BILL ANALYSIS AB 2201 Page 1 Date of Hearing: May 5, 2010 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 2201 (Coto) - As Amended: April 15, 2010 Policy Committee: Governmental Organization Vote: 22 - 0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill would authorize the California Horse Racing Board (CHRB) to permit a California harness racing association to accept wagers on the full card of races conducted by another racing association on the date of the Cane Pace. FISCAL EFFECT Potential increase in revenue available to fund the CHRB and the Kenneth L. Maddy Equine Analytical Chemistry Laboratory at the University of California, Davis due to increased wagering opportunities. However, the CHRB is not required under current law to provide the Legislature with the funding formula for the board, and CHRB considers its funding formula a confidential matter between the racing industry and the board. Thus, it is unknown whether an increase in racing revenue would impact these two state entities or increase the revenue available in the Horse Racing Fund. COMMENTS 1)Rationale . This bill will allow a harness racing association in California to import all of the races conducted on Cane Pace day, irrespective of the six-race day limit. The author intends for this bill to give the California harness racing industry a marketing tool to increase on-track and off-track attendance on this specific day. As a result of the increased attendance, the author hopes this bill will provide the industry with a mechanism to increase track commissions, AB 2201 Page 2 purses, and breeder's awards. 2)Harness racing is a form of horse-racing in which standard-bred horses race in a specified gait, either trotting or a faster gait called pacing. The jockey sits in a two-wheeled cart pulled by the horse. In California, harness racing is held exclusively at Cal Expo in Sacramento. For 2010, the harness racing meets are scheduled from December 26, 2009 to June 19, 2010 and from August 13, 2010 to December 18, 2010. 3)The Cane Pace . The Cane Pace is a harness horse race run annually since 1955. In 1956 the race joined with the Little Brown Jug and the Messenger Stakes to become the first leg in the Triple Crown of Harness Racing for Pacers. Since 1998, the race is held at the Freehold Raceway in Freehold Borough, New Jersey. Established in 1853, Freehold Raceway is the oldest half-mile racetrack in the United States. 4)The Impact of SB 16 XX on CHRB Funding . SB 16 XX (Ashburn; Chapter 12, Statutes of 2009-10 Second Extraordinary Session) provides among other things, that beginning on July 1, 2009, and annually thereafter, $32 million shall be appropriated from the state's General Fund and paid into the Fair and Exposition Fund for the financial support of the network of California fairs. In addition, this legislation states that all racing associations and fairs including all breeds of racing shall participate in the funding of the board in accordance with a formula devised by the board in consultation with the industry. The legislation further states that the baseline funding for the board and equine drug testing program in the first fiscal year after the enactment of this section shall be the amount approved in the 2008-09 Budget Act. Any changes to that funding level need to be approved by the Legislature. Because SB 16 XX states that CHRB develop a funding formula to maintain its baseline funding, but does not require CHRB provide that formula to the Legislature, it is difficult to determine whether bills that may increase or decrease wagering pool or change the takeout will have an impact on the funding for either the CHRB or the Maddy Laboratory. 5)Related Legislation . AB 3074 (Governmental Organization AB 2201 Page 3 Committee; Chapter 510, Statutes of 2008) allows a harness racing association in California to import all of the races conducted on Kentucky Futurity day, irrespective of the six-race day limit in law and increases, from 23 to 32, the limitation on the total number of out-of-state Thoroughbred races that may be imported per day by a Thoroughbred association or fair that is conducting a live race meet. Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081