BILL NUMBER: AB 509 CHAPTERED 08/16/04 CHAPTER 235 FILED WITH SECRETARY OF STATE AUGUST 16, 2004 APPROVED BY GOVERNOR AUGUST 16, 2004 PASSED THE ASSEMBLY JULY 2, 2004 PASSED THE SENATE JUNE 24, 2004 AMENDED IN SENATE JUNE 15, 2004 AMENDED IN SENATE AUGUST 25, 2003 INTRODUCED BY Assembly Member Jerome Horton FEBRUARY 18, 2003 An act to amend Sections 19596.1 and 19596.2 of, and to add Section 19596.3 to, the Business and Professions Code, relating to horse racing, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 509, Jerome Horton. Horse racing: out-of-country thoroughbred races. Existing law provides that a thoroughbred racing association or fair may distribute the audiovisual signal and accept wagers on the results of out-of-state and out-of-country thoroughbred races during the calendar period the association or fair is conducting a race meeting, provided that the total number of thoroughbred races on which wagers are accepted statewide in any given year does not exceed the total number of thoroughbred races on which wagers were accepted in 1998. Existing law permits this without the consent of the organization that represents horsemen participating in the race meeting, but subject to other limitations, including a limitation of 23 races per day, except as provided. State license fees on this wagering are provided for in existing law. This bill would amend those provisions with the 23 race per day limitation to apply only to out-of-state races in the United States. It would add separate provisions to permit a thoroughbred racing association or fair to distribute the audiovisual signal and accept wagers on the results of out-of-country thoroughbred races on similar conditions, without a daily limit on races. Existing law specifically provides that one of these thoroughbred racing associations may execute an agreement with any other association that conducts thoroughbred races in the southern zone to allow the other association to distribute the signal and accept wagers on out-of-country thoroughbred races. This bill would fix the license fee paid to the state under these arrangements at twice the amount paid by a quarter horse association in the northern zone on satellite wagering. Existing law provides that a thoroughbred association or fair may not accept wagers on out-of-state or out-of-country races commencing after 7 p.m. without the consent of the harness or quarter horse association that is then conducting a live racing meeting in Orange or Sacramento County. This bill would, with regard to out-of-country races only, forbid a thoroughbred racing association or fair to accept, without consent, wagers on races commencing after 5:30 p.m., and would require that consent from any harness or quarter horse association that is then conducting a live racing meeting without limitation to specific counties. Under existing law, revenues distributed to the state as license fees from horse racing are required to be deposited in the Fair and Exposition Fund and are continuously appropriated to the Department of Food and Agriculture for various regulatory and general governmental purposes. This bill would authorize additional wagering, and would increase the amount of continuously appropriated license fees, thereby making an appropriation. This bill would declare that it is to take effect immediately as an urgency statute. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 19596.1 of the Business and Professions Code is amended to read: 19596.1. (a) Notwithstanding any other provision of law, the board may authorize a harness or quarter horse association conducting a race meeting to accept wagers on the results of out-of-state or out-of-country harness or quarter horse races and, with the board's approval and with the concurrence of the horsemen's organization contracting with the association, other designated harness or quarter horse races during the period it is conducting the racing meeting, if all of the following conditions are met: (1) The authorization complies with federal laws, including, but not limited to, Chapter 57 (commencing with Section 3001) of Title 15 of the United States Code. (2) Wagering is offered only within the racing inclosure and only within 36 hours of the running of the out-of-state feature race. (3) The association conducts at least seven live races, and imports not more than six races on those days during a racing meeting when live races are being run, except as provided in subdivision (b). (4) If only one breed of horse specified in this section is being raced on a given day, then the association conducting the live racing may import those races which would otherwise be simulcast by the association which is not racing, provided that the total number of harness or quarter horse races imported in a calendar year does not exceed the number of night races imported in 1998 after 5:30 p.m. After the usual deductions, including the portion for the racing association, the portion remaining for purses from these races shall be distributed equally for purses for harness horsemen and quarter horse horsemen. (5) No quarter horse or harness racing association shall accept wagers on out-of-state or out-of-country quarter horse or harness races commencing before 5:30 p.m., Pacific standard time, without the consent of any thoroughbred association or fair that is then conducting a live racing meeting in this state. (b) An association that is authorized to import races pursuant to subdivision (a) may, at its sole discretion, import fewer than the maximum number of harness or quarter horse races authorized in paragraph (3) of subdivision (a). For up to two races per night, for each race that is not imported under the maximum authorized by paragraph (3) of subdivision (a) on a particular night of racing, the association may add a race to the number of races allowable under the maximum authorization on another night of racing. However, no more than two races may be added under this subdivision to the number allowable on a single night, and the total number of imported races over a calendar year may not exceed the total number of imported races authorized pursuant to paragraphs (3) and (4) of subdivision (a). SEC. 2. Section 19596.2 of the Business and Professions Code is amended to read: 19596.2. (a) Notwithstanding any other provision of law and except as provided in Section 19596.4, a thoroughbred racing association or fair may distribute the audiovisual signal and accept wagers on the results of out-of-state thoroughbred races conducted in the United States during the calendar period the association or fair is conducting a race meeting, including days on which there is no live racing being conducted by the association or fair, without the consent of the organization that represents horsemen participating in the race meeting and without regard to the amount of purses, provided that the total number of thoroughbred races on which wagers are accepted statewide in any given year does not exceed the total number of thoroughbred races on which wagers were accepted in 1998. Further, the total number of thoroughbred races imported by associations or fairs on a statewide basis under this section shall not exceed 23 per day on days when live thoroughbred or fair racing is being conducted in the state. The limitation of 23 imported races per day does not apply to any of the following: (1) Races imported for wagering purposes pursuant to subdivision (c). (2) Races imported that are part of the race card of the Kentucky Derby, the Kentucky Oaks, the Preakness Stakes, the Belmont Stakes, the Jockey Club Gold Cup, the Breeders' Cup, or the Haskell Invitational. (3) Races imported into the northern zone when there is no live thoroughbred or fair racing being conducted in the northern zone. (4) Races imported into the combined central and southern zones when there is no live thoroughbred or fair racing being conducted in the combined central and southern zones. (b) Any thoroughbred association or fair accepting wagers pursuant to subdivision (a) shall conduct the wagering in accordance with the applicable provisions of Sections 19601, 19616, 19616.1, and 19616.2. (c) No thoroughbred association or fair may accept wagers pursuant to this section on out-of-state races commencing after 7 p.m., Pacific standard time, without the consent of the harness or quarter horse racing association that is then conducting a live racing meeting in Orange or Sacramento Counties. SEC. 3. Section 19596.3 is added to the Business and Professions Code, to read: 19596.3. Notwithstanding any other provision of law, a thoroughbred racing association or fair may distribute the audiovisual signal and accept wagers on the results of out-of-country thoroughbred races during the calendar period the association or fair is conducting a race meeting, without the consent of the organization that represents horsemen participating in the race meeting. Out-of-country races shall be imported under the following conditions: (a) A thoroughbred association or fair shall conduct the wagering in accordance with the applicable provisions of Sections 19601, 19616, 19616.1, and 19616.2. (b) The total number of out-of-country thoroughbred races on which wagers are allowed to be accepted statewide in any given year shall not exceed the total number of out-of-country thoroughbred races on which wagers were accepted in 1998. (c) No thoroughbred association or fair may accept wagers pursuant to this section on out-of-country races commencing after 5:30 p.m., Pacific standard time, without the consent of the harness or quarter horse racing association that is then conducting a live racing meeting. (d) A thoroughbred racing association or fair distributing the audiovisual signal and accepting wagers on the results of out-of-country races pursuant to this section may execute an agreement with an association that conducts thoroughbred races in the southern zone to allow that association to distribute the signal and accept wagers on the results of out-of-country thoroughbred races, except that the license fees paid to the state shall be double the amount paid by a quarter horse racing association specified in subdivision (b) of Section 19605.7. SEC. 4. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: To protect the California horse racing industry from losing customers to out-of-state and out-of-country wagering hubs, it is necessary that this bill take immediate effect.