BILL NUMBER: AB 401 CHAPTERED 09/29/03 CHAPTER 556 FILED WITH SECRETARY OF STATE SEPTEMBER 29, 2003 APPROVED BY GOVERNOR SEPTEMBER 28, 2003 PASSED THE ASSEMBLY SEPTEMBER 9, 2003 PASSED THE SENATE SEPTEMBER 8, 2003 AMENDED IN SENATE SEPTEMBER 3, 2003 AMENDED IN SENATE AUGUST 27, 2003 INTRODUCED BY Assembly Member Jerome Horton FEBRUARY 14, 2003 An act to amend Section 19617 of, and to add Section 19605.53 to, the Business and Professions Code, relating to horse racing. LEGISLATIVE COUNSEL'S DIGEST AB 401, Jerome Horton. Horse racing: satellite wagering facilities. Existing law permits the California Horse Racing Board to authorize a fair to operate a satellite wagering facility at the fairgrounds, under certain circumstances. Existing law permits any fair in Shasta, San Joaquin, Humboldt, or Fresno County, with the approval of the Department of Food and Agriculture and the authorization of the board, to operate one satellite wagering facility on leased premises within the boundaries of that fair, subject to specified conditions. This bill would permit the California Exposition and State Fair, in lieu of a facility that could otherwise be authorized by the board to the Sacramento County Fair, with the approval of the department and the authorization of the board, to operate one satellite wagering facility within the boundaries of the California Exposition and State Fair in addition to any facility otherwise authorized at its fairgrounds, as specified. The bill would also allow the operation of this facility by agreement between the California Exposition and State Fair and an advance deposit wagering entity, as specified. Existing law provides for the distribution of the proceeds of wagering on horse races. In particular, existing law requires the distribution of certain funds to stallion owners and breeders of California-bred thoroughbred horses, as specified. Under these provisions, eligible earnings of horses in qualifying races determine the amounts of breeder and stallion awards distributed. Under existing law, for purposes of breeder and stallion awards, qualifying races are defined to include certain types of races, including graded stakes races conducted within the United States. This bill would add to those qualifying races other stakes races as designated by the official registering agency, the California Thoroughbred Breeders Association. Existing law provides that eligible earnings for purposes of thoroughbred stallion awards are those earned by California-bred and California-conceived foals of an eligible thoroughbred stallion in winning qualifying races plus the amount earned by those foals for finishing 2nd or 3rd in a stakes race in this state and for finishing first, 2nd, or 3rd in a graded stakes race within the United States. This bill would add to those eligible earnings the amount earned by these foals for finishing first, 2nd, or 3rd in other stakes races as designated by that same official registering agency. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 19605.53 is added to the Business and Professions Code, to read: 19605.53. (a) Notwithstanding subdivision (a) of Section 19605, and Section 19605.1, in lieu of a satellite wagering facility that could otherwise be authorized by the board to the Sacramento County Fair, the California Exposition and State Fair may, with the approval of the Department of Food and Agriculture and the authorization of the board, subject to the conditions specified in Section 19605.3, operate one satellite wagering facility within the boundaries of that fair in addition to any satellite wagering facility authorized at its fairgrounds under those provisions. (b) A satellite wagering facility authorized pursuant to subdivision (a) may be operated by agreement between the California Exposition and State Fair and an entity described in Section 19604, pursuant to the provisions of that section. SEC. 2. Section 19617 of the Business and Professions Code is amended to read: 19617. The following definitions shall govern the construction of this section: (a) "Breeder" means a person who is registered as a breeder of a California-bred thoroughbred with the official registering agency and is named on the applicable Certificate of Registration issued by the Jockey Club of New York. (b) "Qualifying race" means the following: (1) In the case of breeder awards, all races in this state, all graded stakes races conducted within the United States, and other stakes races as designated by the official registering agency. (2) As qualified by paragraph (5), in the case of owner premiums, certain claiming races, as defined by paragraph (4), and all allowance races, including maiden special weights. No owner premiums shall be paid on California-bred restricted races pursuant to Section 19568. (3) As qualified by paragraph (5), in the case of stallion awards, all nonclaiming races and certain claiming races, if the nonclaiming races and the certain claiming races are conducted in this state during racing meetings where more than one-half of the races on every racing program are for thoroughbreds, all graded stakes races conducted within the United States, and other stakes races as designated by the official registering agency. (4) "Certain claiming races" means those claiming races in the central and southern zone in which the total purse exceeds the daily average purse in races, excluding stakes, distributed at that meeting during the prior year, or a claiming race in the northern zone in which the total purse exceeds 125 percent of the daily average purse in races, excluding stakes, distributed at that meeting during the prior year. (5) No owner premium or stallion award shall be paid on races with purses of less than fifteen thousand dollars ($15,000). In determining whether a race complies with the definition in paragraph (4), the official registering agency shall base its determination on the actual amount of the purse at the time the race was conducted and shall not take into consideration any postrace adjustments to that purse. (c) "Eligible earnings" means the following: (1) In the case of breeder awards, the annual amount earned by a California-bred thoroughbred for finishing first, second, or third in qualifying races. (2) In the case of owner premiums, the annual amount earned by a California-bred thoroughbred for winning qualifying races. (3) In order for earnings from a qualifying race to be considered as eligible earnings, a California-bred thoroughbred shall be registered as such with the official registering agency before the date entries were taken by the association for the qualifying race in which that horse earned purse money. (4) In the case of stallion awards, the annual amount earned by California-conceived or California-bred foals of an eligible thoroughbred stallion in winning qualifying races plus the amount earned by those foals for finishing second or third in a stakes race in this state, for finishing first, second, or third in a graded stakes race within the United States, and for finishing first, second, or third in other stakes races as designated by the official registering agency. (5) For purposes of this section, the maximum purse considered earned in any qualifying race within this state shall be three hundred thirty thousand dollars ($330,000) for a win, one hundred twenty thousand dollars ($120,000) for a second, and ninety thousand dollars ($90,000) for a third place finish and the maximum purse considered earned in any qualifying race outside of this state shall be one hundred sixty-five thousand dollars ($165,000) for a win, sixty thousand dollars ($60,000) for a second, and forty-five thousand dollars ($45,000) for a third place finish. (6) In determining the purse earned in any qualifying race that is a stakes race, the amount earned shall be based solely on the added money, with no consideration to be given to other sources of the purse, such as nomination, entry, or starting fees, bonuses, and sponsor contributions, or any combination thereof. (7) On or before February 15 of any year, it is the ultimate responsibility of the stallion owner to advise the official registering agency of any and all purses earned during the preceding year that shall be considered in determining the amount of the stallion award to which the owner is entitled. (8) On or before February 15 of any year, it is the ultimate responsibility of the breeder to advise the official registering agency of any and all purses earned during the preceding year in graded stakes races outside of this state by horses bred by breeder. (d) "Eligible thoroughbred stallion" means a thoroughbred stallion that was continuously present in this state from February 1 to June 15, inclusive, of the calendar year in which the qualifying race was conducted, and if the sire left this state after June 15 of the calendar year in which the qualifying race was conducted, the sire returned to and was present in this state by February 1 of the following calendar year and thereafter remained until June 15 of that year. If a sire dies in this state and stood his last season at stud in this state, he shall thereafter continue to be considered an eligible thoroughbred stallion. (1) Notwithstanding any provision to the contrary, a thoroughbred stallion shall be considered an eligible thoroughbred stallion only if its owner has filed a claim for stallion award on or before February 15 of the calendar year immediately following the calendar year for which the awards are being distributed and is registered with the official registering agency. (2) The official registering agency shall establish procedures for the registration of stallions and may charge a fee for that registration. (e) "Official registering agency" means the California Thoroughbred Breeders Association. (f) "Owner" means the person who is registered with the paymaster of purses on the date the qualifying race was conducted as the owner of the California-bred thoroughbred earning purse money in that race. (g) "Quotient," for any fund, means the amount allocated to that fund pursuant to subdivision (b) of Section 19617.2 divided by the aggregate eligible earnings of the horses applicable to that fund. In calculating the quotient for each of the funds, any retroactive purse payments with respect to a race shall not be considered after the disbursement of the fund. (h) "Stallion owner" means the person who is the owner of the eligible thoroughbred stallion as of December 31 of the calendar year in which that sire's foals had eligible earnings or the person who owned the eligible thoroughbred sire on the date that the stallion died.