19550-19557

BUSINESS AND PROFESSIONS CODE
SECTION 19550-19557




19550.  (a) The board shall require each licensed racing association
that conducts 14 or less weeks of racing to designate 3 racing days,
and each licensed racing association that conducts more than 14
weeks of racing to designate five racing days during any one meeting,
to be conducted as charity days by the licensee for the purpose of
distribution of the net proceeds therefrom to beneficiaries through
the distributing agent. For the purposes of this section, a split
meeting shall be considered a single meeting and the appropriate
number of charity days shall be based on the total weeks of racing
allocated for both periods of the meeting.
   (b) Notwithstanding subdivision (a) or any other provision of law,
no racing association shall be required to pay to a distributing
agent for the purpose of distribution to beneficiaries more than an
amount equal to two-tenths of 1 percent of the association's total
on-track handle on live races conducted by the association at the
meeting.
   (c) This section does not apply to a fair, or to a licensed racing
association conducting three weeks of racing or less.



19551.  As a condition of the issuance of the license, the board
shall require that the licensee of such meeting shall conduct such
charity day racing and shall furnish its plant, facilities and all
personnel and property necessary for the conduct of racing on the
charity days.



19552.  All racing officials required by law or regulation to serve
in connection with the meeting shall also serve, without further
authority or designation, in their respective capacities and at the
same rate of compensation in connection with the charity day racing.




19553.  On such charity days the income from all operations carried
on in connection with or resulting from the conduct of racing on such
days, including income from parimutuel wagering, admissions,
parking, program sales and concessions shall be income from
operations on such charity days.
   From the gross income from such operations on charity days there
shall be deducted only the expenses incurred because of the conduct
of racing on such days, but no deduction shall be made by the
licensee for any overhead expenses or for expenses of the licensee
which would be incurred irrespective of the conduct of the charity
days racing.
   The balance of such income after such deductions is herein
designated as charity days' net proceeds and shall be paid by such
licensee to a distributing agent selected and qualified in accordance
with this article. No profit shall be made, either directly or
indirectly, from such charity days' operations by the licensee of the
meeting.



19554.  Except as provided elsewhere in this section, the
distributing agent for charity distributions shall be a nonprofit
organization or corporation, or nonprofit organizations or
corporations, selected by the licensee of the meeting and approved by
the board.
   (a) Each distributing agent to be qualified hereunder shall
conform to the then existing laws and regulations of this state and
the United States, so as to be exempt or be entitled to exemption
from the payment of any tax measured by income.
   (b) Each distributing agent shall have not less than five trustees
or directors. None of the individuals constituting the governing
board of trustees or directors of the distributing agent shall be
directly connected with, be a stockholder, or have any interest in
the racing association that is the licensee of the race meeting. Each
of the individual trustees or directors shall be a person who is, at
the time, both a resident of this state, and an executive, officer,
director, trustee, or member of the governing body or board, by
whatever name the governing body or board may be known, of an
organization engaged in civic, religious, charitable, educational, or
veteran activities in this state.
   (c) Each distributing agent shall adopt bylaws, shall provide for
election to fill vacancies in the board of directors or trustees, and
shall hold at least one meeting each year.
   (d) Notwithstanding any other provision of this section, with the
approval of the board, a racing association whose board of trustees
or directors is precluded by its articles of incorporation, bylaws,
or by contract from receiving compensation for services in the
capacity of trustee or director may act as its own distributing
agent.
   (e) Notwithstanding any other provision of this section, with the
approval of the board, a racing association may act as its own
distributing agent provided it allocates and distributes for
charitable purposes an amount at least equal to that specified in
subdivision (b) of Section 19550 in accordance with Section 19555 and
subdivision (b) of Section 19556.



19555.  Each licensee shall pay over such charity days' net proceeds
to such distributing agent as soon as practicable after the
determination thereof, and such agent or agents shall hereafter
distribute not less than 90 percent of the aggregate proceeds from
charity days' racing received and available for distribution by it to
beneficiaries within 12 calendar months after the last day of the
meeting during which such charity days were conducted. The balance,
if any, of such aggregate charity days' net proceeds not distributed
within such 12-month period shall be distributed as soon thereafter
as is practicable.


19556.  (a) The distribution shall be made by the distributing agent
to beneficiaries qualified under this article. For the purposes of
this article, a beneficiary shall be all of the following:
   (1) A nonprofit corporation or organization entitled by law to
receive a distribution made by a distributing agent.
   (2) Exempt or entitled to an exemption from taxes measured by
income imposed by this state and the United States.
   (3) Engaged in charitable, benevolent, civic, religious,
educational, or veterans' work similar to that of agencies recognized
by an organized community chest in the State of California, except
that the funds so distributed may be used by the beneficiary for
capital expenditures.
   (4) Approved by the board.
   (b) At least 20 percent of the distribution shall be made to
charities associated with the horse racing industry. In addition to
this 20 percent of the distribution, another 5 percent of the
distribution shall be paid to a welfare fund described in subdivision
(b) of Section 19641 and another 5 percent of the distribution shall
be paid to a nonprofit corporation, the primary purpose of which is
to assist horsemen and backstretch personnel who are being affected
adversely as a result of alcohol or substance abuse. No beneficiary
otherwise qualified under this section to receive charity day net
proceeds shall be excluded on the basis that the beneficiary provides
charitable benefits to persons connected with the care, training,
and running of racehorses, except that type of beneficiary shall make
an accounting to the board within one calendar year of the date of
receipt of any distribution.
   (c) (1) In addition to the distribution pursuant to subdivision
(b), a separate 20 percent of the distribution shall be made to a
nonprofit corporation or trust, the directors or trustees of which
shall serve without compensation except for reimbursement for
reasonable expenses, and which has as its sole purpose the
accumulation of endowment funds, the income on which shall be
distributed to qualified disabled jockeys.
   (2) To receive a distribution under this subdivision, a
corporation or trust must establish objective qualifications for
disabled jockeys, and provide an annual accounting and report to the
board on its activities indicating compliance with the requirements
of this subdivision.
   (3) The nonprofit corporation or trust shall, in an amount
proportional to the contributions received pursuant to this
subdivision as a percentage of the total contributions received by
the corporation or trust, give preference in assisting qualified
disabled jockeys to the following:
   (A) Jockeys who were disabled while participating in the racing or
training of horses at licensed racing associations or approved
training facilities in California.
   (B) Jockeys licensed by the board who were disabled while
participating in the racing or training of horses in a state other
than California.
   (d) When the nonprofit corporation or trust described in
subdivision (c) has received distributions in an amount equal to two
million dollars ($2,000,000), the distribution mandated by
subdivision (c) shall cease.



19556.5.  The board shall designate a nonprofit organization that is
dedicated to research and development of improved safety standards
for horse racing as a beneficiary qualified to receive a distribution
pursuant to this article.


19557.  Within the 12-month period specified in Section 19555, and
prior to the payment of any charity days' net proceeds to any
beneficiary, the distributing agent shall submit the name of the
beneficiary to the board for the board's approval.
   If the board does not disapprove of the beneficiary within 60 days
after the submission, its approval shall be deemed to have been
given.