BILL ANALYSIS Ó
Bill No: SB
721
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2013-2014 Regular Session
Staff Analysis
SB 721 Author: Padilla
As Introduced: February 22, 2013
Hearing Date: April 9, 2013
Consultant: Art Terzakis
SUBJECT
Horse Racing
DESCRIPTION
SB 721 makes minor code maintenance changes to horse racing
law by repealing obsolete references to license fees for
racing meetings at fairs.
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 California Horse Racing Board
(CHRB) the authority to regulate the various forms of horse
racing authorized in this state.
Existing law (Business & Professions Code Section 19614.5)
authorizes any county or district agricultural association
fair conducting racing meetings for the first time on or
after January 1, 1979, to retain the applicable state
license fee for payment of a capital expense loan incurred
for the purpose of preparing its facilities for horse
racing.
Existing law (Business & Professions Code Section 19530)
provides the CHRB with the authority to allocate racing
weeks to an applicant pursuant to the provisions of the
Horse Racing Law and to specify such racing days, dates and
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hours for horse racing meetings as will be in the public
interest. Existing law (Business & Professions Code
Section 19531) also provides that the CHRB shall make
allocation for racing weeks, including simultaneous racing
between zones, as it deems appropriate.
BACKGROUND
Purpose of SB 721: According to the author's office, some
sections of California law reference horse racing license
fees in conjunction with California fairs despite enactment
of SB 16xx (Ashburn) of 2009. This measure would delete
reference to those license fees.
Additionally, the author's office notes that one of
California's premier horse racing tracks, Hollywood Park,
is likely to close after the 2013 racing season for
residential and commercial development. If the racetrack
closes, legislation would be required to reallocate
Hollywood Park's race dates and relocate horse training and
stabling facilities. The author's office states that this
measure will very likely be the vehicle to address the
necessary statutory changes if Hollywood Park closes this
year.
Comments: Legalized 80 years ago in 1933, horse racing has
a rich and storied history in California. Today, horse
racing in California supports over 50,000 jobs and
contributes over $2.5 billion to the state's economy.
Prior to the passage and enactment of SB 16xx (Ashburn) of
2009, 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 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 16xx 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
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network of California fairs was eliminated in the 2011-2012
Budget due to the state's growing fiscal problems.
Hollywood Park racetrack, located in Inglewood, first
opened in 1938 and has gone through several ownership
changes in the past 10 years. The track was once a
playground for Hollywood celebrities and boasted average
daily attendance of nearly 30,000 as recently as the early
1980s. Hollywood Park is owned by the Bay Meadows Land
Company, which previously bought Bay Meadows racetrack just
south of San Francisco and demolished it in 2008 with plans
for development. The owners intend to close Hollywood Park
racetrack and develop the 238 acre property into a retail
and residential complex. The developer's proposal calls
for creating a new neighborhood with parks, office
buildings and a hotel, housing and possibly a school. The
existing Hollywood Park Casino (card club) will also be
incorporated into the new project.
If and when Hollywood Park racetrack closes, the CHRB and
the industry will have to facilitate the relocation of more
than 1,000 thoroughbreds based there and also reconfigure
racing dates in Southern California.
The CHRB allocated race dates for 2013 at its regular board
meeting in August 2012. During the discussion regarding
the proposed Hollywood Park race dates the issue as to
whether Hollywood Park would run the proposed fall 2013
race dates was raised. After discussion, the CHRB approved
a motion to grant Hollywood Park 2013 race dates
conditioned on the racing association returning to the CHRB
with a commitment to run its allocated fall 2013 race
dates.
PRIOR LEGISLATION
SB 16xx (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
the supplemental 1% assessed against fair meets, it also
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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.
SB 1825 (Kelley) Chapter 342, Statutes of 2000. Provided
that, notwithstanding any other provision of law, if the
total amount paid to the state by racing associations and
fairs pursuant to the Horse Racing Law is less than $40
million in any calendar year, beginning January 1, 2001,
and thereafter, all associations and fairs that conducted
live racing during the year of shortfall shall remit to the
state, on a pro rata basis according to the amount handled
in-state by each association or fair, the amount necessary
to bring the total amount paid to the state to $40 million.
SB 27 (Maddy), Chapter 335, Statutes of 1998. Among other
things, granted major license fee relief ($40 million
annually) and limited out-of-state full-card simulcasting.
Proposition 3 of 1933. Legalized parimutuel wagering on
horse racing in California. With the passage of Proposition
3, the stated purpose of the new law was for the
"encouragement of agriculture and breeding of horses."
Furthermore, Proposition 3 included a "commitment for the
continuous funding of the fairs of California with an
annual allotment of racing revenues to be used for health,
safety and maintenance projects."
SUPPORT: As of April 5, 2013:
Del Mar Thoroughbred Club
Oak Tree Racing Association
OPPOSE: None on file as of April 5, 2013.
FISCAL COMMITTEE: Senate Appropriations Committee
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