BILL NUMBER: AB 2011	CHAPTERED
	BILL TEXT

	CHAPTER  562
	FILED WITH SECRETARY OF STATE  SEPTEMBER 24, 2016
	APPROVED BY GOVERNOR  SEPTEMBER 24, 2016
	PASSED THE SENATE  AUGUST 23, 2016
	PASSED THE ASSEMBLY  AUGUST 29, 2016
	AMENDED IN SENATE  AUGUST 19, 2016

INTRODUCED BY   Assembly Member Cooper

                        FEBRUARY 16, 2016

   An act to amend Sections 19607, 19607.1, 19607.2, and 19607.3 of
the Business and Professions Code, relating to horse racing, and
declaring the urgency thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2011, Cooper. Thoroughbred racing: 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, 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 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 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, 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, 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,
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, 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 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.



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 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 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, 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) Notwithstanding Section 19535, the funds distributed
to the organization formed pursuant to Section 19607 shall be used
to 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 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
offsite stabling and vanning program nor any of the entities forming
and operating the organization, except 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 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 auxiliary offsite stabling facilities and 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 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.
   (g) The amount initially deducted and distributed to the
organization shall be 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 2 percent of the total amount handled
by satellite wagering 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.
  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 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. 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 expenses of the organization and compensate the provider
of a board-approved auxiliary facility for offsite stabling and
training of thoroughbred horses in the northern zone. The
organization administering the offsite stabling 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
offsite stabling and vanning program nor any of the entities forming
and operating the organization, except 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 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 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 fair conducting the
thoroughbred or fair racing meeting. 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 auxiliary offsite stabling facilities and 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 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 the 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 19607.2 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 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 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.
  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.