Senate BillNo. 1240


Introduced by Senator Hall

February 18, 2016


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

LEGISLATIVE COUNSEL’S DIGEST

SB 1240, as introduced, Hall. Horse racing: thoroughbred racing: 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 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 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%. The bill would establish an auxiliary offsite stabling and training facility and vanning program for thoroughbred races in the 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 compensate the provider of a board-approved auxiliary facility for offsite stabling and training of thoroughbred horses in the 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 also require that the funds be used to cover all or part of the cost of vanning thoroughbred horses in the 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 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 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, or vanning.

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.

(2) 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.

(3) This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 19607 of the Business and Professions
2Code
is amended to read:

3

19607.  

begin insert(a)end insertbegin insertend insertNotwithstanding Sections 19605.8 and 19605.9,
4when satellite wagering is conducted on thoroughbred races at
5associations or fairs in the central or southern zone, an amount not
P3    1to exceedbegin delete 1.25 percentend deletebegin insert 2 percentend insert of the total amount handled by
2all of those satellite wagering facilities shall be deducted from the
3funds otherwise allocated for distribution as commissions, purses,
4and owners’ premiums and instead distributed to an organization
5formed and operated bybegin delete thoroughbred racing associations, fairs
6conducting thoroughbred racing,end delete
begin insert one licensed association from
7each facility in the central and southern zones at which a
8thoroughbred or fair racing meeting is conducted,end insert
and the
9organization representing thoroughbred horsemen andbegin delete horsewomen,
10with each party having meaningful representation on the board of
11the organization, to administer, pursuant to supervision of the
12board, a fund to provide reimbursement for offsite stabling at
13board-approved auxiliary training facilities for additional stalls
14beyond the number of usable stalls the association or fair is
15required to make available and maintain pursuant to Section 19535,
16and for the vanning of starters from these additional stalls on racing
17days for thoroughbred horses.end delete
begin insert horsewomen, for use in accordance
18with Section 19607.1.end insert

begin insert

19(b) A vote of the organization representing thoroughbred
20horsemen and horsewomen shall constitute 50 percent of all voting
21interests on the board of the organization formed and operated to
22administer the fund. The other 50 percent of all voting interests
23shall be allocated among thoroughbred racing associations and
24fairs conducting thoroughbred racing in proportion to the number
25of racing weeks allocated to each thoroughbred racing association
26or fair in the central or southern zone. Any use of funds by the
27organization shall be approved by the affirmative vote of both (1)
28the organization representing thoroughbred horsemen and
29horsewomen, and (2) at least two of the licensed thoroughbred
30racing associations that are part of the organization formed
31pursuant to this section.

end insert
32

SEC. 2.  

Section 19607.1 of the Business and Professions Code
33 is amended to read:

34

19607.1.  

(a) begin deleteThe end deletebegin insertNotwithstanding Section 19535, end insertfunds
35distributed to the organization formed pursuant to Section 19607
36shall be used tobegin delete reimburse racing associations that are operating
37offsite stabling providing additional stalls for the incremental
38increase in operating costs directly resulting from providing the
39stabling.end delete
begin insert compensate the provider of a board-approved auxiliary
40facility for offsite stabling and training of thoroughbred horses in
P4    1 the central or southern zone. The organization administering the
2offsite stabling and vanning program shall submit its proposed
3financial and operational plans for the upcoming calendar year
4to the board for review and approval no later than November 1 of
5the preceding year.end insert
Neither the organization administering the
6offsite stabling and vanning program nor any of the entities forming
7and operating the organization, exceptbegin delete theend deletebegin insert anend insert entity operating the
8begin insert auxiliaryend insert offsite stabling facility where the injury occurred, shall
9be liable for any injury to any jockey, exercise person, owner,
10trainer, or any employee or agent thereof, or any horse occurring
11at any offsite stabling facility.

begin delete

12(b) The funds shall also be used to reimburse horsemen for the
13cost of vanning starting horses from a board-approved auxiliary
14training facility operated by a licensed racing association to the
15track conducting the racing meeting. Horsemen may use carriers
16of their own choice, except that the amount of reimbursement to
17horsemen is limited to the amount that the organization determines
18is generally charged by carriers for vanning from the auxiliary
19training facility to the track conducting the racing meeting. Neither
20the organization administering the offsite stabling and vanning
21program nor any of the entities forming and operating the
22organization, except the entity actually engaged in vanning horses,
23is liable for any injury occurring to any individual or horse during
24vanning from an offsite stabling facility.

end delete
begin insert

25(b) The funds shall also be used to cover all or part of the cost
26of vanning thoroughbred horses from a board-approved auxiliary
27offsite stabling and training facility to start in a thoroughbred race
28at a thoroughbred or fair racing meeting in the central or southern
29zone. The organization shall determine the extent of and manner
30in which compensation will be paid for thoroughbred horses that
31are vanned from the auxiliary facility to the track conducting the
32thoroughbred or fair racing meeting, but the vanning shall be
33made available on a consistent and uniform basis for all
34thoroughbred and fair racing meetings in a given year. Neither
35the organization administering the offsite stabling and vanning
36program nor any of the entities that form and operate the
37organization, except an entity actually engaged in vanning horses,
38is liable for any injury occurring to any individual or horse during
39vanning from an offsite stabling facility.

end insert

P5    1(c) Thebegin delete trainingend deletebegin insert auxiliary offsite stablingend insert facilities and amenities
2provided for offsite stabling and training purposes shall be
3begin insert substantiallyend insert equivalent in character to those provided begin delete during
4racing meetings of the association.end delete
begin insert by the thoroughbred racing
5association or fair conducting the racing meeting.end insert

begin delete

6(d) Upon the request of any party within the organization, the
7board shall adjudicate any dispute regarding costs, or other matters
8relating to the furnishing of offsite stabling or vanning. The board
9may, if necessary, appoint an independent auditor to assist in the
10resolution of disputes. The auditor shall be reimbursed from the
11funds of the organization.

end delete
begin delete

12(e) The organization may maintain a reserve fund of up to 10
13percent of the total estimated annual vanning and stabling costs.
14In addition to the reserve fund, if the funds generated for offsite
15stabling and vanning are insufficient to fully reimburse racing
16associations for expenses incurred during the offsite vanning and
17stabling program, the organization may accumulate sufficient funds
18to fully reimburse those associations for those expenses.

end delete
begin insert

19(d) In order to ensure the long-term availability of facilities for
20offsite stabling and training, the organization may enter into
21multiyear contracts for auxiliary facilities in either the central or
22southern zone. The organization shall submit to the board for its
23approval multiyear contracts it enters into with providers of
24auxiliary facilities for the offsite stabling and training period.
25Contracts not disapproved by the board within 60 days of submittal
26to the board shall be deemed to have been approved by the board.
27Once a multiyear contract has been approved by the board, it shall
28be considered to have been approved for its duration.

end insert
begin insert

29(e) At the request of the board, the organization shall submit a
30report detailing all of its receipts and expenditures over the prior
31two fiscal years and upon request of any party within the
32organization, those receipts and expenditures shall be audited by
33the board.

end insert
begin insert

34(f) In addition to the uses of funds described in subdivisions (a)
35and (b), the organization may use the funds for both of the
36following:

end insert
begin insert

37(1) The organization may maintain a reserve fund of up to 10
38percent of the total estimated annual vanning and auxiliary offsite
39stabling costs. In addition to the reserve fund, if the funds
40generated for the auxiliary offsite stabling facilities and vanning
P6    1are insufficient to fully cover the expenses incurred, the
2organization may, in the future, accumulate sufficient funds to
3fully cover those expenses.

end insert
begin insert

4(2) Pay back commissions, purses, and owners’ premiums to
5the extent the deductions made pursuant to Section 19607 exceed
6in any year the amount of funds necessary to achieve the objectives
7of the organization.

end insert
begin delete

8(f)

end delete

9begin insert(g)end insert The amount initially deducted and distributed to the
10organization shall bebegin delete 1.25end deletebegin insert 2end insert percent of the total amount handled
11by satellite wagering facilities authorized under this article in the
12central or southern zone on thoroughbred racing, but that allocation
13may be adjusted by the board, in its discretion. However, the
14adjusted amount may not exceedbegin delete 1.25end deletebegin insert 2end insert percent of the total amount
15handled by satellite wageringbegin delete facilities, to pay expenses and
16maintain the reserve fund for the continuing support of the
17program.end delete
begin insert facilities.end insert

begin insert

18(h) The board shall reserve the right to adjudicate any disputes
19that arise regarding costs or other matters relating to the
20furnishing of offsite stabling or vanning. Notwithstanding any
21other law, the board shall maintain all powers necessary and
22proper to ensure that offsite stabling and vanning, as provided for
23in this chapter, is conducted in a manner that protects the public
24and serves the best interests of horse racing.

end insert
25

SEC. 3.  

No reimbursement is required by this act pursuant to
26Section 6 of Article XIII B of the California Constitution because
27the only costs that may be incurred by a local agency or school
28district will be incurred because this act creates a new crime or
29infraction, eliminates a crime or infraction, or changes the penalty
30for a crime or infraction, within the meaning of Section 17556 of
31the Government Code, or changes the definition of a crime within
32the meaning of Section 6 of Article XIII B of the California
33Constitution.

34

SEC. 4.  

This act is an urgency statute necessary for the
35immediate preservation of the public peace, health, or safety within
36the meaning of Article IV of the Constitution and shall go into
37immediate effect. The facts constituting the necessity are:

38In order to ensure that the horse racing industry may continue,
39uninterrupted, to provide auxiliary offsite stabling and vanning in
P7    1an effective manner that protects the public safety, it is necessary
2that this act take effect immediately.



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