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Business and Professions Code

DIVISION 8. SPECIAL BUSINESS REGULATIONS

Chapter 4. Horse Racing

Article 9.2. Satellite Wagering

Section 19605.7

19605.7. Amount and distribution of deductions from wagers at facilities in northern zone. The total percentage deducted from wagers at satellite wagering facilities in the northern zone shall be the same as the deductions for wagers at the racetrack where the racing meeting is being conducted and shall be distributed as set forth in this section. Amounts deducted under this section shall be distributed as follows:

(a) (1) For thoroughbred meetings, 1.3 percent of the amount handled by the satellite wagering facility on conventional and exotic wagers shall be distributed to the racing association for payment to the state as a license fee, 2 percent shall be distributed to the satellite wagering facility as a commission for the right to do business, as a franchise, and this commission is not for the use of any real property, 0.54 percent shall be deposited with the official registering agency pursuant to subdivision (a) of Section 19617.2 and shall thereafter be distributed in accordance with subdivisions (b), (c) and (d) of Section 19617.2, 0.033 percent shall be distributed to the Center for Equine Health, and 0.067 percent shall be distributed to the California Animal Health and Food Safety Laboratory, School of Veterinary Medicine, University of California at Davis. It is the intent of the Legislature that the 0.033 percent of funds distributed to the Center for Equine Health shall supplement, and not supplant, other funding sources.

(2) (A) In addition to the distributions specified in paragraph (1), for thoroughbred meetings, an amount not to exceed 4 percent of the amount handled by the satellite wagering facility on conventional and exotic wagers shall be distributed to an organization described in Section 19608.2 with the mutual consent of the racing association, the organization representing the horsemen participating in the meeting, and the board from January 1, 2010, until December 31, 2013. However, the amount shall be no less than that specified in subparagraph (B), and any amount greater than the amount specified in subparagraph (B) shall be approved by the board for no more than 12 months at a time, and only upon a determination by the board that the greater amount is in the economic interest of thoroughbred racing.

(B) Commencing January 1, 2014, an amount not to exceed the amount of actual operating expenses, as determined by the board, or 2.5 percent of the amount handled by the satellite wagering facility on conventional and exotic wagers, whichever is less, shall be distributed to an organization described in Section 19608.2.

(C) A request to the board for a distribution pursuant to subparagraph (A) shall be accompanied by a report detailing all receipts and expenditures over the two prior fiscal years of the funds affected by the request.

(D) The racing association whose request pursuant to subparagraph (A) has been approved by the board shall provide subsequent quarterly reports of receipts and expenditures of the affected funds if requested by the board.

(b) For harness, quarter horse, Appaloosa, Arabian, or mixed breed meetings, 0.4 percent of the amount handled by the satellite wagering facility on conventional and exotic wagers shall be distributed to the racing association for payment to the state as a license fee, for fair meetings, 1 percent of the amount handled by the satellite wagering facility on conventional and exotic wagers shall be distributed to the fair association for payment to the state as a license fee, 2 percent shall be distributed to the satellite wagering facility as a commission for the right to do business, as a franchise, and this commission is not for the use of any real property, and 6 percent of the amount handled by the satellite wagering facility or the amount of actual operating expenses, as determined by the board, whichever is less, shall be distributed to an organization described in Section 19608.2. In addition, in the case of quarter horses, 0.4 percent shall be deposited with the official registering agency pursuant to subdivision (b) of Section 19617.7 and shall thereafter be distributed in accordance with subdivisions (c), (d), and (e) of Section 19617.7; in the case of Appaloosas, 0.4 percent shall be deposited with the official registering agency pursuant to subdivision (b) of Section 19617.9 and shall thereafter be distributed in accordance with subdivisions (c), (d), and (e) of Section 19617.9; in the case of Arabians, 0.4 percent shall be held by the association to be deposited with the official registering agency pursuant to Section 19617.8, and shall thereafter be distributed in accordance with Section 19617.8; in the case of standardbreds, 0.4 percent shall be distributed for the California Standardbred Sires Stakes Program pursuant to Section 19619; in the case of thoroughbreds, 0.48 percent shall be deposited with the official registering agency pursuant to subdivision (a) of Section 19617.2 and shall thereafter be distributed in accordance with subdivisions (b), (c), and (d) of Section 19617.2; 0.033 percent shall be distributed to the Center for Equine Health; and 0.067 percent shall be distributed to the California Animal Health and Food Safety Laboratory, School of Veterinary Medicine, University of California at Davis. It is the intent of the Legislature that the 0.033 percent of funds distributed to the Center for Equine Health shall supplement, and not supplant, other funding sources.

(c) In addition to the distributions specified in subdivisions (a) and (b), for mixed breed meetings, 1 percent of the total amount handled by each satellite wagering facility shall be distributed to an organization described in Section 19608.2 for promotion of the program at satellite wagering facilities. For harness meetings, 0.5 percent of the total amount handled by each satellite wagering facility shall be distributed to an organization described in Section 19608.2 for the promotion of the program at satellite wagering facilities, and 0.5 percent of the total amount handled by each satellite wagering facility shall be distributed according to a written agreement for each race meeting between the licensed racing association and the organization representing the horsemen participating in the meeting. If, with respect to harness meetings, there are funds unexpended from this 1 percent, these funds may be expended for other purposes with the consent of the horsemen and the racing association to benefit the horsemen, or the racing association, or both, pursuant to their agreement. For quarter horse meetings, 0.5 percent of the total amount handled by each satellite wagering facility on races run in California shall be distributed to an organization described in Section 19608.2 for the promotion of the program at satellite wagering facilities, 0.5 percent of the total amount handled by each satellite wagering facility on out-of-state and out-of-country imported races shall be distributed to the official quarter horse registering agency for the purposes of Section 19617.75, and 0.5 percent of the total amount handled by each satellite wagering facility on all races shall be distributed according to a written agreement for each race meeting between the licensed racing association and the organization representing the horsemen participating in the meeting.

(d) Additionally, for thoroughbred, harness, quarter horse, mixed breed, and fair meetings, 0.33 percent of the total amount handled by each satellite wagering facility shall be paid to the city or county in which the satellite wagering facility is located pursuant to Section 19610.3 or 19610.4.

(e) Notwithstanding any other provision of law, a racing association is responsible for the payment of the state license fee as required by this section.

History.—Stats. 1993, Ch. 1084, in effect October 11, 1993, added "for the right . . . any real property" after "as a commission" in the first sentences of subdivisions of (a) and (b); and deleted ", quarter horse," after "For harness" in the second sentence, and added the third sentence to subdivision (c). Stats. 1993, Ch. 1085 in effect January 1, 1994, added "thirty-three hundredths of" after "Section 19617.2, and" and added "and sixty-seven hundredths . . . Laboratory System" after "Research Laboratory" in the first sentence; and added "thirty-three hundredths of" after "Legislature that the" in the second sentence of subdivision (a); and added "thirty-three hundredths of" after "Section 19617.2; and" and added "and sixty-seven hundredths . . . Laboratory System" after "Research Laboratory" in the second sentence, and added "thirty-three hundredths of" after "Legislature that the" in the third sentence of subdivision (b). Stats. 1994, Ch. 1213, in effect September 30, 1994, substituted "deposited with the . . . of Section 19617.9" for "distributed as breeders' awards to breeders of Appaloosas" after "percent shall be" in the second sentence of subdivision (b); substituted "that" for "which" after "stabling and vanning" in the first sentence of subdivision (d); and substituted "that" for "such" after "or administrative expenses" in the fourth sentence of subdivision (e). Stats. 1995, Ch. 826, in effect October 13, 1995, substituted "California Center for Equine Health and Performance" for "Equine Research Laboratory" after "to the" in the first and second sentences of subdivision (a) and in the second and third sentences of subdivision (b); deleted "harness and" after "for" in the second sentence, and added "and harness meetings" after "For quarter horse meetings" in the third sentence of subdivision (c). Stats. 1996, Ch. 53, in effect May 6, 1996, added "and vanning" after "providing offsite stabling" in subdivision (e); and substituted "shall be allocated to the organization representing racing fairs for additional payments to the racing association to offset its costs" for "shall be retained by the racing association to offset its costs, in excess of payments by the organization representing fairs," after "they are collected" in subdivision (g). Stats. 1996, Ch. 393, in effect January 1, 1997, substituted "subdivisions (b), (c), and (d)" for "subdivisions (b) and (c)" after "distributed in accordance with" in subdivision (a); substituted "subdivisions (b), (c), and (d)" for "subdivisions (b) and (c)" before "of Section 19617.2;" in subdivision (b). Stats. 1996, Ch. 393, in effect January 1, 1997, substituted "subdivision (b), (c), and (d)" for "subdivision (b) and (c)" after "distributed in accordance with" in subdivision (a); and substituted "subdivisions (b), (c), and (d)" for "subdivisions (b) and (c)" before "of Section 19617.2;" in subdivision (b). Stats. 1997, Ch. 2 (SB 20), in effect March 3, 1997, substituted "held by the . . . Section 19617.8;" for "distributed as breeders' awards to breeders of Arabians;" in the second sentence of subdivision (b). Stats. 1998, Ch. 335 (SB 27), in effect January 1, 1999, substituted "1.3" for "2.5" after "meetings," deleted "wagers" after "conventional", deleted "4 percent on" before "exotic", substituted "shall be distributed to" for "retained by" after "2 percent", substituted "this" for "such" after "franchise, and", added "shall be" after "is less,", substituted "0.54 percent shall be" for "four-tenths of 1 percent" after "19608.2, and", substituted "0.033" for "thirty-three hundredths of one-tenth of" after "Performance and" in the first sentence, and substituted "0.033" for "thirty-three hundredths of one-tenth of 1" after "Section 19617.2; and", and substituted "0.067" for "sixty-seven hundredths of one-tenth of one-tenth of 1" in the second sentence of subdivision (a); substituted "0.4" for "1" after "mixed breed meetings," deleted "wagers" after "conventional", deleted "1 percent on" before "exotic", substituted "1" for "1.5" after "fair meetings," deleted "wagers" after the second "conventional", deleted "3 percent on" before the second "exotic", substituted "fair" for "racing" after the second "distributed to the", substituted "shall be distributed to" for "retained by" after "2 percent", substituted "this" for "such" after "franchise, and", added "shall be" after "is less," in the first sentence, substituted "0.4" for four-tenths of 1" four times, substituted "0.003" for "thirty-three hundredths of one-tenth of 1", and substituted "0.067 percent shall be" for sixty-seven hundredths of one-tenth of 1 ", and substituted "0.48" for "four-tenths of 1" after "thoroughbreds," in the second sentence, and substituted "0.0003" for "thirty-three hundredths of one-tenth of 1" in the third sentence of subdivision (b); deleted "thoroughbred and fair meetings only, six-tenths of 1 percent of the total amount handled by each satellite wagering facility authorized pursuant to Section 19605.1 and one-half of 1 percent of the total amount handled at each other satellite wagering facility shall be allocated to the facility for promotion of that meeting's program" after "for" in the former first sentence and added the balance of the former second sentence to create the first sentence of subdivision (c) and substituted "0.5" for "one-half of 1" twice therein; deleted former subdivisions (d), (e), (f), and (g) and relettered former subdivision (h) and (i) as subdivision (d) and (e), respectively; and substituted "0.33" for "thirty-three hundredths of 1" after "meetings," in subdivision (d). Stats. 2000, Ch. 1082 (SB 2054), in effect January 1, 2001, substituted "Center for Equine Health" for "California Center for Equine Health and Performance" and substituted "California Animal Health and Food Safety Laboratory" for "California Veterinary Diagnostic Laboratory System" in subdivisions (a) and (b). Stats. 2001, Ch. 65 (AB 413), in effect July 16, 2001, capitalized "Laboratory," after "Food Safety" in the first sentence of subdivision (a); deleted the hyphen from the word "standardbreds" after "in the case of", and deleted the hyphen from the word "Standardbred" after "California" in the first sentence of subdivision (b); and deleted "quarter horse meetings and" before "harness meetings" in the second sentence of subdivision (c) and added the third sentence therein. Amended by Stats. 2008, Ch. 19 (AB 813), in effect June 2, 2008. Amended by Stats. 2009, Ch. 650 (AB 1575), in effect January 1, 2010.

Note.—Section 12 of Stats. 1995, Ch. 826, provided that this act applies to any horseracing meeting conducted on or after January 1, 1995.

Note.—Section 3 of Stats. 1993, Ch. 1084, provided that the amendment of this section which states that the amount retained by the satellite wagering facility as a commission is for the right to do business as a franchise and that the commission is not for the use of any real property does not constitute a change in, but is declaratory of, the existing law.

Note.—Section 3 of Stats. 2008, Ch. 19 (AB 813), provided that this act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order for the changes made by this act to apply to the existing race dates for 2008, it is necessary that this act take effect immediately.