BILL ANALYSIS Ó
Bill No: AB
1303
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Lou Correa, Chair
2013-2014 Regular Session
Staff Analysis
AB 1303 Author: Hall
As Amended: February 13, 2014
Hearing Date: March 4, 2014
Consultant: Art Terzakis
SUBJECT
Horse Racing: fairs: satellite wagering
DESCRIPTION
AB 1303 allows a racing association to enter into an
agreement to operate a live race meet at a fair (Alameda
County Fair) in the northern zone provided the California
Horse Racing Board (CHRB) grants approval. Additionally,
it extends by three years an existing sunset date to allow
a thoroughbred racing association in the northern zone to
deduct up to 4% of the in-state satellite wagering handle
to off-set simulcast operating expenses. Specifically,
this measure:
1)Grants the CHRB the authority to allocate racing days to
a fair in the northern zone to be conducted by the fair
or, at the request of the fair, the CHRB may license a
racing association that was licensed to conduct racing
meetings in California prior to 2010 to conduct live
horse racing at the fair during the dates allocated to
the fair by the CHRB.
2)Requires the live horse racing days, whether conducted by
the fair or the racing association contracting with the
fair, to be subject to the same provisions of law as are
presently applicable to a fair race meeting in the
northern zone.
3)Extends an existing sunset date in Horse Racing Law
relative to certain authorized deductions by a
AB 1303 (Hall) continued
Page 2
thoroughbred racing association in the northern zone from
the in-state satellite wagering handle for simulcast
operating expenses, from December 31, 2013 to December
31, 2016.
4)Contains an urgency clause to take effect immediately.
EXISTING LAW
Article IV, Section 19(b) of the Constitution of the State
of California provides that the Legislature may provide for
the regulation of horse races and horse race meetings and
wagering on the results.
Existing law grants the CHRB the authority to regulate the
various forms of horse racing authorized in this state.
Existing law provides for Northern California off-Track
Wagering Incorporated (NOTWINC) and Southern California
off-Track Wagering Incorporated (SCOTWINC) which are
organizations formed by representatives of the racing
associations, fairs and satellite wagering facilities of
Northern California and Southern California, respectively,
to promote off-track wagering and to equitably divide
expenses associated with off-track betting.
Existing law, until December 31, 2013, requires an amount
not to exceed 4% of the in-state satellite wagering handle
be distributed to either NOTWINC or SCOTWINC, depending on
where the wager was placed (geographically), at which point
it reverts to the previous amount of 2.5%.
BACKGROUND
Purpose of AB 1303: According to the author's office, this
measure is intended to allow Oak Tree Racing Association to
enter into a public/private partnership with the Alameda
County Fair to operate its summer horse racing meet in
Pleasanton, California.
The author's office notes that Oak Tree is a not-for-profit
racing association which was founded in 1969. The
association was formed after a group of southern California
horsemen convinced a reluctant Santa Anita Park management
that there was a very good reason to offer a quality live
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Page 3
horse racing meet in the autumn of the year, especially if
it was a meet run by horse owners who would dedicate the
profits to equine veterinary research and assorted racing
charities.
Oak Tree generally ran their race meet in
September/October, and at one time was considered one of
the finest race meetings in the country. During its live
race meet, Oak Tree would host a series of races for
California bred horses, led by the California Cup Classic.
In addition, Oak Tree hosted the Breeders' Cup at Santa
Anita Park in Arcadia, California in 1986, 1993, 2003, 2008
and 2009. However, there has not been an Oak Tree race
meeting in California since 2010, because the association's
agreement with Santa Anita Park was terminated. Oak Tree is
essentially a racing association without a racetrack to
operate its annual race meet.
The author's office points out that since last being
licensed by the California Horse Racing Board (CHRB), the
Oak Tree board has cast its sights to northern California,
where live horse racing is conducted year round by Golden
Gate Fields and at county and State fairs.
The Oak Tree board has had discussions with various racing
interests in northern California and has determined that
one possible location to rekindle their past history may be
at the Alameda County Fair located in the town of
Pleasanton. The Fair traditionally kicks off the northern
California racing fair circuit each summer with dates in
late June and early July. Pleasanton stays open year-round
for training as well, giving local horsemen an alternative
to Golden Gate and Oak Tree a reason to look favorably upon
a possible long-term partnership where both parties can
benefit.
Staff Comments: AB 1303 is an urgency measure in order to
facilitate Oak Tree's possible lease agreement with the
Alameda County Fair for the 2014 summer racing season
scheduled from 06/19/2014 to 07/06/2014. Additionally, the
urgency provides for the immediate restoration of the
authority granted thoroughbred racing associations to
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deduct up to 4% of the in-state satellite wagering handle
to off-set simulcasting expenses.
The State's racing fair circuit consists of the following
fairs conducting approximately 90+ days of racing: San
Joaquin County (Stockton), Alameda County (Pleasanton),
Sonoma County (Santa Rosa), Humboldt County (Ferndale),
Fresno County (Fresno), and the Los Angeles County Fair
(Pomona). In addition to mixed-breed meets at Cal-Expo
(Sacramento), a harness (Standard-bred) racing meet is
conducted at various times of the year at the Cal-Expo
facility.
PRIOR/RELATED LEGISLATION
SB 398 (Galgiani) 2013-14 Session. Would have allowed
revenue raised by racing associations from their charity
racing days to be used to fund a non-profit corporation or
trust that supports a recognized fair or the Network of
California fairs. In addition, the bill would have
extended a sunset date in Horse Racing Law from December
31, 2013 until December 31, 2016 to allow a thoroughbred
racing association in the northern zone to deduct up to 4%
of the in-state satellite wagering handle for simulcast
operating expenses, as specified. (Governor's veto message
stated, "Under current law any nonprofit organization
engaged in charitable, benevolent or civic activities -
including one supporting fairs - may benefit from revenues
generated from horseracing charity days. Thus, it is not
clear why a separate designation is needed.")
AB 1575 (Governmental Organization Committee), Chapter 650,
Statutes of 2009. Among other things, allowed the CHRB to
increase the amount set aside under existing law for
simulcast operating expenses for a Thoroughbred race meet
in the northern zone and in the central and southern zones
from 2.5% to up to 4%.
SB 16 X2 (Ashburn), Chapter 12, Statutes of 2009-10 Second
Extraordinary Session. Among other things, eliminated the
$40 million floor on the amount the horse racing industry
is required to pay annually for support of the network of
California fairs, the CHRB, and the Kenneth L. Maddy Equine
Analytical Chemistry Laboratory at UC Davis. Other than
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Page 5
the supplemental 1% assessed against fair meets, it also
eliminated the license fee on horse racing wagers and
provided that beginning on July 1, 2009, and annually
thereafter, $32 million shall be appropriated from the
state's General Fund and paid into the F&E Fund for the
financial support of the state's network of fairs.
SUPPORT: As of February 28, 2014:
Oak Tree Racing Association
Alameda County Fair
California Association of Racing Fairs
OPPOSE: None on file as of February 28, 2014.
FISCAL COMMITTEE: Senate Appropriations Committee