BILL ANALYSIS �
SB 1227
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Date of Hearing: August 8, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1227 (Negrete McLeod) - As Introduced: February 23, 2012
Policy Committee: Governmental
Organization Vote: 15 - 0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill deletes an existing requirement that 1% of the total
amount handled in daily conventional and exotic parimutuel pools
be distributed to the Fair and Exposition (F& E) Fund, and
instead requires those funds to be equally distributed as
commissions and purses.
FISCAL EFFECT
Eliminating the requirement that 1% of the racing handle be paid
into the F&E fund would result in a loss of revenue to the fund
of approximately $670,000 annually. The 1% live racing fair
funds make up nearly 30% of the California Department of Food
and Agriculture's (CDFA) Divisions of Fairs and Expositions'
budget which provides state mandated oversight of the state's
network of fairs.
COMMENTS
1)Purpose . The purpose of this legislation is to redirect the
money used to support oversight of the state's network of
fairs to horseracing purses and commissions. According to the
sponsor, the California Authority of Racing Fairs (CARF),
racing fairs are in need of additional license fee relief
because of declining racing revenues and the need to attract
larger fields. CARF and proponents emphasize that this
measure will go a long way in helping strengthen horse racing
at fairs - fairs are reliant on revenues generated by horse
racing, particularly since fair funding has been eliminated
from the state budget.
SB 1227
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2)Background . Prior to the passage and enactment of SB 16xx
(Ashburn) of 2009, license fees assessed from the wagers made
on horse racing were deposited to the credit of the F&E Fund
which, in addition to providing general support for the annual
budget of the CHRB, supplemented the income of the State's
network of fairs. At that time, the law guaranteed the F&E
Fund would receive $40 million annually from license fees. SB
16xx eliminated the license fee on wagers as a means of
helping the struggling horse racing industry. In addition, it
deleted the $40 million "guarantee" from law. This amount is,
instead, distributed to the racing associations and horsemen
and horsewomen. The bill also provided that the state funding
for the network of California fairs shall be a continuous
appropriation of $32 million annually from the General Fund.
The $32 million General Fund support for the network of
California fairs was eliminated in the 2011-2012 Budget due to
the state's growing fiscal problems. In addition, the
2012-2013 Budget Act does not contain an appropriation into
the F & E Fund to fund the network of California fairs.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081