BILL ANALYSIS Ó AB 2011 Page 1 Date of Hearing: April 20, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2011 (Cooper) - As Introduced February 16, 2016 ----------------------------------------------------------------- |Policy |Governmental Organization |Vote:|17 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: No SUMMARY: This bill restructures the funding and administration of the Stabling and Vanning Fund (S & V Fund). In summary, this bill: 1)Increases the amount that may be deducted by a racing association or racing fair in the northern zone for the S & V Fund from 1.25% to 2.0% of the total amount handled by AB 2011 Page 2 satellite wagering facilities. 2)Specifies that 50% of the voting interests of the organization that administers the funds must be a vote of the organization representing thoroughbred horsemen and horsewomen and the other 50% shall be allocated among thoroughbred racing associations and fairs. 3)Specifies that funds distributed to the organization shall pay the organization's expenses and compensate a board-approved auxiliary offsite facility for stabling, training, and vanning of thoroughbred horses in the northern zone. 4)Authorizes the organization to enter into multiyear contracts for auxiliary facilities in the northern zone, pending approval from the board. 5)Allows a thoroughbred racing association or fair in the northern zone that is able to provide the minimum number of stalls required by its racing and meeting license without the use of auxiliary offsite stabling and training facility and vanning program may opt out of this program. AB 2011 Page 3 6)Specifies that the board reserves the right to adjudicate any disputes that arise regarding costs or other matters related to stabling, training or vanning. The board may also request that the organization submit a report detailing receipts and expenditures over the prior two fiscal years. FISCAL EFFECT: Negligible fiscal impact. COMMENTS: 1)Background. Existing law establishes the amount that may be deducted from the pari-mutuel wagering pools of California horseraces. This amount, called the takeout, is the amount deducted from wagers before winnings are paid out to bettors. Currently, California's takeout rate on thoroughbred races is 15.43% for the win, place, and show wagers, and 20.18% for other types of wagers. This takeout is used for specific purposes, defined by law, such as license fees, enforcement fees, owners purses, racing association commissions, marketing, workers' compensation, and vanning and stabling of the horses. 2)Stabling and vanning. The Stabling and Vanning Fund (S & V Fund) exists to help horsemen and horsewomen defray the costs of having to transport and stable their horses at auxiliary training facilities. Currently, up to 1.25% of the total amount handled at satellite wagering facilities at AB 2011 Page 4 thoroughbred races at northern zone fairs or associations are deposited into the S&V Fund. However, revenue from wagering facilities has been in decline, and as a result there has been a significant reduction in money flowing into the S & V Fund. According to the author's office, two licensed auxiliary off-site stabling facilities in northern California (Alameda County Fair and Golden Gate Fields) are operating with deficient balances. 3)Purpose. According to the author, this bill is intended to allow for greater flexibility in the use of the Stabling and Vanning Fund (S&V Fund) to help streamline operations in light of current financial constraints. Without these changes, the S&V fund will continue to be in the red. Analysis Prepared by:Luke Reidenbach / APPR. / (916) 319-2081