BILL ANALYSIS �
AB 2637
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Date of Hearing: April 30, 2014
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Isadore Hall, Chair
AB 2637 (Hall) - As Amended: March 28, 2014
SUBJECT : Horse racing: pari-mutuel wagering and charity racing
days.
SUMMARY : Corrects an outdated cross-reference in Horse Racing
Law and increases from 20% to 30%, that at least 30% of the
distribution from charity day racing go to charities associated
with the horse racing industry. Specifically, this bill :
1) Deletes an outdated cross-reference in law which allows the
California Horse Racing Board (CHRB) to annually allocate a
maximum of 28 racing days to any county fair in the northern
zone which did not conduct horse racing prior to January 1,
1985.
2) Requires, among other distributions, that at least 30% of
the distribution from charity day racing be allocated to
charities associated with the horse racing industry.
EXISTING LAW :
1)Provides, Article IV, Section 19(b) of the Constitution of the
State of California, that the Legislature may provide for the
regulation of horse races and horse race meetings and wagering
on the results.
2)Grants the California Horse Racing Board (CHRB) the authority
to regulate the various forms of horse racing authorized in
this state.
3)Provides that each licensed racing association shall designate
three to five racing days during any one meeting (depending on
the length of the meeting), as charity days by the licensee
for the purpose of distribution of the net proceeds to
charitable beneficiaries.
4)Provides that at least 20% of the distribution from charity
day racing must be made to charities associated with the horse
racing industry. In addition to this 20%, another 5% of the
distribution must go to a welfare fund established for the
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benefit of horsemen, horsewomen and backstretch personnel, as
specified, and another 5% of the distribution must be provided
to a nonprofit corporation assisting horsemen, horsewomen and
backstretch personnel who are affected adversely as a result
of alcohol or substance abuse.
5)Requires that an additional 20% of the distribution from
charity day racing, up to a maximum of $2 million, be provided
as an endowment for a nonprofit corporation or trust which
assists disabled jockeys.
6)Requires that beneficiaries of these proceeds be a nonprofit
corporation or organization entitled by law to receive a
distribution made by a distributing agent, exempt or entitled
to exemption from state and federal income taxes, involved in
specified beneficial activities, and approved by the CHRB.
FISCAL EFFECT : Unknown.
COMMENTS :
Purpose of the bill : According to the author's office, this
measure is intended to give the horse racing industry the
ability to further support charities associated with the horse
racing industry. Currently, charity day proceeds go to a number
of causes, including a backstretch program to combat drug and
alcohol abuse, a workers' welfare fund, support of disabled
jockeys and other charities associated with the horse racing
industry.
The author states this bill is intended to ensure that
California's Horse Racing Industry is providing the proper funds
to aid charities dedicated to the rescue, rehabilitation,
retraining, adoption, and retirement of racehorses who no longer
complete at racetracks throughout the state.
For instance, the author states that it might be beneficial to
use charity day proceeds for therapeutic riding programs, which
include the use of Thoroughbreds in their programs. Therapeutic
riding programs provide horseback and therapeutic riding
instruction to children and adults with physical, developmental,
social and emotional disabilities. These types of programs
provide a place for retired race horses to be rehabilitated and
retrained to be placed and utilized in therapeutic riding
programs.
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The bill also deletes an outdated cross-reference in law which
allows the CHRB to annually allocate a maximum of 28 racing days
to any county fair in the northern zone which did not conduct
horse racing prior to January 1, 1985.
Background : Since the early 1940s, California racing
associations have been required to conduct charity racing days.
By law, each racing association must conduct a specified portion
of its race meeting for the benefit of charities meeting the
statutory criteria and approved by the CHRB. The law also
requires that at least 50% of the proceeds be distributed to
charitable groups within the horse-racing industry. While
recognizing the worthwhile nature of all the charitable
organizations favored by the various distributing foundations,
the CHRB encourages the foundations to exceed this minimum
percentage. According to the CHRB, charity racing day donations
in the 2011-12 Fiscal Year totaled just over $577,000.
On charity racing days, the racing association furnishes the
facilities and personnel necessary for the conduct of racing.
The income from all operations of the race meeting on charity
racing days, less deductions for actual expenses, is dedicated
to charitable purposes. The following racing associations
distributed funds last year: Los Angeles Turf Club, Hollywood
Park Racing Association, Del Mar Thoroughbred Club, and Los
Alamitos Quarter Horse Racing Association.
Prior legislation : SB 1337 (Vincent), Chapter 904, Statutes of
2002. Requires an additional 20% of the distribution from
charity day racing be provided as endowment for a nonprofit
corporation or trust that assists disabled jockeys, as provided.
Designates at least 5% of the charity funds to the welfare fund
established for the benefit of horsemen and backstretch
personnel and an additional 5% to a nonprofit corporation, who
purpose is to assist horsemen and backstretch personnel who are
affected by substance abuse.
SB 517 (Johnson), Chapter 170, Statutes of 1999. Allows a
California racing association to act as its own distributing
agent for distribution of charity day proceeds, provided the
association complies with existing law and receives approval
from the CHRB.
SB 220 (Rosenthal), Chapter 451, Statutes of 1997. Requires
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that at least 20% of the proceeds derived from charity racing
days be distributed to charities associated with the horse
racing industry.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531