BILL ANALYSIS Ó AB 1074 Page 1 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 Page 2 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 AB 1074 Page 3