California Legislature—2015–16 Regular Session

Assembly BillNo. 1539


Introduced by Committee on Governmental Organization (Assembly Members Gray (Chair), Linder (Vice Chair), Achadjian, Bigelow, Cooley, Cooper, Jones-Sawyer, Levine, Mayes, Salas, Steinorth, and Waldron)

March 26, 2015


An act to amend Section 19604 of the Business and Professions Code, relating to horse racing.

LEGISLATIVE COUNSEL’S DIGEST

AB 1539, as introduced, Committee on Governmental Organization. Horse racing: advance deposit wagering: deductions and distributions: jockey retirement plan.

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.

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.

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.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

P2    1

SECTION 1.  

Section 19604 of the Business and Professions
2Code
is amended to read:

3

19604.  

The board may authorizebegin delete anyend deletebegin insert aend insert racing association,
4racing fair, betting system, or multijurisdictional wagering hub to
5conduct advance deposit wagering in accordance with this section.
6Racing associations, racing fairs, and their respective horsemen’s
7organizations may form a partnership, joint venture, or any other
8affiliation in order to further the purposes of this section.

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

10(1) “Advance deposit wagering” (ADW) means a form of
11parimutuel wagering in which a person residing within California
12or outside of this state establishes an account with an ADW
13provider, and subsequently issues wagering instructions concerning
14the funds in this account, thereby authorizing the ADW provider
15holding the account to place wagers on the account owner’s behalf.

16(2) “ADW provider” means a licensee, betting system, or
17multijurisdictional wagering hub, located within California or
18outside this state, that is authorized to conduct advance deposit
19wagering pursuant to this section.

20(3) “Betting system” means a business conducted exclusively
21in this state that facilitates parimutuel wagering on races it
22simulcasts and other races it offers in its wagering menu.

23(4) “Breed of racing” means as follows:

P3    1(A) With respect to associations and fairs licensed by the board
2to conduct thoroughbred, fair, or mixed breed race meetings, “breed
3of racing” shall mean thoroughbred.

4(B) With respect to associations licensed by the board to conduct
5quarter horse race meetings, “breed of racing” shall mean quarter
6horse.

7(C) With respect to associations and fairs licensed by the board
8to conduct standardbred race meetings, “breed of racing” shall
9mean standardbred.

10(5) “Contractual compensation” means the amount paid to an
11ADW provider from advance deposit wagers originating in this
12state. Contractual compensation includes, but is not limited to, hub
13fee payments, and may include host fee payments, if any, for
14out-of-state and out-of-country races. Contractual compensation
15is subject to the following requirements:

16(A) Excluding contractual compensation for host fee payments,
17contractual compensation shall not exceed 6.5 percent of the
18amount wagered.

19(B) The host fee payments included within contractual
20compensation shall not exceed 3.5 percent of the amount wagered.
21Notwithstanding this provision, the host fee payment with respect
22to wagers on the Kentucky Derby, Preakness Stakes, Belmont
23Stakes, and selected Breeders’ Cup Championship races may be
24negotiated by the ADW provider, the racing associations accepting
25wagers on those races pursuant to Section 19596.2, and the
26horsemen’s organization.

27(C) In order to ensure fair and consistent market access fee
28distributions to associations, fairs, horsemen, and breeders, for
29each breed of racing, the percentage of wagers paid as contractual
30compensation to an ADW provider pursuant to the terms of a hub
31agreement with a racing association or fair when that racing
32association or fair is conducting live racing shall be the same as
33the percentage of wagers paid as contractual compensation to that
34ADW provider when that racing association or fair is not
35conducting live racing.

36(6) “Horsemen’s organization” means, with respect to a
37particular racing meeting, the organization recognized by the board
38as responsible for negotiating purse agreements on behalf of
39horsemen participating in that racing meeting.

P4    1(7) “Hub agreement” means a written agreement providing for
2contractual compensation paid with respect to advance deposit
3wagers placed by California residents on a particular breed of
4racing conducted outside of California. In the event a hub
5agreement exceeds a term of two years, then an ADW provider,
6one or more racing associations or fairs that together conduct no
7fewer than five weeks of live racing for the breed covered by the
8hub agreement, and the horsemen’s organization responsible for
9negotiating purse agreements for the breed covered by the hub
10agreement shall be signatories to the hub agreement. A hub
11agreement is required for an ADW provider to receive contractual
12compensation for races conducted outside of California.

13(8) “Hub agreement arbitration” means an arbitration proceeding
14pursuant to which the disputed provisions of the hub agreement
15pertaining to the hub or host fees from wagers on races conducted
16outside of California provided pursuant to paragraph (2) of
17subdivision (b) are determined in accordance with the provisions
18of this paragraph. If a hub agreement arbitration is requested, all
19of the following shall apply:

20(A) The ADW provider shall be permitted to accept advance
21deposit wagers from California residents.

22(B) The contractual compensation received by the ADW
23provider shall be the contractual compensation specified in the
24hub agreement that is the subject of the hub agreement arbitration.

25(C) The difference between the contractual compensation
26specified in subparagraph (B) and the contractual compensation
27determined to be payable at the conclusion of the hub agreement
28arbitration shall be calculated and paid within 15 days following
29the arbitrator’s decision and order. The hub agreement arbitration
30shall be held as promptly as possible, but in no event more than
3160 days following the demand for that arbitration. The arbitrator
32shall issue a decision no later than 15 days following the conclusion
33of the arbitration. A single arbitrator jointly selected by the ADW
34provider and the party requesting a hub agreement arbitration shall
35conduct the hub agreement arbitration. However, if the parties
36cannot agree on the arbitrator within seven days of issuance of the
37written demand for arbitration, then the arbitrator shall be selected
38pursuant to the Streamlined Arbitration Rules and Procedures of
39the Judicial Arbitration and Mediation Services, or pursuant to the
40applicable rules of its successor organization. In making the hub
P5    1agreement arbitration determination, the arbitrator shall be required
2to choose between the contractual compensation of the hub
3agreement agreed to by the ADW provider or whatever different
4terms for the hub agreement were proposed by the party requesting
5the hub agreement arbitration. The arbitrator shall not be permitted
6to impose new, different, or compromised terms to the hub
7agreement. The arbitrator’s decision shall be final and binding on
8the parties. If an arbitration is requested, either party may bring
9an action in state court to compel a party to go into arbitration or
10to enforce the decision of the arbitrator. The cost of the hub
11agreement arbitration, including the cost of the arbitrator, shall be
12borne in equal shares by the parties to the hub agreement and the
13party or parties requesting a hub agreement arbitration. The hub
14agreement arbitration shall be administered by the Judicial
15Arbitration and Mediation Services pursuant to its Streamlined
16Arbitration Rules and Procedures or its successor organization.

17(9) “Incentive awards” means those payments provided for in
18Sections 19617.2, 19617.7, 19617.8, 19617.9, and 19619. The
19amount determined to be payable for incentive awards under this
20section shall be payable to the applicable official registering agency
21and thereafter distributed as provided in this chapter.

22(10) “Licensee” meansbegin delete anyend deletebegin insert aend insert racing association or fair licensed
23to conduct a live racing meet in this state, or affiliation thereof,
24authorized under this section.

25(11) “Market access fee” means the amount of advance deposit
26wagering handle remaining after the payment of winning wagers,
27and after the payment of contractual compensation, if any, to an
28ADW provider. Market access fees shall be distributed in
29accordance with subdivision (f).

30(12) “Multijurisdictional wagering hub” means a business
31conducted in more than one jurisdiction that facilitates parimutuel
32wagering on races it simulcasts and other races it offers in its
33wagering menu.

34(13) “Racing fair” means a fair authorized by the board to
35conduct live racing.

36(14) “Zone” means the zone of the state, as defined in Section
3719530.5, except as modified by the provisions of subdivision (f)
38of Section 19601. For these purposes, the central and southern
39zones shall together be considered one zone.

P6    1(b) Wagers shall be accepted according to the procedures set
2forth in this subdivision.

3(1) No ADW provider shall accept wagers or wagering
4instructions on races conducted in California from a resident of
5California unless all of the following conditions are met:

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

7(B) A written agreement allowing those wagers exists with the
8racing association or fair conducting the races on which the wagers
9are made.

10(C) The agreement referenced in subparagraph (B) shall have
11been approved in writing by the horsemen’s organization
12responsible for negotiating purse agreements for the breed on
13which the wagers are made in accordance with the Interstate
14Horseracing Act (15 U.S.C. Sec. 3001 et seq.), regardless of the
15location of the ADW provider, whether in California or otherwise,
16including, without limitation, any and all requirements contained
17therein with respect to written consents and required written
18agreements of horsemen’s groups to the terms and conditions of
19the acceptance of those wagers and any arrangements as to the
20exclusivity between the host racing association or fair and the
21ADW provider. For purposes of this subdivision, the substantive
22provisions of the Interstate Horseracing Act shall be taken into
23account without regard to whether, by its own terms, that act is
24applicable to advance deposit wagering on races conducted in
25California accepted from residents of California.

26(2) No ADW provider shall accept wagers or wagering
27instructions on races conducted outside of California from a
28resident of California unless all of the following conditions are
29met:

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

31(B) There is a hub agreement between the ADW provider and
32one or both of (i) one or more racing associations or fairs that
33together conduct no fewer than five weeks of live racing on the
34breed on which wagering is conducted during the calendar year
35during which the wager is placed, and (ii) the horsemen’s
36organization responsible for negotiating purse agreements for the
37breed on which wagering is conducted.

38(C) If the parties referenced in clauses (i) and (ii) of
39subparagraph (B) are both signatories to the hub agreement, then
40no party shall have the right to request a hub agreement arbitration.

P7    1(D) If only the party or parties referenced in clause (i) of
2subparagraph (B) is a signatory to the hub agreement, then the
3signatories to the hub agreement shall, within five days of
4execution of the hub agreement, provide a copy of the hub
5agreement to the horsemen’s organization responsible for
6negotiating purse agreements for the breed on which wagering is
7conducted for each race conducted outside of California on which
8California residents may place advance deposit wagers. Before
9receipt of the hub agreement, the horsemen’s organization shall
10sign a nondisclosure agreement with the ADW provider agreeing
11to hold confidential all terms of the hub agreement. If the
12horsemen’s organization wants to request a hub agreement
13arbitration, it shall send written notice of its election to the
14signatories to the hub agreement within 10 days after receipt of
15the copy of the hub agreement, and shall provide its alternate
16proposal to the hub and host fees specified in the hub agreement
17with that written notice. If the horsemen’s organization does not
18provide that written notice within the 10-day period, then no party
19shall have the right to request a hub agreement arbitration. If the
20horsemen’s organization does provide that written notice within
21the 10-day period, then the ADW provider shall have 10 days to
22elect in writing to do one of the following:

23(i) Abandon the hub agreement.

24(ii) Accept the alternate proposal submitted by the horsemen’s
25organization.

26(iii) Proceed with a hub agreement arbitration.

27(E) If only the party referenced in clause (ii) of subparagraph
28(B) is a signatory to the hub agreement, then the signatories to the
29hub agreement shall, within five days of execution of the hub
30 agreement, provide written notice of the host and hub fees
31applicable pursuant to the hub agreement for each race conducted
32outside of California on which California residents may place
33advance deposit wagers, which notice shall be provided to all
34racing associations and fairs conducting live racing of the same
35breed covered by the hub agreement. If any racing association or
36fair wants to request a hub agreement arbitration, it shall send
37written notice of its election to the signatories to the hub agreement
38within 10 days after receipt of the notice of host and hub fees. It
39shall also provide its alternate proposal to the hub and host fees
40specified in the hub agreement with the notice of its election. If
P8    1more than one racing association or fair provides notice of their
2request for hub agreement arbitration, those racing associations or
3fairs, or both, shall have a period of five days to jointly agree upon
4which of their alternate proposals shall be the official proposal for
5purposes of the hub agreement arbitration. If one or more racing
6associations or fairs that together conduct no fewer than five weeks
7of live racing on the breed on which wagering is conducted during
8the calendar year during which the wager is placed does not provide
9written notice of their election to arbitrate within the 10-day period,
10then no party shall have the right to request a hub agreement
11arbitration. If a valid hub agreement arbitration request is made,
12then the ADW provider shall have 10 days to elect in writing to
13do one of the following:

14(i) Abandon the hub agreement.

15(ii) Accept the alternate proposal submitted by the racing
16associations or fairs.

17(iii) Proceed with a hub agreement arbitration.

18The results ofbegin delete anyend deletebegin insert aend insert hub agreement arbitration elected pursuant
19to this subdivision shall be binding on all other associations and
20fairs conducting live racing on that breed.

21(F) The acceptance thereof is in compliance with the provisions
22of the Interstate Horseracing Act (15 U.S.C. Sec. 3001 et seq.),
23regardless of the location of the ADW provider, whether in
24California or otherwise, including, without limitation, any and all
25requirements contained therein with respect to written consents
26and required written agreements of horsemen’s groups to the terms
27and conditions of the acceptance of the wagers and any
28arrangements as to the exclusivity between the host racing
29association or fair and the ADW provider.

30(c) An advance deposit wager may be made only by the ADW
31provider holding the account pursuant to wagering instructions
32issued by the owner of the funds communicated by telephone call
33or through other electronic media. The ADW provider shall ensure
34the identification of the account’s owner by using methods and
35technologies approved by the board.begin delete Anyend deletebegin insert Anend insert ADW provider that
36accepts wagering instructions concerning races conducted in
37California, or accepts wagering instructions originating in
38California, shall provide a full accounting and verification of the
39source of the wagers thereby made, including the postal ZIP Code
40and breed of the source of the wagers, in the form of a daily
P9    1download of parimutuel data to a database designated by the board.
2The daily download shall be delivered in a timely basis using file
3formats specified by the database designated by the board, and
4shall include any and all data necessary to calculate and distribute
5moneys according to the rules and regulations governing California
6parimutuel wagering.begin delete Any and allend deletebegin insert Allend insert reasonable costs associated
7with the creation, provision, and transfer of this data shall be borne
8by the ADW provider.

9(d) (1) (A) The board shall develop and adopt rules to license
10and regulate all phases of operation of advance deposit wagering
11for ADW providers operating in California, including advance
12deposit wagering activity that takes place within a minisatellite
13wagering facility. The board may recoverbegin delete anyend delete costs associated
14with the licensing or regulation of advance deposit wagering
15activities in a minisatellite wagering facility either directly from
16the ADW provider or through an appropriate increase in the
17funding formula devised by the board pursuant to paragraph (1)
18of subdivision (a) of Section 19616.51.

19(B) The board shall not approve an application for an original
20or renewal license as an ADW provider unless the entity, if
21requested in writing by a bona fide labor organization no later than
2290 days before licensing, has entered into a contractual agreement
23with that labor organization that provides all of the following:

24(i) The labor organization has historically represented employees
25who accept or process any form of wagering at the nearest horse
26racing meeting located in California.

27(ii) The agreement establishes the method by which the ADW
28provider will agree to recognize and bargain in good faith with a
29labor organization that has demonstrated majority status by
30submitting authorization cards signed by those employees who
31accept or process any form of wagering for which a California
32ADW license is required.

33(iii) The agreement requires the ADW provider to maintain its
34neutrality concerning the choice of those employees who accept
35or process any form of wagering for which a California ADW
36license is required whether or not to authorize the labor
37organization to represent them with regard to wages, hours, and
38other terms and conditions of employment.

39(iv) The agreement applies to those classifications of employees
40who accept or process wagers for which a California ADW license
P10   1is required whether the facility is located within or outside of
2California.

3(C) (i) The agreement required by subparagraph (B) shall not
4be conditioned by either party upon the other party agreeing to
5matters outside the requirements of subparagraph (B).

6(ii) The requirement in subparagraph (B) shall not apply to an
7ADW provider that has entered into a collective bargaining
8agreement with a bona fide labor organization that is the exclusive
9bargaining representative of employees who accept or process
10parimutuel wagers on races for which an ADW license is required
11whether the facility is located within or outside of California.

12(D) Permanent state or county employees and nonprofit
13organizations that have historically performed certain services at
14county, state, or district fairs may continue to provide those
15services.

16(E) Parimutuel clerks employed by racing associations or fairs
17or employees of ADW providers who accept or process any form
18of wagers who are laid off due to lack of work shall have
19preferential hiring rights for new positions with their employer in
20occupations whose duties include accepting or processing any
21form of wagers, or the operation, repair, service, or maintenance
22of equipment that accepts or processes any form of wagering at a
23racetrack, satellite wagering facility, or ADW provider licensed
24by the board. The preferential hiring rights established by this
25subdivision shall be conditioned upon the employee meeting the
26minimum qualification requirements of the new job.

27(2) The board shall develop and adopt rules and regulations
28requiring ADW providers to establish security access policies and
29safeguards, including, but not limited to, the following:

30(A) The ADW provider shall use board-approved methods to
31perform location and age verification confirmation with respect
32to persons establishing an advance deposit wagering account.

33(B) The ADW provider shall use personal identification numbers
34(PINs) or other technologies to assure that only the accountholder
35has access to the advance deposit wagering account.

36(C) The ADW provider shall provide for withdrawals from the
37wagering account only by means of a check made payable to the
38accountholder and sent to the address of the accountholder or by
39means of an electronic transfer to an account held by the verified
40accountholder or the accountholder may withdraw funds from the
P11   1wagering account at a facility approved by the board by presenting
2verifiable account identification information.

3(D) The ADW provider shall allow the board access to its
4premises to visit, investigate, audit, and place expert accountants
5and other persons it deems necessary for the purpose of ensuring
6that its rules and regulations concerning credit authorization,
7account access, and other security provisions are strictly complied
8with. To ensure that the amounts retained from the parimutuel
9handle are distributed under law, rules, or agreements, any ADW
10provider that accepts wagering instructions concerning races
11conducted in California or accepts wagering instructions originating
12in California shall provide an independent “agreed-upon
13procedures” audit for each California racing meeting, within 60
14days of the conclusion of the race meeting. The auditing firm to
15be used and the content and scope of the audit, including host fee
16obligations, shall be set forth in the applicable agreement. The
17ADW provider shall provide the board, horsemen’s organizations,
18and the host racing association with an annual parimutuel audit of
19the financial transactions of the ADW provider with respect to
20wagers authorized pursuant to this section, prepared in accordance
21with generally accepted auditing standards and the requirements
22of the board. Any and all reasonable costs associated with those
23audits shall be borne by the ADW provider.

24(3) The board shall prohibit advance deposit wagering
25advertising that it determines to be deceptive to the public. The
26board shall also require, by regulation, that every form of
27advertising contain a statement that minors are not allowed to open
28or have access to advance deposit wagering accounts.

29(e) In order for a licensee, betting system, or multijurisdictional
30wagering hub to be approved by the board as an ADW provider,
31it shall meet both of the following requirements:

32(1) All wagers thereby made shall be included in the appropriate
33parimutuel pool under a contractual agreement with the applicable
34host track.

35(2) The amounts deducted from advance deposit wagers shall
36be in accordance with the provisions of this chapter.

37(f) After the payment of contractual compensation, the amounts
38received as market access fees from advance deposit wagers, which
39shall not be considered for purposes of Section 19616.51, shall be
40distributed as follows:

P12   1(1) An amount equal to 0.0011 multiplied by the amount handled
2on advance deposit wagers originating in California for each racing
3meeting shall be distributed to the Center for Equine Health to
4establish the Kenneth L. Maddy Fund for the benefit of the School
5of Veterinary Medicine at the University of California at Davis.

6(2) An amount equal to 0.0003 multiplied by the amount handled
7on advance deposit wagers originating in California for each racing
8meeting shall be distributed to the Public Employment Relations
9Board to cover costs associated with audits conducted pursuant to
10Section 19526 and for purposes of reimbursing the State Mediation
11and Conciliation Service for costs incurred pursuant to this section.
12However, if that amount would exceed the costs of the Public
13Employment Relations Board, the amount distributed to that board
14shall be reduced, and that reduction shall be forwarded to an
15organization designated by the racing association or fair described
16in subdivision (a) for the purpose of augmenting a compulsive
17gambling prevention program specifically addressing that problem.

18(3) An amount equal to 0.00165 multiplied by the amount
19handled on advance deposit wagers that originate in California for
20each racing meeting shall be distributed as follows:

21(A) One-half of the amount shall be distributed to supplement
22the trainer-administered pension plans for backstretch personnel
23established pursuant to Section 19613. Moneys distributed pursuant
24to this subparagraph shall supplement, and not supplant, moneys
25distributed to that fund pursuant to Section 19613 or any other
26provision of law.

27(B) One-half of the amount shall be distributed to the welfare
28fund established for the benefit of horsemen and backstretch
29personnel pursuant to subdivision (b) of Section 19641. Moneys
30distributed pursuant to this subparagraph shall supplement, and
31not supplant, moneys distributed to that fund pursuant to Section
3219641 or any other provision of law.

33(4) With respect to wagers on each breed of racing that originate
34in California, an amount equal to 2 percent of the first two hundred
35fifty million dollars ($250,000,000) of handle from all advance
36deposit wagers originating from within California annually, an
37amount equal to 1.5 percent of the next two hundred fifty million
38dollars ($250,000,000) of handle from all advance deposit wagers
39originating from within California annually, an amount equal to
401 percent of the next two hundred fifty million dollars
P13   1($250,000,000) of handle from all advance deposit wagers
2originating from within California annually, and an amount equal
3to 0.50 percent of handle from all advance deposit wagers
4originating from within California in excess of seven hundred fifty
5million dollars ($750,000,000) annually, shall be distributed as
6satellite wagering commissions. Satellite wagering facilities that
7were not operational in 2001, other than one each in the Cities of
8Inglewood and San Mateo, and two additional facilities each
9operated by the Alameda County Fair and the Los Angeles County
10Fair and their partners and other than existing facilities that are
11relocated, are not eligible for satellite wagering commission
12distributions under this section. The satellite wagering facility
13commissions calculated in accordance with this subdivision shall
14be distributed to each satellite wagering facility and racing
15association or fair in the zone in which the wager originated in the
16same relative proportions that the satellite wagering facility or the
17racing association or fair generated satellite commissions during
18the previous calendar year. If there is a reduction in the satellite
19wagering commissions pursuant to this section, the benefits
20therefrom shall be distributed equitably as purses and commissions
21to all associations and racing fairs generating advance deposit
22wagers in proportion to the handle generated by those associations
23and racing fairs. If a satellite wagering facility is permanently
24closed other than for renovation or remodeling, or if a satellite
25wagering facility is unwilling or unable to accept all of the signals
26that are available to that facility, the commissions otherwise
27provided for in this subdivision that would be payable to that
28facility shall be proportionately reduced to take into account the
29time that satellite wagering is no longer conducted by that facility,
30or the payment of those commissions shall be eliminated entirely
31if the facility is permanently closed, and, in either case, the satellite
32wagering commissions not paid shall be proportionately
33redistributed to the other eligible satellite wagering facilities. For
34purposes of this section, the purse funds distributed pursuant to
35Section 19605.72 shall be considered to be satellite wagering
36facility commissions attributable to thoroughbred races at the
37locations described in that section.

38(5) After the distribution of the amounts set forth in paragraphs
39(1) to (4), inclusive, the remaining market access fees from advance
40deposit wagers originating in California shall be as follows:

P14   1(A) With respect to wagers on each breed of racing, the amount
2remaining shall be distributed to the racing association or fair that
3is conducting live racing on that breed during the calendar period
4in the zone in which the wager originated. That amount shall be
5allocated to that racing association or fair as commissions, to
6horsemen participating in that racing meeting in the form of purses,
7and as incentive awards, in the same relative proportion as they
8were generated or earned during the prior calendar year at that
9racing association or fair on races conducted or imported by that
10racing association or fair after making all deductions required by
11applicable law. Notwithstanding any other law, the distributions
12with respect to each breed of racing set forth in this subparagraph
13may be altered upon the approval of the board, in accordance with
14an agreement signed by the respective associations, fairs,
15horsemen’s organizations, and breeders organizations receiving
16those distributions.

17(B) If the provisions of Section 19601.2 apply, then the amount
18distributed to the applicable racing associations or fairs shall first
19be divided between those racing associations or fairs in direct
20proportion to the total amount wagered in the applicable zone on
21the live races conducted by the respective association or fair.
22Notwithstanding this requirement, when the provisions of
23subdivision (b) of Section 19607.5 apply to the 2nd District
24Agricultural Association in Stockton or the California Exposition
25and State Fair in Sacramento, then the total amount distributed to
26the applicable racing associations or fairs shall first be divided
27equally, with 50 percent distributed to applicable fairs and 50
28percent distributed to applicable associations.

29(C) Notwithstanding any provisions of this section to the
30contrary, with respect to wagers on out-of-state and out-of-country
31thoroughbred races conducted after 6 p.m., Pacificbegin insert standardend insert time,
3250 percent of the amount remaining shall be distributed as
33commissions to thoroughbred associations and racing fairs, as
34thoroughbred and fair purses, and as incentive awards in
35accordance with subparagraph (A), and the remaining 50 percent,
36together with the total amount remaining from advance deposit
37wagering originating from California out-of-state and
38out-of-country harness and quarter horse races conducted after 6
39p.m., Pacificbegin insert standardend insert time, shall be distributed as commissions
40on a pro rata basis to the applicable licensed quarter horse
P15   1association and the applicable licensed harness association, based
2upon the amount handled in state, both on- and off-track, on each
3breed’s own live races in the previous year by that association, or
4its predecessor association. One-half of the amount thereby
5received by each association shall be retained by that association
6as a commission, and the other half of the money received shall
7 be distributed as purses to the horsemen participating in its current
8or next scheduled licensed racing meeting.

9(D) Notwithstanding any provisions of this section to the
10contrary, with respect to wagers on out-of-state and out-of-country
11nonthoroughbred races conducted before 6 p.m., Pacificbegin insert standardend insert
12 time, 50 percent of the amount remaining shall be distributed as
13commissions as provided in subparagraph (C) for licensed quarter
14horse and harness associations, and the remaining 50 percent shall
15be distributed as commissions to the applicable thoroughbred
16associations or fairs, as thoroughbred and fair purses, and as
17incentive awards in accordance with subparagraph (A).

18(E) Notwithstanding any provision of this section to the contrary,
19the distribution of market access fees pursuant to this subparagraph
20may be altered upon the approval of the board, in accordance with
21an agreement signed by all parties whose distributions would be
22affected.

23(g) A racing association, a fair, a satellite wagering facility, or
24a minisatellite wagering facility may enter into an agreement with
25an ADW provider to accept and facilitate the placement of any
26wager from a patron at its facility that a California resident could
27make through that ADW provider. Deductions from wagers made
28pursuant tobegin delete theend deletebegin insert thisend insert agreement shall be distributed in accordance
29with the provisions of this chapter governing wagers placed at that
30facility, except that the board may authorize alternative
31distributions as agreed to by the ADW provider, the operator of
32 the facility accepting the wager, the association or fair conducting
33that breed of racing in the zone where the wager is placed, and the
34respective horsemen’s organization.

35(h) Anybegin delete issuesend deletebegin insert issueend insert concerning the interpretation or application
36of this section shall be resolved by the board.

37(i) Amounts distributed under this section shall be proportionally
38reduced by an amount equal to 0.00295 multiplied by the amount
39 handled on advance deposit wagers originating in California for
40each racing meeting, except for harness racing meetings, provided
P16   1that the amount of this reduction shall not exceed two million
2dollars ($2,000,000). The method used to calculate the reduction
3in proportionate share shall be approved by the board. The amount
4deducted shall be distributed as follows:

5(1) begin insert(A)end insertbegin insertend insertFifty percent of the money to the board to establish and
6to administer jointly with the organization certified as the majority
7representative of California-licensed jockeys pursuant to Section
819612.9, a defined contribution retirement plan for
9California-licensed jockeys who retired from racing on or after
10January 1, 2009.

begin insert

11(B) A person becomes a participant in the retirement plan when
12he or she is licensed as a jockey in California.

end insert

13(2) The remaining 50 percent of the money shall be distributed
14as follows:

15(A) Seventy percent shall be distributed to supplement the
16trainer-administered pension plans for backstretch personnel
17established pursuant to Section 19613. Moneys distributed pursuant
18to this subparagraph shall supplement, and not supplant, moneys
19distributed to that fund pursuant to Section 19613 or any other
20provision of law.

21(B) Thirty percent shall be distributed to the welfare fund
22established for the benefit of horsemen and backstretch personnel
23pursuant to subdivision (b) of Section 19641. Moneys distributed
24pursuant to this subparagraph shall supplement, and not supplant,
25moneys distributed to that fund pursuant to Section 19641 or any
26other provision of law.

27(j) Amounts distributed under this section shall be proportionally
28reduced by an amount equal to 0.00295 multiplied by the amount
29handled on advance deposit wagers originating in California for
30each harness racing meeting, provided that the amount of this
31reduction shall not exceed five hundred thousand dollars
32($500,000). The method used to calculate the reduction in
33proportionate share shall be approved by the board. The amount
34deducted shall be distributed as follows:

35(1) First to the welfare fund established for the benefit of
36horsemen and backstretch personnel, pursuant to subdivision (b)
37of Section 19641, and administered by the organization
38representing the horsemen participating in the race meeting, in the
39amount requested by the welfare fund. Moneys distributed pursuant
40to this paragraph shall supplement, and not supplant, moneys
P17   1distributed to that fund pursuant to Section 19641 or any other
2provision of law.

3(2) The amount remaining, if any, shall be utilized for the benefit
4of the horsemen as specified in a written agreement between the
5racing association that conducts the live harness race meeting and
6the organization representing the horsemen participating in the
7race meeting.

8(k) Notwithstanding subdivision (j), amounts generated that
9were deducted from amounts handled on advance deposit wagering
10for harness racing meetings pursuant to subdivision (i), as that
11section read before the enactment of subdivision (j), that have been
12held in trust by the California Exposition and State Fair shall be
13distributed as follows:

14(1) Fifty percent to the harness racing horsemen who participated
15in the racing meeting that concluded June 16, 2012, in the form
16of purses.

17(2) Fifty percent to the California Exposition and State Fair in
18the form of commissions.



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