BILL NUMBER: AB 449 CHAPTERED 07/21/05 CHAPTER 96 FILED WITH SECRETARY OF STATE JULY 21, 2005 APPROVED BY GOVERNOR JULY 21, 2005 PASSED THE ASSEMBLY JULY 13, 2005 PASSED THE SENATE JULY 7, 2005 AMENDED IN SENATE JUNE 23, 2005 INTRODUCED BY Assembly Member Plescia FEBRUARY 15, 2005 An act to amend and repeal Sections 19613 and 19613.3 of the Business and Professions Code, relating to horse racing. LEGISLATIVE COUNSEL'S DIGEST AB 449, Plescia Horse racing. Existing law provides for the deduction of a portion of the proceeds of horse races as purses for the benefit of horsemen and horsewomen at the racing meeting, and provides for specific deductions from this portion for the benefit of owners' and trainers' organizations, administrative expenses, and for other purposes as specified, depending on the type of horse race involved. Under existing law, "trainer" is defined for these purposes as a person currently licensed by the board as a trainer. These provisions are to remain in effect until January 1, 2006, at which time the definition of "trainer" will include a person currently licensed by the board as an owner and a trainer or as a trainer. This bill would repeal the provision set to go into effect January 1, 2006, and amend the provision set to go into effect January 1, 2008, to maintain the definition of trainer, for these purposes, to mean a person currently licensed by the board as a trainer. Existing law provides for the recognition of horsemen's and horsewomen's organizations by the California Horse Racing Board. Each organization, except for the thoroughbred horsemen's and horsewomen' s organizations, and except an organization that solely represents owners, or solely represents trainers, shall provide for the representation of owners and trainers on its board of directors. Each thoroughbred horsemen's and horsewomen's organization, except one that solely represents trainers, shall provide for the representation of owners and owner-trainers on its board. Existing law provides that the organization representing owners who are also licensed as trainers, and their spouses who are licensed as owners, shall comprise a class of owner-trainers, which may elect 3 of its members to the board of directors or the owner's organization, while all other directors shall be owners and not owner-trainers. The board of the thoroughbred owners' organization shall not exceed 15 members and all members shall have equal standing. Existing law further provides that the thoroughbred trainers' organization may appoint 3 persons who qualify as owner-trainers, to the board of the thoroughbred owners' organization. This provision will be repealed as of January 1, 2006, unless a later enacted statute, enacted before January 1, 2006, deletes or extends that date. This bill would maintain these provisions in effect until January 1, 2007. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 19613 of the Business and Professions Code, as amended by Section 2 of Chapter 923 of the Statutes of 2002, is amended to read: 19613. (a) Except as provided in subdivisions (b), (c), (d), (e), and (f), the portion deducted for purses pursuant to this chapter shall be paid to or for the benefit of the horsemen at the racing meeting, and may include obtaining, providing, or defraying the cost of workers' compensation coverage for stable employees and jockeys of licensed trainers. (b) Any association other than a fair that conducts a thoroughbred racing meeting shall pay to the owners' organization contracting with the association with respect to the conduct of racing meetings for administrative expenses and services rendered to owners, an amount not to exceed two-thirds of 11/2 percent of the portion, and to a trainers' organization for administrative expenses and services rendered to trainers and backstretch employees an amount equivalent to one-third of 11/2 percent of the portion. That association shall also pay an amount for a pension plan for backstretch personnel to be administered pursuant to Section 19613.8 equivalent to an additional 1 percent of the portion. The remainder of the portion shall be distributed as purses. (c) Any other association may pay to the horsemen's organization contracting with the association with respect to the conduct of racing meetings for administrative expenses and services rendered to horsemen an amount out of the portion as may be determined by the association by agreement or otherwise, but, in all events, shall include, relative to a thoroughbred horsemen's organization racing, 1 percent of the portion for a pension plan for backstretch personnel pursuant to Section 19613.8. The remainder of the portion shall be distributed as purses. (d) Notwithstanding subdivisions (b) and (c), any association conducting a fair racing meeting or conducting a mixed breed racing meeting shall pay to the horsemen's organizations contracting with the association with respect to the conduct of races for their respective breeds of horses at the meetings for administrative expenses and services rendered to their respective horsemen those amounts out of the portion as determined by the horsemen's organization for the respective breeds with the approval of the board. Pursuant to this subdivision, amounts not to exceed 3 percent of the portion for the owners' and trainers' organizations shall be distributed to any thoroughbred owners' and trainers' organizations contracting with an association for a fair racing meeting or participating in mixed breed racing meetings as follows: two-thirds of 1 percent to the owners' organization and one-third of 1 percent to the trainers' organization for administrative expenses and services rendered to both owners and trainers, 1 percent for welfare funds, and 1 percent for a pension program for backstretch personnel, to be administered pursuant to Section 19613.8. (e) Any association other than a fair that conducts a quarter horse racing meeting, except a mixed breed meeting, shall pay to the horsemen's organization contracting with the association with respect to the conduct of racing meetings for administrative expenses and services rendered to horsemen, an amount not to exceed 3 percent of the portion. The remainder of the portion shall be distributed as purses. (f) For racing meetings other than thoroughbred meetings, if no contract has been signed between the association conducting the racing meeting and the organization representing the horsemen by the time the racing meeting commences, the distribution of purses shall be governed by the following: (1) If the association conducted a racing meeting within the past 15 months and a contract was in existence for that meeting with the horsemen's organization and the association is conducting a subsequent meeting for the same breed or mixed breeds, the amounts payable to the horsemen's organization under subdivision (c) shall be computed under the provisions of the last signed contract between the parties. (2) This subdivision applies regardless of the cause of the failure to execute a contract, whether that failure is a result of inadvertence or otherwise. (3) For racing meetings that do not come within paragraph (1), the board shall, within 15 days after the commencement of the racing meeting, determine the amounts payable to the horsemen's organization for administrative expenses and services, and provide for the direct payment of those amounts. (g) Amounts distributed pursuant to this section are derived from owners' purses. (h) For the purposes of this section, the following definitions shall apply: (1) "Owner" means a person currently licensed by the board as an owner of a thoroughbred racehorse. (2) "Trainer" means a person currently licensed by the board as a trainer of a thoroughbred racehorse. This section shall remain in effect only until January 1, 2008, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2008, deletes or extends that date. SEC. 2. Section 19613 of the Business and Professions Code, as added by Section 3 of Chapter 923 of the Statutes of 2002, is repealed. SEC. 3. Section 19613 of the Business and Professions Code, as amended by Section 9 of Chapter 62 of the Statutes of 2003, is amended to read: 19613. (a) Except as provided in subdivisions (b), (c), (d), (e), and (f), the portion deducted for purses pursuant to this chapter shall be paid to or for the benefit of the horsemen at the racing meeting, and may include obtaining, providing, or defraying the cost of workers' compensation coverage for stable employees and jockeys of licensed trainers. (b) Any association other than a fair that conducts a thoroughbred racing meeting shall pay to the owners' organization contracting with the association with respect to the conduct of racing meetings for administrative expenses and services rendered to owners, an amount not to exceed two-thirds of 11/2 percent of the portion, and to a trainers' organization for administrative expenses and services rendered to trainers and backstretch employees an amount equivalent to one-third of 11/2 percent of the portion. That association shall also pay an amount for a pension plan for backstretch personnel to be administered by the trainers' organization equivalent to an additional 1 percent of the portion. The remainder of the portion shall be distributed as purses. (c) Any other association may pay to the horsemen's organization contracting with the association with respect to the conduct of racing meetings for administrative expenses and services rendered to horsemen an amount out of the portion as may be determined by the association by agreement or otherwise, but, in all events, shall include, relative to a thoroughbred horsemen's organization racing, 1 percent of the portion for a pension plan for the trainers' organization. The remainder of the portion shall be distributed as purses. (d) Notwithstanding subdivisions (b) and (c), any association conducting a fair racing meeting shall pay to the horsemen's organizations contracting with the association with respect to the conduct of races for their respective breeds of horses at the meetings for administrative expenses and services rendered to their respective horsemen those amounts out of the portion as determined by the horsemen's organization for the respective breeds with the approval of the board. Pursuant to this subdivision, amounts not to exceed 3 percent of the portion for the owners' and trainers' organizations shall be distributed to any thoroughbred owners' and trainers' organizations contracting with an association for a fair racing meeting or participating in mixed breed racing meetings as follows: two-thirds of 1 percent to the owners' organization and one-third of 1 percent to the trainers' organization for administrative expenses and services rendered to both owners and trainers, 1 percent for welfare funds, and 1 percent for a pension program for backstretch personnel, to be administered by the thoroughbred trainers' organization. (e) Any association other than a fair that conducts a quarter horse racing meeting shall pay to the horsemen's organization contracting with the association with respect to the conduct of racing meetings for administrative expenses and services rendered to horsemen, an amount not to exceed 3 percent of the portion. The remainder of the portion shall be distributed as purses. (f) For racing meetings other than thoroughbred meetings, if no contract has been signed between the association conducting the racing meeting and the organization representing the horsemen by the time the racing meeting commences, the distribution of purses shall be governed by the following: (1) If the association conducted a racing meeting within the past 15 months and a contract was in existence, for that meeting with the horsemen's organization and the association is conducting a subsequent meeting for the same breed or mixed breeds, the amounts payable to the horsemen's organization under subdivision (c) shall be computed under the provisions of the last signed contract between the parties. (2) This subdivision applies regardless of the cause of the failure to execute a contract, whether that failure is a result of inadvertence or otherwise. (3) For racing meetings that do not come within paragraph (1), the board shall, within 15 days after the commencement of the racing meeting, determine the amounts payable to the horsemen's organization for administrative expenses and services, and provide for the direct payment of those amounts. (g) Amounts distributed pursuant to this section are derived from owners' purses. (h) For the purposes of this section, the following definitions shall apply: (1) "Owner" means a person currently licensed by the board as an owner of a thoroughbred racehorse. (2) "Trainer" means a person currently licensed by the board as a trainer of a thoroughbred racehorse. (i) This section shall become operative on January 1, 2008. SEC. 4. Section 19613.3 of the Business and Professions Code, as amended by Section 3 of Chapter 921 of the Statutes of 2002, is amended to read: 19613.3. (a) Except as provided in subdivision (b), (c), (d), and (e) relating to thoroughbred horsemen's organizations, each horsemen's organization, except an organization that solely represents owners, or an organization that solely represents trainers, shall provide for the representation of owners and trainers on its board of directors. The provisions setting forth the composition of the board of directors of each organization shall be in the bylaws of the organization and shall be submitted to the board. The bylaws and any changes thereto shall be approved by the board. (b) Each thoroughbred horsemen's organization, except an organization that solely represents trainers, shall provide for the representation of owners and owner-trainers, as defined in subdivision (c), on its board of directors. The provisions setting forth the composition of the board of directors of each organization shall be in the bylaws of the organization and shall be submitted to the board. The bylaws and any changes thereto shall be approved by the board. (c) The organization representing owners shall provide in its bylaws that owners who are also licensed as trainers, and their spouses who are licensed as owners shall comprise a class of owner-trainers, which may elect three of its members to the board of directors of the organization representing owners. All other directors shall be owners as defined in Section 19613, and shall not be members of the class of owner-trainers. (d) The board of directors of the thoroughbred owners' organization shall not exceed 15 persons, and all members of the board shall have equal standing. No person other than a duly elected or appointed member of the board of directors shall be entitled to vote on matters that are subject to the vote of the board. (e) The organization representing thoroughbred trainers may, upon the effective date of this section, appoint three individuals who qualify as members of the class of owner-trainers as described in subdivision (c) to the board of directors of the organization representing thoroughbred owners. These appointees shall hold these positions until members of the class are elected to fill the positions, no later than July 1, 2003. This section shall remain in effect only until January 1, 2007, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2007, deletes or extends that date. SEC. 5. Section 19613.3 of the Business and Professions Code, as added by Section 4 of Chapter 921 of the Statutes of 2002, is repealed.