BILL ANALYSIS
AB 1152
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1152 (Anderson)
As Amended June 3, 2010
2/3 vote. Urgency
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|ASSEMBLY: | |(May 26, 2009) |SENATE: |33-0 |(June 17, |
| | | | | |2010) |
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(vote not relevant)
Original Committee Reference: B.,P., & C.P.
SUMMARY : Provides that, if a racetrack (Santa Anita Park)
located in the central zone is not available for use by a
Thoroughbred association (Oak Tree Racing Association) that was
licensed by the California Horse Racing Board (CHRB) to conduct
a live race meet at that racetrack in 2009, the CHRB shall be
authorized to allocate racing dates to that association to be
operated at a racetrack in the central zone or southern zone for
racing in 2010, or thereafter. In addition, corrects
"unforeseen consequences" from previous chaptered legislation.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Provides that notwithstanding any other provision of law,
commencing July 1, 2010, if a racetrack located in the central
zone is not available for use by a Thoroughbred association
that was licensed by the CHRB to conduct a live race meet at
that racetrack in 2009, the CHRB shall be authorized to
allocate racing dates to that association to be operated at a
racetrack in the central zone or the southern zone for racing
in 2010, or thereafter, in accordance with the rules and
regulations of the CHRB.
2)Requires the licensure of outriders by the CHRB pursuant to
the provisions of law listing the persons required to be
licensed who participate in, or have anything to do with, the
racing of horses.
3)Provides that the CHRB may adopt regulations to require
outrider license applicants to pass both a written and an oral
examination and to authorize outriders to exercise the duties
and powers as prescribed by the CHRB.
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4)Deletes the provisions requiring a jockey to have ridden in a
minimum of 1,250 pari-mutuel races conducted in California in
order to be vested in the jockeys' retirement pension program.
5)Exempts California harness racing meetings from participating
in the jockeys' retirement pension program.
6)Requires amounts distributed under certain provisions of law
relating to advance deposit wagering to be proportionally
reduced by an amount equal to 0.00295 multiplied by the amount
handled on advance deposit wagers originating in California
for each harness racing meeting, not to exceed $500,000, and
requires the amount deducted to be distributed to a certain
welfare fund established for the benefit of horsemen and
backstretch personnel, as provided, and the amount remaining,
if any, for the benefit of the horsemen, as specified.
EXISTING LAW :
1)Provides that CHRB regulate the various forms of horse racing
authorized in this state.
2)Authorizes and defines "advance deposit wagering" as a form of
pari-mutuel wagering in which a person "establishes an account
with a CHRB approved betting system or wagering hub where the
account owner provides 'wagering instructions' authorizing the
entity holding the account to place wagers on the owner's
behalf."
3)Under current law, a percentage of advanced deposit wagering
wagers is used to establish and administer a defined
contribution retirement plan for California licensed jockeys
who retired from racing on or after January 1, 2009. The
revenue paid into this fund shall not exceed $1 million
annually.
4)Defines "racing official" as the starter, outrider, timer,
paddock judge, horseshoe inspector, horse
identifier, official veterinarian, racing veterinarian,
associate judge, placing judge, patrol judge, clerk of scales,
clerk of the course, and any other person acting as an
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official at any horse racing meeting.
5)Provides that every steward and racing official shall be
licensed and subject to both written and oral examinations.
6)Provides that CHRB has the authority to allocate racing dates
for horse racing meetings, as it deems appropriate in the
public's interest. Defines "racing days" as days on which a
licensed racing association or fair is authorized by the board
to conduct horse racing.
7)Provides with respect to Thoroughbred racing, that no more
than 44 weeks may be allocated in the northern zone, 42 weeks
in the central zone and seven weeks per year in the southern
zone (Del Mar Thoroughbred Club). Limits a northern racing
fair to no more than 14 days of racing per year and a central
or southern fair to no more than three weeks of racing.
8)Authorizes the CHRB to allocate dates to licensed associations
or racing fairs in the southern or central zone if a venue
used for Thoroughbred racing by an association or racing fair
licensed to conduct Thoroughbred racing in the central zone in
2008 is not available for racing in 2009 or thereafter.
AS PASSED BY THE ASSEMBLY , this bill added physical therapists
(PT) to the individuals who may be shareholders, officers,
directors, or professional employees of a medical or podiatric
medical corporation so long as the sum of all shares owned by
those licensed persons does not exceed 49 percent of the total
number of shares, and so long as the number of those licensed
persons owning shares in the professional corporation so
designated herein does not exceed the number of persons licensed
by the governmental agency regulating the designated
professional corporation.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : This bill was amended in the Senate and the
Assembly-approved provisions of this bill were deleted. The
language contained in this bill has not been heard by the
Assembly Committee on Governmental Organization.
Purpose of the bill : According to the author and the sponsor,
the intent of this bill is to address and/or correct the
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following issues within Horse Racing Law and the industry
itself:
Jockey retirement plans : In 2007, the Legislature passed AB 765
(Evans), Chapter 613, Statutes of 2007, which extended the
authorization for advanced deposit wagering horse racing. A
portion of that bill directed some of the proceeds to fund a
"defined contribution" retirement plan for California
licensed jockeys. At the time, the bill included a vesting
requirement of 1,250 races run in California.
Upon implementing that legislation, the law firm hired by the
CHRB has been informed by the Internal Revenue Service (IRS)
that the vesting requirement is inconsistent with federal law.
A defined contribution plan (e.g., IRA, 401K, etc.) cannot have
a vesting requirement. It must vest with the first dollar
contributed; otherwise, it loses its tax-deferred status.
This bill corrects this problem by removing the vesting
provisions to ensure that the plan is consistent with federal
law and qualifies as a "defined contribution plan".
Classification of racetrack personnel : Additionally, in 2009,
the Legislature passed AB 1575 (Governmental Organization),
Chapter 650, Statutes of 2009, which changed the licensure
classification for outriders from "barn personnel" to "racing
officials". This change was intended to recognize the
significant amount of responsibility that outriders exercise
on-track, working in close communications with the race steward,
and thereby requiring outriders to demonstrate a higher level of
qualification. Unfortunately, the bill had an unexpected effect
of placing outriders in a different collective bargaining unit.
This bill corrects the problem without undoing the intent of AB
1575 of last year. The change reclassifies outriders as
"general racing personnel" who must be licensed. The bill also
specifies that the CHRB may administer written and oral
examinations of outriders to certify that they are
qualified.
Race dates : According to the proponents of this bill, "The Oak
Tree Racing Association has been in operation since 1969, when
they entered into the lease agreement with the owners of the
Santa Anita Race Track. It has been a successful meet ever
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since. Oak Tree has been known as the "Ambassador of Racing,"
operating as a not-for-profit, non-dividend-paying group of
California owners and breeders whose directors serve without
compensation. Oak Tree has contributed over $26 million dollars
in projects benefiting the racing industry. The largest grants
for industry support have included more than $4.6 million
dollars in support of projects at the UC Davis Center for Equine
Health and Performance.
On May 15, 2010, the owners of the Santa Anita Race Track, MI
Developments (MID), voided the contract which allowed Oak Tree
Racing Association to lease the racetrack through 2016. The
contract was void after MID took control of the track through a
reorganization plan of its subsidiary, Magna Entertainment
Corporation (MEC). In March, 2010, MID acquired ownership of
Santa Anita, Golden Gate Fields, and XpressBet, along with other
assets, through bankruptcy proceedings in Delaware from its
subsidiary, MEC. Under bankruptcy law, a new owner is not
required to honor existing leases.
The CHRB, at their last meeting, granted Oak Tree it's racing
dates to allow them to run at an alternative track in either the
central or southern zone. This bill clarifies the right of the
CHRB to award these dates to Oak Tree so they can race at either
Hollywood Park in the central zone or Del Mar in the southern
zone." Officials with Hollywood Park and the Del Mar
Thoroughbred Club have offered their racetracks as host venues
in the event that MID and Oak Tree are unable to reach an
agreement.
Currently, there is a lot of uncertainty within the California
Horse racing industry for various direct and indirect reasons.
There has been a general decline in the number of people
attending and wagering at live horse racetracks in California
due to a number of factors, including increased competition from
other forms of gaming, unwillingness of customers to travel a
significant distance to racetracks and the availability of
off-track wagering. The declining attendance at live horse
racing events has prompted racetracks to rely on revenues from
in-state and out-of-state satellite wagering and account
wagering. Considering all of this, the CHRB must begin to look
at race date alternatives should a licensed California racetrack
decide to cease live racing operations due to the general
declining economics within the business.
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The long-term future of Hollywood Park racetrack is also in
question. On March 19, 2010, a representative of the Hollywood
Park Land Company told the CHRB that plans to demolish the
Inglewood track and develop the 238-acre site are progressing,
but that until the economy improves, racing will continue on a
meet-to-meet basis.
Prior legislation : SB 16 X2 (Ashburn), Chapter 12, Statutes of
2009-10 Second Extraordinary Session, provides among other
things, that beginning on July 1, 2009, and annually thereafter,
$32 million shall be appropriated from the state's General Fund
and paid into the Fair and Exposition Fund for the financial
support of the network of California fairs.
AB 2205 (Garrick), Chapter 448, Statutes of 2008, authorizes the
CHRB to allocate dates to licensed associations or racing fairs
in the southern or central zone if a venue used for Thoroughbred
racing by an association or racing fair licensed to conduct
Thoroughbred racing in the central zone in 2008 is not available
for racing in 2009 or thereafter.
AB 241 (Price), Chapter 594, Statutes of 2007, provides that any
racetrack in the central zone that conducted racing in 2007, but
has since closed may continue to operate a satellite wagering.
If the racetrack site is no longer available for use as a
satellite wagering facility, then the owner of the racetrack may
conduct satellite racing at another location within that city,
subject to approval of CHRB, as specified.
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531
FN: 0004904