BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 721|
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THIRD READING
Bill No: SB 721
Author: Padilla (D)
Amended: As introduced
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 : 7-0, 4/22/13
AYES: De Le�n, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SUBJECT : Horse racing: license fee retention
SOURCE : Del Mar Thoroughbred Club
Oak Tree Racing Association
DIGEST : This bill makes minor code maintenance changes to
horse racing law by repealing obsolete references to license
fees for racing meetings at fairs.
ANALYSIS :
Existing law:
1. 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.
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2. Provides the California Horse Racing Board (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 hours for horse racing meetings as
will be in the public interest. Existing law also provides
that the CHRB shall make allocation for racing weeks,
including simultaneous racing between zones, as it deems
appropriate.
This bill makes minor code maintenance changes to horse racing
law by repealing obsolete references to license fees for racing
meetings at fairs.
Background
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 16X2 (Ashburn, 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 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 2011-12 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 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
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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 16X2 (Ashburn, Chapter 12, Statutes of
2009-10, 2nd 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 University of California,
Davis. Other than 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee, there are
minor, absorbable costs to the CHRB (General).
SUPPORT : (Verified 4/23/13)
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Del Mar Thoroughbred Club (co-source)
Oak Tree Racing Association (co-source)
ARGUMENTS IN SUPPORT : 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
16X2 (Ashburn, 2009). This bill deletes 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 bill will very likely be the vehicle to address
the necessary statutory changes if Hollywood Park closes this
year.
MW:k 4/23/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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