BILL NUMBER: AB 2792	CHAPTERED
	BILL TEXT

	CHAPTER  272
	FILED WITH SECRETARY OF STATE  SEPTEMBER 24, 2010
	APPROVED BY GOVERNOR  SEPTEMBER 23, 2010
	PASSED THE SENATE  AUGUST 25, 2010
	PASSED THE ASSEMBLY  AUGUST 30, 2010
	AMENDED IN SENATE  AUGUST 20, 2010

INTRODUCED BY   Committee on Governmental Organization (Coto (Chair),
Anderson (Vice Chair), Bradford, Chesbro, Cook, Evans, Galgiani,
Hall, Hill, Jeffries, Lieu, Mendoza, Nestande, V. Manuel Perez,
Portantino, Silva, Torres, and Tran)

                        MARCH 17, 2010

   An act to amend Sections 19401, 19460, 19613.05, 19617, and
19617.2 of the Business and Professions Code, relating to horse
racing.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2792, Committee on Governmental Organization. Horse racing.
   (1) Existing law, the Horse Racing Law, generally regulates horse
racing and vests the administration and enforcement of the Horse
Racing Law in the California Horse Racing Board.
   Existing law provides that the intent of the Horse Racing Law is
to allow parimutuel wagering on horse races while, among other
things, supporting the network of California fairs.
   This bill would delete supporting the network of California fairs
from that statement of intent.
   (2) Existing law requires all licenses granted under the Horse
Racing Law to, among other things, contain such conditions as are
deemed necessary or desirable by the board for the purposes of the
Horse Racing Law.
   This bill would instead require those licenses to contain such
conditions as are deemed necessary or desirable by the board for the
best interests of horse racing and the purposes of the Horse Racing
Law. The bill would also make technical, nonsubstantive changes.
   (3) Existing law requires any racing association, including a
fair, that conducts thoroughbred racing to pay to the owners'
organization contracting with the association with respect to the
conduct of thoroughbred racing an additional 13/4% of the portion
required to be deducted for purses for a national marketing program,
as provided. These provisions are repealed as of January 1, 2011.
   This bill would instead provide for the repeal of these provisions
on January 1, 2014.
   (4) Existing law provides that an "eligible thoroughbred stallion"
means a thoroughbred stallion that was continuously present in this
state during certain dates of the calendar year in which the
qualifying race was conducted or, if the sire left this state after
June 15 of the year in which the qualifying race was conducted,
during certain dates of the following calendar year. Existing law
provides that 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."
   This bill would revise and recast the definition of "eligible
thoroughbred stallion" by removing the requirement that the
thoroughbred stallion be continuously present in this state during
certain dates of the calendar year in which the qualifying race was
conducted or that a sire be present during certain dates of the
following calendar year and instead provide that an "eligible
thoroughbred stallion" means a thoroughbred stallion that was
continuously present in this state during certain dates of the
calendar year in which he stood at stud and fathered the winner of
the race. The bill would additionally provide that if a sire was
standing at stud in this state on the date of his death, he shall
thereafter continue to be considered an eligible thoroughbred
stallion regarding a race participant fathered by him in that season.
These provisions would only apply to thoroughbred stallions standing
at stud and foals conceived in this state on or after January 1,
2010.
   (5) Existing law provides that 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
awards are being distributed and is registered with the official
registering agency.

   This bill would additionally require that the stallion owner be
registered with the official registering agency. The bill would
require the official registering agency to establish procedures for
the registration of stallion owners. These eligible thoroughbred
stallion provisions would only apply in regard to thoroughbred
stallions standing at stud and foals conceived in this state on or
after January 1, 2010.
   (6) Existing law provides that a "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 sire on the
date that the stallion died.
   This bill would instead provide that "stallion owner" means the
person who is the owner of the eligible thoroughbred stallion as of
December 31 of each calendar year in which the eligible thoroughbred
stallion stands at stud in this state as to all of that sire's foals
(1) that were conceived in this state in that calendar year and (2)
that thereafter have eligible earnings. The bill would provide that
in regards to eligible thoroughbred stallions that die, that stallion
must have had stood at stud in this state during that year in order
for the person who owned that thoroughbred stallion to be the
stallion owner for that year. These stallion owner provisions would
only apply in regard to thoroughbred stallions standing at stud and
foals conceived in this state on or after January 1, 2010.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 19401 of the Business and Professions Code is
amended to read:
   19401.  The intent of this chapter is to allow parimutuel wagering
on horse races, while:
   (a) Assuring protection of the public.
   (b) Encouraging agriculture and the breeding of horses in this
state.
   (c) Providing for maximum expansion of horse racing opportunities
in the public interest.
   (d) Providing uniformity of regulation for each type of horse
racing.
  SEC. 2.  Section 19460 of the Business and Professions Code is
amended to read:
   19460.  All licenses granted under this chapter:
   (a) Shall be in writing.
   (b) Are subject to all rules, regulations, and conditions
prescribed by the board.
   (c) Shall contain such conditions as are deemed necessary or
desirable by the board for the best interests of horse racing and the
purposes of this chapter.
  SEC. 3.  Section 19613.05 of the Business and Professions Code is
amended to read:
   19613.05.  (a) Any association, including a fair, that conducts
thoroughbred racing shall pay to the owners' organization,
contracting with the association with respect to the conduct of
thoroughbred racing, an additional 13/4 percent of the portion
required by Section 19613 for a national marketing program. These
funds shall be used exclusively for the promotion of thoroughbred
racing in conjunction with a national thoroughbred racing marketing
program. Funds that may not be needed for this effort shall be
returned to the purse pool at the racing associations where these
funds were raised in direct proportion to the amount in which they
were initially raised. The owners' organization shall file a report
with the board and the respective Committees on Governmental
Organization of the Senate and Assembly, accounting for the receipt
and expenditure of these funds on an annual basis. The board of
directors of the owners' organization shall have the discretion to
select the national marketing organization that shall be the
recipient of these funds. If the board of directors of the owners'
organization decides at any time not to contribute to the national
marketing organization, notice shall be given promptly to the
respective racing association or associations and the 13/4 percent
deduction shall cease until the owners' organization decides
otherwise.
   (b) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
  SEC. 4.  Section 19617 of the Business and Professions Code is
amended to read:
   19617.  The following definitions shall govern the construction of
this section and Section 19617.2:
   (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 thoroughbred races in the
central and southern zone with a minimum claiming level of forty
thousand dollars ($40,000) for winners and thoroughbred races in the
northern zone with a minimum claiming level of twenty thousand
dollars ($20,000) for winners.
   (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.
   (3) This subdivision shall apply only to thoroughbred stallions
standing at stud in this state before January 1, 2010, and as to
foals conceived in this state before January 1, 2010.
   (e) "Eligible thoroughbred stallion" means a thoroughbred stallion
that was continuously present in this state from February 1 to June
15, inclusive, of the year 2010 or any subsequent calendar year in
which he stood at stud and fathered the participant in the race. If a
sire dies in this state in the year 2010 or any subsequent year and
stood his last season at stud in this state, or was standing at stud
in this state on the date of his death in the year 2010 or any
subsequent year, he shall thereafter continue to be considered an
eligible thoroughbred stallion regarding a race participant fathered
by him in that season.
   (1) Notwithstanding any provision to the contrary, a thoroughbred
stallion shall be considered an eligible thoroughbred stallion only
if the stallion 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 the
stallion and the stallion owner are registered with the official
registering agency.
   (2) The official registering agency shall establish procedures for
the registration of stallions and stallion owners and may charge a
fee for that registration.
   (3) This subdivision shall apply only to thoroughbred stallions
standing at stud in this state on or after January 1, 2010, and as to
foals conceived in this state on or after January 1, 2010.
   (f) "Official registering agency" means the California
Thoroughbred Breeders Association.
   (g) "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.

   (h) "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.
   (i) "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. This subdivision shall only apply to thoroughbred stallions
standing at stud in this state before January 1, 2010, and as to
foals conceived in this state before January 1, 2010.
   (j) "Stallion owner" means the person who is the owner of the
eligible thoroughbred stallion as of December 31 of each calendar
year in which the eligible thoroughbred stallion stands at stud in
this state as to all of that sire's foals (1) that were conceived in
this state in that calendar year and (2) that thereafter have
eligible earnings. If the eligible thoroughbred stallion dies prior
to December 31 of a year in which that stallion stands at stud in
this state, the person who owned the eligible thoroughbred stallion
on the date that the stallion died shall be the stallion owner for
that year. This subdivision shall only apply to thoroughbred
stallions standing at stud in this state on or after January 1, 2010,
and as to foals conceived in this state on or after January 1, 2010.

  SEC. 5.  Section 19617.2 of the Business and Professions Code is
amended to read:
   19617.2.  (a) Except as otherwise provided in this chapter, any
association conducting a race meeting that includes thoroughbred
racing shall deposit with the official registering agency 0.54
percent of the total amount handled ontrack in daily conventional and
exotic parimutuel pools resulting from thoroughbred wagers made in
this state. These deposits shall be made at the following intervals:
   (1) For any meeting of 20 racing days or less, the requisite
deposit shall be made not later than seven days immediately following
the last day of that meeting.
   (2) For any meeting of more than 20 racing days, the initial
deposit shall be made not later than 27 racing days after the
commencement of that meeting and every 20 racing days thereafter,
with a final deposit made not later than seven days following the
last day of that meeting. The initial deposit for that meeting shall
be based upon the applicable amount handled during the first 20
racing days of the meeting, and deposits thereafter shall be based
upon the applicable amount handled during the ensuing periods of 20
racing days with the last deposit being based upon the applicable
amount handled from the end of the last 20-racing-day period for
which a deposit has been made to the end of the meeting.
   (b) After deducting a sum equal to 5 percent of the total deposits
made pursuant to subdivision (a) and the total deposits made
pursuant to Section 19602, the amount to compensate the official
registering agency for its administrative cost and for expenses it
incurs for educational, promotional, and research programs, the
official registering agency shall for computational purposes
distribute annually the balance of the deposits in the following
manner:
   (1) To the California-bred race fund, 10 percent to be used for
the promotion of California-bred races and from which purses are to
be provided or supplemented for California Cup Day, other
California-bred races, and, upon the approval of the official
registering agency, races featuring California-breds. This fund shall
be administered by the official registering agency. Any funds not
used for those purposes during any year, up to 1 percent of the total
breeder, stallion, and owner award receipts, shall remain in the
California-bred race fund to be distributed for the purposes of this
paragraph the following year. Any funds remaining thereafter shall be
redistributed to augment the funds referred to in subdivision (c),
and shall be allocated to the breeder fund and to the stallion fund
as provided in that subdivision. It is the intent of the Legislature
that all funds used for purses shall supplement and not supplant
existing purses for California-breds.
   (2) To the owner fund for the purpose of owner premiums pursuant
to Section 19614.4.
   (3) To the California-bred bonus program, 15 percent of the amount
remaining to be used for the payment of bonuses to California-bred
horses in maiden allowance races in California. This bonus program
shall be administered by the official registering agency.
   (c) The funds remaining after the distributions made pursuant to
subdivision (b) shall be distributed as follows:
   (1) To the breeder fund 75 percent, from which breeder awards are
to be paid.
   (2) To the stallion fund 25 percent, from which stallion awards
are to be paid.
   (d) The official registering agency shall make the following
payments to the owner, breeder, and stallion owner so as to encourage
agriculture and the breeding of higher quality horses in this state:

   (1) The owner shall be paid an owner premium pursuant to Section
19614.4.
   (2) The breeder shall be paid a breeder award equal to the
quotient for the breeder fund multiplied by the eligible earnings of
the horse bred by the breeder.
   (3) The stallion owner shall be paid a stallion award equal to the
quotient for the stallion fund multiplied by the eligible earnings
of the stallion owner's eligible thoroughbred stallion.
   (4) Owner premiums for California-bred horses shall be listed in
the racing program alongside the advertised purse, and shall be
distributed to the owner pursuant to Section 19614.4 at the same time
as the purse.
   (5) The breeder and stallion awards shall be paid not later than
March 31 of the calendar year immediately following the calendar year
for which the awards or premiums were earned.