This bill creates a new state treasury account called the Washington equine industry federal regulatory account and adds three new sections to chapter 67.16 RCW. It authorizes the Washington State Horse Racing Commission to impose fees it deems reasonable to pay federal fees and comply with the Horseracing Integrity and Safety Act of 2020 (15 U.S.C. §3051 et seq.), requires revenues from those commission-imposed fees to be deposited into the new account, and authorizes the commission to adopt rules to implement its fee authority. The state treasurer must, beginning by July 1, 2027 and each July 1 thereafter, transfer from the general fund to the new account an amount not to exceed $1,500,000 per fiscal year based on information from the Department of Revenue and amounts directly derived from specified state parimutuel and sales and use taxes tied to class 1 racing associations, taxes submitted under RCW 67.16.105, and fees submitted under WAC 260-49-070. Moneys in the account may be spent only after appropriation and only to pay fees charged by the federal Horseracing Integrity and Safety Authority or for direct required costs as determined by the commission under the federal Act. After each biennium, the $1,500,000 cap may be reviewed and increased based on inflation calculations by the Department of Revenue and federal fee amounts as determined by the commission. The text does not explicitly identify the commission by full statutory name in this excerpt, does not define “class 1 racing association,” does not specify the exact methodology for calculating the transfer amounts from the listed tax sources or the specific information the Department of Revenue must provide, and does not define “direct required costs.”

If enacted, the bill creates a new state account to collect fees and requires the state treasurer to transfer up to $1.5 million a year from the general fund into that account starting July 1, 2027, based on specified taxes and fees tied to horse racing. The Washington State Horse Racing Commission can set and collect additional fees to cover federal Horseracing Integrity and Safety Act costs, and money in the account may only be spent, after appropriation, to pay federal authority fees or other costs the commission says are directly required; the transfer cap can be reviewed and raised every two years to reflect inflation and federal fee changes. The agencies and groups most affected are the Horse Racing Commission (new fee and spending responsibilities), the state treasurer and Department of Revenue (who must provide information and make transfers), class 1 racing associations and related racing businesses (who will likely face higher fees or have transfer amounts tied to taxes on their activities), and the general fund (which could be reduced by up to $1.5 million annually). Important details are left unclear in the text provided, including how the transfer amount is calculated from the listed tax sources, who exactly qualifies as a class 1 racing association, and what “direct required costs” include, so the precise financial impact on individual racing businesses and state budgeting is uncertain.