BILL ANALYSIS Ó
SB 398
Page 1
Date of Hearing: July 3, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 398 (Galgiani) - As Amended: April 1, 2013
Policy Committee: Governmental
Organization Vote: 16 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill allows revenue raised by racing associations from
their charity racing days to be distributed to a non-profit
corporation or trust that supports recognized fairs within the
network of California fairs.
FISCAL EFFECT
1)There are no significant state costs associated with this
legislation.
2)Each year, racing associations donate approximately $600,000
to charity. The funding is raised through their charity racing
days. Under current law, at least half of the proceeds from
charity racing days must be distributed to charitable groups
within the horse-racing industry.
COMMENTS
1)Background and Purpose . The author's office points out that
for more than 75 years, horse racing license fees has been the
primary source of funding for fairs. In 2009, SB 16 X2
(Ashburn; Chapter 12, Statutes of 2009-10 Second Extraordinary
Session) provided, among other things, that beginning on July
1, 2009, and annually thereafter, $32 million would be
appropriated from the state's General Fund and paid into the
Fair and Exposition Fund for the financial support of the
network of California fairs. That General Fund support for
fairs was subsequently eliminated in 2011 as part of a package
of cuts designed to help deal with the state's ongoing fiscal
crisis. This budget action eliminated all funding from the
SB 398
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state to support the network of fairs.
The author argues that this bill is intended to give the horse
racing industry the ability to, once again, contribute to the
well-being of California's fairs. However, as written, any
funding would not go to support the majority of fairs in the
state because the authorization is limited to nonprofit
organizations and does not include government entities. Any
funding would likely go to the Western Fairs Association,
which is a trade association and the handful fairs that are
managed by a non-profit organization.
2)California's Network of Fairs includes 80 fair organizations
divided into four categories:
a) 52 DAAs - a state government entity.
b) 23 county fairs - 6 county government and 17
not-for-profit organizations.
c) 2 citrus fruit fairs - not-for-profit organizations.
d) The California Exposition and State Fair (Cal Expo) - a
state agency.
3)Western Fairs Association . Founded in 1922 and incorporated in
1945, Western Fairs Association (WFA) is a non-profit trade
association serving the fair industry throughout the Western
United States and Canada. The primary objective of Western
Fairs Association is to promote the prosperity of fairs
through educational activities, training programs, and
legislative advocacy.
4)Related Legislation . Currently, SB 741 (Cannella) among other
things, would delete provisions requiring satellite wagering
license fees be deposited into a separate account in the Fairs
and Exposition (F&E) Fund for specified purposes and would
instead require certain revenues paid by racing associations
and fairs generated by pari-mutuel wagering and certain
revenues from live races paid by fair racing associations as
license fees be deposited into the F&E Fund for various
purposes, including, among others, capital improvements at
fairgrounds. This bill is currently awaiting hearing in the
Assembly Agriculture Committee.
SB 1227 In 2012, (Negrete McLeod) would have deleted an
existing requirement that 1% of the total amount handled in
daily conventional and exotic pari-mutuel pools be distributed
SB 398
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to the F&E Fund, and instead would have required that those
funds be equally distributed as commissions and to the
horsemen and horsewomen who participated in the racing meet
(as purses). That bill was held on this committee's Suspense
File.
SB 1337 (Vincent), Chapter 904, Statutes of 2002, increased,
from 20% to 40%, the amount of designated charity day racing
proceeds that must be distributed to charities associated
with the horse racing industry. The additional 20
percent must be distributed through a specified nonprofit
corporation or trust as specified, to qualified disabled
jockeys, as defined.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081