BILL NUMBER: SB 1465 CHAPTERED 07/11/02 CHAPTER 145 FILED WITH SECRETARY OF STATE JULY 11, 2002 APPROVED BY GOVERNOR JULY 10, 2002 PASSED THE ASSEMBLY JUNE 27, 2002 PASSED THE SENATE APRIL 15, 2002 AMENDED IN SENATE APRIL 2, 2002 INTRODUCED BY Senator Costa FEBRUARY 15, 2002 An act to amend Sections 19568 and 19617.2 of the Business and Professions Code, relating to horse racing. LEGISLATIVE COUNSEL'S DIGEST SB 1465, Costa. Horse racing. Existing law generally requires every licensee conducting a horse racing meeting to provide for the running of at least one race each racing day limited to California-bred horses, to be known as the "California-bred race." Existing law requires for thoroughbred and quarter horse racing that the total amount distributed to horsemen and horsewomen for California-bred stakes races from the purse account to be not less than 10% of the total amount distributed for all stakes races from the purse account at that racing meeting. This bill would permit some of that 10% from the purse account at a race meeting to be distributed to horsemen and horsewomen for races featuring California-breds, upon approval of the official registering agency. Existing law requires any association conducting a race meeting that includes thoroughbred racing to deposit certain sums with the official registering agency for thoroughbred horses, and requires that official registering agency to distribute a portion of those sums annually to the California-bred race fund for the promotion of California-bred races and for purses for California Cup Day and other California-bred races. Under existing law, any of that portion of the funds not used for those purposes is redistributed to augment the breeder and stallion funds, as specified. This bill would permit some of those funds apportioned for California-bred purposes to be used as purses for races featuring California-bred horses, upon the approval of the official registering agency. This bill would also provide that, out of those funds that remain in the California-bred fund at the end of a year, an amount up to 1% of the total breeder, stallion, and owner award receipts shall remain in the fund for allocation under these provisions the following year, and only the balance above that amount, if any, is to be distributed to the breeder and stallion funds, as specified. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 19568 of the Business and Professions Code is amended to read: 19568. (a) Every licensee conducting a horse racing meeting shall, each racing day, provide for the running of at least one race limited to California-bred horses, to be known as the "California-bred race." If, however, sufficient competition cannot be had among horses of that class on any day, the race, with the consent of the board, may be eliminated for that day and a substitute race provided. (b) For thoroughbred and quarter horse racing only, the total amount distributed to horsemen and horsewomen for California-bred stakes races, and for races featuring California-breds upon the approval of the official registering agency, from the purse account, including overnight stakes, shall be not less than 10 percent of the total amount distributed for all stakes races from the purse account, including overnight stakes races, at that meeting of the racing association licensed to conduct live racing. (c) It is the intent of the Legislature that the thoroughbred racing associations in this state, in conjunction with the official registering agency, and owners and trainers organizations meet and report to the board on the establishment of a coordinated California-bred restricted schedule of stakes races designed to showcase California-bred restricted stakes races and qualify registered California-bred horses for the California Cup and the California Cup Day races. It is also the intent of the Legislature that the report be submitted to the board annually at least 60 days prior to the start of the racing year. SEC. 2. Section 19617.2 of the Business and Professions Code is amended to read: 19617.2. (a) Except as otherwise provided in this chapter, any association conducting a race meeting that includes thoroughbred racing shall deposit with the official registering agency 0.54 percent of the total amount handled ontrack in daily conventional and exotic parimutuel pools resulting from thoroughbred wagers made in this state. These deposits shall be made at the following intervals: (1) For any meeting of 20 racing days or less, the requisite deposit shall be made not later than seven days immediately following the last day of that meeting. (2) For any meeting of more than 20 racing days, the initial deposit shall be made not later than 27 racing days after the commencement of that meeting and every 20 racing days thereafter, with a final deposit made not later than seven days following the last day of that meeting. The initial deposit for that meeting shall be based upon the applicable amount handled during the first 20 racing days of the meeting, and deposits thereafter shall be based upon the applicable amount handled during the ensuing periods of 20 racing days with the last deposit being based upon the applicable amount handled from the end of the last 20-racing-day period for which a deposit has been made to the end of the meeting. (b) After deducting a sum equal to 5 percent of the total deposits made pursuant to subdivision (a) and the total deposits made pursuant to Section 19602, the amount to compensate the official registering agency for its administrative cost and for expenses it incurs for educational, promotional, and research programs, the official registering agency shall for computational purposes distribute annually the balance of the deposits in the following manner: (1) To the California-bred race fund, 10 percent to be used for the promotion of California-bred races and from which purses are to be provided or supplemented for California Cup Day, other California-bred races, and, upon the approval of the official registering agency, races featuring California-breds. This fund shall be administered by the official registering agency. Any funds not used for those purposes during any year, up to 1 percent of the total breeder, stallion, and owner award receipts, shall remain in the California-bred race fund to be distributed for the purposes of this paragraph the following year. Any funds remaining thereafter shall be redistributed to augment the funds referred to in subdivision (c), and shall be allocated to the breeder fund and to the stallion fund as provided in that subdivision. It is the intent of the Legislature that all funds used for purses shall supplement and not supplant existing purses for California-breds. (2) To the owner fund for the purpose of owner premiums pursuant to Section 19614.4. (c) The funds remaining after the distributions made pursuant to subdivision (b) shall be distributed as follows: (1) To the breeder fund 75 percent, from which breeder awards are to be paid. (2) To the stallion fund 25 percent, from which stallion awards are to be paid. (d) The official registering agency shall make the following payments to the owner, breeder, and stallion owner so as to encourage agriculture and the breeding of higher quality horses in this state: (1) The owner shall be paid an owner premium pursuant to Section 19614.4. (2) The breeder shall be paid a breeder award equal to the quotient for the breeder fund multiplied by the eligible earnings of the horse bred by the breeder. (3) The stallion owner shall be paid a stallion award equal to the quotient for the stallion fund multiplied by the eligible earnings of the stallion owner's eligible thoroughbred sire. (4) Owner premiums for California-bred horses shall be listed in the racing program alongside the advertised purse, and shall be distributed to the owner pursuant to Section 19614.4 at the same time as the purse. (5) The breeder and stallion awards shall be paid not later than March 31 of the calendar year immediately following the calendar year for which the awards or premiums were earned.