Cal. Business and Professions Code § 19613.2

(a) Any horsemen’s, owners’, or trainers’ organization or organization representing horsemen, owners, or trainers shall be incorporated under the laws of the State of California in order to receive a distribution or deduction under this chapter. Each corporation shall represent a majority of the horsemen, owners, or trainers in the state with respect to the breed of horses the corporation represents. The board shall initially determine the organization that represents California horsemen with respect to each breed. Any distribution or deduction received by any of those organizations shall be used only for the benefit of California horsemen. (b) No portion of the amount distributed pursuant to Section 19613 to an owners’, trainers’, or horsemen’s organization shall be used for the purpose of making contributions to candidates for public office, or to urge or oppose any measure on the ballot. The organizations representing owners, trainers, and horsemen may expend no more than the amount reasonably necessary to represent its members before the Legislature and the board with respect to issues that directly affect services rendered to owners, trainers, and horsemen. The board shall annually review the budgets of the organizations representing owners, trainers, and horsemen and shall determine the appropriate amount to be expended for providing the representation authorized by this subdivision. (c) If an owners’, trainers’, or horsemen’s organization is conducting itself contrary to statute, regulation, or order of the board, the board may take disciplinary action against the organization, including ordering an association to withhold any distribution authorized pursuant to Section 19613. (d) Upon recognition by the board of a successor horsemen’s, owners’, or trainers’ organization or organization representing horsemen, owners, or trainers, the board shall apportion those assets that were generated pursuant to Section 19613 for the benefit of the horsemen and the successor organization.