BILL ANALYSIS �
Bill No: SB
1523
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2011-2012 Regular Session
Staff Analysis
SB 1523 Author: Strickland
As Amended: April1 16, 2012
Hearing Date: April 24, 2012
Consultant: Art Terzakis
SUBJECT
Horse Racing: fund for retired race horses
DESCRIPTION
SB 1523 requires the California Horse Racing Board (CHRB)
to establish a program for the rehabilitation and
retraining of retired California race horses in state
prisons using monies collected from fines and penalties
assessed by stewards as well as fees paid to the CHRB for
occupational licenses. Specifically, this measure:
1.Requires the CHRB to deposit all money representing
penalties or fines imposed by the stewards of a horse
race meeting, as well as, all fees for occupational
licenses into the "Fund for Retired California Race
Horses" which is established by this measure.
2.Provides that all moneys in the Fund shall be
continuously appropriated to the CHRB for purposes of
funding a program for the rehabilitation and retraining
of retired California race horses in state prisons.
3.Requires the CHRB to establish the program in partnership
with a nonprofit organization that operates
rehabilitation and retirement facilities in the state for
the care of retired race horses.
4.Stipulates that the nonprofit organization shall be
approved by the CHRB and the California Department of
Corrections and Rehabilitation (CDCR).
5.Requires the CHRB to adopt regulations for the management
and distribution of moneys in the Fund and additionally
SB 1523 (Strickland) continued
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requires that the regulations establish a process for the
distribution of those moneys to the nonprofit
organization and for the distribution of moneys received
by the nonprofit organization to the CDCR for services
provided by prisoners for the rehabilitation and
retraining of retired California race horses.
6.Requires the nonprofit organization and CDCR to submit a
budget for the ensuing calendar year at the CHRB's
November meeting each year, and file quarterly financial
statements with the CHRB.
SB 1523 (Strickland) continued
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EXISTING LAW
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 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 provides that all money representing penalties
or fines imposed by the stewards of a horse race meeting
shall be collected by the licensee of the meeting and paid
to the CHRB within 10 days after its close. Existing law
requires the CHRB to deposit the money in the State
Treasury to the credit of the General Fund. Existing law
also requires persons who participate in horse racing,
including horse owners, jockeys, drivers, apprentices,
grooms, and valets, to be licensed by the CHRB, and to pay
license fees pursuant to the rules and regulations adopted
by the CHRB.
BACKGROUND
Purpose of SB 1523: According to the author's office, this
measure is intended to provide horses an opportunity for a
second career after their racing days are over by
establishing a fund for the retirement and retraining of
California race horses. Under the program envisioned,
horses will be retrained by inmates of the California
Department of Corrections (CDCR) in a curriculum modeled
after similar programs in other states throughout the
country. Monies collected from fines and penalties
assessed by stewards, as well as fees paid to the CHRB for
occupational licenses, will be the means of funding this
program.
The author's office notes that this measure is a result of
various recommendations made by the CHRB in its 2010-2011
Annual Report. Specifically, the CHRB recommended that
legislation be introduced providing for the retraining of
race horses for new careers at the conclusion of their
racing careers and providing for increased sanctuaries for
other retired race horses. The author's office points out
that the CHRB estimates that approximately 1500 California
race horses end their racing careers annually in this state
SB 1523 (Strickland) continued
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and approximately 20% find productive careers off the
track. The well-being of these horses is becoming more and
more of an interest of the general public as well as animal
rights groups.
The author's office states that current law does not
provide funds for the rehabilitation of race horses that
retire from the racetrack and that internal CHRB Rules and
Regulations provide meager funding to care for retired
California race horses. The California Retirement
Management Account (CARMA) is a 501 (c) (3) trust fund that
distributes these monies to California facilities that
provide services to retired thoroughbreds. Contributions to
this account are on a volunteer basis and are debited by
the paymaster from the owners account at the rate of 0.3%
from the winning purse. The author's office emphasizes that
by being a voluntary fund, it lacks the legislative mandate
needed to affect the necessary programs required to provide
for retired racehorses.
CARMA is an organization that does its best to get the
message to the public of the need for retirement programs
and dispersing funds to those organizations with the
ability to offer the day to day care of these horses. This
is a voluntary mechanism to take care of retired race
horses. A study conducted in 2010 by the University of
California-Davis School of Veterinary Medicine determined
that the 236 registered equine retirement facilities
currently in operation "cannot predictably expand to
provide quality care and rehabilitation for more horses
than they are now caring for" without additional sources of
revenue.
This measure is an attempt at emulating similar programs in
Virginia, Indiana, Maryland, Nevada, and Kentucky - all of
these states have successful programs in place where
retired race horses are retrained at correctional
facilities with the participation of inmates.
CHRB staff believes this measure will go a long way in
assuring equine athletes have useful and fulfilling lives
after crossing the finish line for the last time.
Additionally, CHRB staff points out that this measure will
enable inmates to be trained in how to care for horses
which could be a viable occupation for them once they're
released.
SB 1523 (Strickland) continued
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Staff Comments: Current law provides that all money
representing penalties or fines imposed by the stewards of
a horse race meeting shall be collected and paid to the
CHRB for deposit into the State Treasury to the credit of
the General Fund. This measure would essentially divert
money that otherwise would go to the General Fund in order
to pay for the new retired race horse program outlined
above.
PRIOR/RELATED LEGISLATION
SB 1227 (Negrete McLeod) 2011-12 Session. Would modify a
provision of Horse Racing Law which currently provides for
a 1% deduction from wagers at fair racing meets for deposit
into the Fair and Exposition Fund (F&E Fund) for specified
purposes and instead diverts the distribution of the 1%
license fee equally between the fair that conducted the
racing meet (as commissions) and to the horsemen and
horsewomen who participated in the racing meet (as purses).
(Pending in Senate Appropriations Committee)
SB 1418 (Berryhill) 2011-12 Session. Among other things,
would delete the current calendar period restriction (only
between June 1 and October 31) during which the CHRB may
allocate combined fair horse racing meetings thus allowing
the CHRB greater flexibility in allocation of racing dates.
(Pending in Senate Appropriations Committee)
SB 16xx (Ashburn), Chapter 12, Statutes of 2009-10 Second
Extraordinary Session . Among other things, eliminated the
$40 million floor on the amount the horse racing industry
is required to pay annually for support of the network of
California fairs, the CHRB, and the Kenneth L. Maddy Equine
Analytical Chemistry Laboratory at UC Davis. Other than
the supplemental 1% assessed against fair meets, it also
eliminated the license fee on horse racing wagers and
provided that beginning on July 1, 2009, and annually
thereafter, $32 million shall be appropriated from the
state's General Fund and paid into the F&E Fund for the
financial support of the State's network of fairs.
SB 766 (Negrete McLeod) Chapter 616, Statutes of 2009.
Added a new section to the Horse Racing Law to provide
that, in the event there are at any time uncommitted
surplus funds in the horse racing Market Promotion Fund or
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the horse racing Workers' Compensation Fund, those
unexpended funds may, at the request of the organization
governing those funds and with the approval of the CHRB, be
reallocated to any other fund or account created pursuant
to the Horse Racing Law.
SB 517 (Florez) Chapter 636, Statutes of 2009. Allowed a
thoroughbred association or fair, subject to the approval
of the CHRB, to alter the amount deducted from horse racing
wagering. Also, allowed the distribution of funds from the
amount deducted to be modified or redirected, subject to
the approval of CHRB.
AB 2258 (Evans, Chapter 453, Statutes of 2008). Clarified
that the $40 million guarantee is based on the total amount
paid to the state as license fees.
AB 765 (Evans) Chapter 613, Statutes of 2007.
Reauthorized horse racing's Advance Deposit Wagering law,
which was due to "sunset" on January 1, 2008, as specified.
In addition, provided that a fair, combination of fairs,
or an association conducting racing at a fair, may, with
CHRB approval, deduct an additional 1% from its handle, to
be used for maintenance and improvements at a fair's
racetrack inclosure, as specified.
AB 1308 (Torrico) Chapter 410, Statutes of 2007.
Authorized a Thoroughbred association or fair and the
horsemen's organization, subject to approval by CHRB, to
deduct an amount of not less than 10% nor more than 25%
from the parimutuel pool for any type of wager.
AB 2164 (Plescia) Chapter 80, Statutes of 2004. Extended
the sunset on provisions to enable racing associations and
fairs to fund taking part in the statewide horse racing
marketing program to 2006.
SB 1825 (Kelley) Chapter 342, Statutes of 2000. Provided
that, notwithstanding any other provision of law, if the
total amount paid to the state by racing associations and
fairs pursuant to the Horse Racing Law is less than $40
million in any calendar year, beginning January 1, 2001,
and thereafter, all associations and fairs that conducted
live racing during the year of shortfall shall remit to the
state, on a pro rata basis according to the amount handled
in-state by each association or fair, the amount necessary
SB 1523 (Strickland) continued
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to bring the total amount paid to the state to $40 million.
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.
SUPPORT: As of April 20, 2012:
California Horse Racing Board (CHRB)
California Retirement Management Account
California Thoroughbred Breeders Association
California's Thoroughbred Horsemen
Paw Pac
Thoroughbred Owners of California
OPPOSE: None on file as of April 20, 2012.
FISCAL COMMITTEE: Senate Appropriations Committee