BILL ANALYSIS SB 1072 Page 1 Date of Hearing: August 12, 2010 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 1072 (Calderon) - As Amended: August 2, 2010 Policy Committee: Governmental Organization Vote: 18 - 0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill extends the sunset for the statewide horseracing marketing organization from January 1, 2011 to January 1, 2014 and requires the organization to present each November to the California Horse Racing Board (CHRB) a verbal report on their statewide marketing plan for the upcoming year. Specifically, this bill: FISCAL EFFECT 1)Funding for the California Marketing Committee (CMC) comes from the instate off-track wagering handle. 0.4% of the amount wagered is provided to the CMC for marketing horse racing in the state. In 2009, the CMC received approximately $5 million for marketing. Extending the sunset would result in continuing the annual redirection of the handle. 2)Minor and absorbable costs for CMC to produce a semi-annual report on receipts and expenditures and for CHRB to audit and review the reports. COMMENTS 1)Rationale . This bill is intended to create transparency in the statewide marketing organization by requiring the organization to present a marketing plan to the CHRB each year and to submit accounts of their expenditures every six month to the CHRB. This should provide the board with the information they need to ensure that the funds are being spent appropriately and that horse racing in California is being marketed effectively. SB 1072 Page 2 2)Statewide Marketing Organization . SB 27 (Maddy; Chapter 335, Statutes of 1998) created a private statewide marketing organization for thoroughbred and fair racing funded by 0.4% of the instate off-track (satellite wagering) handle. The funds generated from this portion of the takeout are used for marketing California horse racing throughout the state. 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. An underlying assumption of the CMC's Marketing Plan is that it is easier to capture a new fan through an on-track experience than through an off-track visitation to a satellite wagering facility. In 2003, the CMC received approximately $6.1 million to support its marketing efforts but due to reduced handle revenue, it was reduced to approximately $5 million in 2009. Current law provides that the CMC must annually submit to the CHRB a statewide marketing and promotion plan for thoroughbred and fair horse racing that encompasses all geographical zones in the state, including the manner in which funds were expended in the implementation of the plan for the previous calendar year. Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081