BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 246
                                                                  Page  1

          Date of Hearing:   April 22, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                    AB 246 (Price) - As Amended:  March 25, 2009 

          Policy Committee:                              Governmental  
          Organization Vote:                            19 - 0

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill requires a person licensed to conduct a horse racing  
          meeting to hold in trust the distribution required to be made  
          pursuant to horse racing law until the funds are paid to the  
          various individuals and groups that receive them. Specifically,  
          this bill: 

          1)Provides that a person licensed under horse racing law to  
            conduct a horse racing meeting must hold money in trust until  
            it is distributed.

          2)States that the funds shall not be used by the racing  
            association for any purpose other than for payment to the  
            appropriate distributees. 

          3)Provides that these funds are not the property of the racing  
            association and must be held in a separate depository account  
            until they are distributed.

           FISCAL EFFECT  

          There are no significant costs associated with this legislation.  


           COMMENTS  

           Purpose  . This legislation is in response to distribution  
          problems arising from the recent bankruptcy filing of Magna  
          Entertainment Corporation (MEC), the operators of Golden Gate  
          Fields and Santa Anita Race Track. According to information  
          released by the California Horse Racing Board (CHRB), the  








                                                                  AB 246
                                                                  Page  2

          bankruptcy filing has delayed the distribution of millions of  
          dollars from pari-mutuel wagering that is due to other  
          beneficiaries, including $1.2 million in licensing fees due to  
          the State of California.

          By clarifying that funds wagered at horse races are not the  
          property of the racing association and are simply held in trust  
          by the association, the author hopes to prevent such funds from  
          being caught up in bankruptcy filings or other business  
          difficulties faced by the licensee. 

           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)  
          319-2081