Racetrack satellite casino bill heads to House floor, along with bill to end limestone severance tax

CHARLESTON — A bill to allow West Virginia’s four racetracks to open satellite casinos in their home counties heads to the House floor after receiving its second committee Ok on Tuesday.

HB 2901 would allow a racino, as they’re sometimes called, to open a second casino site in any building it owns or leases within the same county. The site would not offer a track or hotel, but could offer table games, slots, sports betting and simulcast racing.

House Finance gave its thumbs-up to amended version of the bill that adds a couple new provisions.

Delegate Erikka Storch, R-Ohio, is lead sponsor and told her committee colleagues the reason for the bill. Wheeling Island, in her district, already faces challenges with its somewhat out-of-the-way location and periodic flooding, she said.

Planned highway projects on Interstate 70, she said, will divert even more traffic away. So track owners want to move to another site along I-70 with more visibility where they can maintain their business.

“We’re just trying to get in front of the construction and avoid loss of revenues,” she said. “We just want to give them some flexibility and some visibility.”

While the intent is to immediately help Wheeling Island, she said, the other three tracks could also open sites and are on board with the bill.

The Finance version adds to the original bill provisions to allow pari-mutuel (pool) betting on simulcast races and to mandate that the original facility remain open and offer all current amenities and services.

The bill also provides that the city hosting the original racino would continue to receive its due share of funds form table games and slots (pari-mutuel betting is excluded); any funds above that generated by the new site would be divided between the original city and the locality hosting the new casino. This is a measure to prevent the new site bleeding off money from its parent’s host.

Several delegates worried that the bill doesn’t dictate such things as the location of the satellite casino and the building requirements. They were concerned that a secondary site could sit next to a school or church.

Douglas Buffington, with the Lottery Commission, admitted that the bill doesn’t specify those things. But any application has to come before the commission for approval, and it’s likely those things would be considered. Responding to a question from Storch, he added that the commission also wouldn’t approve any application that violates local laws or zoning ordinances.

The bill passed in a voice vote, with a couple nays, and heads to the House floor.

Severance tax bill

HB 2829 proposes to end the severance tax on limestone and sandstone on July 1. Members passed it unanimously and sent it to the floor.

Mike Clowser, with the West Virginia Contractors Association, told the members that the tax has been an issue for close to a decade, but this is the first bill to address it.

The chief problem, he said, is that the tax isn’t uniform. And Deputy Tax Commissioner Lydia McKee confirmed that.

The tax, they said, is based on the value of the stone, which is determined by production costs. It costs less to mine from a cave than to take down trees and dig down through layers of dirt and rock to create a quarry. So the surface quarries are taxed more.

And it can take up to two years for the Tax Department to audit the business’ records to determine the tax, they said. So they’re selling their rock while unsure how it will be taxed down the road.

Neighboring Pennsylvania, Virginia and Maryland don’t have a severance tax, Clowser said, and most of the production takes place in the eastern part of the state, so those businesses are at a competitive disadvantage.

Finally, Clowser said, the Division of Highways is the single biggest customer for the industry, so ending the tax would save the DOH money.

Ending the tax would cost the state a projected $1.2 million a year, but about half of that, they guessed, is paid by the DOH. And increased sales could help offset more of the loss, and stimulate jobs and business activity.

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