SACRAMENTO — A bill sponsored by Assemblyman Frank Hill (R-Whittier) narrowly passed the Assembly on Monday, despite criticism that it would create a special tax break to benefit a single private firm.
The measure would aid a horse racing meet at Bay Meadows in San Mateo operated by the Peninsula Quarter Horse Racing Assn. Peninsula's parent firm, Quarter Horse Racing Inc., also operates a meet at Los Alamitos.
According to the legislative analyst's office, the bill would cost the state $440,000 annually in revenues by reducing licensing fees paid by the association for two years.
The Assembly passed the bill last Thursday, 56 to 15, but opponents asked that it be reheard Monday. It again cleared the Assembly, 55 to 19, and was sent to the Senate. The bill needed 54 votes to pass because it has an urgency clause. If the bill passes the Senate and the governor signs it, it will take effect immediately.
Hill, whose 52nd District covers part of the Southeast area, said in an interview that his goal is to enable quarter horses to continue to race year-round in California. He said his bill is needed because the Bay Meadows meet has been losing money and might be forced out of business.
Lost Money for 11 Years
"They've lost money at Bay Meadows for 11 years. . .. The reason they've been able to keep going is that they make money at Los Alamitos," Hill said.
But Assemblyman Richard Katz (D-Sepulveda) said last week that Hill's measure "is just a bad bill . . .. There are thousands of businesses in California losing money and the state doesn't bail them out."
Without the bill, Hill argued, the annual Bay Meadows meet, which opened last Thursday, might collapse. That could trigger a stampede by trainers leaving California for states with year-round quarter horse racing, he said.
$2-Million Estimated Loss
Hill estimated that California would lose an estimated $2 million a year in business generated by quarter horse racing at Bay Meadows.
He said only 56% of the savings would benefit the association; the other 44% would accrue to horse owners participating in the meet. The fees are derived from the wagering pool.
"Let's give them a two-year chance at it and see if this works with this fee break," Hill said.
Similar Bill Vetoed
Last year, Gov. George Deukmejian vetoed a similar bill sponsored by Hill that would have given a fee break to several race meets run by a number of operators.
'Happens All the Time'
While he was maneuvering that bill through the Legislature last year, Hill received $6,500 in contributions from Quarter Horse Racing Inc.
"I guess they appreciated it (Hill's sponsorship of the bill) and sent over a campaign contribution. It happens all the time," said the two-term lawmaker, whose district covers Whittier, La Habra Heights, La Mirada, West Covina, Diamond Bar, Hacienda Heights, Rowland Heights and Walnut.
He said he agreed to sponsor a more limited version of the bill after the association asked for his help again this year.
'Blank' in Circuit
Marvin Reynolds, Quarter Horse Racing's vice president for finance, agreed that the measure "is a special break for one company." However, he argued that without the measure, there would be "a blank" in the racing circuit.
Assemblyman Lloyd Connelly (D-Sacramento), who has led the opposition, said in a written statement, "The bottom line is . . . (the bill) is designed and, in fact, benefits one single private firm in the state--even though other private and public entities have similar circumstances."
Moreover, Connelly said, the tax break provided in the measure exceeds losses at Bay Meadows. In response, Hill said he would have the bill amended so Peninsula "will not turn a profit as a result of the bill."