"Sec. 2   RCW 43.20A.890 and 2002 c 349 s 4 are each amended to read as follows:
     (1) A program for (a) the prevention and treatment of ((pathological)) problem and pathological gambling; and (b) the training of professionals in the identification and treatment of problem and pathological gambling is established within the department of social and health services, to be administered by a qualified person who has training and experience in ((handling pathological)) problem gambling ((problems)) or the organization and administration of treatment services for persons suffering from ((pathological)) problem gambling ((problems)). The department may contract for any services provided under the program. The department shall track program participation and client outcomes.
     (2) To receive treatment under subsection (1) of this section, a person must:
     (a) Need treatment for ((pathological)) problem or pathological gambling, or because of the problem or pathological gambling of a family member, but be unable to afford treatment; and
     (b) Be targeted by the department of social and health services as ((to be)) being most amenable to treatment.
     (3) Treatment under this section is ((limited to)) available only to the extent of the funds appropriated or otherwise made available to the department of social and health services for this purpose. The department may solicit and accept for use any gift of money or property made by will or otherwise, and any grant of money, services, or property from the federal government, any tribal government, the state, or any political subdivision thereof or any private source, and do all things necessary to cooperate with the federal government or any of its agencies or any tribal government in making an application for any grant.
     (4)(a) There is hereby created within the office of financial management a problem gambling financial advisory committee, consisting of eight voting members appointed or selected by the governor. It is the purpose and function of the problem gambling financial advisory committee to annually determine and report to the governor a consensus estimate of the monetary value of all programs for the treatment of problem and pathological gambling that:
     (i) Provided problem and pathological gambling treatment services to Washington residents in compliance with RCW 49.60.030 at any time during the immediately preceding calendar year;
     (ii) Were funded in whole or in part by either a tribal government located within the external geographic boundaries of the state, or an entity subject to taxation under section 5(2) or 6(1) of this act; and
     (iii) Provided to the problem gambling financial advisory committee by March 30th of the current calendar year such financial and programmatic information deemed by at least half of the advisory committee to be timely and sufficient to afford adequate review under this section.
     (b) The members of the problem gambling financial advisory committee shall be appointed as follows:
     (i) Three members selected by the governor from among those nominated by any, some, or all federally recognized Indian tribes with which the state has entered into a compact under RCW 9.46.360;
     (ii) Two members selected by the governor from among those nominated by any, some, or all entities subject to taxation under section 5(2) or 6(1) of this act;
     (iii) One member selected by the governor from among those nominated by any, some, or all entities providing problem and pathological gambling services in Washington;
     (iv) One member representing the department of social and health services; and
     (v) One member representing the office of financial management.
     (c) The problem gambling financial advisory committee's report of the consensus estimate of the monetary value of programs for the treatment of problem and pathological gambling shall be submitted to the governor only if the advisory committee's entire report receives (i) an affirmative vote of six or more voting members; and (ii) the vote is obtained on or before September 30th of the year in which the committee received timely financial reports.
     (5) The department of social and health services shall ((report to the legislature by September 1, 2002, with a plan for implementing this section)) establish an advisory committee to assist it in designing, managing, and evaluating the effectiveness of the program established in this section. The committee shall include, at a minimum, persons knowledgeable in the field of problem and pathological gambling and persons representing tribal gambling, privately owned nontribal gambling, and the state lottery.
     (((5) The department of social and health services shall report to the legislature by November 1, 2003, on program participation and client outcomes.)) (6) For purposes of this section, "pathological gambling" is a mental disorder characterized by loss of control over gambling, progression in preoccupation with gambling and in obtaining money to gamble, and continuation of gambling despite adverse consequences. "Problem gambling" is an earlier stage of pathological gambling which compromises, disrupts, or damages family or personal relationships or vocational pursuits.

NEW SECTION.  Sec. 3   A new section is added to chapter 43.20A RCW to read as follows:
     (1) The problem gambling account is created in the state treasury. Money in the account may be spent only after appropriation. Expenditures from the account may be used only for the purposes of the program established under RCW 43.20A.890.
     (2) The treasurer shall keep an accurate record of receipts of, and deposits or payments into, and all disbursements from, the account and shall separately account for and distinguish amounts received:
     (a) Pursuant to RCW 67.70.340(3) or section 5(2) or 6(1) of this act, hereinafter referred to as "mandatory contributions" to the problem gambling account;
     (b) From a tribal government located within the external geographic boundaries of the state of Washington, hereinafter referred to as "voluntary tribal contributions" to the problem gambling account, which includes a tribal contribution in support of purposes substantially similar to those described in RCW 43.20A.890 that are received by the department of social and health services after January 1, 2005, but before July 1, 2005, and which are transferred to the problem gambling account; and
     (c) From all other sources.
     (3)(a) On or before September 30th of each year, the gambling commission shall determine, and shall promptly thereafter notify the office of treasurer of, the total and pro rata share of the amount of gambling that occurred within the external geographic boundaries of the state of Washington during the previous fiscal year attributable to:
     (i) Entities subject to RCW 67.70.340(3) or section 5(2) or 6(1) of this act; and
     (ii) Tribal governments located within the external geographic boundaries of the state of Washington.
     (b) For the purposes of this section, the "amount of gambling" means:
     (i) The "net receipts" of the state lottery, as defined in RCW 67.70.340(3);
     (ii) The "gross income of the business derived from contests of chance" of entities subject to tax under section 5(2) of this act;
     (iii) The "gross income of the business derived from parimutuel wagering" of entities subject to tax under section 6(1) of this act; and
     (iv) The gross income derived from the conduct of Class III gaming, as defined in the Indian gaming regulatory act, 25 U.S.C. Sec. 2701 et seq.
     (c) In computing the amount of gambling attributable to an entity with an annual fiscal reporting period that does not coincide with the state's fiscal year, the gambling commission may rely upon the report for the period which it determines best reflects the most current data available.
     (d) Determinations made by the state treasurer and the gambling commission are final and shall not be used to challenge the validity of any transfer requirement under RCW 67.70.340, or any tax imposed under section 5 or 6 of this act.
     (4) Each expenditure from the problem gambling account shall be credited:
     (a) First against the balance of receipts, payments, and deposits accounted for under subsection (2)(c) of this section, with the remaining amount of the expenditure, if any, credited
     (b) From balances of the (i) mandatory contributions to the problem gambling account; and the (ii) voluntary tribal contributions to the problem gambling account, as accounted for under subsection (2)(a) and (b) of this section, respectively on the same pro rata basis as determined in subsection (3)(a) of this section, as may be adjusted by the office of financial management under subsection (8) of this section, for the most recently completed fiscal year for which the pro rata basis has been determined.
     (5) No expenditure shall be made from the problem gambling account if the balance of either the (a) mandatory contributions to the problem gambling account; or the (b) voluntary tribal contributions to the problem gambling account, as accounted for under subsection (2)(a) and (b) of this section, respectively, is insufficient to fully pay for its respective pro rata share of expenditure after the reduction of the credit required under subsection (4)(a) of this section.
     (6) Within ninety days after the end of each fiscal year, the treasurer shall determine, and shall promptly thereafter notify the office of financial management of:
     (a) The balance, as of the first day of the most recently completed fiscal year, of the mandatory contributions portion of the problem gambling account, as accounted for under subsection (2)(a) of this section, net of all receipts, payments, deposits, and expenditures;
     (b) The gross total amount of the mandatory contributions received during the fiscal year by the problem gambling account, as accounted for under subsection (2)(a) of this section; and
     (c) The balance, as of the last day of the most recently completed fiscal year, of the mandatory contributions portion of the problem gambling account, as accounted for under subsection (2)(a) of this section, net of all receipts, payments, deposits, and expenditures.
     (7) The office of financial management shall promptly determine and report to the department of revenue and the lottery commission the ratio of:
     (a) The balance of the mandatory contributions portion of the problem gambling account as of the end of the most recent fiscal year, as determined under subsection (6)(c) of this section; to
     (b) The gross amount of mandatory contributions made available to the problem gambling account during the most recent fiscal year, which shall be calculated as the sum of the amounts determined under subsection (6)(a) and (b) of this section.
     (8) In computing the ratio required by subsection (7) of this section, the office of financial management may consider and adjust the balances reported by the treasurer under subsection (6) of this section, and the ratio determined by the gambling commission under subsection (3) of this section to reflect the monetary value of nonstate programs for the treatment of problem and pathological gambling as determined by the advisory committee, as provided under RCW 43.20A.890(4).

Sec. 4   RCW 67.70.340 and 2002 c 349 s 3 are each amended to read as follows:
     (1) The legislature recognizes that creating a shared game lottery could result in less revenue being raised by the existing state lottery ticket sales. The legislature further recognizes that the two funds most impacted by this potential event are the student achievement fund and the education construction account. Therefore, it is the intent of the legislature to use some of the proceeds from the shared game lottery to make up the difference that the potential state lottery revenue loss would have on the student achievement fund and the education construction account. The legislature further intends to use some of the proceeds from the shared game lottery to fund programs and services related to problem and pathological gambling.
     (2) The student achievement fund and the education construction account are expected to collectively receive one hundred two million dollars annually from state lottery games other than the shared game lottery. For fiscal year 2003 and thereafter, if the amount of lottery revenues earmarked for the student achievement fund and the education construction account ((are)) is less than one hundred two million dollars, the commission, after making the transfer required under subsection (3) of this section, must transfer sufficient moneys from revenues derived from the shared game lottery into the student achievement fund and the education construction account to bring the total revenue up to one hundred two million dollars. The funds transferred from the shared game lottery account under this subsection must be divided between the student achievement fund and the education construction account in a manner consistent with RCW 67.70.240(3).
     (3) ((For fiscal year 2003, the commission shall transfer from revenues derived from the shared game lottery to the violence reduction and drug enforcement account under RCW 69.50.520 five hundred thousand dollars exclusively for the treatment of pathological gambling as prescribed by RCW 67.70.350.)) (a) The commission shall transfer, from revenue derived from the shared game lottery, to the problem gambling account created in section 3 of this act, an amount equal to the percentage specified in (b) of this subsection of net receipts. For purposes of this subsection, "net receipts" means the difference between (i) revenue received from the sale of lottery tickets or shares and revenue received from the sale of shared game lottery tickets or shares; and (ii) the sum of payments made to winners.
     (b) In fiscal year 2006, the percentage to be transferred to the problem gambling account is one-tenth of one percent. Except as provided in (c) of this subsection, in fiscal year 2007 and subsequent fiscal years, the percentage to be transferred to the problem gambling account is thirteen one-hundredths of one percent.
     (c) If the ratio of the amount determined under section 3(7) of this act is greater than twenty percent, the percentage to be transferred to the problem gambling account during the calendar year beginning January 1st following the end of the fiscal year for which the ratio was determined shall be reduced by an amount equal to the amount otherwise due multiplied by the ratio determined under section 3(7) of this act.
     (4) The remaining net revenues, if any, in the shared game lottery account after the transfers pursuant to this section shall be deposited into the general fund."

"NEW SECTION.  Sec. 6   A new section is added to chapter 82.04 RCW to read as follows:
     (1) Upon every person engaging within this state in the business of conducting race meets for the conduct of which a license must be secured from the Washington horse racing commission; as to such persons, the amount of tax with respect to the business of parimutuel wagering is equal to the gross income of the business derived from parimutuel wagering multiplied by the rate of 0.1 percent through June 30, 2006, and 0.13 percent thereafter. The money collected under this section shall be deposited in the problem gambling account created in section 3 of this act.
     (2) If the persons described in subsection (1) of this section receive income from sources other than those described in subsection (1) of this section or provide services other than those named in subsection (1) of this section, that income and those services are subject to tax as otherwise provided in this chapter.
     (3) For purposes of this section, "gross income of the business" does not include amounts paid to players for winning wagers, or taxes imposed or other distributions required under chapter 67.16 RCW.
     (4) The tax imposed under this section is in addition to any tax imposed under chapter 67.16 RCW."

"NEW SECTION.  Sec. 9   A new section is added to chapter 82.04 RCW to read as follows:
     If the ratio of the amount determined under section 3(7) of this act is greater than twenty percent, a taxpayer required to pay the tax imposed under section 5(2) or 6(1) of this act, during the calendar year beginning January 1st following the end of the fiscal year for which the ratio was determined, shall be allowed to take a credit against the current tax due in an amount equal to the amount due multiplied by the ratio of the amount determined under section 3(7) of this act. The credit is nontransferable and may not be carried forward to any future tax period.

Sec. 10   RCW 9.46.071 and 2003 c 75 s 1 are each amended to read as follows:
     (1) The legislature recognizes that some individuals in this state are problem or ((compulsive)) pathological gamblers. Because the state promotes and regulates gambling through the activities of the state lottery commission, the Washington horse racing commission, and the Washington state gambling commission, the state has the responsibility to continue to provide resources for the support of services for problem and ((compulsive)) pathological gamblers. Therefore, ((at a minimum,)) the Washington state gambling commission, the Washington horse racing commission, and the state lottery commission shall jointly develop informational signs concerning problem and ((compulsive)) pathological gambling which include a toll-free hot line number for problem and ((compulsive)) pathological gamblers. The signs shall be placed in the establishments of gambling licensees, horse racing licensees, and lottery retailers. In addition, the Washington state gambling commission, the Washington horse racing commission, and the state lottery commission may also contract with other qualified entities to provide public awareness, training, treatment, and other services to ensure the intent of this section is fulfilled.
     (2) While section 5 of this act is in effect, the commission may not increase fees payable by licensees under its jurisdiction for the purpose of funding services for problem and compulsive gamblers, including but not limited to the program established under RCW 43.20A.890. Any fee imposed or increased by the commission, for the purpose described in this section, before the effective date of this section, shall have no force or effect after the effective date of this section."