BILL NUMBER: AB 1093 CHAPTERED 10/14/01 CHAPTER 933 FILED WITH SECRETARY OF STATE OCTOBER 14, 2001 APPROVED BY GOVERNOR OCTOBER 14, 2001 PASSED THE ASSEMBLY SEPTEMBER 10, 2001 PASSED THE SENATE SEPTEMBER 4, 2001 AMENDED IN SENATE AUGUST 30, 2001 AMENDED IN ASSEMBLY APRIL 17, 2001 INTRODUCED BY Assembly Member Briggs FEBRUARY 23, 2001 An act to amend Sections 19582, 19605.73, and 19661 of, and to add Section 19517.5 to, the Business and Professions Code, relating to horse racing. LEGISLATIVE COUNSEL'S DIGEST AB 1093, Briggs. Horse racing: equine medication. (1) Existing law authorizes the California Horse Racing Board to suspend or revoke a horse racing license and provides that the action of the board in suspending or revoking a license issued is final, except that the decision is subject to review by any court of competent jurisdiction, as specified. Under existing law, every steward or racing official who is not required to be licensed under specified provisions relating to track operators is required to be licensed by the board. Existing law authorizes the board to remove any racing official or employee in any case where it has reason to believe that the official or employee has been guilty of any dishonest practice in connection with horse racing, has failed to comply with any condition of the licensee's license, or has violated any law or any rule or regulation of the board. This bill would generally require that enforcement proceedings that allege the use of a prohibited substance, as defined under class I, class II, or class III of the board's schedule of prohibited substances, be referred directly to the Office of Administrative Hearings for administrative adjudication and preparation of a proposed decision for action by the board. The bill would provide specified procedures for the hearing, including, among other things, that the licensee post a bond with the paymaster of purses, as specified. The bill would provide that the board may only modify or amend an administrative law judge's decision so as to decrease, mitigate, or suspend a sanction or penalty. (2) Existing law, the Horse Racing Law, provides for the operation of horse racing in this state, and associated wagering, subject to regulation and oversight by the California Horse Racing Board as specified. The administration of any substance of any kind to a horse entered in a race is prohibited, unless the board has specifically authorized the use of the substance, and the quantity and composition. Existing law requires the board to classify violations of this provision based upon specified criteria. In addition to any other penalties that may be imposed, a violation of this provision is punishable by, among other things, the imposition of a monetary penalty of not more than $10,000. This bill would instead authorize the board to classify violations of this provision based on the specified criteria and would increase the monetary penalty for a violation involving a prohibited drug substance to not more than $10,000, the actual amount to be determined, as specified. The bill would provide that the board may impose a monetary penalty of not more than $100,000 for any other violation of the Horse Racing Law. (3) Existing law allows racing associations, fairs, and the organization responsible for contracting with racing associations to form a private, statewide marketing association to market and promote thoroughbred and fair horse racing. The organization is required to annually submit a statewide marketing and promotion plan to the California Horse Racing Board, as specified. Existing law provides that these provisions shall become inoperative on July 1, 2002. This bill would provide that these provisions would become inoperative on July 1, 2004. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 19517.5 is added to the Business and Professions Code, to read: 19517.5. (a) Enforcement proceedings that allege the use of a prohibited substance, as defined under class I, class II, or class III of the board's schedule of prohibited substances, shall be referred directly to the Office of Administrative Hearings for administrative adjudication and preparation of a proposed decision for action by the board, unless both the licensee and the board waive that referral. (b) The hearing before an administrative law judge shall commence no later than 90 days after the filing of the accusation. The administrative law judge may extend the hearing date only upon a showing of good cause to the earliest possible hearing date beyond the 90-day period, provided a written order and the reasons for the continuance are filed with the board. (c) No later than 20 days before the hearing, the licensee shall post a bond with the paymaster of purses for the amount of the purse or purses in question and received by the licensee. The bond shall be in cash, or a surety bond that meets the requirements of the board. (d) (1) The board shall neither modify nor amend a proposed decision by the administrative law judge so as to increase any sanction or penalty contemplated in the proposed decision. (2) The board may, by means of a written decision that includes the reasons for its decision, modify or amend a proposed decision by the administrative law judge so as to decrease, mitigate, or suspend a sanction or penalty contemplated in the proposed decision. SEC. 2. Section 19582 of the Business and Professions Code is amended to read: 19582. (a) (1) Violations of Section 19581, as determined by the board, are punishable as set forth in regulations adopted by the board. (2) The board may classify violations of Section 19581 based upon each class of prohibited drug substances, prior violations within the previous three years, and prior violations within the violator's lifetime. (3) (A) The board may provide for the suspension of a license for not more than three years, except as provided in subdivision (b), or a monetary penalty of not more than fifty thousand dollars ($50,000), or both, and disqualification from purses, for a violation of Section 19581. (B) The actual amount of the monetary penalty imposed pursuant to this paragraph shall be determined only after due consideration has been given to all the facts, circumstances, acts, and intent of the licensee, and shall not be solely based on the trainer-insurer rule, as established in Sections 1843 and 1887 of Title 4 of the California Code of Regulations. (4) The punishment for second and subsequent violations of Section 19581 shall be greater than the punishment for a first violation of Section 19581 with respect to each class of prohibited drug substances, unless the administrative law judge, in findings of fact and conclusions of law filed with the board, concludes that a deviation from this general rule is justified. (b) (1) A third violation of Section 19581 during the lifetime of the licensee, determined by the board to be at a class I or class II level, may result in the permanent revocation of the person's license. (2) The administrative law judge shall, after consideration of the circumstances surrounding a violation specified in paragraph (1), file a decision with the board that includes findings of fact and conclusions of law. (c) Any person whose license is suspended or revoked pursuant to this section shall not be entitled to receive any material benefit or remuneration in any capacity or from any business activity permitted or allowed by the license during any period of its suspension or revocation. (d) The penalties provided by this section are in addition to any other civil, criminal, and administrative penalties or sanctions provided by law, and do not supplant, but are cumulative to, other penalties or sanctions. SEC. 3. Section 19605.73 of the Business and Professions Code is amended to read: 19605.73. (a) Racing associations, fairs, and the organization responsible for contracting with racing associations and fairs with respect to the conduct of racing meetings, may form a private, statewide marketing organization to market and promote thoroughbred and fair horse racing. The organization shall consist of the following members: two members, one from the northern zone and one from the combined central and southern zones, appointed by the thoroughbred racetracks; two members, one from the northern zone and one from the combined central and southern zones, appointed by the owners' organization responsible for contracting with associations and fairs with respect to the conduct of racing meetings; and two members, one from the northern zone and one from the combined central and southern zones, appointed by the organization representing racing and satellite fairs. (b) The marketing organization formed pursuant to subdivision (a) shall annually submit to the board a statewide marketing and promotion plan for thoroughbred and fair horse racing that encompasses all geographical zones in the state, and which includes the manner in which funds were expended in the implementation of the plan for the previous calendar year. The plan shall be implemented as determined by the organization. The organization shall receive input from all interested industry participants and may utilize outside consultants in developing the annual marketing plan. (c) In addition to the distributions specified in subdivisions (a) and (b) of Section 19605.7, and in Sections 19605.71 and 19605.72, for thoroughbred and fair meetings only, from the amount that would normally be available for commissions and purses, an amount equal to 0.4 percent of the total amount handled by each satellite wagering facility shall be distributed to the statewide marketing organization formed pursuant to subdivision (a) for the promotion of thoroughbred and fair horse racing. Any of the promotion funds that are not expended in the year in which they are collected may be expended in the following year. If promotion funds expended in any one year exceed the amount collected for that year, the funds expended in the following year shall be reduced by the excess amount. (d) This section shall become inoperative on July 1, 2004, and, as of January 1, 2005, is repealed, unless a later enacted statute that is enacted before January 1, 2005, deletes or extends the dates on which it becomes inoperative and is repealed. Any moneys held by the organization shall, in the event this section is repealed, be distributed to the organization formed pursuant to Section 19608.2, for purposes of that section. SEC. 4. Section 19661 of the Business and Professions Code is amended to read: 19661. (a) Any person who violates any of the provisions of this chapter for which a penalty is not herein expressly provided, is guilty of a misdemeanor. (b) Unless otherwise expressly provided, the board may impose a monetary penalty of not more than one hundred thousand dollars ($100,000) for a violation of any of the provisions of this chapter.