BILL ANALYSIS �
AB 2005
Page 1
Date of Hearing: April 30, 2014
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Isadore Hall, Chair
AB 2005 (Chesbro) - As Amended: April 23, 2014
SUBJECT : California Horse Racing Board: membership and per
diem.
SUMMARY : Expands the membership of the California Horse Racing
Board (CHRB) from seven to eleven board members. The four new
board members would be appointed as nonvoting, ex-officio
members as follows: two Members of the Senate appointed by the
Senate Committee on Rules, and two Members of the Assembly
appointed by the Speaker of the Assembly, as defined.
Specifically, this bill :
1) Expands the membership of the CHRB to 11 members, 7 public
members appointed by the Governor, 2 Members of the Senate
appointed by the Senate Committee on Rules, and 2 Members of the
Assembly appointed by the Speaker of the Assembly, as specified.
2) Provides that Members of the Legislature appointed to the
CHRB shall serve as nonvoting, ex-officio members for a term of
2 years, with no limit on the number of terms that may be served
by any one Member.
3) Makes the legislative members ineligible to serve on the
subcommittees of the CHRB and would prohibit a legislative
member of the board from receiving per diem or reimbursement for
traveling and other expenses from the board for his or her
service on the CHRB.
EXISTING LAW :
1) Provides for the conduct of live horse racing in California
and for pari-mutuel wagering on these races at both on-track and
satellite wagering facilities and via Advance Deposit Wagering.
Horse racing in this state is subject to regulation and
oversight by the CHRB.
2) Specifies that CHRB board consist of seven members,
appointed by the Governor. Each member shall hold office for a
term of four years, commencing at the expiration of the previous
term.
AB 2005
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3) Provides that each member of the CHRB shall have been a
resident of this State for two years preceding his appointment.
4) Specifies that a person is disqualified from membership on
the board if the person, the person's spouse or any dependent
child thereof:
(a) Holds a financial interest in any horse racing track.
(b) Holds a financial interest or position of management
with any business entity which conducts pari-mutuel horse
racing.
(c) Holds a financial interest in a management or
concession contract with any business entity which conducts
pari-mutuel horse racing.
5) Allows the appointment of horsemen and horsewomen who
represent the interests of owners and breeders to the CHRB by a
finding that it serves the public interest and owners and
breeders are members of the public for purposes of a finding of
financial interest, pursuant to the Government Code.
6) Provides the Governor may remove any board member for
incompetence, neglect of duty or corruption upon first giving
him a copy of the charges against him and an opportunity to be
heard.
FISCAL EFFECT : Unknown
COMMENTS :
According to the author, "this bill is intended to provide more
legislative participation and oversight of California's Horse
Racing Board. Currently, there is no involvement with the CHRB
by the Legislature. Board members are appointed by the
Governor, and make critical decisions relating to the viability
of communities through allocation of racing dates. Changes in
the horse racing calendar can financially impact those
communities. It simply makes sense that the Legislature should
have some role on the Board since the decisions made there
affect their districts."
AB 2005
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The author further states "that currently, there are numerous
boards and commissions which have members of the Legislature as
members. There are currently 61 boards and 32 commissions that
have Members of the Legislature serving on them. This bill would
just add membership on the CHRB board to the list of those
boards."
Background :
California Horse Racing Board : California's Horse Racing
Industry is heavily regulated. The "Horse Racing Law," found in
Chapter 4 of the Business and Professions Code, directs
regulatory authority over horse racing to the CHRB. The CHRB
currently consists of seven members, each appointed by the
Governor of California. The CHRB members serve a broad
constituency of track owners, horse owners, breeders, trainers,
jockeys and the betting public.
Currently, six of the seven members of the CHRB have been
appointed or reappointed to serve on the CHRB by Governor Brown.
The CHRB is responsible for adopting rules and regulations for
the protection of the public and the control of horse racing and
pari-mutuel wagering; administration and enforcement of all
laws, rules, and regulations affecting horse racing and
pari-mutuel wagering; adjudication of controversies arising from
the enforcement of those laws and regulations dealing with horse
racing and pari-mutuel wagering; licensing of each racing
association and all persons, other than the public at large, who
participate in a horse racing meet with pari-mutuel wagering;
allocation of racing dates to qualified associations in
accordance with law; the board may delegate to stewards
appointed pursuant to any of its powers and duties that are
necessary to carry out fully and effectuate the purposes of
Horse Racing Law; and selecting an executive director to carry
out its policies.
What is an ex-officio member ? An ex-officio member is a member
of a body (a board, committee, council, etc.) who is part of it
by virtue of holding another office.
The California Transportation Commission (CTC) has two
ex-officio non-voting members : The California Transportation
Commission (CTC) was established in 1978, out of a growing
concern for a single, unified California transportation policy.
AB 2005
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The CTC consists of eleven voting members and two non-voting
ex-officio members. Of the eleven voting members, nine are
appointed by the Governor, one is appointed by the Senate Rules
Committee, and one is appointed by the Speaker of the Assembly.
The two ex-officio non-voting members are appointed from the
State Senate and Assembly, usually the respective chairs of the
transportation policy committee in each house.
California Exposition & State Fair Board has ex-officio members :
The California Exposition & State Fair is an independent state
agency established by law and governed primarily by the
California Department of Food and Agriculture codes. The
governing body of the California Exposition & State Fair is an
11-member board of directors. The directors are residents of
California. Nine (9) directors are appointed by the Governor
with the consent of the Senate. One director each is appointed
by the Speaker of the Assembly and the Senate Rules Committee.
The board also has two ex-officio members.
California State Park and Recreation Commission has ex-officio
member too : The California State Park and Recreation Commission
was created as the State Park Commission in 1927. The Commission
has specific authorities and responsibilities which are defined
in California law. Nine voting commissioners are appointed to
staggered four-year terms. The governor appoints the voting
members of the Commission. The Speaker of the Assembly and the
Senate Rules Committee each appoint one non-voting ex-officio
member to the Commission.
Deteriorating status of the horse racing industry in California :
The California horse racing industry's long-term health is
threatened by a combination of factors, including competition
from racing in other states, other forms of gaming within
California, racetrack closures, and the potential for higher
return from development than operating revenues. As the value
of racing operations declines, track ownership is struggling to
maximize a significant return on the investment and tempted by
alternative uses of the property that yield higher returns.
Consequently, the racing industry is suffering unprecedented
instability and capital flight. Tens of thousands of industry
jobs might be in jeopardy, along with breeding farms and
precious open space in urban centers throughout California.
Also at risk is a substantial amount of local and state revenue
generated both directly and indirectly by the industry.
AB 2005
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Prior legislation : SB 863 (Yee) of 2007-2008 Legislative
Session. Would have prohibited more than 3 members of the CHRB
board who are licensed to participate in the horse racing
industry from serving on the CHRB at the same time, as
specified. This bill would also require the CHRB to promulgate
and adopt regulations regarding conflicts of interest and ethics
for the board, as specified. (Gutted and amended on Assembly
Floor)
SR 14 (Yee) of 2007-2008 Legislative Session. Urged the current
CHRB Chairman Richard Shapiro to tender his resignation from the
CHRB board as soon as possible, to allow the Board to move
forward with new leadership and direction. (Senate Rules)
AB 1752 (Levine) of 2005-2006 Legislative Session. Would have
required the CHRB to promulgate and adopt regulations regarding
CHRB member conflicts of interest, and further, to develop a
code of ethics for all board members as specified. (Gutted and
amended on Senate Floor)
AB 531 (Levine) of 2005-2006 Legislative Session. Would have
eliminated the exception for interested owners and breeders that
allows them to serve on the CHRB, and would prohibit any person
from serving on the board if they have a financial interest in
horse racing. (Assembly Appropriations Committee)
REGISTERED SUPPORT / OPPOSITION :
Support
Sonoma County Fair
Opposition
None on file.
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531