BILL NUMBER: AB 1575 AMENDED BILL TEXT AMENDED IN SENATE AUGUST 31, 2009 INTRODUCED BYCommittee on Governmental Organization(Price (Chair), Coto, Evans, Galgiani, Hall, Hill, Lieu, Mendoza, Portantino, Torres, and Torrico)Committee on Governmental Organization ( Coto (Chair), Anderson, Chesbro, Cook, De Leon, Evans, Galgiani, Hall, Hill, Jeffries, Lieu, Mendoza, Nestande, V. Manual Perez, Portantino, Silva, Torres, Torrico, and Tran ) MARCH 23, 2009 An act to amend Sections 19510and 19513, 19513, 19605.7, 19605.9, and 19606.3 of the Business and Professions Code, relating to horse racing, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 1575, as amended, Committee on Governmental Organization. Horseracing officials: stewards, outriders, and official veterinarians.racing.(1) ExistingExisting law, the Horse Racing Law, provides for the operation of live horse racing in this state and for wagering thereon, and for the operation of satellite wagering facilities, subject to regulation and oversight by the California Horse Racing Board, as specified. Existing law provides that every steward and racing official shall be licensed and subject to both written and oral examinations, as specified. "Racing official" is defined to include official veterinarians. In general,personsa person whoparticipateparticipates in a horse race without proper licensureareis guilty of a misdemeanor. This bill would include outriders in the definition of racing officials thus requiring them to be licensed and examined, as specified. The bill would also provide that oral examinations for stewards shall be conducted by a panel of not less than 3 members of the board, while oral examinations for official veterinarians shall be conducted by a panel of not less than one member of the board, the equine medical director, and the executive director of the board. By expanding the scope of an existing crime, this bill would impose a state-mandated local program.(2) Under existing law, revenues distributed to the state as license fees from horse racing are required to be deposited in the Fair and Exposition Fund and are continuously appropriated to the Department of Food and Agriculture for various regulatory and general governmental purposes.Because this bill would revise the amount of money deposited into, and distributed from, that fund, it would make an appropriation.Existing law requires that the total percentage deducted from wagers at satellite wagering facilities in the northern zone be the same as deductions for wagers at the racetrack where the racing meeting is being conducted and amounts deducted are to be distributed as specified. Existing law provides that, for thoroughbred meetings, 2.5% of the amount handled by the satellite wagering facility on conventional and exotic wagers, or the amount of actual operating expenses, as determined by the board, whichever is less, shall be distributed to a specified organization formed to operate the audiovisual signal system. This bill would instead require, for thoroughbred meetings from January 1, 2010, until December 31, 2013, an amount no less than in existing law, nor more than 4% of the amount handled by the satellite wagering facility on conventional and exotic wagers, to be distributed to that specified organization with the mutual consent of the racing association, horsemen's organization, and the board, as specified. The bill would require the distribution to revert on January 1, 2014, to that in existing law. Existing provisions of law continuously appropriate certain satellite wagering moneys from wagering on thoroughbred racing at the 22nd District Agricultural Association for supplementing purses at fair meetings in Los Angeles and Orange Counties, as specified. This bill would instead provide for the payment of that money to an unspecified racing fair in the County of Los Angeles for supplementing purses, as specified. Existing law requires, on July 1, 2009, and each July 1 thereafter, the transfer of $32,000,000 from the General Fund to be paid into the State Treasury to the credit of the separate account of the Fair and Exposition Fund created for satellite wagering revenues, and to continuously appropriate those moneys for allocation for the financial support of the network of California fairs. Existing law requires the first $1,100,000 of all funds for distribution as purses generated at satellite wagering facilities statewide from wagering on thoroughbred horse racing to be deposited in a special account in the Fair and Exposition Fund and continuously appropriated to the Department of Food and Agriculture for supplementing purses at fair meetings to achieve certain specified purposes. This bill would instead authorize the Secretary of Food and Agriculture to allocate up to $1,100,000 of those General Fund moneys to supplement purses at fair meetings to achieve those specified purposes. The bill would require the secretary to make these allocations part of the annual expenditure plan the secretary is required to submit to the Joint Committee on Fairs Allocation and Classification. Because this bill would authorize the expenditure of money from the continuously appropriated Fair and Exposition Fund for a new purpose, the bill would make an appropriation.(3) TheThe 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. Vote:majority2/3 . Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 19510 of the Business and Professions Code is amended to read: 19510. (a) Every steward and racing official not required to be licensed under Article 4 (commencing with Section 19480) shall be licensed by the board pursuant to this article. Any license issued pursuant to this article shall include a current photograph of the licensed person. (b) No person required to be licensed pursuant to this article may participate in any capacity in any horse race meeting without a valid and unrevoked license. The board shall determine the fixed license fee which shall be paid in order to receive a license pursuant to this article. (c) As used in this section, "racing official" means 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 official at any horse racing meeting. SEC. 2. Section 19513 of the Business and Professions Code is amended to read: 19513. (a) The board shall prepare both written and oral examinations. All examinations shall be standardized and, in the case of oral examinations, tape recorded. Written examinations may be administered by members of the board staff. Oral examinations for stewards shall be conducted by a panel of not less than three board members. Oral examinations for official veterinarians shall be conducted by a panel of not less than one board member, the equine medical director, and the executive director. (b) The board shall provide a detailed outline of the subjects to be covered by the oral and written examinations for a license to every person who requests the outline. (c) The results of the oral and written examinations forstewards licensesa steward's license shall be a public record. SEC. 3. Section 19605.7 of the Business and Professions Code is amended to read: 19605.7. The total percentage deducted from wagers at satellite wagering facilities in the northern zone shall be the same as the deductions for wagers at the racetrack where the racing meeting is being conducted and shall be distributed as set forth in this section. Amounts deducted under this section shall be distributed as follows: (a) (1) For thoroughbred meetings, 1.3 percent of the amount handled by the satellite wagering facility on conventional and exotic wagers shall be distributed to the racing association for payment to the state as a license fee, 2 percent shall be distributed to the satellite wagering facility as a commission for the right to do business, as a franchise, and this commission is not for the use of any real property,2.5 percent or the amount of actual operating expenses, as determined by the board, whichever is less, shall be distributed to an organization described in Section 19608.2, and0.54 percent shall be deposited with the official registering agency pursuant to subdivision (a) of Section 19617.2 and shall thereafter be distributed in accordance with subdivisions (b), (c) and (d) of Section 19617.2,and0.033 percent shall be distributed to the Center for Equine Health , and 0.067 percent shall be distributed to the California Animal Health and Food Safety Laboratory, School of Veterinary Medicine, University of California at Davis. It is the intent of the Legislature that the 0.033 percent of funds distributed to the Center for Equine Health shall supplement, and not supplant, other funding sources. (2) (A) In addition to the distributions specified in paragraph (1), for thoroughbred meetings, an amount not to exceed 4 percent of the amount handled by the satellite wagering facility on conventional and exotic wagers shall be distributed to an organization described in Section 19608.2 with the mutual consent of the racing association, the organization representing the horsemen participating in the meeting, and the board from January 1, 2010, until December 31, 2013. However, the amount shall be no less than that specified in subparagraph (B), and any amount greater than the amount specified in subparagraph (B) shall be approved by the board for no more than 12 months at a time, and only upon a determination by the board that the greater amount is in the economic interest of thoroughbred racing. (B) Commencing January 1, 2014, an amount not to exceed the amount of actual operating expenses, as determined by the board, or 2.5 percent of the amount handled by the satellite wagering facility on conventional and exotic wagers, whichever is less, shall be distributed to an organization described in Section 19608.2. (C) A request to the board for a distribution pursuant to subparagraph (A) shall be accompanied by a report detailing all receipts and expenditures over the two prior fiscal years of the funds affected by the request. (D) The racing association whose request pursuant to subparagraph (A) has been approved by the board shall provide subsequent quarterly reports of receipts and expenditures of the affected funds if requested by the board. (b) For harness, quarter horse, Appaloosa, Arabian, or mixed breed meetings, 0.4 percent of the amount handled by the satellite wagering facility on conventional and exotic wagers shall be distributed to the racing association for payment to the state as a license fee, for fair meetings, 1 percent of the amount handled by the satellite wagering facility on conventional and exotic wagers shall be distributed to the fair association for payment to the state as a license fee, 2 percent shall be distributed to the satellite wagering facility as a commission for the right to do business, as a franchise, and this commission is not for the use of any real property, and 6 percent of the amount handled by the satellite wagering facility or the amount of actual operating expenses, as determined by the board, whichever is less, shall be distributed to an organization described in Section 19608.2. In addition, in the case of quarter horses, 0.4 percent shall be deposited with the official registering agency pursuant to subdivision (b) of Section 19617.7 and shall thereafter be distributed in accordance with subdivisions (c), (d), and (e) of Section 19617.7; in the case of Appaloosas, 0.4 percent shall be deposited with the official registering agency pursuant to subdivision (b) of Section 19617.9 and shall thereafter be distributed in accordance with subdivisions (c), (d), and (e) of Section 19617.9; in the case of Arabians, 0.4 percent shall be held by the association to be deposited with the official registering agency pursuant to Section 19617.8, and shall thereafter be distributed in accordance with Section 19617.8; in the case of standardbreds, 0.4 percent shall be distributed for the California Standardbred Sires Stakes Program pursuant to Section 19619; in the case of thoroughbreds, 0.48 percent shall be deposited with the official registering agency pursuant to subdivision (a) of Section 19617.2 and shall thereafter be distributed in accordance with subdivisions (b), (c), and (d) of Section 19617.2;and0.033 percent shall be distributed to the Center for Equine Health ; and 0.067 percent shall be distributed to the California Animal Health and Food Safety Laboratory, School of Veterinary Medicine, University of California at Davis. It is the intent of the Legislature that the 0.033 percent of funds distributed to the Center for Equine Health shall supplement, and not supplant, other funding sources. (c) In addition to the distributions specified insubdivisionsubdivisions (a) and (b), for mixed breed meetings, 1 percent of the total amount handled by each satellite wagering facility shall be distributed to an organization described in Section 19608.2 for promotion of the program at satellite wagering facilities. For harness meetings, 0.5 percent of the total amount handled by each satellite wagering facility shall be distributed to an organization described in Section 19608.2 for the promotion of the program at satellite wagering facilities, and 0.5 percent of the total amount handled by each satellite wagering facility shall be distributed according to a written agreement for each race meeting between the licensed racing association and the organization representing the horsemen participating in the meeting. If, with respect to harness meetings, there are funds unexpended from this 1 percent, these funds may be expended for other purposes with the consent of the horsemen and the racing association to benefit the horsemen, or the racing association, or both, pursuant to their agreement. For quarter horse meetings , 0.5 percent of the total amount handled by each satellite wagering facility on races run in California shall be distributed to an organization described in Section 19608.2 for the promotion of the program at satellite wagering facilities, 0.5 percent of the total amount handled by each satellite wagering facility on out-of-state and out-of-country imported races shall be distributed to the official quarter horse registering agency for the purposes of Section 19617.75, and 0.5 percent of the total amount handled by each satellite wagering facility on all races shall be distributed according to a written agreement for each race meeting between the licensed racing association and the organization representing the horsemen participating in the meeting. (d) Additionally, for thoroughbred, harness, quarter horse, mixed breed, and fair meetings, 0.33 percent of the total amount handled by each satellite wagering facility shall be paid to the city or county in which the satellite wagering facility is located pursuant to Section 19610.3 or 19610.4. (e) Notwithstanding any other provision of law, a racing association is responsible for the payment of the state license fee as required by this section. SEC. 4. Section 19605.9 of the Business and Professions Code is amended to read: 19605.9. (a) Except as provided in subdivision (b), in the central and southern zones, all of the funds distributed for purses from satellite wagering facilities shall go to the purse program of the association conducting the racing meeting. (b) Notwithstanding subdivision (a), all funds for distribution as purses at satellite wagering facilities which are racing fairs in the County of Los Angeles from wagering on thoroughbredhorseracinghorse racing conducted at the 22nd District Agricultural Association Fairgrounds shall bedeposited in a separate account in the fund and, notwithstanding Section 13340 of the Government Code, are hereby continuously appropriated to the Department of Food and Agriculturepaid to a racing fair in the County of Los Angeles for supplementing purses atfair meetings in Los Angeles and Orange Counties. The department shall distribute these funds on an equal basis to each racing fair in these counties for distribution in all nonstakes races and among all breedsthe fair meeting . Commencing January 1, 1992, the funds distributed for purses from satellite wagering facilities pursuant to this subdivision shall not exceed the amount distributed during the 1990 calendar year. Any funds in excess of this amount shall be distributed as purses at the racing meeting conducted by the association. SEC. 5. Section 19606.3 of the Business and Professions Code is amended to read: 19606.3.The first(a) From all revenues transferred pursuant to Section 19620.2 and deposited in the Fair and Exposition Fund, an amount up to one million one hundred thousand dollars ($1,100,000)of all funds for distribution as purses generated at satellite wagering facilities statewide from wagering on thoroughbred horse racing shall be deposited in a special account in the fund and, notwithstanding Section 13340 of the Government Code, are hereby continuously appropriated to the Department of Food and Agriculture for supplementingmay be allocated by the Secretary of Food and Agriculture, at his or her discretion, to supplement purses at fair meetings to achieve the purposes of Section 19606.4. (b) All allocations made pursuant to this section shall be made part of the annual expenditure plan submitted to the Joint Committee on Fairs Allocation and Classification by the Secretary of Food and Agriculture as provided in Section 19621.SEC. 3.SEC. 6. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.