BILL ANALYSIS �
AB 2005
Page 1
ASSEMBLY THIRD READING
AB 2005 (Chesbro and Levine)
As Amended April 24, 2014
Majority vote
GOVERNMENTAL ORGANIZATION 18-0 APPROPRIATIONS 16-1
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|Ayes:|Hall, Nestande, |Ayes:|Gatto, Bigelow, |
| |Achadjian, Bigelow, | |Bocanegra, Bradford, Ian |
| |Campos, Chesbro, Cooley, | |Calderon, Campos, |
| |Dababneh, Gray, Roger | |Donnelly, Eggman, Gomez, |
| |Hern�ndez, Jones-Sawyer, | |Holden, Linder, Pan, |
| |Levine, Medina, Perea, V. | |Quirk, Ridley-Thomas, |
| |Manuel P�rez, Salas, | |Wagner, Weber |
| |Waldron, Wilk | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Jones |
| | | | |
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SUMMARY : Expands the membership of the California Horse Racing
Board (CHRB) from seven to 11 board members. The four new board
members would be appointed as non-voting, ex-officio members as
follows: two Members of the Senate appointed by the Senate
Rules Committee, 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, seven public
members appointed by the Governor, two Members of the Senate
appointed by the Senate Rules Committee, and two 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 non-voting, ex-officio members for a term of
two 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
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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.
3)Provides that each member of the CHRB shall have been a
resident of the 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 : According to the Assembly Appropriations
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Committee, insignificant costs to the CHRB to staff and
administer the additional ex-officio members.
COMMENTS :
Purpose of the bill: According to the author, this bill is
intended to provide more legislative participation and oversight
of the CHRB. Currently, there is limited involvement with the
CHRB by the Legislature. Board members appointed by the
Governor, make critical decisions relating to the economic
viability of cities and counties within the state by way of an
annual allocation of race dates. Changes in the horse racing
calendar can have a dramatic financial impact on communities
throughout California.
The author points out, "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.
Background:
California Horse Racing Board: California's Horse Racing
Industry is heavily regulated. The "Horse Racing Law," found in
Business and Professions Code Chapter 4, 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 board by Governor
Edmund G. 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;
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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 CTC was established in 1978,
out of a growing concern for a single, unified California
transportation policy. The CTC consists of 11 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 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 (Commission) has
ex-officio member too: The 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:
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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.
Prior legislation: SB 863 (Yee) of 2007, would have prohibited
more than three 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.
(SB 863 was substantially amended on the Assembly Floor.)
SR 14 (Yee) of 2007, 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. (SR 14 died in the Senate Rules Committee.)
AB 1752 (Levine) of 2005, 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. (AB 1752 was substantially amended
on the Senate Floor)
AB 531 (Levine) of 2005, 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. (AB 531 died in
the Assembly Governmental Organization Committee.)
Analysis Prepared by : Eric Johnson / G.O. / (916) 319-2531
AB 2005
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