BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de Le�n, Chair


          SB 721 (Padilla) - Horse Racing
          
          Amended: As Introduced          Policy Vote: GO 11-0
          Urgency: No                     Mandate: No
          Hearing Date: April 22, 2013                            
          Consultant: Maureen Ortiz       
          
          This bill does not meet the criteria for referral to the  
          Suspense File.
          

          Bill Summary:  SB 721 repeals obsolete references in the Horse  
          Racing Law relating to horse racing licensing fees.
           
          Fiscal Impact:
           
              Minor, absorbable administrative costs to the CHRB  
              (General)

          Background:  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 was to 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 consequently eliminated in the  
          2011-2012 Budget Act due to the state's growing fiscal problems.  
           References to the license fees still exist in the Business and  
          Professions Code.

          Hollywood Park racetrack, located in Inglewood, first opened in  
          1938 and has gone through several ownership changes in the past  
          10 years.  The track once boasted average daily attendance of  








          SB 721 (Padilla)
          Page 1



          nearly 30,000 as recently as the early 1980s.  Hollywood Park is  
          owned by the Bay Meadows Land Company, which previously  
          purchased 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  
          aces property into a retail and residential complex.  The  
          developer's proposal calls for creating new neighborhoods with  
          parks, office buildings, a hotel, housing, and possible a  
          school.  The exiting Hollywood Park Casino (card club) will also  
          be incorporated into the new project.

          If and when Hollywood Park racetrack closes, the California  
          Horse Racing Board and the industry will have to facilitate the  
          relocation of more than 1,000 thoroughbreds currently based  
          there and also reconfigure racing dates now allocated to the  
          Hollywood Park track.

          Proposed Law:  SB 721 makes code maintenance changes to horse  
          racing law by repealing obsolete references to license fees for  
          racing meetings at fairs.

          Staff Comments:  SB 721 may be used as a vehicle to make  
          statutory changes necessary to reallocate Hollywood Park's race  
          dates and relocate horse training and stabling facilities should  
          the Hollywood Park Racetrack close later this year.