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