SENATE BILL REPORT

                   SB 5280

              As Reported By Senate Committee On:

          Labor, Commerce & Trade, February 13, 1995

                  Ways & Means, March 3, 1995

Title:  An act relating to tax deferrals for a new thoroughbred race track facility.

Brief Description:  Providing tax exemptions for a new thoroughbred race track facility.

Sponsors:  Senators Smith, Roach, West, Bauer, Schow, Finkbeiner, Johnson, Hale, Kohl, Deccio, Drew and Rasmussen.

Brief History:

Committee Activity:  Labor, Commerce & Trade:  1/31/95, 2/13/95 [DPS].

Ways & Means:  2/21/95, 3/3/95 [DP2S].

SENATE COMMITTEE ON LABOR, COMMERCE & TRADE

Majority Report:  That Substitute Senate Bill No. 5280 be substituted therefor, and the substitute bill do pass.

  Signed by Senators Pelz, Chair; Heavey, Vice Chair; Deccio, Franklin, Hale, Newhouse and Palmer.

Staff:  Traci Ratzliff (786-7452)

Background: Sales and use taxes are imposed on the labor and materials used on construction projects in this state.

Summary of Substitute Bill:  A sales and use tax deferral program for the labor and materials associated with the construction of a new thoroughbred horse racing facility in Western Washington is established.  An application for deferral of taxes must be made to the Department of Revenue (DOR).  DOR then issues a tax deferral certificate to the recipient.  Taxes are deferred for ten years from the date the facility is operationally complete.  A five-year repayment plan is established.  

Substitute Bill Compared to Original Bill:  The original bill was not considered.

Appropriation:  None.

Fiscal Note:  Available.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  This bill will help to assure that a new race track is constructed which will lead to the resurrection of the horse racing industry in this state.

Testimony Against:  None.

Testified:  PRO:  Ron Crockett, Jim Johnston, Northwest Racing Associates; Ralph Vacca, Washington Thoroughbred Breeders Association; Alan Darr, International Operating Engineers, Washington State Building and Construction Trades; Marlyta Deck, Washington State Fairs Association.

SENATE COMMITTEE ON WAYS & MEANS

Majority Report:  That Second Substitute Senate Bill No. 5280 be substituted therefor, and the second substitute bill do pass.

  Signed by Senators Rinehart, Chair; Loveland, Vice Chair; Bauer, Cantu, Drew, Finkbeiner, Fraser, Gaspard, Hargrove, Hochstatter, Johnson, Long, McDonald, Pelz, Roach, Sheldon, Snyder, Spanel, Strannigan, Sutherland, West and Winsley.

Staff:  Terry Wilson (786-7715)

Second Substitute Bill Compared to Substitute Bill:  The deferral period is decreased to three years.

Testimony For:  There is no major race track in the state since Longacres closed.  The horse-racing industry is in serious decline in the state.  Horses and trainers have been leaving the state.  The industry had generated 15,000 jobs and added $400 million in revenues to the economy.  Longacres itself added $9.7 million in tax revenues a year to the state.  The state fair fund revenues are down by 40 percent since the closure.

Testimony Against:   None.

Testified:  Carl Baze, HBPA (pro); Joe LaDuca, WTBA (pro); Les Merritt, owner/trainer (pro); Marlyta Deck, WA State Fairs Assn. (pro); Ron Crockett, Northwest Racing (pro); Jim Johnston, Lane Powell (pro).