Amended in Senate June 30, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 1295


Introduced by Assembly Member Gray

February 27, 2015


An act to amendbegin delete Section 19596.2end deletebegin insert Sections 19596.2 and 19604end insert of the Business and Professions Code, relating to horse racing.

LEGISLATIVE COUNSEL’S DIGEST

AB 1295, as amended, Gray. Horse racing: out-of-state thoroughbred races:begin delete limitation exception.end deletebegin insert advance deposit wagering.end insert

begin delete

The

end delete

begin insert(1)end insertbegin insertend insertbegin insertTheend insert Horse Racing Law authorizes a thoroughbred racing association or fair to distribute the audiovisual signal and accept wagers on the results of out-of-state thoroughbred races conducted in the United States during the calendar period the association or fair is conducting a race meeting, including days on which there is no live racing being conducted by the association or fair, without the consent of the organization that represents horsemen and horsewomen participating in the race meeting and without regard to the amount of purses. Under that law, the total number of thoroughbred races imported by associations or fairs on a statewide basis under these provisions are required to not exceed 50 per day on days when live thoroughbred or fair racing is being conducted in the state, with the exception of prescribed races, including races imported into the combined central and southern zones when there is no live thoroughbred or fair racing being conducted in the combined central and southern zones.

This bill would additionally provide that the limitation of 50 imported races per day does not apply to races imported into the combined central and southern zones when there is live thoroughbred or fair racing being conducted in those zones but no live thoroughbred or fair racing is being conducted in the northern zone.

begin insert

(2) The Horse Racing Law authorizes advance deposit wagering to be conducted, with the approval of the California Horse Racing Board. That law requires the board to develop and adopt rules to license and regulate all phases of operation of advance deposit wagering for advance deposit wagering providers operating in California and authorizes a racing association, a fair, a satellite wagering facility, or a minisatellite wagering facility to enter into an agreement with an advance deposit wagering provider to accept and facilitate the placement of any wager at its facility that a California resident could make through that advance deposit wagering provider.

end insert
begin insert

The Horse Racing Law also requires that amounts distributed under these advance deposit wagering provisions be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting, except for harness racing meetings, provided that the amount of this reduction not exceed $2,000,000. That law requires that the method used to calculate the reduction in proportionate share be approved by the board and deducted and distributed in specified amounts, including 50% of the money to the board to establish and to administer jointly with the organization certified as the majority representative of California-licensed jockeys, a defined contribution retirement plan for California-licensed jockeys who retired from racing on or after January 1, 2009.

end insert
begin insert

This bill would provide that a person becomes a participant in the retirement plan when he or she is licensed as a jockey in California.

end insert

Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 19596.2 of the Business and Professions
2Code
is amended to read:

3

19596.2.  

(a) Notwithstanding any other law and except as
4provided in Section 19596.4, a thoroughbred racing association
5or fair may distribute the audiovisual signal and accept wagers on
6the results of out-of-state thoroughbred races conducted in the
7United States during the calendar period the association or fair is
P3    1conducting a race meeting, including days on which there is no
2live racing being conducted by the association or fair, without the
3consent of the organization that represents horsemen and
4horsewomen participating in the race meeting and without regard
5to the amount of purses. Further, the total number of thoroughbred
6races imported by associations or fairs on a statewide basis under
7this section shall not exceed 50 per day on days when live
8thoroughbred or fair racing is being conducted in the state. The
9limitation of 50 imported races per day does not apply to any of
10the following:

11(1) Races imported for wagering purposes pursuant to
12subdivision (c).

13(2) Races imported that are part of the race card of the Kentucky
14Derby, the Kentucky Oaks, the Preakness Stakes, the Belmont
15Stakes, the Jockey Club Gold Cup, the Travers Stakes, the
16Arlington Million, the Breeders’ Cup, the Dubaibegin insert Worldend insert Cup, the
17Arkansas Derby, the Apple Blossom Handicap, or the Haskell
18Invitational.

19(3) Races imported into the northern zone when there is no live
20thoroughbred or fair racing being conducted in the northern zone.

21(4) Races imported into the combined central and southern zones
22when there is no live thoroughbred or fair racing being conducted
23in the combined central and southern zones.

24(5) Races imported into the combined central and southern zones
25when there is live thoroughbred or fair racing being conducted in
26those zones but no live thoroughbred or fair racing is being
27conducted in the northern zone.

28(b) Any thoroughbred association or fair accepting wagers
29pursuant to subdivision (a) shall conduct the wagering in
30accordance with the applicable provisions of Sections 19601,
3119616, 19616.1, and 19616.2.

32(c) No thoroughbred association or fair may accept wagers
33pursuant to this section on out-of-state races commencing after 7
34p.m., Pacific standard time, without the consent of the harness or
35quarter horse racing association that is then conducting a live racing
36meeting in Orange or Sacramento Counties.

37begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 19604 of the end insertbegin insertBusiness and Professions Codeend insert
38begin insert is amended to read:end insert

39

19604.  

The board may authorizebegin delete anyend deletebegin insert aend insert racing association,
40racing fair, betting system, or multijurisdictional wagering hub to
P4    1conduct advance deposit wagering in accordance with this section.
2Racing associations, racing fairs, and their respective horsemen’s
3organizations may form a partnership, joint venture, or any other
4affiliation in order to further the purposes of this section.

5(a) As used in this section, the following definitions apply:

6(1) “Advance deposit wagering” (ADW) means a form of
7parimutuel wagering in which a person residing within California
8or outside of this state establishes an account with an ADW
9provider, and subsequently issues wagering instructions concerning
10the funds in this account, thereby authorizing the ADW provider
11holding the account to place wagers on the account owner’s behalf.

12(2) “ADW provider” means a licensee, betting system, or
13multijurisdictional wagering hub, located within California or
14outside this state, that is authorized to conduct advance deposit
15wagering pursuant to this section.

16(3) “Betting system” means a business conducted exclusively
17in this state that facilitates parimutuel wagering on races it
18simulcasts and other races it offers in its wagering menu.

19(4) “Breed of racing” means as follows:

20(A) With respect to associations and fairs licensed by the board
21to conduct thoroughbred, fair, or mixed breed race meetings, “breed
22of racing” shall mean thoroughbred.

23(B) With respect to associations licensed by the board to conduct
24quarter horse race meetings, “breed of racing” shall mean quarter
25horse.

26(C) With respect to associations and fairs licensed by the board
27to conduct standardbred race meetings, “breed of racing” shall
28mean standardbred.

29(5) “Contractual compensation” means the amount paid to an
30ADW provider from advance deposit wagers originating in this
31state. Contractual compensation includes, but is not limited to, hub
32fee payments, and may include host fee payments, if any, for
33out-of-state and out-of-country races. Contractual compensation
34is subject to the following requirements:

35(A) Excluding contractual compensation for host fee payments,
36contractual compensation shall not exceed 6.5 percent of the
37amount wagered.

38(B) The host fee payments included within contractual
39compensation shall not exceed 3.5 percent of the amount wagered.
40Notwithstanding this provision, the host fee payment with respect
P5    1to wagers on the Kentucky Derby, Preakness Stakes, Belmont
2Stakes, and selected Breeders’ Cup Championship races may be
3negotiated by the ADW provider, the racing associations accepting
4wagers on those races pursuant to Section 19596.2, and the
5horsemen’s organization.

6(C) In order to ensure fair and consistent market access fee
7distributions to associations, fairs, horsemen, and breeders, for
8each breed of racing, the percentage of wagers paid as contractual
9compensation to an ADW provider pursuant to the terms of a hub
10agreement with a racing association or fair when that racing
11association or fair is conducting live racing shall be the same as
12the percentage of wagers paid as contractual compensation to that
13ADW provider when that racing association or fair is not
14conducting live racing.

15(6) “Horsemen’s organization” means, with respect to a
16particular racing meeting, the organization recognized by the board
17as responsible for negotiating purse agreements on behalf of
18horsemen participating in that racing meeting.

19(7) “Hub agreement” means a written agreement providing for
20contractual compensation paid with respect to advance deposit
21wagers placed by California residents on a particular breed of
22racing conducted outside of California. In the event a hub
23agreement exceeds a term of two years, then an ADW provider,
24one or more racing associations or fairs that together conduct no
25fewer than five weeks of live racing for the breed covered by the
26hub agreement, and the horsemen’s organization responsible for
27negotiating purse agreements for the breed covered by the hub
28agreement shall be signatories to the hub agreement. A hub
29agreement is required for an ADW provider to receive contractual
30compensation for races conducted outside of California.

31(8) “Hub agreement arbitration” means an arbitration proceeding
32pursuant to which the disputed provisions of the hub agreement
33pertaining to the hub or host fees from wagers on races conducted
34outside of California provided pursuant to paragraph (2) of
35subdivision (b) are determined in accordance with the provisions
36of this paragraph. If a hub agreement arbitration is requested, all
37of the following shall apply:

38(A) The ADW provider shall be permitted to accept advance
39deposit wagers from California residents.

P6    1(B) The contractual compensation received by the ADW
2provider shall be the contractual compensation specified in the
3hub agreement that is the subject of the hub agreement arbitration.

4(C) The difference between the contractual compensation
5specified in subparagraph (B) and the contractual compensation
6determined to be payable at the conclusion of the hub agreement
7arbitration shall be calculated and paid within 15 days following
8the arbitrator’s decision and order. The hub agreement arbitration
9shall be held as promptly as possible, but in no event more than
1060 days following the demand for that arbitration. The arbitrator
11shall issue a decision no later than 15 days following the conclusion
12of the arbitration. A single arbitrator jointly selected by the ADW
13provider and the party requesting a hub agreement arbitration shall
14conduct the hub agreement arbitration. However, if the parties
15cannot agree on the arbitrator within seven days of issuance of the
16written demand for arbitration, then the arbitrator shall be selected
17pursuant to the Streamlined Arbitration Rules and Procedures of
18the Judicial Arbitration and Mediation Services, or pursuant to the
19applicable rules of its successor organization. In making the hub
20agreement arbitration determination, the arbitrator shall be required
21to choose between the contractual compensation of the hub
22agreement agreed to by the ADW provider or whatever different
23terms for the hub agreement were proposed by the party requesting
24the hub agreement arbitration. The arbitrator shall not be permitted
25to impose new, different, or compromised terms to the hub
26agreement. The arbitrator’s decision shall be final and binding on
27the parties. If an arbitration is requested, either party may bring
28an action in state court to compel a party to go into arbitration or
29to enforce the decision of the arbitrator. The cost of the hub
30agreement arbitration, including the cost of the arbitrator, shall be
31borne in equal shares by the parties to the hub agreement and the
32party or parties requesting a hub agreement arbitration. The hub
33agreement arbitration shall be administered by the Judicial
34Arbitration and Mediation Services pursuant to its Streamlined
35Arbitration Rules and Procedures or its successor organization.

36(9) “Incentive awards” means those payments provided for in
37Sections 19617.2, 19617.7, 19617.8, 19617.9, and 19619. The
38amount determined to be payable for incentive awards under this
39section shall be payable to the applicable official registering agency
40and thereafter distributed as provided in this chapter.

P7    1(10) “Licensee” meansbegin delete anyend deletebegin insert aend insert racing association or fair licensed
2to conduct a live racing meet in this state, or affiliation thereof,
3authorized under this section.

4(11) “Market access fee” means the amount of advance deposit
5wagering handle remaining after the payment of winning wagers,
6and after the payment of contractual compensation, if any, to an
7ADW provider. Market access fees shall be distributed in
8accordance with subdivision (f).

9(12) “Multijurisdictional wagering hub” means a business
10conducted in more than one jurisdiction that facilitates parimutuel
11wagering on races it simulcasts and other races it offers in its
12wagering menu.

13(13) “Racing fair” means a fair authorized by the board to
14conduct live racing.

15(14) “Zone” means the zone of the state, as defined in Section
1619530.5, except as modified by the provisions of subdivision (f)
17of Section 19601. For these purposes, the central and southern
18zones shall together be considered one zone.

19(b) Wagers shall be accepted according to the procedures set
20forth in this subdivision.

21(1) No ADW provider shall accept wagers or wagering
22instructions on races conducted in California from a resident of
23California unless all of the following conditions are met:

24(A) The ADW provider is licensed by the board.

25(B) A written agreement allowing those wagers exists with the
26racing association or fair conducting the races on which the wagers
27are made.

28(C) The agreement referenced in subparagraph (B) shall have
29been approved in writing by the horsemen’s organization
30responsible for negotiating purse agreements for the breed on
31which the wagers are made in accordance with the Interstate
32Horseracing Act (15 U.S.C. Sec. 3001 et seq.), regardless of the
33location of the ADW provider, whether in California or otherwise,
34including, without limitation, any and all requirements contained
35therein with respect to written consents and required written
36agreements of horsemen’s groups to the terms and conditions of
37the acceptance of those wagers and any arrangements as to the
38exclusivity between the host racing association or fair and the
39ADW provider. For purposes of this subdivision, the substantive
40provisions of the Interstate Horseracing Act shall be taken into
P8    1account without regard to whether, by its own terms, that act is
2applicable to advance deposit wagering on races conducted in
3California accepted from residents of California.

4(2) No ADW provider shall accept wagers or wagering
5instructions on races conducted outside of California from a
6resident of California unless all of the following conditions are
7met:

8(A) The ADW provider is licensed by the board.

9(B) There is a hub agreement between the ADW provider and
10one or both of (i) one or more racing associations or fairs that
11together conduct no fewer than five weeks of live racing on the
12breed on which wagering is conducted during the calendar year
13during which the wager is placed, and (ii) the horsemen’s
14organization responsible for negotiating purse agreements for the
15breed on which wagering is conducted.

16(C) If the parties referenced in clauses (i) and (ii) of
17subparagraph (B) are both signatories to the hub agreement, then
18no party shall have the right to request a hub agreement arbitration.

19(D) If only the party or parties referenced in clause (i) of
20subparagraph (B) is a signatory to the hub agreement, then the
21signatories to the hub agreement shall, within five days of
22execution of the hub agreement, provide a copy of the hub
23agreement to the horsemen’s organization responsible for
24negotiating purse agreements for the breed on which wagering is
25conducted for each race conducted outside of California on which
26California residents may place advance deposit wagers. Before
27receipt of the hub agreement, the horsemen’s organization shall
28sign a nondisclosure agreement with the ADW provider agreeing
29to hold confidential all terms of the hub agreement. If the
30horsemen’s organization wants to request a hub agreement
31arbitration, it shall send written notice of its election to the
32signatories to the hub agreement within 10 days after receipt of
33the copy of the hub agreement, and shall provide its alternate
34proposal to the hub and host fees specified in the hub agreement
35with that written notice. If the horsemen’s organization does not
36provide that written notice within the 10-day period, then no party
37shall have the right to request a hub agreement arbitration. If the
38horsemen’s organization does provide that written notice within
39the 10-day period, then the ADW provider shall have 10 days to
40elect in writing to do one of the following:

P9    1(i) Abandon the hub agreement.

2(ii) Accept the alternate proposal submitted by the horsemen’s
3organization.

4(iii) Proceed with a hub agreement arbitration.

5(E) If only the party referenced in clause (ii) of subparagraph
6(B) is a signatory to the hub agreement, then the signatories to the
7hub agreement shall, within five days of execution of the hub
8 agreement, provide written notice of the host and hub fees
9applicable pursuant to the hub agreement for each race conducted
10outside of California on which California residents may place
11advance deposit wagers, which notice shall be provided to all
12racing associations and fairs conducting live racing of the same
13breed covered by the hub agreement. If any racing association or
14fair wants to request a hub agreement arbitration, it shall send
15written notice of its election to the signatories to the hub agreement
16within 10 days after receipt of the notice of host and hub fees. It
17shall also provide its alternate proposal to the hub and host fees
18specified in the hub agreement with the notice of its election. If
19more than one racing association or fair provides notice of their
20request for hub agreement arbitration, those racing associations or
21fairs, or both, shall have a period of five days to jointly agree upon
22which of their alternate proposals shall be the official proposal for
23purposes of the hub agreement arbitration. If one or more racing
24associations or fairs that together conduct no fewer than five weeks
25of live racing on the breed on which wagering is conducted during
26the calendar year during which the wager is placed does not provide
27written notice of their election to arbitrate within the 10-day period,
28then no party shall have the right to request a hub agreement
29arbitration. If a valid hub agreement arbitration request is made,
30then the ADW provider shall have 10 days to elect in writing to
31do one of the following:

32(i) Abandon the hub agreement.

33(ii) Accept the alternate proposal submitted by the racing
34associations or fairs.

35(iii) Proceed with a hub agreement arbitration.

36The results ofbegin delete anyend deletebegin insert aend insert hub agreement arbitration elected pursuant
37to this subdivision shall be binding on all other associations and
38fairs conducting live racing on that breed.

39(F) The acceptance thereof is in compliance with the provisions
40of the Interstate Horseracing Act (15 U.S.C. Sec. 3001 et seq.),
P10   1regardless of the location of the ADW provider, whether in
2California or otherwise, including, without limitation, any and all
3requirements contained therein with respect to written consents
4and required written agreements of horsemen’s groups to the terms
5and conditions of the acceptance of the wagers and any
6arrangements as to the exclusivity between the host racing
7association or fair and the ADW provider.

8(c) An advance deposit wager may be made only by the ADW
9provider holding the account pursuant to wagering instructions
10issued by the owner of the funds communicated by telephone call
11or through other electronic media. The ADW provider shall ensure
12the identification of the account’s owner by using methods and
13technologies approved by the board.begin delete Anyend deletebegin insert Anend insert ADW provider that
14accepts wagering instructions concerning races conducted in
15California, or accepts wagering instructions originating in
16California, shall provide a full accounting and verification of the
17source of the wagers thereby made, including the postal ZIP Code
18and breed of the source of the wagers, in the form of a daily
19download of parimutuel data to a database designated by the board.
20The daily download shall be delivered in a timely basis using file
21formats specified by the database designated by the board, and
22shall include any and all data necessary to calculate and distribute
23moneys according to the rules and regulations governing California
24parimutuel wagering.begin delete Any and allend deletebegin insert Allend insert reasonable costs associated
25with the creation, provision, and transfer of this data shall be borne
26by the ADW provider.

27(d) (1) (A) The board shall develop and adopt rules to license
28and regulate all phases of operation of advance deposit wagering
29for ADW providers operating in California, including advance
30deposit wagering activity that takes place within a minisatellite
31wagering facility. The board may recoverbegin delete anyend delete costs associated
32with the licensing or regulation of advance deposit wagering
33activities in a minisatellite wagering facility either directly from
34the ADW provider or through an appropriate increase in the
35funding formula devised by the board pursuant to paragraph (1)
36of subdivision (a) of Section 19616.51.

37(B) The board shall not approve an application for an original
38or renewal license as an ADW provider unless the entity, if
39requested in writing by a bona fide labor organization no later than
P11   190 days before licensing, has entered into a contractual agreement
2with that labor organization that provides all of the following:

3(i) The labor organization has historically represented employees
4who accept or process any form of wagering at the nearest horse
5racing meeting located in California.

6(ii) The agreement establishes the method by which the ADW
7provider will agree to recognize and bargain in good faith with a
8labor organization that has demonstrated majority status by
9submitting authorization cards signed by those employees who
10accept or process any form of wagering for which a California
11ADW license is required.

12(iii) The agreement requires the ADW provider to maintain its
13neutrality concerning the choice of those employees who accept
14or process any form of wagering for which a California ADW
15license is required whether or not to authorize the labor
16organization to represent them with regard to wages, hours, and
17other terms and conditions of employment.

18(iv) The agreement applies to those classifications of employees
19who accept or process wagers for which a California ADW license
20is required whether the facility is located within or outside of
21California.

22(C) (i) The agreement required by subparagraph (B) shall not
23be conditioned by either party upon the other party agreeing to
24matters outside the requirements of subparagraph (B).

25(ii) The requirement in subparagraph (B) shall not apply to an
26 ADW provider that has entered into a collective bargaining
27agreement with a bona fide labor organization that is the exclusive
28bargaining representative of employees who accept or process
29parimutuel wagers on races for which an ADW license is required
30whether the facility is located within or outside of California.

31(D) Permanent state or county employees and nonprofit
32organizations that have historically performed certain services at
33county, state, or district fairs may continue to provide those
34services.

35(E) Parimutuel clerks employed by racing associations or fairs
36or employees of ADW providers who accept or process any form
37of wagers who are laid off due to lack of work shall have
38preferential hiring rights for new positions with their employer in
39occupations whose duties include accepting or processing any
40form of wagers, or the operation, repair, service, or maintenance
P12   1of equipment that accepts or processes any form of wagering at a
2racetrack, satellite wagering facility, or ADW provider licensed
3by the board. The preferential hiring rights established by this
4subdivision shall be conditioned upon the employee meeting the
5minimum qualification requirements of the new job.

6(2) The board shall develop and adopt rules and regulations
7requiring ADW providers to establish security access policies and
8safeguards, including, but not limited to, the following:

9(A) The ADW provider shall use board-approved methods to
10perform location and age verification confirmation with respect
11to persons establishing an advance deposit wagering account.

12(B) The ADW provider shall use personal identification numbers
13(PINs) or other technologies to assure that only the accountholder
14has access to the advance deposit wagering account.

15(C) The ADW provider shall provide for withdrawals from the
16wagering account only by means of a check made payable to the
17accountholder and sent to the address of the accountholder or by
18means of an electronic transfer to an account held by the verified
19accountholder or the accountholder may withdraw funds from the
20wagering account at a facility approved by the board by presenting
21verifiable account identification information.

22(D) The ADW provider shall allow the board access to its
23premises to visit, investigate, audit, and place expert accountants
24and other persons it deems necessary for the purpose of ensuring
25that its rules and regulations concerning credit authorization,
26account access, and other security provisions are strictly complied
27with. To ensure that the amounts retained from the parimutuel
28handle are distributed under law, rules, or agreements, any ADW
29provider that accepts wagering instructions concerning races
30conducted in California or accepts wagering instructions originating
31in California shall provide an independent “agreed-upon
32procedures” audit for each California racing meeting, within 60
33days of the conclusion of the race meeting. The auditing firm to
34be used and the content and scope of the audit, including host fee
35obligations, shall be set forth in the applicable agreement. The
36ADW provider shall provide the board, horsemen’s organizations,
37and the host racing association with an annual parimutuel audit of
38the financial transactions of the ADW provider with respect to
39wagers authorized pursuant to this section, prepared in accordance
40with generally accepted auditing standards and the requirements
P13   1of the board. Any and all reasonable costs associated with those
2audits shall be borne by the ADW provider.

3(3) The board shall prohibit advance deposit wagering
4 advertising that it determines to be deceptive to the public. The
5board shall also require, by regulation, that every form of
6advertising contain a statement that minors are not allowed to open
7or have access to advance deposit wagering accounts.

8(e) In order for a licensee, betting system, or multijurisdictional
9wagering hub to be approved by the board as an ADW provider,
10it shall meet both of the following requirements:

11(1) All wagers thereby made shall be included in the appropriate
12parimutuel pool under a contractual agreement with the applicable
13host track.

14(2) The amounts deducted from advance deposit wagers shall
15be in accordance with the provisions of this chapter.

16(f) After the payment of contractual compensation, the amounts
17received as market access fees from advance deposit wagers, which
18shall not be considered for purposes of Section 19616.51, shall be
19distributed as follows:

20(1) An amount equal to 0.0011 multiplied by the amount handled
21on advance deposit wagers originating in California for each racing
22meeting shall be distributed to the Center for Equine Health to
23establish the Kenneth L. Maddy Fund for the benefit of the School
24of Veterinary Medicine at the University of California at Davis.

25(2) An amount equal to 0.0003 multiplied by the amount handled
26on advance deposit wagers originating in California for each racing
27meeting shall be distributed to the Public Employment Relations
28Board to cover costs associated with audits conducted pursuant to
29Section 19526 and for purposes of reimbursing the State Mediation
30and Conciliation Service for costs incurred pursuant to this section.
31However, if that amount would exceed the costs of the Public
32Employment Relations Board, the amount distributed to that board
33shall be reduced, and that reduction shall be forwarded to an
34organization designated by the racing association or fair described
35in subdivision (a) for the purpose of augmenting a compulsive
36gambling prevention program specifically addressing that problem.

37(3) An amount equal to 0.00165 multiplied by the amount
38handled on advance deposit wagers that originate in California for
39each racing meeting shall be distributed as follows:

P14   1(A) One-half of the amount shall be distributed to supplement
2the trainer-administered pension plans for backstretch personnel
3established pursuant to Section 19613. Moneys distributed pursuant
4to this subparagraph shall supplement, and not supplant, moneys
5distributed to that fund pursuant to Section 19613 or any other
6provision of law.

7(B) One-half of the amount shall be distributed to the welfare
8fund established for the benefit of horsemen and backstretch
9personnel pursuant to subdivision (b) of Section 19641. Moneys
10distributed pursuant to this subparagraph shall supplement, and
11not supplant, moneys distributed to that fund pursuant to Section
1219641 or any other provision of law.

13(4) With respect to wagers on each breed of racing that originate
14in California, an amount equal to 2 percent of the first two hundred
15fifty million dollars ($250,000,000) of handle from all advance
16deposit wagers originating from within California annually, an
17amount equal to 1.5 percent of the next two hundred fifty million
18dollars ($250,000,000) of handle from all advance deposit wagers
19originating from within California annually, an amount equal to
201 percent of the next two hundred fifty million dollars
21($250,000,000) of handle from all advance deposit wagers
22originating from within California annually, and an amount equal
23to 0.50 percent of handle from all advance deposit wagers
24originating from within California in excess of seven hundred fifty
25million dollars ($750,000,000) annually, shall be distributed as
26satellite wagering commissions. Satellite wagering facilities that
27were not operational in 2001, other than one each in the Cities of
28Inglewood and San Mateo, and two additional facilities each
29operated by the Alameda County Fair and the Los Angeles County
30Fair and their partners and other than existing facilities that are
31relocated, are not eligible for satellite wagering commission
32distributions under this section. The satellite wagering facility
33commissions calculated in accordance with this subdivision shall
34be distributed to each satellite wagering facility and racing
35association or fair in the zone in which the wager originated in the
36same relative proportions that the satellite wagering facility or the
37racing association or fair generated satellite commissions during
38the previous calendar year. If there is a reduction in the satellite
39wagering commissions pursuant to this section, the benefits
40therefrom shall be distributed equitably as purses and commissions
P15   1to all associations and racing fairs generating advance deposit
2wagers in proportion to the handle generated by those associations
3and racing fairs. If a satellite wagering facility is permanently
4closed other than for renovation or remodeling, or if a satellite
5wagering facility is unwilling or unable to accept all of the signals
6that are available to that facility, the commissions otherwise
7provided for in this subdivision that would be payable to that
8facility shall be proportionately reduced to take into account the
9time that satellite wagering is no longer conducted by that facility,
10or the payment of those commissions shall be eliminated entirely
11if the facility is permanently closed, and, in either case, the satellite
12wagering commissions not paid shall be proportionately
13redistributed to the other eligible satellite wagering facilities. For
14purposes of this section, the purse funds distributed pursuant to
15Section 19605.72 shall be considered to be satellite wagering
16facility commissions attributable to thoroughbred races at the
17locations described in that section.

18(5) After the distribution of the amounts set forth in paragraphs
19(1) to (4), inclusive, the remaining market access fees from advance
20deposit wagers originating in California shall be as follows:

21(A) With respect to wagers on each breed of racing, the amount
22remaining shall be distributed to the racing association or fair that
23is conducting live racing on that breed during the calendar period
24in the zone in which the wager originated. That amount shall be
25allocated to that racing association or fair as commissions, to
26horsemen participating in that racing meeting in the form of purses,
27and as incentive awards, in the same relative proportion as they
28were generated or earned during the prior calendar year at that
29racing association or fair on races conducted or imported by that
30racing association or fair after making all deductions required by
31applicable law. Notwithstanding any other law, the distributions
32with respect to each breed of racing set forth in this subparagraph
33may be altered upon the approval of the board, in accordance with
34an agreement signed by the respective associations, fairs,
35horsemen’s organizations, and breeders organizations receiving
36those distributions.

37(B) If the provisions of Section 19601.2 apply, then the amount
38distributed to the applicable racing associations or fairs shall first
39be divided between those racing associations or fairs in direct
40proportion to the total amount wagered in the applicable zone on
P16   1the live races conducted by the respective association or fair.
2 Notwithstanding this requirement, when the provisions of
3subdivision (b) of Section 19607.5 apply to the 2nd District
4Agricultural Association in Stockton or the California Exposition
5and State Fair in Sacramento, then the total amount distributed to
6the applicable racing associations or fairs shall first be divided
7equally, with 50 percent distributed to applicable fairs and 50
8percent distributed to applicable associations.

9(C) Notwithstanding any provisions of this section to the
10contrary, with respect to wagers on out-of-state and out-of-country
11thoroughbred races conducted after 6 p.m., Pacificbegin insert standardend insert time,
1250 percent of the amount remaining shall be distributed as
13commissions to thoroughbred associations and racing fairs, as
14thoroughbred and fair purses, and as incentive awards in
15accordance with subparagraph (A), and the remaining 50 percent,
16together with the total amount remaining from advance deposit
17wagering originating from California out-of-state and
18out-of-country harness and quarter horse races conducted after 6
19p.m., Pacificbegin insert standardend insert time, shall be distributed as commissions
20on a pro rata basis to the applicable licensed quarter horse
21association and the applicable licensed harness association, based
22upon the amount handled in state, both on- and off-track, on each
23breed’s own live races in the previous year by that association, or
24its predecessor association. One-half of the amount thereby
25received by each association shall be retained by that association
26as a commission, and the other half of the money received shall
27be distributed as purses to the horsemen participating in its current
28or next scheduled licensed racing meeting.

29(D) Notwithstanding any provisions of this section to the
30contrary, with respect to wagers on out-of-state and out-of-country
31nonthoroughbred races conducted before 6 p.m., Pacificbegin insert standardend insert
32 time, 50 percent of the amount remaining shall be distributed as
33commissions as provided in subparagraph (C) for licensed quarter
34horse and harness associations, and the remaining 50 percent shall
35be distributed as commissions to the applicable thoroughbred
36associations or fairs, as thoroughbred and fair purses, and as
37incentive awards in accordance with subparagraph (A).

38(E) Notwithstanding any provision of this section to the contrary,
39the distribution of market access fees pursuant to this subparagraph
40may be altered upon the approval of the board, in accordance with
P17   1an agreement signed by all parties whose distributions would be
2affected.

3(g) A racing association, a fair, a satellite wagering facility, or
4a minisatellite wagering facility may enter into an agreement with
5an ADW provider to accept and facilitate the placement of any
6wager from a patron at its facility that a California resident could
7make through that ADW provider. Deductions from wagers made
8pursuant tobegin delete theend deletebegin insert thisend insert agreement shall be distributed in accordance
9with the provisions of this chapter governing wagers placed at that
10facility, except that the board may authorize alternative
11distributions as agreed to by the ADW provider, the operator of
12the facility accepting the wager, the association or fair conducting
13that breed of racing in the zone where the wager is placed, and the
14respective horsemen’s organization.

15(h) Anybegin delete issuesend deletebegin insert issueend insert concerning the interpretation or application
16of this section shall be resolved by the board.

17(i) Amounts distributed under this section shall be proportionally
18reduced by an amount equal to 0.00295 multiplied by the amount
19 handled on advance deposit wagers originating in California for
20each racing meeting, except for harness racing meetings, provided
21that the amount of this reduction shall not exceed two million
22dollars ($2,000,000). The method used to calculate the reduction
23in proportionate share shall be approved by the board. The amount
24deducted shall be distributed as follows:

25(1) begin insert(A)end insertbegin insertend insertFifty percent of the money to the board to establish and
26to administer jointly with the organization certified as the majority
27representative of California-licensed jockeys pursuant to Section
2819612.9, a defined contribution retirement plan for
29California-licensed jockeys who retired from racing on or after
30January 1, 2009.

begin insert

31(B) A person becomes a participant in the retirement plan when
32he or she is licensed as a jockey in California.

end insert

33(2) The remaining 50 percent of the money shall be distributed
34as follows:

35(A) Seventy percent shall be distributed to supplement the
36trainer-administered pension plans for backstretch personnel
37established pursuant to Section 19613. Moneys distributed pursuant
38to this subparagraph shall supplement, and not supplant, moneys
39distributed to that fund pursuant to Section 19613 or any other
40provision of law.

P18   1(B) Thirty percent shall be distributed to the welfare fund
2established for the benefit of horsemen and backstretch personnel
3pursuant to subdivision (b) of Section 19641. Moneys distributed
4pursuant to this subparagraph shall supplement, and not supplant,
5moneys distributed to that fund pursuant to Section 19641 or any
6other provision of law.

7(j) Amounts distributed under this section shall be proportionally
8reduced by an amount equal to 0.00295 multiplied by the amount
9handled on advance deposit wagers originating in California for
10each harness racing meeting, provided that the amount of this
11reduction shall not exceed five hundred thousand dollars
12($500,000). The method used to calculate the reduction in
13proportionate share shall be approved by the board. The amount
14deducted shall be distributed as follows:

15(1) First to the welfare fund established for the benefit of
16horsemen and backstretch personnel, pursuant to subdivision (b)
17of Section 19641, and administered by the organization
18representing the horsemen participating in the race meeting, in the
19amount requested by the welfare fund. Moneys distributed pursuant
20to this paragraph shall supplement, and not supplant, moneys
21distributed to that fund pursuant to Section 19641 or any other
22provision of law.

23(2) The amount remaining, if any, shall be utilized for the benefit
24of the horsemen as specified in a written agreement between the
25racing association that conducts the live harness race meeting and
26the organization representing the horsemen participating in the
27race meeting.

28(k) Notwithstanding subdivision (j), amounts generated that
29were deducted from amounts handled on advance deposit wagering
30for harness racing meetings pursuant to subdivision (i), as that
31section read before the enactment of subdivision (j), that have been
32held in trust by the California Exposition and State Fair shall be
33distributed as follows:

34(1) Fifty percent to the harness racing horsemen who participated
35in the racing meeting that concluded June 16, 2012, in the form
36of purses.

37(2) Fifty percent to the California Exposition and State Fair in
38the form of commissions.



O

    98