BILL ANALYSIS Ó AB 1786 Page 1 Date of Hearing: April 6, 2016 ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION Adam Gray, Chair AB 1786 (Cooley) - As Introduced February 4, 2016 SUBJECT: Horse racing: the California Standardbred Sires Stakes Program SUMMARY: Modifies the requirements for Standardbred horses eligible to race in the California Standardbred Sires Stakes Program. Specifically, this bill: 1) Expands eligibility to race in the California Standardbred Sires Stakes Program to include the offspring of registered Standardbred stallions standing in Iowa, Wisconsin, Minnesota, Michigan, or Maine, or the Province of Alberta, Canada. 2) Requires that races be scheduled for two-year-old or three-year-old trotters and would delete the requirement that two- and three-year-old races be divided into colt and filly divisions. 3) Establishes the percentages to be allocated for horses finishing in first through fifth place, inclusive, regardless of the number of starters in the race. AB 1786 Page 2 4) Makes conforming changes. EXISTING LAW: 1) Provides that the California Horse Racing Board (CHRB) is responsible for adopting rules and regulations for the protection of the public and the control of horse racing and pari-mutuel wagering, as well as enforcing all laws, rules, and regulations dealing with horse racing and pari-mutuel wagering. 2) Establishes the California Standardbred Sires Stakes Program for Standardbred horses bred in California, and provides that an offspring of a registered California Standardbred stallion standing in California during an entire breeding season is eligible to race in the program. 3) Requires the CHRB to set a schedule of races for the program in accordance with specified requirements, including, among other things, that races be scheduled by the California Standardbred Sires Stakes Committee, at its discretion, for two-year-old and three-year-old trotters, as specified, and that two- and three-year-old races be divided into colt and filly divisions. 4) Establishes the manner of dividing the purse in California Standardbred sires stakes races, and sets forth the percentages to be allocated for horses placing in the race based on the number of participating starters in a race. AB 1786 Page 3 FISCAL EFFECT: Unknown. COMMENTS: Purpose of the bill: The sponsor of this measure, the California Harness Horsemen's Association, points out that the California Legislature created the California Standardbred Sires Stakes Committee (CSSSC) in 1977 to "encourage agriculture and the breeding of horses in California." In short, the CSSSC's purpose is to provide financial incentives for the breeding and development of Standardbred racehorses. In FY 2014-15, the Standardbred Breeders Program generated approximately $225,000. By law, the CSSSC provides oversight and administration of the Sires Stakes Fund and all related Sires Stakes programs including the California Stallion Register, Sires Stakes eligibility and staked generations, Sires Stakes series races, purses and awards. According to the sponsor, in the last decade, there has been a steep decline in the number of Standardbred foals - which are used exclusively in harness racing - born in California. In 2004 there were 190 Standardbred foals born in California but only 15 in 2015. Breeders have left California for other states that have slot machine revenues to supplement purse pools. The sponsor notes that the shrinking Standardbred breeding industry in California has significantly contributed to a decline of racehorses and a resulting loss of jobs on both breeding farms and racetracks. In 2006, Standardbreds raced over 120 days a year at racetracks in California. Today there AB 1786 Page 4 are only 54 live race days a year, resulting in staffing reductions of 50% or more. Under this measure, the requirements for Standardbred horses to qualify to race in California Sire Stakes races would be modified to allow horses bred in specified states but foaled in California to qualify for entry to race. Supporters state that this bill will create an incentive that will help revive the overall breeding of Standardbred horses on California farms, attract more horses to California, increase the overall horse population, and add more live racing days to the annual calendar. Prior Legislation : AB 280 (Silva), Chapter 98, Statutes of 2011. Changed the definition of a California-bred Standardbred horse to delete the requirement that the Standardbred foal be conceived in California, as specified. AB 1578 (Governmental Organization Committee), Chapter 550, Statutes of 2009. Among other things, required 15 percent of the funds remaining after specified deductions from conventional and exotic pari-mutuel wagering pools resulting from Thoroughbred wagers made in California to be used for the payment of bonuses to California-bred horses in maiden allowance races in California. AB 2538 (Strickland), Chapter 278, Statutes of 2004, changed the AB 1786 Page 5 definition of a California Standardbred horse for these purposes to a Standardbred foal conceived in California by a stallion registered with the California Standardbred Sire Stakes Program, deleting the requirements in existing law that the mare drop the horse in California after the conception. SB 738 (Karnette), Chapter 24, Statutes of 2003, defined a "California bred Standardbred horse" as a Standardbred foal dropped by a mare in California after being conceived in California by a stallion registered with CSSSP. REGISTERED SUPPORT / OPPOSITION: Support California Harness Horseman's Association Golden Bear Racing Opposition None on file AB 1786 Page 6 Analysis Prepared by:Eric Johnson / G.O. / (916) 319-2531