BILL NUMBER: AB 2011 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 19, 2016
INTRODUCED BY Assembly Member Cooper
FEBRUARY 16, 2016
An act to amend Sections 19607.2 19607,
19607.1, 19607.2, and 19607.3 of the Business and Professions
Code, relating to horse racing. racing, and
declaring the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 2011, as amended, Cooper. Horse racing: thoroughbred
Thoroughbred racing: northern zone:
northern, central, and southern zones: auxiliary
offsite stabling, training, and vanning.
(1) The Horse Racing Law requires, when satellite wagering is
conducted on thoroughbred races at associations or fairs in the
northern zone, northern, central, or southern
zone, that an amount not to exceed 1.25% of the total amount
handled by all of those satellite wagering facilities be deducted
from the funds otherwise allocated for distribution as commissions,
purses, and owners' premiums and instead be distributed to an
organization formed and operated by thoroughbred racing associations,
fairs conducting thoroughbred racing, and the organization
representing thoroughbred horsemen, horsemen
and horsewomen, to administer a fund to provide reimbursement
for offsite stabling at California Horse Racing Board-approved
auxiliary training facilities for additional stalls beyond the number
of usable stalls the association or fair is required to make
available and maintain, and for the vanning of starters from these
additional stalls on racing days for thoroughbred horses.
This bill would increase the amount that is required to be
deducted to an amount not to exceed 2% in the northern, central,
and southern zones, and would provide that this
amount, amount in the northern zone, if adjusted
by the board, may be a different percentage of the handle for
different associations and fairs, but only if all the associations
and fairs agree to the differing percentages. The bill would
establish an auxiliary offsite stabling and training facility and
vanning program for thoroughbred races in the northern zone.
northern, central, and southern zones. The bill
would revise and recast the provisions governing the organization
formed and operated to administer the fund to include, among other
things, a 50-50 percentage allocation of specified voting interests
on the board of the organization, the use of funds to pay the
organization's expenses and compensate the provider of a
board-approved auxiliary facility for offsite stabling and training
of thoroughbred horses in the northern zone,
northern, central, and southern zones, and the requirement that
the organization submit its proposed financial and operational plans
for the upcoming calendar year to the board for review no later than
November 1 of the preceding year. The bill would require, at
the request of the board, the organization to submit a report
detailing all of its receipts and expenditures over the prior 2
fiscal years and, upon request of any party within the organization,
that those receipts and expenditures be audited by an independent 3rd
party selected by the board at the organization's expense.
The bill would also require that the funds be used to cover all or
part of the cost of vanning thoroughbred horses in the
northern northern, central, or southern zone
from a board-approved auxiliary offsite stabling and training
facility and would authorize the organization to enter into multiyear
contracts for auxiliary facilities in the northern
northern, central, or southern zone subject to
specified conditions. The bill would authorize the organization to
use the funds to pay back commissions, purses, and owners' premiums
to the extent that the deductions made exceed in any year the amount
of the funds necessary to achieve the objectives of the organization.
The bill would also authorize a thoroughbred racing association or
fair in the northern zone to opt out of the auxiliary offsite
stabling and training facility and vanning program, as specified. The
bill would provide that the board shall reserve the right to
adjudicate any disputes that arise regarding costs, or other matters,
relating to the furnishing of offsite stabling, training,
stabling or vanning, as specified.
(2) By expanding the provisions of the Horse Racing Law, a
violation of which is a crime, the bill would create new crimes and
would thereby impose a state-mandated local program.
(3) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
(4) This bill would declare that it is to take effect immediately
as an urgency statute.
Vote: majority 2/3 . Appropriation:
no. Fiscal committee: yes. State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 19607 of the
Business and Professions Code is amended to read:
19607. (a) Notwithstanding Sections 19605.8
and 19605.9, when satellite wagering is conducted on thoroughbred
races at associations or fairs in the central or southern zone, an
amount not to exceed 1.25 percent 2 percent
of the total amount handled by all of those satellite wagering
facilities shall be deducted from the funds otherwise allocated for
distribution as commissions, purses, and owners' premiums and instead
distributed to an organization formed and operated by
thoroughbred racing associations, fairs conducting thoroughbred
racing, one licensed association from each facility in
the central and southern zones at which a thoroughbred or fair
racing meeting is conducted, and the organization representing
thoroughbred horsemen and horsewomen, with each party having
meaningful representation on the board of the organization, to
administer, pursuant to supervision of the board, a fund to provide
reimbursement for offsite stabling at board-approved auxiliary
training facilities for additional stalls beyond the number of usable
stalls the association or fair is required to make available and
maintain pursuant to Section 19535, and for the vanning of starters
from these additional stalls on racing days for thoroughbred horses.
for use in accordance with Section 19607.1.
(b) A vote of the organization representing thoroughbred horsemen
and horsewomen shall constitute 50 percent of all voting interests on
the board of the organization formed and operated to administer the
fund. The other 50 percent of all voting interests shall be allocated
equally among the other members of the organization. Any use of
funds by the organization shall be approved by the affirmative vote
of both (1) the organization representing thoroughbred horsemen and
horsewomen, and (2) at least two of the licensed thoroughbred racing
associations that are part of the organization formed pursuant to
this section, provided, however, that, if there are only two licensed
thoroughbred racing associations that are part of the organization
formed pursuant to this section, the vote of at least one of those
two licensed thoroughbred racing associations shall be sufficient.
SEC. 2. Section 19607.1 of the Business
and Professions Code is amended to read:
19607.1. (a) The Notwithstanding Section
19535, the funds distributed to the organization formed
pursuant to Section 19607 shall be used to reimburse racing
associations that are operating offsite stabling providing additional
stalls for the incremental increase in operating costs directly
resulting from providing the stabling. pay the
expenses of the organization and compensate the provider of a
board-approved auxiliary facility for offsite stabling and
training of thoroughbred horses in the central or southern zone. The
organization administering the offsite stabling and vanning program
shall submit its proposed financial and opera tional plans
for the upcoming calendar year to the board for review no later than
November 1 of the preceding year. Neither the organization
administering the offsite stabling and vanning program nor any of the
entities forming and operating the organization, except the
an entity operating the auxiliary
offsite stabling facility where the injury occurred, shall be liable
for any injury to any jockey, exercise person, owner, trainer, or any
employee or agent thereof, or any horse occurring at any offsite
stabling facility.
(b) The funds shall also be used to reimburse horsemen for the
cost of vanning starting horses from a board-approved auxiliary
training facility operated by a licensed racing association to the
track conducting the racing meeting. Horsemen may use carriers of
their own choice, except that the amount of reimbursement to horsemen
is limited to the amount that the organization determines is
generally charged by carriers for vanning from the auxiliary training
facility to the track conducting the racing meeting. Neither the
organization administering the offsite stabling and vanning program
nor any of the entities forming and operating the organization,
except the entity actually engaged in vanning horses, is liable for
any injury occurring to any individual or horse during vanning from
an offsite stabling facility.
(b) The funds shall also be used to cover all or part of the cost
of vanning thoroughbred horses from a board-approved auxiliary
offsite stabling and training facility to start in a thoroughbred
race at a thoroughbred or fair racing meeting in the central or
southern zone. The organization shall determine the extent of and
manner in which compensation will be paid for thoroughbred horses
that are vanned from the auxiliary facility to the track conducting
the thoroughbred or fair racing meeting, but the vanning shall be
made available on a consistent and uniform basis for all thoroughbred
and fair racing meetings in a given year. Neither the organization
administering the offsite stabling and vanning program nor any of the
entities that form and operate the organization, except an entity
actually engaged in vanning horses, is liable for any injury
occurring to any individual or horse during vanning from an offsite
stabling facility.
(c) The training auxiliary offsite
stabling facilities and amenities provided for offsite stabling
and training purposes shall be substantially equivalent
in character to those provided during racing meetings of the
association. by the thoroughbred racing association
or fair conducting the racing meeting.
(d) Upon the request of any party within the organization, the
board shall adjudicate any dispute regarding costs, or other matters
relating to the furnishing of offsite stabling or vanning. The board
may, if necessary, appoint an independent auditor to assist in the
resolution of disputes. The auditor shall be reimbursed from the
funds of the organization.
(e) The organization may maintain a reserve fund of up to 10
percent of the total estimated annual vanning and stabling costs. In
addition to the reserve fund, if the funds generated for offsite
stabling and vanning are insufficient to fully reimburse racing
associations for expenses incurred during the offsite vanning and
stabling program, the organization may accumulate sufficient funds to
fully reimburse those associations for those expenses.
(d) In order to ensure the long-term availability of facilities
for offsite stabling and training, the organization may enter into
multiyear contracts for auxiliary facilities in either the central or
southern zone. The organization shall submit to the board for its
approval multiyear contracts it enters into with providers of
auxiliary facilities for the offsite stabling and training. Contracts
not disapproved by the board within 60 days of submittal to the
board shall be deemed to have been approved by the board. Once a
multiyear contract has been approved by the board, it shall be
considered to have been approved for its duration.
(e) At the request of the board, the organization shall submit a
report detailing all of its receipts and expenditures over the prior
two fiscal years and, upon request of any party within the
organization, those receipts and expenditures shall be audited by an
independent third party selected by the board at the expense of the
organization.
(f) In addition to the uses of funds described in subdivisions (a)
and (b), the organization may use those funds to do both of the
following:
(1) Maintain a reserve fund of up to 10 percent of the total
estimated annual vanning and auxiliary offsite stabling costs. In
addition to the reserve fund, if the funds generated for the
auxiliary offsite stabling facilities and vanning are insufficient to
fully cover the expenses incurred, the organization may, in the
future, accumulate sufficient funds to fully cover those expenses.
(2) Pay back commissions, purses, and owners' premiums to the
extent the deductions made pursuant to Section 19607 exceed in any
year the amount of funds necessary to achieve the objectives of the
organization.
(f)
(g) The amount initially deducted and distributed to the
organization shall be 1.25 percent 2 percent
of the total amount handled by satellite wagering facilities
authorized under this article in the central or southern zone on
thoroughbred racing, but that allocation may be adjusted by the
board, in its discretion. However, the adjusted amount may not exceed
1.25 percent 2 percent of the total
amount handled by satellite wagering facilities, to pay
expenses and maintain the reserve fund for the continuing support of
the program. facilities.
(h) The board shall reserve the right to adjudicate any disputes
that arise regarding costs or other matters relating to the
furnishing of offsite stabling or vanning. Notwithstanding any other
law, the board shall maintain all powers necessary and proper to
ensure that offsite stabling and vanning, as provided for in this
chapter, is conducted in a manner that protects the public and serves
the best interests of horse racing.
SECTION 1. SEC. 3. Section 19607.2
of the Business and Professions Code is amended to read:
19607.2. Notwithstanding Section 19605.8, when satellite wagering
is conducted on thoroughbred races at associations or fairs in the
northern zone, an amount not to exceed 2 percent of the total amount
handled by all of those satellite wagering facilities,
facilities shall be deducted from the funds
otherwise allocated for distribution as commissions, purses, and
owners' premiums and instead be distributed to an organization formed
and operated by thoroughbred racing associations, fairs conducting
thoroughbred racing, and the organization representing thoroughbred
horsemen and horsewomen, for use pursuant to Section 19607.3. A vote
of the organization representing thoroughbred horsemen and horsewomen
shall constitute 50 percent of all voting interests on the board of
the organization formed and operated to administer the fund. The
other 50 percent of all voting interests shall be allocated among
thoroughbred racing associations and fairs conducting thoroughbred
racing in a manner that provides meaningful representation on the
governing board of the organization for thoroughbred racing
associations and fairs conducting thoroughbred racing, except as
provided in subdivision (h) of Section 19607.3.
SEC. 2. SEC. 4. Section 19607.3 of
the Business and Professions Code is amended to read:
19607.3. (a) Notwithstanding Section 19535, the funds distributed
to the organization formed pursuant to Section 19607.2 shall be used
to pay the organization's expenses of the
organization and compensate the provider of a board-approved
auxiliary offsite facility for stabling,
training, and vanning offsite stabling and training
of thoroughbred horses in the northern zone. The organization
administering the auxiliary offsite stabling
and training facility and vanning program shall
submit its proposed financial and operational plans for the upcoming
calendar year to the board for review no later than November 1 of the
preceding year. Neither the organization administering the
auxiliary offsite stabling and training facility
and vanning program nor any of the entities forming and
operating the organization, except the an
entity operating the auxiliary offsite stabling and
training facility where the injury occurred, shall be
liable for any injury to any jockey, exercise person, owner, trainer,
or any employee or agent thereof, or any horse occurring at any
auxiliary offsite stabling and training
facility.
(b) The funds shall also be used to cover all or part of the cost
of vanning thoroughbred horses from a board-approved auxiliary
offsite stabling and training facility to the track to
start in a thoroughbred race at a thoroughbred or fair
racing meeting in the northern zone. The organization shall determine
the extent of and manner in which compensation will be paid for
thoroughbred horses that are vanned from the auxiliary facility to
the track or the fair conducting the thoroughbred
or fair racing meeting. Neither the organization administering the
auxiliary offsite stabling and training
facility and vanning program nor any of the entities
forming and operating that form and operate
the organization, except an entity actually engaged in vanning
horses, is liable for any injury occurring to any individual or horse
during vanning from an offsite stabling and training
facility.
(c) The auxiliary offsite stabling and training
facilities and the amenities provided for offsite
stabling and training purposes shall be substantially equivalent in
character to those provided by the thoroughbred racing association or
fair conducting the racing meeting.
(d) In order to ensure the long-term availability of facilities
for offsite stabling and training, the organization may enter into
multiyear contracts for auxiliary facilities in the northern zone.
The organization shall submit to the board for its approval
the multiyear contracts that it enters
into with providers of auxiliary facilities for the
offsite stabling and training. Contracts not disapproved by the board
within 60 days of submittal to the board shall be deemed to have
been approved by the board. Once a multiyear contract has been
approved by the board, it shall be considered to have been approved
for its duration.
(e) At the request of the board, the organization shall submit a
report detailing all of its receipts and expenditures over the prior
two fiscal years and, upon request of any party within the
organization, those receipts and expenditures shall be audited by
the board. an independent third party
selected by the board at the expense of the organization.
(f) In addition to the uses of the funds described in subdivisions
(a) and (b), the organization may use the
those funds for to do both of the
following:
(1) Maintain a reserve fund of up to 10 percent of the total
estimated annual vanning and auxiliary offsite stabling and
training facility costs. In addition to the reserve fund,
if the funds generated for the auxiliary offsite stabling
and training facilities and vanning are insufficient to
fully cover the expenses incurred, the organization may, in the
future, accumulate sufficient funds to fully cover those expenses.
(2) Pay back commissions, purses, and owners' premiums to the
extent the deductions made pursuant to Section 19607.2 exceed in any
year the amount of funds necessary to achieve the objectives of the
organization.
(g) The amount initially deducted and distributed to the
organization pursuant to Section 19607.2 may be adjusted by the
board, in its discretion. However, the adjusted amount may
shall not exceed 2 percent of the total amount
handled by satellite wagering facilities. The amount deducted and
distributed to the organization as adjusted by the board may be a
different percentage of the handle for different associations and
fairs conducting thoroughbred racing meetings in the northern zone,
but only if all the associations and fairs agree to the differing
percentages.
(h) A thoroughbred racing association or fair in the northern zone
that the board determines is able to provide the minimum
number of stalls required by its racing meeting license without the
use of any auxiliary offsite stabling and training facility and
vanning program may opt out of that program, in which case the
deduction described in Section 19607.2 shall not apply during the
live racing meeting conducted by the association or fair until such
time as the association or fair opts back into the auxiliary offsite
stabling and training facility and vanning program. Any thoroughbred
racing association or fair in the northern zone that opts out of the
auxiliary offsite stabling and training facility and vanning program
shall not have any voting interest therein until such time as the
association or fair opts back into the program. The organization
shall establish reasonable procedures and timelines for the giving of
notice to the organization by a thoroughbred racing association or
fair that elects to opt out of the auxiliary offsite stabling and
training facility and vanning program.
(i) The board shall reserve the right to adjudicate any disputes
that arise regarding costs, or other matters, relating to the
furnishing of offsite stabling, training,
stabling or vanning. Notwithstanding any other law, the board
shall maintain all powers necessary and proper to ensure that offsite
stabling, training, stabling and
vanning, as provided for in this article,
chapter is conducted in a manner that protects the public and
serves the best interests of horse racing.
SEC. 3. SEC. 5. No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution because the only costs that may be incurred
by a local agency or school district will be incurred because this
act creates a new crime or infraction, eliminates a crime or
infraction, or changes the penalty for a crime or infraction, within
the meaning of Section 17556 of the Government Code, or changes the
definition of a crime within the meaning of Section 6 of Article XIII
B of the California Constitution.
SEC. 6. This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
In order to ensure that the horse racing industry may continue,
uninterrupted, to provide offsite stabling and vanning in an
effective manner that protects the public safety, it is necessary
that this act take effect immediately.