BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 732
                                                                  Page  1

          Date of Hearing:   July 6, 2011

                   ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
                                 Isadore Hall, Chair
                    SB 732 (Wyland) - As Amended:  April 11, 2011

           SENATE VOTE  :   39-0
           
          SUBJECT  :   Horse racing: northern zone: vanning of starters.

           SUMMARY  :    Makes changes to existing horse racing law 
          provisions pertaining to offsite stabling and vanning of horses 
          in the northern zone.  Specifically,  this bill  :   

          1)  Deletes the requirement that racing associations in the 
          northern zone provide, at the option of the horse owner, vanning 
          of participating racehorses from any California Horse Racing 
          Board (CHRB) approved offsite stabling facility.  

          2)  Authorizes, with respect to the northern zone and subject to 
          the availability of specified funds, at the option of the horse 
          owner, vanning of participating racehorses from any 
          CHRB-approved offsite stabling facility. 

           EXISTING LAW  :

          1)  Authorizes the CHRB to regulate the various forms of horse 
          racing authorized in this state.

          2)  Provides that, when satellite wagering is conducted on 
          thoroughbred races at associations or fairs in the northern 
          zone, an amount equal to 1.25 percent of the total amount 
          handled by all of those satellite wagering facilities must be 
          deducted from the take-out for the benefit of the "Vanning and 
          Stabling" Fund.  Proceeds therein are distributed to the 
          organization representing the racing associations and horsemen 
          and women for the purpose of providing reimbursement for 
          off-site stabling and vanning at board-approved auxiliary 
          training facilities of licensed racing associations. This is to 
          compensate for the additional stalls beyond the number of usable 
          stalls the association is required to provide under current law.

          3)  Requires the CHRB to determine the number of usable stalls 
          that each racing association or fair must make available and 
          maintain for a racing meeting.  The minimum number of stalls may 








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          be at the site of the racing meeting or at CHRB-approved offsite 
          locations.

          4)  Divides the state into three geographical zones for 
          regulating horse racing (northern zone, central zone and 
          southern zone) and with respect to racing meetings conducted in 
          the northern zone, requires the association or fair conducting 
          the meeting to provide all stabling required by the CHRB without 
          cost to participating horsemen.  

          5)  Requires with respect to northern zone thoroughbred meetings 
          only, the association conducting the meeting to provide, at the 
          option of the horse owner, vanning of participating racehorses 
          from any CHRB-approved offsite stabling facility in the northern 
          zone.  Racing fairs may, but are not required to, provide 
          vanning of participating racehorses from any board-approved 
          offsite stabling facility subject to the availability of funds.

           FISCAL EFFECT  :   None

           COMMENTS  :   

          Over the years, racing has been raiding the Stabling and Vanning 
          Fund to cover the costs of workers' compensation, amongst other 
          things.  Since 2002, upwards of $4 million annually has been 
          deducted from the fund to help defray the cost of workers' 
          compensation coverage for stable employees and jockeys of 
          thoroughbred trainers.  Furthermore, an additional $1 million 
          from the Stabling and Vanning Fund has been diverted to the 
          backstretch employees' welfare fund to provide various services 
          and benefits to backstretch employees.

          The author's office notes that the Stabling and Vanning Fund 
          exists to help horsemen and women defray the costs of having to 
          transport and stable their races horses at auxiliary training 
          facilities.  This bill is intended to allow for greater 
          flexibility in the use of the Stabling and Vanning Fund to help 
          streamline operations in light of current financial constraints. 
           The author's states that this bill provides racing associations 
          the same flexibility currently available to racing fairs by 
          deleting the requirement that they help pay for the vanning or 
          transportation of a race horse from an offsite stabling facility 
          to the racing venue.  The author's office contends that this 
          modification would allow racing associations to use the Fund's 
          support where it will be most efficient.








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          In support  : The Thoroughbred Owners of California (TOC), the 
          sponsor of this bill, points out that "when a racing association 
          conducts live racing, current law mandates that the Stabling and 
          Vanning Fund provide for the subsidization of shipping a race 
          horse(s) from an approved offsite stabling facility to the live 
          racing venue; however, the law makes no such mandate when racing 
          fairs are conducting live racing (e.g., it is left to the 
          discretion of the Fund's management along with other business 
          decisions)."

          The TOC states that "this bill would treat racing associations 
          in the same manner as racing fairs by allowing the Stabling and 
          Vanning Fund the same operational flexibility to allocate its 
          funds to where they may be most efficient depending on horse 
          inventory, vanning and stabling demands, and other operating 
          requirements."

           Prior legislation : SB 766 (Negrete McLeod), Chapter 616, 
          Statutes of 2009, authorized the CHRB to shift money around from 
          various funds dedicated for specific purposes within horse 
          racing that are in surplus, such as the promotions fund and 
          workers' compensation fund, to others that are in deficit, such 
          as the Vanning and Stabling account.

          AB 2103 (Plescia), Chapter 443, Statutes of 2008, extended the 
          sunset date, from January 1, 2009 to January 1, 2014, on a 
          deduction from pari-mutuel wagering on thoroughbred horse racing 
          in order to defray the costs of pay or workers' compensation 
          insurance.

          SB 1805 (Florez), Chapter 883, Statutes of 2006, provided that 
          any funds not used to defray the costs of workers' compensation 
          insurance as described, may also be used to reimburse a racing 
          association for actual costs of safety improvements to racing 
          and training surfaces, health and        safety programs, and 
          research or safety equipment.

          AB 2931 (Horton), Chapter 922, Statutes of 2002, authorized 
          racing associations to use existing industry funds (stabling and 
          vanning and promotion funds) for use in developing a program to 
          offset workers' compensation rates for horse trainers in the 
          state.

          SB 28 (Maddy), Chapter 516, Statutes of 1998, provided that when 








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          satellite wagering is conducted on thoroughbred races at 
          associations or fairs in the central or southern zone, an amount 
          equal to 1.25 percent of the total amount handled by all of 
          those satellite wagering facilities must be deducted from the 
          take-out and distributed to the organization representing the 
          racing associations and horsemen and women for the purpose of 
          providing reimbursement for off-site stabling and vanning at 
          board-approved auxiliary training facilities of licensed racing 
          associations.  This was intended to compensate for additional 
          stalls beyond the number of usable stalls an association is 
          required to provide under existing law.

          SB 1515 (Maddy), Chapter 53, Statutes of 1996, permitted any 
          vanning and stabling reimbursement funds that are not expended 
          during an association or fair horse racing meeting in which they 
          are collected to be allocated to the organization representing 
          racing fairs to offset its costs of maintaining the stalls 
          contracted for by fairs.

          SB 1196 (Thompson), Chapter 80, Statutes of 1995, allowed fairs 
          in the northern zone, subject to the availability of funds, to 
          provide for the vanning of racehorses from any offsite stabling 
          facility.  

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          Thoroughbred Owners of California
           
            Opposition 
           
          None on file

           
          Analysis Prepared by  :    Eric Johnson / G. O. / (916) 319-2531