BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 254|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: SB 254
Author: Wiggins (D)
Amended: 5/20/09
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 10-1, 4/28/09
AYES: Wright, Harman, Calderon, Florez, Negrete McLeod,
Oropeza, Padilla, Wiggins, Wyland, Yee
NOES: Benoit
NO VOTE RECORDED: Denham, Vacancy
SENATE JUDICIARY COMMITTEE : 4-1, 5/12/09
AYES: Corbett, Harman, Florez, Leno
NOES: Walters
SUBJECT : Horses: sale, purchase, or transfer
SOURCE : Stonestreet
DIGEST : This bill revises horse racing law relative to
the sale of equines. Requires each purchase, sale or
transfer to be accompanied by a written bill of sale signed
by the buyer and seller. Prohibits any person from acting
as a dual agent, as defined, without the knowledge and
written consent of the buyer and seller. Restricts an
agent's compensation to no more than $500 per transaction
unless the amount of compensation is disclosed in writing
and the buyer and seller provide written consent. Enhances
penalties for violations of this section of law.
CONTINUED
SB 254
Page
2
ANALYSIS : Existing law prohibits a person from receiving
any form of compensation in connection with the sale or
purchase of a racehorse, prospective racehorse, stallion,
or broodmare, unless the purchaser and seller have agreed
in writing to the payment of that compensation.
Existing law provides that no contract or agreement shall
be enforceable by way of an action or defense unless there
is a document in writing sufficient to indicate that the
party against whom enforcement is sought or his or her
authorized agent or broker has agreed to the commission,
fee, gratuity, or other form of compensation.
Existing law provides that anyone who receives a
commission, fee, gratuity or any other form of compensation
in violation of this section is subject to treble damages
to the injured purchaser or seller.
Existing law authorizes the California Horse Racing Board
(CHRB) to suspend or revoke the license of any person who
violates this section. Any transfer of an interest in a
racehorse, prospective racehorse, stallion, or broodmare
shall be accompanied by a written bill of sale setting
forth the purchase price.
This bill:
1.Defines "equine" to mean a horse of any breed used for
racing or showing, including prospective racehorses,
breeding prospects, stallions, stallion seasons,
broodmares, yearlings, or weanlings, or any interest
therein.
2.Requires any sale, purchase, or transfer of an equine to
be:
A. Accompanied by a written bill of sale or
acknowledgment of purchase setting forth the purchase
price.
B. Signed by both the purchaser and the seller or
their duly authorized agents or, in a transaction
solely relating to a season or fractional interest in
a stallion, signed by the syndicate manager or
SB 254
Page
3
stallion manager.
3.Provides that when a sale, purchase or transfer of an
equine is accomplished through a public auction, the
bill of sale requirement may be satisfied by the
issuance of an auction receipt generated by the auction
house and signed by the purchaser or an agent whom the
purchaser has authorized.
4.Makes it unlawful for a person to act as a "dual agent,"
which is defined as a person acting as an agent for both
the purchaser and the seller, in a transaction involving
the sale, purchase, or transfer of an interest in an
equine without the prior knowledge of both the purchaser
and seller, and the written consent of both the
purchaser and seller.
5.Makes it unlawful for a person acting as an agent for
either a purchaser or a seller or acting as a dual agent
in a transaction involving the sale, purchase, or
transfer of an equine to receive in excess of $500 worth
of compensation, fees, gratuities, or other items of
value, related directly or indirectly to that
transaction, from an individual or entity, including any
consigner involved in the transaction, other than the
agent's principal, unless both of the following occur:
A. The agent receiving the item of value and the
individual or entity giving the item of value
disclose the transfer of that item of value in
writing to the principal or principals for whom the
agent is acting.
B. Each principal for whom the agent is acting
consents thereto in writing.
6.Requires any person acting as an agent for a purchaser
or seller or acting as a dual agent in a transaction
involving the sale, purchase, or transfer of an equine
shall, upon request by his or her principal or
principals, provide to the requesters, copies of all
financial records in the possession or control of the
agent pertaining to the transaction. For purposes of
this subdivision, financial records shall not include
SB 254
Page
4
the agent's or owner's work product used to internally
evaluate the equine.
7.Provides that any person injured by a violation of this
section of law shall recover treble damages from persons
or entities violating this provision of law.
8. Provides that no contract or agreement for payment of a
commission, fee, gratuity, or any other form of
compensation in connection with any sale, purchase, or
transfer of an equine shall be enforceable by way of an
action or defense unless both of the following occur:
A. The contract or agreement is in writing and is
signed by the party against whom enforcement is
sought.
B. The recipient of the compensation provides a
written bill of sale or auction receipt for the
transaction of the equine.
9.Authorizes the CHRB to suspend or revoke the license of
any person who violates this section.
10.Provides that the provisions related to the award of
damages or enforceability of an action shall not apply
to the acts or omissions of an entity or individual
engaged in conducting a public auction of an equine, or
the entity or individual's employees or agents, if both
of the following conditions apply:
A. The acts or omissions of the entity, individual,
employee, or agent are in furtherance of or pursuant
to the conduct of the public auction of an equine.
B. The entity or individual is appropriately licensed
or authorized to conduct that specific public auction
by CHRB and any other governmental entity whose
permission or authorization is required to conduct
the auction.
Comments
According to the author's office, "current law lacks
SB 254
Page
5
clarity and has resulted in opportunities for unscrupulous
individuals to defraud people in the sale of horses. This
bill seeks to remedy this problem by mandating a reliable
written record of horse transactions and punishing, through
treble damages and potential license revocation, those who
use equine transactions to defraud."
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/20/09)
Stonestreet (source)
Barretts Equine Limited
Hey & Hey, Attorneys-at-Law
ARGUMENTS IN SUPPORT : Stonestreet, the sponsor of the
bill, writes, "[t]he unfortunate reality of the equine
world is that traditionally acceptable industry practices
have resulted in an environment which provides an
opportunity for unscrupulous individuals to defraud others
and when such fraud has been both difficult to detect and
correct. The intent of the statute is leveled at both
correcting the business culture by mandating written
agreements and deterring inappropriate behavior by
providing enhanced damages. The revision does not change
the intent of (existing law), it simply clarifies the
language and improves the efficiency of the statute."
TMS:cm 5/20/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****