BERLIN -- A bill extending a sunset provision for an allocation of up to $1.2 million for Ocean Downs from the horseracing purse fund generated by slots to help subsidize operating costs at the Berlin racetrack had its first hearing in the Senate this week, but not everyone is happy with the proposal.

Maryland’s approved slots legislation allowed for a one-time subsidy for operating costs at the state’s two harness racing tracks, including Ocean Downs, in an amount not to exceed $1.2 million. However, with the harness racing industry continuing to struggle and the state’s two open slots venues not generating the revenue expected, state lawmakers are considering legislation to make the one-time $1.2 million subsidy an annual contribution.

Senate Bill 794 would alter language in the legislation providing financial assistance to Maryland’s harness racing tracks from the Purse Dedication Fund fueled by slots in the state to change the one-time contribution set to expire in 2012 to an annual one.

Ocean Downs owner William Rickman, Jr. has publicly said both the harness racing track and the Casino at Ocean Downs are both hemorrhaging money to the tune of several million dollars and the subsidy from the purse fund is needed to continue to keep the harness racing track viable.

The Senate bill had its first hearing in front of the Budget and Taxation Committee on Wednesday, prior to which Senator Jim Mathias (D-38) heard from a group of horsemen and trainers about their consternation with the annual contribution to the track’s operating costs from the purse fund, which has just started to do what it was designed to do in terms of increasing the purses at Maryland’s tracks.

“I had about a dozen horsemen here today [Wednesday] and we talked about this for about an hour,” he said. “They’re concerned because this takes money out of the purse fund. I co-sponsored the bill because I want to protect horseracing here, but there has to be a middle ground.”

Mathias said he appreciated the horsemen’s concerns, but cautioned without the annual subsidy from the purse fund, harness racing at Ocean Downs could cease to exist. He said there has to be some symbiotic relationship between the casino and track, although both are owned by Rickman.

“Horseracing is important to Worcester County and our district,” he said. “They’re now working to make it a success and we are trying to find the middle. It’s important for Ocean Downs to be viable and the County Commissioners support this legislation.”

Indeed, the County Commissioners lent their support to the legislation with an unsolicited letter to Mathias dated Tuesday, Feb. 28.

“As you know, this legislation repeals the sunset provision which allows Ocean Downs to receive up to $1.2 million annually from the Purse Dedication Account to be used to provide operating assistance to support a minimum of 40 annual racing days at Ocean Downs,” the letter reads. “The Ocean Downs Racetrack, which is a separate business from the casino, has operated at a loss for the last six years and additionally, the casino is operating at a loss.”

The commissioners’ letter reiterated the importance of having a viable harness racing season to complement a successful casino operation and urged Mathias to continue to push the legislation. The bill has also been cross-filed in the House although no hearings have yet been heard.

“It is important that both of these businesses remain viable and operate successfully,” the letter reads. “This legislation is of great economic importance to the county and we respectfully request your continued support.”

After the state’s horseracing industry faced a near collapse in recent years, the General Assembly last year approved legislation that allowed for millions of dollars to be diverted from the Purse Dedication Fund derived from the nascent slots operations to subsidize the Maryland Jockey Club and its facilities at Pimlico and Laurel, for example. The same legislation included a provision to provide a one-time subsidy of $1.2 million from the same purse fund to harness racing operations at Ocean Downs in Worcester and Rosecroft in Prince George’s County.

The legislation now on the table would make the subsidy an annual contribution in the same amount. While they are opposed to the concept in general, the state’s horsemen, represented by the Cloverleaf Standardbred Owners’ Association, has been willing to meet the track owners halfway and said they could support an annual contribution of about half, or $600,000. Lawmakers, including Mathias, are hoping there is some middle ground in the debate.

“We went from having no racing a few years back while the casino was being built to having it back last summer and they’re now trying to make it success, but they need some help,” he said. “I went out there again last summer for the first time in a long time and the place was very vibrant and the temporary grandstands were full.”