorized days of parimutuel wagering between July 1, 2013, and June 30, 2023, 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 must 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 must withhold and pay to the commission daily 1.803 percent of the daily gross receipts.
     (3)(a) In addition to those amounts in subsection (2) of this section, a licensee must 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 the percentage may not be charged against the licensee.
     (b) Payments to nonprofit race meets under this subsection must be distributed on a 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 in 2010 or for the five consecutive years immediately preceding the year of payment.
     (c) As provided in this subsection, the commission must distribute funds up to fifteen thousand eight hundred dollars per race day from funds generated under this subsection (3).
     (4) Beginning July 1, 1999, at the conclusion of each authorized race meet, the commission must 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)) must 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 must 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 must 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.
     (5) Licensees of race meets that do not fall under subsection (1) of this section must promote the lottery with any combination of in-kind advertising, sponsorship, or prize promotions, valued at fifteen percent of the amount distributed to the horse racing commission operating account pursuant to RCW 67.70.240(1)(i) annually beginning September 2013 for the purpose of increasing lottery sales of games authorized under chapter 67.70 RCW. The content and value of the advertising sponsorship or prize promotions are subject to reasonable approval in advance by the lottery commission. The obligation of this subsection must cease when the distributions under RCW 67.70.240(1)(i) end, but not later than June 30, 2023.

Sec. 6   RCW 67.16.050 and 1997 c 87 s 2 are each amended to read as follows:
     (1) Every person making application for license to hold a race meet, under the provisions of this chapter ((shall)) must file an application with the commission ((which shall)) that sets forth the time, the place, the number of days such meet will continue, and such other information as the commission may require. The commission ((shall be)) is the sole judge of whether or not the race meet ((shall)) will be licensed and the number of days the meet ((shall)) will continue.
     (2) No person who has been convicted of any crime involving moral turpitude ((shall)) may be issued a license, nor ((shall)) may any license be issued to any person who has violated the terms or provisions of this chapter, or any of the rules and regulations of the commission made pursuant thereto, or who has failed to pay to the commission any or all sums required under the provisions of this chapter.
     (3) The license ((shall)) must specify the number of days the race meet ((shall)) will continue and the number of races per day, which ((shall)) must include not less than six nor more than eleven live races per day, and beginning on July 1, 2023, for which a fee ((shall)) must be paid daily in advance of five hundred dollars for each live race day for those licensees ((which)) that had gross receipts from parimutuel machines in excess of fifty million dollars in the previous year and two hundred dollars for each day for meets ((which)) that had gross receipts from parimutuel machines at or below fifty million dollars in the previous year((;)). In addition any newly authorized live race meets ((shall)) must pay two hundred dollars per day for the first year((: PROVIDED, That)). However, if unforeseen obstacles arise((, which)) that prevent the holding((,)) or completion of any race meet, the license fee for the meet, or for ((a)) the portion ((which)) that cannot be held, may be refunded the licensee, if the commission deems the reasons for failure to hold or complete the race meet sufficient.
     (4) Any unexpired license held by any person who violates any of the provisions of this chapter, or any of the rules or regulations of the commission made pursuant thereto, or who fails to pay to the commission any and all sums required under the provisions of this chapter, ((shall be)) is subject to cancellation and revocation by the commission. Such cancellation ((shall)) may be made only after a summary hearing before the commission, of which three days' notice, in writing, ((shall)) must be given the licensee, specifying the grounds for the proposed cancellation, and at which hearing the licensee ((shall)) must be given an opportunity to be heard in opposition to the proposed cancellation.

Sec. 7   RCW 67.16.170 and 1998 c 345 s 7 are each amended to read as follows:
     (1) Licensees of race meets that are nonprofit in nature and are of ten days or less may retain daily for each authorized day of racing fifteen percent of daily gross receipts of all parimutuel machines at each race meet.
     (2) Licensees of race meets that do not fall under subsection (1) of this section may retain daily for each authorized day of parimutuel wagering the following percentages from the daily gross receipts of all its in-state parimutuel machines:
     (a) If the daily gross receipts of all its in-state parimutuel machines are more than fifty million dollars in the previous calendar year, the licensee may retain daily ((13.70)) 15.0 percent of the daily gross receipts; and
     (b) If the daily gross receipts of all its in-state parimutuel machines are fifty million dollars or less in the previous calendar year, the licensee may retain daily ((14.48)) 15.78 percent of the daily gross receipts.