BILL ANALYSIS
Bill No: SB
1072
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
SB 1072 Author: Calderon
As Introduced: February 17, 2010
Hearing Date: April 27, 1020
Consultant: Chris Lindstrom
SUBJECT
Horse racing: statewide marketing organization.
DESCRIPTION
SB 1072 extends the sunset, from January 1, 2011 to January
1, 2014, on provisions of the Horse Racing Law that
authorize racing associations and fairs that conduct
thoroughbred racing to pay to the owners' organization a
certain portion of the purses for a statewide marketing
program, as specified, to increase interest in horse
racing.
EXISTING LAW
Existing law provides that the California Horse Racing
Board (CHRB) regulates the various forms of horse racing
authorized in this state.
Existing law authorizes a California racing association to
execute an agreement with any other racing association
conducting thoroughbred races in the southern racing zone
to allow the other association to distribute the signal and
accept wagers on out-of-state and international races.
Existing law permits racing associations, fairs, and the
organization responsible for contracting with racing
associations and fairs with respect to the conduct of
racing meetings, to form a private, statewide marketing
SB 1072 (Calderon) continued
Page 2
organization to market and promote thoroughbred and fair
horse racing, and to obtain, provide, or defray the cost of
workers' compensation coverage for stable employees and
jockeys of thoroughbred trainers. Existing law requires
the marketing organization to annually submit to the
California Horse Racing Board a statewide marketing and
promotion plan and a thoroughbred trainers' workers'
compensation defrayal plan for thoroughbred and fair horse
racing. A specified percentage of the amount handled by
each satellite wagering facility is required to be
distributed to the marketing organization for the promotion
of thoroughbred and fair horse racing, and for workers'
compensation defrayal, as specified. Existing law repeals
these provisions on January 1, 2011.
Existing law authorizes California Thoroughbred owners to
deduct a portion of their purse pools to participate in the
"national marketing" association, the National Thoroughbred
Racing Association (NTRA).
Existing law allows uncommitted surplus funds in the horse
racing Marketing Promotion Fund or the horse racing
Workers' Compensation Fund, to be reallocated to any other
fund or account created pursuant to the Horse Racing Law.
BACKGROUND
Purpose of the bill . According to the author's office, "SB
27 (Maddy), Chapter 335, Statutes of 1998, among its
provision, created a private statewide marketing
organization for thoroughbred and fair racing that is
funded by .4 percent of the instate off-track handle. The
funds generated from this distribution are used to market
California horse racing on a statewide basis. The
California Marketing Committee (CMC) is generally
responsible for promoting horse racing in the state by
developing and implementing a marketing plan that will
increase on-track and off-track attendance throughout the
state.
"AB 1736 (Governmental Organization), Chapter 444, Statutes
of 2007, extended the sunset to January 1, 2011. SB 1072
will extend the sunset of the program until January 1,
2014."
Background . The scale and scope of horse racing is
SB 1072 (Calderon) continued
Page 3
governed by statute. Any attempt to expand its market
requires legislative action. The California Legislature
has attempted to address the racing industry's long-term
viability through a number of legislative efforts to expand
the exposure of horse racing to the general public and
enhance horse racing's marketability.
In addition, existing law defines "parimutuel wagering" as
a form of wagering in which bettors purchase tickets of
various denominations on the outcome of one or more horse
races. Existing law requires racing associations to deduct
a specified percentage of the total amount wagered on each
race and type of wager, for the purpose of distributing the
amount collected for state license fees, purses,
commissions, and other mandated distributions, as
specified.
SB 27 (Maddy), Chapter 335, Statutes of 1998, created an
authorization to deduct .4 percent of the instate off-track
handle to fund a statewide marketing program to market and
promote thoroughbred racing in the state.
In addition, AB 2931 (Horton), Chapter 922, Statutes 2002,
enacted an authorization to use a portion of the funds from
the statewide marketing program to defray the cost of
workers' compensation insurance for jockeys of thoroughbred
trainers and stable employees, as specified. This
authorization was intended to address a need in the horse
racing industry to offset the escalating costs of workers'
compensation insurance premiums.
Finally, SB 766 (Negrete McLeod), Chapter 616, Statutes of
2009, allows uncommitted surplus funds in the horse racing
Marketing Promotion Fund or the horse racing Workers'
Compensation Fund, to be reallocated to any other fund or
account created pursuant to the Horse Racing Law.
According to the rationale for SB 766, there are two funds
in horse racing that have surpluses, the Marketing
Promotion Fund and the Workers' Compensation Fund. SB 766
allows any surplus in the funds to be transferred to
accounts that are in deficit, such as the Vanning and
Stabling Fund.
SB 1072 extends the sunset date of the statewide marketing
program which, also, helps defray the cost of workers'
compensation insurance for jockeys of thoroughbred trainers
SB 1072 (Calderon) continued
Page 4
and stable employees, as well as, any other fund or account
created in the Horse Racing Law that is in deficit.
PRIOR/RELATED LEGISLATION
SB 766 (Negrete McLeod), Chapter 616, Statutes of 2009 .
Allows uncommitted surplus funds in the horse racing
Marketing Promotion Fund or the horse racing Workers'
Compensation Fund, to be reallocated to any other fund or
account created pursuant to the Horse Racing Law.
AB 1736 (Governmental Organization), Chapter 444, Statutes
of 2007 . Extends the sunset date, from January 1, 2008 to
January 1, 2011, on the provision in existing law
authorizing any racing association or fair that conducts
thoroughbred racing to pay to the owners' organization a
certain portion of the purses for a statewide marketing
program, as specified.
SB 124 (Denham), Chapter 130, Statutes of 2005 . Extends
the sunset date, from January 1, 2006 to January 1, 2008,
related to a private statewide marketing organization to
market and promote thoroughbred and fair horse racing in
California from January 1, 2006, to January 1, 2008.
AB 2164 (Plescia), Chapter 80, Statutes of 2004 . Extends a
sunset date, from July 1, 2004 to January 1, 2006, related
to a private statewide marketing organization to market and
promote thoroughbred and fair horse racing in California.
AB 2931 (Horton), Chapter 922, Statutes of 2002 .
Authorizes funds from a designated marketing program, and
also funds used for the purpose of stabling and vanning
horses, to be used to defray the cost workers' compensation
insurance for jockeys of thoroughbred trainers and stable
employees, as specified.
AB 1093 (Briggs), Chapter 933, Statutes of 2001 . Extended
the sunset date, from July 1, 2002 to July 1, 2004, for the
statewide marketing organization to market and promote
thoroughbred and fair horse racing in California.
SB 239 (Perata), 1999-2000 Legislative Session . Would have
authorized the establishment of a nonprofit public benefit
corporation to secure workers' compensation insurance
coverage for licensed trainers, jockeys, apprentice
SB 1072 (Calderon) continued
Page 5
jockeys, exercise riders, and pony riders licensed by the
California Horse Racing Board. (Died in Assembly)
SB 27 (Maddy) Chapter 335, Statutes of 1998 . Established,
until July 1, 2002, a private statewide marketing
organization for thoroughbred and fair racing, as
specified.
SUPPORT : As of April 23, 2010:
California Authority of Racing Fairs (sponsor)
OPPOSE : None on file as of April 23, 2010.
FISCAL COMMITTEE: No.
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