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: |75-0 |(May 26, 2009) |SENATE: |33-0 |(June 17, 2010) |
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|COMMITTEE VOTE: |21-0 |(June 23, 2010) |RECOMMENDATION: |concur |
|(Governmental | | | | |
|Organization) | | | | |
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Original Committee Reference: B. & 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
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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.
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,
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official veterinarian, racing veterinarian, associate judge,
placing judge, patrol judge, clerk of scales, clerk of the
course, and any other person acting as an 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.
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Purpose of the bill : According to the author and the sponsor, the
intent of this bill is to address and/or correct the 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 since. Oak Tree
has been known as the "Ambassador of Racing," operating as a
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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.
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
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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, thirty-two
million ($32,000,000) 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: 0005022