BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2693|
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THIRD READING
Bill No: AB 2693
Author: Assembly Governmental Organization Committee
Amended: 8/15/12 in Senate
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMM. : 13-0, 6/26/12
AYES: Wright, Anderson, Berryhill, Calderon, Cannella,
Corbett, De Le�n, Evans, Hernandez, Padilla, Walters,
Wyland, Yee
ASSEMBLY FLOOR : 73-0, 5/10/12 (Consent) - See last page
for vote
SUBJECT : Horse racing: Arkansas Derby
SOURCE : Author
DIGEST : This bill adds the Arkansas Derby to the group
of stake races in Horse Racing Law which are exempt from
the 50-race per day limit on imported races, as defined.
Senate Floor Amendments of 8/15/12 clarify in statute that
the California Thoroughbred Trainers (CTT), formerly the
California Horsemen's Benevolent and Protective
Association, Inc., sponsors the backstretch workers'
pension plan.
ANALYSIS : Existing law:
1.Grants the California Horse Racing Board (CHRB) the
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authority to regulate the various forms of horse racing
authorized in this state.
2.Limits the number of races that may be imported by
associations and fairs to no more than 50 races per day
on days when live Thoroughbred or fair racing is being
conducted in this state, with specified exceptions.
3.Exempts from that 50 race per day limit races imported
that are part of the race card of certain prominent
races, including the Kentucky Derby, the Kentucky Oaks,
the Preakness Stakes, the Belmont Stakes, the Jockey Club
Gold Cup, the Travers Stakes, the Breeders' Cup, the
Dubai Cup, or the Haskell Invitational.
4.Authorizes Thoroughbred racing associations or fairs to
distribute the audiovisual signal and accept wagers on
the results of out-of-state and international
Thoroughbred races during the calendar period the
association or fair is conducting live racing, including
days on which there is no live racing being conducted by
the association or fair.
I. Arkansas Derby Provision of the Bill
The Arkansas Derby is a Grade 1 stakes race for
three-year-old thoroughbreds, which is held annually at
Oaklawn Park in Hot Springs, Arkansas. Each April, this
prestigious race acts as a major prep for three-year-old
horses with two winners having gone on to victory in the
Kentucky Derby. The race is shown each year on ESPN.
The author's office notes that this bill will help
increase the wagering handle on this specific day
(Arkansas Derby) which will lead to increased purses,
racetrack revenue, and breeders' awards in California.
Purses are important to California's racing industry
because they provide revenue to horse owners for their
racing operations and to breeders through an increase in
the value of their breeding stock.
The author's office states "California's racing industry
has found that it's much easier to make a big day bigger
relative to their marketing efforts rather than trying to
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increase attendance on a typical Wednesday or Thursday."
The author's office believes that this bill also provides
the racing industry a marketing tool to increase on-track
and off-track attendance on this designated day because
racing fans will want to wager on all the races from the
host track of the prestigious Arkansas Derby horse race.
II. Backstretch Personnel
Existing Horse Racing Law (Business and Professions Code
(BPC) Section 19613) requires any racing association
other than a fair that conducts a thoroughbred racing
meeting to, among other things, pay a specified amount
for a pension plan for backstretch personnel to be
administered by the trainers' organization (CTT). This
particular statute has existed since 1979. During the
most recent request for a favorable determination letter
on the tax status of the pension plan, the IRS questioned
the ability of the CTT to sponsor the pension plan since
the CTT is not the actual employer of the backstretch
workers. The IRS has questioned the ability of CTT to
sponsor the plan despite BPC Section 19613.
(NOTE: A "determination letter" is a formal document
issued by the IRS that decrees whether or not the
retirement plan is within Employee Retirement Income
Security Act (ERISA) guidelines. If the plan is
determined to be lacking in some respect, the
shortcomings and necessary action to be taken will be
listed. If the plan meets all of the requirements set
forth by ERISA, then the plan becomes certified as a
qualified plan and is eligible for all resulting tax
benefits.)
This bill simply clarifies that the Legislature intended
the CTT to be the sponsor of the pension plan. The IRS
is expected to take this language into account in
determining whether to issue a favorable determination
letter on the tax status of the pension plan.
Additionally, this bill adds the word "horsewomen" to the
above referenced provision of law as well to BPC Section
19596.2 so that those provisions now read "horsemen and
horsewomen."
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Prior/Related Legislation
AB 2790 (Assembly Governmental Organization Committee),
Chapter 141, Statutes of 2010, adds the Arlington Million
to the group of specific stake races which are exempt from
the 32-race per day limit on imported races.
AB 3074 (Assembly Governmental Organization Committee),
Chapter 510, Statutes of 2008, among other things,
increases from 23 to 32, the limitation on the total number
of out-of-state thoroughbred races that may be imported per
day by a thoroughbred association or fair that is
conducting a live race meet.
AB 1736 (Assembly Governmental Organization Committee),
Chapter 444, Statutes of 2007, adds the "Travers Stakes" to
the group of specific stake races which are exempt from the
23-race per day limit on imported races.
SB 379 (Denham), Chapter 443, Statutes of 2007, adds the
Dubai World Cup race to a specified list of races exempt
from the 23-race per day limit on imported races for
satellite wagering in California.
AB 509 (Jerome Horton), Chapter 235, Statutes of 2004,
allows a Thoroughbred or fair association to distribute the
audiovisual signal and accept wagers on the results of
out-of-country Thoroughbred races during the calendar
period the association or fair is conducting a race meeting
under specified conditions.
SB 590 (Perata), Chapter 936, Statutes of 2001, authorizes
Thoroughbred racing associations and fairs in the northern
racing zone to increase the number of imported racing
simulcasts available to be wagered upon if the CHRB reduces
the number of live racing days.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/15/12)
California Thoroughbred Trainers
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ASSEMBLY FLOOR : 73-0, 5/10/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Davis, Dickinson,
Donnelly, Eng, Feuer, Fong, Fuentes, Beth Gaines,
Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hern�ndez, Hill,
Huber, Hueso, Huffman, Jones, Knight, Lara, Logue, Bonnie
Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Pan, Perea,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. P�rez
NO VOTE RECORDED: Cook, Fletcher, Furutani, Jeffries,
Norby, Olsen, V. Manuel P�rez
DLW:nd 8/16/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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