BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 398|
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CONSENT
Bill No: SB 398
Author: Galgiani (D)
Amended: 4/1/13
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 11-0, 4/9/13
AYES: Wright, Nielsen, Berryhill, Calderon, Cannella, Correa,
De Le�n, Galgiani, Hernandez, Lieu, Padilla
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Horse racing: charity days: distribution of
proceeds
SOURCE : California Authority of Racing Fairs
DIGEST : This bill provides that revenue raised by horse
racing associations, from their mandated charity racing days,
may be distributed to a nonprofit corporation or trust that has
as its sole purpose the support of recognized fairs or the
network of California fairs.
ANALYSIS :
Existing law:
1. Provides that each licensed horse racing association shall
designate three to five racing days as charity days by the
licensee for the purpose of distribution of the net proceeds
to charitable beneficiaries.
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2. Provides that at least 20% of the distribution from charity
day racing must be made to charities associated with the
horse racing industry. In addition to this 20%, another 5%
of the distribution must go to a welfare fund established for
the benefit of horsemen, horsewomen and backstretch
personnel, as specified, and another 5% of the distribution
must be provided to a nonprofit corporation assisting
horsemen, horsewomen and backstretch personnel who are
affected adversely as a result of alcohol or substance abuse.
3. Requires that an additional 20% of the distribution from
charity day racing, up to a maximum of $2 million, be
provided as an endowment for a nonprofit corporation or trust
which assists disabled jockeys.
This bill provides that revenue raised by horse racing
associations, from their mandated charity racing days, may be
distributed to a nonprofit corporation or trust that has as its
sole purpose the support of recognized fairs or the network of
California fairs.
Background
Since the early 1940s, California horse racing associations have
been required to conduct charity racing days. By law, each
racing association must conduct a specified portion of its race
meeting for the benefit of charities meeting the statutory
criteria and approval of the California Horse Racing Board
(CHRB). The law also requires that at least 50% of the proceeds
be distributed to charitable groups within the horse racing
industry. On charity racing days, the racing association
furnishes the facilities and personnel necessary for the conduct
of racing. The income from all operations of the race meeting
on charitable racings days, less deductions for actual expenses,
is dedicated to charitable purposes. According to the CHRB,
charity racing day donations in the 2011-12 fiscal year totaled
just over $577,000.00.
Prior to the passage and enactment of SB 16X2 (Ashburn, Chapter
12, Statutes of 2009-10 Second Extraordinary Session), license
fees assessed from the wagers made on horse racing were
deposited to the credit of the Fair and Exposition (F&E) Fund
which, in addition to providing general support for the annual
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budget of the CHRB, supplemented the income of the state's
network of fairs. At that time, the law guaranteed the F&E Fund
would receive $40 million annually from license fees. SB 16X2
eliminated the license fee on wagers as a means of helping the
struggling horse racing industry. In addition, it deleted the
$40 million "guarantee" from law. This amount is, instead,
distributed to the racing associations and horsemen and
horsewomen. The bill also provided that the state funding for
the network of California fairs shall be a continuous
appropriation of $32 million annually from the General Fund.
The $32 million General Fund support for the network of
California fairs was eliminated in the 2011-2012 Budget due to
the state's growing fiscal problems.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 4/19/13)
California Authority of Racing Fairs (source)
ARGUMENTS IN SUPPORT : According to the author's office, in
2011, the General Fund support for fairs, which totaled $32
million, was eliminated as part of a package of cuts designed to
help deal with the state's ongoing fiscal crisis. This bill
intends to give the horse racing industry the ability to, once
again, contribute to the well-being of California's fairs.
MW:d 4/23/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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