AN ACT Relating to relief for the equine industry by amending the parimutuel tax on horse racing to provide additional support for licensed racing associations, the state fair account, the state trade fair account, and the Washington horse racing commission, and modifying the membership thereof; amending RCW 15.04.090, 67.16.012, 67.16.100, 67.16.105, and 67.16.170; adding a new section to chapter 15.76 RCW; adding a new section to chapter 43.31 RCW; adding new sections to chapter 43.131 RCW; adding new sections to chapter 67.16 RCW; making appropriations; providing a contingent effective date; and declaring an emergency.

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

Sec. 1. RCW 15.04.090 and 1961 c 11 s 15.04.090 are each amended to read as follows:

The director of agriculture may, at his discretion, for a period of not to exceed ten years, lease state lands which are now or may hereafter be, under his direction and control, the retention of which he deems unnecessary for present state purposes or needs, to any nonprofit group or organization having educational, agricultural or youth development purposes. Such leases shall be upon such terms as the director deems beneficial to the state. All rental funds received by the director under the provisions of this section shall be deposited in the ((~~"fair fund" provided in RCW 67.16.100~~)) fair fund created under section 2 of this act.

NEW SECTION. Sec. 2. A new section is added to chapter 15.76 RCW to read as follows:

The fair fund is created in the custody of the state treasury. All moneys received by the department of agriculture for the purposes of this fund and from RCW 67.16.105(4) shall be deposited into the fund. 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.

NEW SECTION. Sec. 3. A new section is added to chapter 43.31 RCW to read as follows:

The state trade fair fund is created in the custody of the state treasury. All moneys received by the department of community, trade, and economic development for the purposes of this fund shall be deposited into the fund. Expenditures from the fund may be used only for the purpose of assisting state trade fairs. Only the director of community, trade, and economic development 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 67.16.012 and 1987 c 453 s 2 are each amended to read as follows:

There is hereby created the Washington horse racing commission, to consist of ((~~three~~)) five commissioners, appointed by the governor and confirmed by the senate. The commissioners shall be citizens, residents, and qualified electors of the state of Washington, one of whom shall be a breeder of race horses and shall be of at least one year's standing. The terms of the members shall be six years. Each member shall hold office until his or her successor is appointed and qualified. Vacancies in the office of commissioner shall be filled by appointment to be made by the governor for the unexpired term. Any commissioner may be removed at any time at the pleasure of the governor. Before entering upon the duties of his or her office, each commissioner shall enter into a surety company bond, to be approved by the governor and attorney general, payable to the state of Washington, in the penal sum of five thousand dollars, conditioned upon the faithful performance of his or her duties and the correct accounting and payment of all sums received and coming within his or her control under this chapter, and in addition thereto each commissioner shall take and subscribe to an oath of office of the same form as that prescribed by law for elective state officers.

Sec. 5. RCW 67.16.100 and 1995 c 399 s 166 are each amended to read as follows:

(1) All sums paid to the commission under this chapter, including those sums collected for license fees and excluding those sums collected under RCW 67.16.102((,)) and 67.16.105(3)((~~, and 67.16.105(4)~~)), shall be disposed of by the commission as follows: ((~~(a) Fifty~~)) One hundred percent thereof shall be retained by the commission for the payment of the salaries of its members, secretary, clerical, office, and other help and all expenses incurred in carrying out the provisions of this chapter. No salary, wages, expenses, or compensation of any kind shall be paid by the state in connection with the work of the commission.

((~~(b) One percent shall, on the next business day following the receipt thereof, be paid to the state treasurer to be deposited in the general fund.~~

(c) Three percent shall, on the next business day following the receipt thereof, be paid to the state treasurer, who is hereby made ex officio treasurer of a fund to be known as the "state trade fair fund" which shall be maintained as a separate and independent fund, and made available to the director of community, trade, and economic development for the sole purpose of assisting state trade fairs.

(d) Forty-six percent shall be paid to the state treasurer, who is hereby made ex officio treasurer of a fund to be known as the "fair fund," which shall be maintained as a separate and independent fund outside of the state treasury, and made available to the director of agriculture for the sole purpose of assisting fairs in the manner provided in Title 15 RCW.))

(2) Any moneys collected or paid to the commission under the terms of this chapter and not expended at the close of the fiscal biennium shall be paid to the state treasurer and be placed in the ((~~general~~)) fair fund created in section 2 of this act. The commission may, with the approval of the office of financial management, retain any sum required for working capital.

Sec. 6. RCW 67.16.105 and 1997 c 87 s 3 are each amended to read as follows:

(1) Licensees of race meets that are nonprofit in nature((,)) and are of ten days or less((, and have an average daily handle of one hundred twenty thousand dollars or less shall withhold and pay to the commission daily for each authorized day of racing one-half percent of the daily gross receipts from all parimutuel machines at each race meet)) 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 ((~~daily~~)) gross receipts of all its in-state parimutuel machines are more than ((~~two hundred fifty thousand~~)) fifty million dollars in the previous calendar year, the licensee shall withhold and pay to the commission daily ((~~two and one-half~~)) 1.30 percent of the daily gross receipts; and

(b) If the ((~~daily~~)) gross receipts of all its in-state parimutuel machines are ((~~two hundred fifty thousand~~)) fifty million dollars or less in the previous calendar year, the licensee shall withhold and pay to the commission daily ((~~one~~)) 0.52 percent of the daily gross receipts.

(3) In addition to those amounts in subsection((~~s (1) and~~)) (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 funds collected under this subsection (3) in a calendar year and 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 section 2 of this act.

Sec. 7. RCW 67.16.170 and 1991 c 270 s 8 are each amended to read as follows:

(1) Licensees of race meets that are nonprofit in nature((,)) and are of ten days or less((~~, and have an average daily handle of one hundred twenty thousand dollars or less~~)) may retain daily for each authorized day of racing ((~~fourteen and one-half~~)) 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 ((~~racing~~)) parimutuel wagering the following percentages from the daily gross receipts of all its in-state parimutuel machines ((~~at each race meet~~)):

(a) If the daily gross receipts of all its in-state parimutuel machines are more than ((~~two hundred fifty thousand~~)) fifty million dollars in the previous calendar year, the licensee may retain daily ((~~twelve and one-half~~)) 13.70 percent of the daily gross receipts; and

(b) If the daily gross receipts of all its in-state parimutuel machines are ((~~two hundred fifty thousand~~)) fifty million dollars or less in the previous calendar year, the licensee may retain daily ((~~fourteen~~)) 14.48 percent of the daily gross receipts.

NEW SECTION. Sec. 8. A new section is added to chapter 43.131 RCW to read as follows:

The reduction in parimutuel taxes and redistributions under sections 5 through 7, chapter . . ., Laws of 1998 (sections 5 through 7 of this act) shall be reviewed under this chapter before June 30, 2001.

NEW SECTION. Sec. 9. A new section is added to chapter 43.131 RCW to read as follows:

The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective June 30, 2001:

(1) RCW 67.16.100 and 1998 c ... s 5 (section 5 of this act), 1995 c 399 s 166, & 1991 c 270 s 4;

(2) RCW 67.16.105 and 1998 c ... s 6 (section 6 of this act), 1997 c 87 s 3, 1995 c 173 s 2, 1994 c 159 s 2, 1993 c 170 s 2, 1991 c 270 s 6, 1987 c 347 s 4, 1985 c 146 s 7, 1982 c 32 s 3, & 1979 c 31 s 6; and

(3) RCW 67.16.170 and 1998 c ... s 7 (section 7 of this act), 1991 c 270 s 8, 1987 c 347 s 2, 1985 c 146 s 9, 1983 c 228 s 1, & 1979 c 31 s 5.

NEW SECTION. Sec. 10. (1) All sums paid to the commission under this chapter, including those sums collected for license fees and excluding those sums collected under RCW 67.16.102 and 67.16.105(3), shall be disposed of by the commission as follows:

(a) Fifty percent thereof shall be retained by the commission for the payment of the salaries of its members, secretary, clerical, office, and other help and all expenses incurred in carrying out the provisions of this chapter. No salary, wages, expenses, or compensation of any kind shall be paid by the state in connection with the work of the commission.

(b) One percent shall, on the next business day following the receipt thereof, be paid to the state treasurer to be deposited in the general fund.

(c) Three percent shall, on the next business day following the receipt thereof, be paid to the state treasurer to be deposited in the state trade fair fund created in section 3 of this act.

(d) Forty-six percent shall, on the next business day following the receipt thereof, be paid to the state treasurer to be deposited in the fair fund created in section 2 of this act.

(2) Any moneys collected or paid to the commission under the terms of this chapter and not expended at the close of the fiscal biennium shall be paid to the state treasurer and be placed in the general fund. The commission may, with the approval of the office of financial management, retain any sum required for working capital.

NEW SECTION. Sec. 11. (1) Licensees of race meets that are nonprofit in nature and are of ten days or less shall withhold and pay to the commission daily for each authorized day of parimutuel wagering one-half percent of the gross receipts of its parimutuel machines at each race meet.

(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 two and one-half 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 one percent of the daily gross receipts.

(3) In addition to those amounts in subsections (1) and (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.

NEW SECTION. Sec. 12. (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 fourteen and one-half 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 twelve and one-half 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 fourteen percent of the daily gross receipts.

NEW SECTION. Sec. 13. The sum of five hundred fifty thousand dollars for fiscal year 1998 and one million nine hundred fifty thousand dollars for fiscal year 1999, or as much thereof as may be necessary, is appropriated from the general fund to the department of agriculture solely for the purposes of chapter 15.76 RCW and section 2 of this act.

NEW SECTION. Sec. 14. The sum of thirty-seven thousand dollars for fiscal year 1998 and one hundred twenty-eight thousand dollars for fiscal year 1999, or as much thereof as may be necessary, is appropriated from the general fund to the department of community, trade, and economic development solely for deposit in the state trade fair fund for the purpose of assisting state trade fairs.

NEW SECTION. Sec. 15. Sections 10 through 12 of this act are each added to chapter 67.16 RCW.

NEW SECTION. Sec. 16. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 17. (1) Sections 1 through 9, 13, 14, and 16 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and take effect immediately.

(2) Sections 10 through 12 of this act take effect July 1, 2001, if the repeal of RCW 67.16.100, 67.16.105, and 67.16.170 under section 9 of this act becomes effective.