Panel hears bill to help racetracks pay federal HISA fees; industry warns of economic loss without aid

The House Finance Committee heard Feb. 21 on House Bill 1703, proposed to help Washington’s horse-racing ecosystem respond to fees levied under the Horse Racing Integrity and Safety Act (HISA) of 2020.

Representative Chris Stearns, prime sponsor, told the committee HISA imposed new, industry-wide fees that have grown substantially and that earlier federal pass-through support has ended. “The fees are gonna jump to about $1.2 to up to $1,500,000,” Stearns said, adding the increase could be “a fatal blow to the horse racing industry here.”

Industry representatives described the economic footprint of Emerald Downs and other racing activities. Phil Ziegler, president of Emerald Downs, said the track drew more than 200,000 attendees last year and estimated a $240 million statewide economic impact. Ziegler and other witnesses said the increased fees could push trainers and owners to race in other states, shrinking the state’s racing ecosystem and related small businesses.

Doug Moore, chair of the Washington Horse Racing Commission, explained that HISA is a nongovernmental organization authorized by Congress in 2020, and said fee methodology changes have made smaller and regional tracks pay disproportionately. Moore said some fees previously covered by federal pass-through funds are no longer available and that the commission needs relief to avoid industry losses.

Supporters included Emerald Downs leadership, racing commission staff and the union representing commission employees; opponents and fiscal concerns focused on funding mechanics. Department of Revenue staff suggested several administrative changes to the bill to improve implementability, including requiring applications for credits and a Jan. 1, 2026 effective date for certain sections to allow programming.

The bill would create a Washington Equine Industry Federal Regulatory account to hold revenues from new state fees dedicated to paying HISA-related costs, authorize the Horse Racing Commission to charge fees to cover HISA compliance costs, and establish a B&O tax credit for amounts paid to HISA or the state commission. The bill also would direct the state treasurer to transfer $1.5 million per fiscal year from the general fund to this account beginning July 1, 2025; DOR preliminary estimates showed general fund reductions of approximately $1.7 million in the first biennium and $3.2 million in the next.

Racing commission staff and industry witnesses emphasized the regulatory oversight role the commission performs and warned that the closure of tracks historically corresponded with community economic loss. “Within 3 years of the loss of racing at these tracks, the commission was receiving calls asking what could be done to revive racing in their communities,” Moore testified.

The committee did not take formal action during the hearing. Staff indicated fiscal notes from the treasurer and the Horse Racing Commission were still pending.