BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1074
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          Date of Hearing:   May 1, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                AB 1074 (Atkins) - As Introduced:  February 22, 2013 

          Policy Committee:                              Governmental  
          Organization Vote:                            16 - 0 

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill deletes a January 1, 2014, sunset date for the  
          statewide marketing organization that is responsible for  
          marketing and promoting thoroughbred and fair horse racing. By  
          deleting the sunset date, this bill extends the operation of the  
          California Marketing Committee (CMC) and its related funding  
          indefinitely.

           FISCAL EFFECT  

          Funding for the CMC comes from the instate off-track wagering  
          handle.  Of the amount wagered, .4%  is provided to the CMC for  
          marketing horse racing in the state. In 2013, the CMC will  
          receive approximately $1.8 million for marketing. Eliminating  
          the sunset would result in continuing the annual redirection of  
          the handle.

           COMMENTS  

           1)Purpose  . According to the author, this bill will allow the CMC  
            to establish a long-term marketing plan to promote horse  
            racing in the state.  Past and current legislative sunsets  
            have been somewhat of a hindrance to the CMC because long-term  
            financial commitments could not be made to support programs  
            which were proven to be successful in attracting new fans to  
            the sport.  The CMC will still be required to present to the  
            CHRB at the board's November meeting a verbal report on the  
            statewide marketing and promotion plan for the upcoming  
            calendar year and will still be required to report  
            expenditures to the CHRB on a quarterly basis.









                                                                  AB 1074
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            Supporters note there is enough history and documentation on  
            the books to remove the legislative sunset.  The CMC,  
            supporters argue, has demonstrated they are able to make  
            fiscally responsible business decisions to market and promote  
            California's racing industry.

           2)Statewide Marketing Organization  . SB 27 (Maddy), Statutes of  
            1998, created a private statewide marketing organization for  
            thoroughbred and fair racing funded by .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 to  
            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 $1.8 million for  
            2013.  Current law provides 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.  

           3)Related Legislation  . SB 1072 (Ron Calderon), Chapter 283,  
            Statutes of 2010 extended the sunset date for the CMC from  
            January 1, 2011 to January 1, 2014. In addition, that bill  
            required the marketing organization, on a quarterly basis, to  
            submit to the board a written report that accounts for all  
            receipts and expenditures of the promotion funds for the  
            previous three months.


           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)  
          319-2081 











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