BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 732|
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THIRD READING
Bill No: SB 732
Author: Wyland (R)
Amended: 4/11/11
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 11-0, 5/10/11
AYES: Wright, Anderson, Berryhill, Cannella, Corbett, De
Le�n, Evans, Hernandez, Padilla, Strickland, Wyland
NO VOTE RECORDED: Calderon, Yee
SUBJECT : Horse racing: northern zone: vanning of
starters
SOURCE : Thoroughbred Owners of California
DIGEST : This bill makes the following substantive
changes to existing horse racing law provisions pertaining
to offsite stabling and vanning of horses: (1) deletes the
requirement that racing associations in the northern zone
provide, at the option of the horse owner, vanning of
participating racehorses from any California Horse Racing
Board (CHRB)-approved offsite stabling facility, and (2)
authorizes, with respect to the northern zone and subject
to the availability of specified funds, at the option of
the horse owner, vanning of participating racehorses from
any CHRB-approved offsite stabling facility.
ANALYSIS : Article IV, Section 19(b) of the Constitution
of the State of California provides that the Legislature
may provide for the regulation of horse races and horse
CONTINUED
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race meetings and wagering on the results.
Existing law authorizes the CHRB to regulate the various
forms of horse racing authorized in this state.
Existing law sets the amount deducted from the parimutuel
pools of thoroughbred races in California. According to
the CHRB 2009-10 annual report, the "takeout rate" (the
amount deducted from wagers before winnings are paid out to
bettors) for conventional wagering (e.g., win, place, and
show wagers) on Thoroughbred races is 15.9 percent, and
21.34 percent for exotic wagers (e.g., Exacta, Trifecta,
Pick-6). These funds are used for a variety of purposes
including funding commissions, purses, welfare funds, and
enforcement fees.
Existing law provides that, when satellite wagering is
conducted on thoroughbred races at associations or fairs in
the central or southern zone, an amount equal to 1.25
percent of the total amount handled by all of those
satellite wagering facilities must be deducted from the
take-out for the benefit of the "Vanning and Stabling"
Fund. Proceeds therein are distributed to the organization
representing the racing associations and horsemen and women
for the purpose of providing reimbursement for off-site
stabling and vanning at board-approved auxiliary training
facilities of licensed racing associations. This is to
compensate for the additional stalls beyond the number of
usable stalls the association is required to provide under
current law.
Existing law requires the CHRB to determine the number of
usable stalls that each racing association or fair must
make available and maintain for a racing meeting. The
minimum number of stalls may be at the site of the racing
meeting or at CHRB-approved offsite locations.
Additionally, existing law divides the state into three
geographical zones for regulating horse racing (northern
zone, central zone and southern zone) and with respect to
racing meetings conducted in the northern zone, requires
the association or fair conducting the meeting to provide
all stabling required by the CHRB without cost to
participating horsemen.
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Furthermore, existing law requires with respect to northern
zone thoroughbred meetings only, the association conducting
the meeting to provide, at the option of the horse owner,
vanning of participating racehorses from any CHRB-approved
offsite stabling facility in the northern zone. Racing
fairs may, but are not required to, provide vanning of
participating racehorses from any board-approved offsite
stabling facility subject to the availability of funds.
This bill makes the following substantive changes to
existing horse racing law provisions pertaining to offsite
stabling and vanning of horses:
1. Deletes the requirement that racing associations in the
northern zone provide, at the option of the horse owner,
vanning of participating racehorses from any
CHRB-approved offsite stabling facility.
2. Authorizes, with respect to the northern zone and
subject to the availability of specified funds, at the
option of the horse owner, vanning of participating
racehorses from any CHRB-approved offsite stabling
facility.
Prior/Related Legislation
SB 766 (Negrete McLeod), Chapter 616, Statutes of 2009,
authorized the CHRB to shift money around from various
funds dedicated for specific purposes within horse racing
that are in surplus, such as the promotions fund and
workers' compensation fund, to others that are in deficit,
such as the Vanning and Stabling account.
AB 813 (Portantino), Chapter 19, Statutes of 2008, provided
that, with respect to harness meetings, if there are funds
unexpended in the horse racing promotion account, those
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.
AB 2103 (Plescia), Chapter 443, Statutes of 2008, extended
the sunset date, from January 1, 2009 to January 1, 2014,
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on a deduction from parimutuel wagering on thoroughbred
horse racing in order to defray the costs of pay or
workers' compensation insurance.
SB 1805 (Florez), Chapter 883, Statutes of 2006, provided
that any funds not used to defray the costs of workers'
compensation insurance as described, may also be used to
reimburse a racing association for actual costs of safety
improvements to racing and training surfaces, health and
safety programs, and research or safety equipment.
AB 2931 (Horton), Chapter 922, Statutes of 2002, authorized
racing associations to use existing industry funds
(stabling and vanning and promotion funds) for use in
developing a program to offset workers' compensation rates
for horse trainers in the state.
SB 27 (Maddy), Chapter 335, Statutes of 1998, among other
things, granted major license fee relief ($40 million
annually) and limited out-of-state full-card simulcasting.
SB 28 (Maddy), Chapter 516, Statutes of 1998, provided that
when satellite wagering is conducted on thoroughbred races
at associations or fairs in the central or southern zone,
an amount equal to 1.25 percent of the total amount handled
by all of those satellite wagering facilities must be
deducted from the take-out and distributed to the
organization representing the racing associations and
horsemen and women for the purpose of providing
reimbursement for off-site stabling and vanning at
board-approved auxiliary training facilities of licensed
racing associations. This was intended to compensate for
additional stalls beyond the number of usable stalls an
association is required to provide under existing law.
SB 1515 (Maddy), Chapter 53, Statutes of 1996, permitted
any vanning and stabling reimbursement funds that are not
expended during an association or fair horse racing meeting
in which they are collected to be allocated to the
organization representing racing fairs to offset its costs
of maintaining the stalls contracted for by fairs.
SB 1196 (Thompson), Chapter 80, Statutes of 1995, allowed
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fairs in the northern zone, subject to the availability of
funds, to provide for the vanning of racehorses from any
offsite stabling facility.
SB 14 (Maddy), Chapter 1273, Statutes of 1987, expanded
satellite wagering statewide, as specified.
SB 1499 (Maddy), Chapter 1698, Statutes of 1984,
implemented satellite wagering in the central and southern
part of the state, and made conforming and technical
changes in the northern part of the state.
Background
Over the years, racing has been raiding the Vanning and
Stabling Fund to cover the costs of workers' compensation,
amongst other things. Since 2002, upwards of $4 million
annually has been deducted from the fund to help defray the
cost of workers' compensation coverage for stable employees
and jockeys of thoroughbred trainers. Furthermore, an
additional $1 million from the Vanning and Stabling Fund
has been diverted to the backstretch employees' welfare
fund to provide various services and benefits to
backstretch employees.
The author's office notes that the Vanning and Stabling
Fund exists to help horsemen and women defray the costs of
having to transport and stable their races horses at
auxiliary training facilities. This bill is intended to
allow for greater flexibility in the use of the Vanning and
Stabling Fund to help streamline operations in light of
current financial constraints. The author's states that
this bill provides racing associations the same flexibility
currently available to racing fairs by deleting the
requirement that they help pay for the vanning or
transportation of a race horse from an offsite stabling
facility to the racing venue. The author's office contends
that this modification would allow racing associations to
use the Fund's support where it will be most efficient.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/10/11)
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Thoroughbred Owners of California (source)
ARGUMENTS IN SUPPORT : The Thoroughbred Owners of
California (TOC), the sponsor of this bill, points out that
"when a racing association conducts live racing, current
law mandates that the Vanning and Stabling Fund provide for
the subsidization of shipping a race horse(s) from an
approved offsite stabling facility to the live racing
venue; however, the law makes no such mandate when racing
fairs are conducting live racing (e.g., it is left to the
discretion of the Fund's management along with other
business decisions)."
The TOC states that "this bill would treat racing
associations in the same manner as racing fairs by allowing
the Vanning and Stabling Fund the same operational
flexibility to allocate its funds to where they may be most
efficient depending on horse inventory, vanning and
stabling demands, and other operating requirements."
PQ:kc 5/10/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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