BILL ANALYSIS Ó Bill No: AB 1226 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION Senator Roderick D. Wright, Chair 2013-2014 Regular Session Staff Analysis AB 1226 Author: Hall As Amended: April 8, 2013 Hearing Date: June 25, 2013 Consultant: Art Terzakis SUBJECT Horse Racing: jockey riding fees DESCRIPTION AB 1226 adds a new Section to Horse Racing Law that establishes minimum jockey fees in a race with a gross purse of more than nine thousand nine hundred ninety-nine dollars ($9,999.00). Specifically, this measure: 1)Provides that in a race with a gross purse of more than $9,999 all of the following shall apply: a) A jockey whose horse finishes first shall be paid at least 10% of the first place winner's share of the gross purse. b) A jockey whose horse finishes second shall be paid at least 5% of the second place winner's share of the gross purse. c) A jockey whose horse finishes third shall be paid at least 5% of the third place winner's share of the gross purse. 2)Defines "gross purse" to mean the published amount of the purse before any deductions. EXISTING LAW Existing law establishes the California Horse Racing Board (CHRB) which generally regulates horse racing in the state, including setting riding fees for jockeys that apply in the AB 1226 (Hall) continued Page 2 absence of an agreement regarding riding fees to the contrary. Existing law provides that jockeys must be licensed by the CHRB. Existing law requires the CHRB to establish safety standards governing the racetracks, equipment, medical services, and other facilities to ensure the safety of horses, riders, and workers at the racetrack. Existing law provides, effective January 1, 2010, the minimum amount awarded to the jockey who finishes second or third in a race shall be increased by ten dollars ($10) over the amount required to be paid on December 31, 2009. Effective January 1, 2012, the minimum amount awarded to the jockey who finishes second or third in a race shall be increased by five dollars ($5) over the amount required to be paid on December 31, 2011. Existing law pertaining to the minimum amount awarded to jockeys finishing second or third applies to races in which the purse is $9,999 or less. BACKGROUND Purpose of AB 1226: Currently, Horse Racing Law requires that the CHRB establish the minimum jockey fee that jockeys earn if a horse they are riding finishes first, second, or third. This measure, instead, would establish those minimums in statute by requiring that winning jockeys in a stakes race be paid a percentage, as specified, of the gross purse. However, it does not prohibit the CHRB from increasing that minimum above the statutory minimums. In addition, this measure would define in statute the term "gross purse" for purposes of this new Section of law. This change is expected to result in an increase in California jockey fees for the winning horses in a stakes race. Additionally, the owners' entry costs would no longer be subtracted from the Win Purse before the jockey fee is calculated. Arguments in Support: Proponents note that this measure would conform California law to the standard in most other racing states by requiring that the fees paid to jockeys whose horses finish first, second or third be a percentage of the listed purse amount. Proponents contend that AB 1226 (Hall) continued Page 3 existing law is unfair to jockeys and effectively requires jockeys to subsidize the fees that owners pay. Proponents estimate that, in the 2012 Breeders' Cup race, held at Santa Anita Racetrack, jockeys received over $80,000 less in winnings than they did when the race was run in Kentucky (Churchill Downs). California Jockeys are Independent Contractors : Jockeys in California are independent contractors for all purposes other than workers' compensation insurance - the jockeys supply their own equipment, choose which horses to ride, and in which races, and are allowed to negotiate their own rate of compensation. Minimum Jockey Riding Fee: The minimum wage that jockeys receive in a horse race is established by the CHRB as a minimum riding fee. Jockeys negotiate their ultimate compensation with individual racehorse owners. Jockeys may also earn additional compensation based on the performance of the horse they are racing. According to the Jockeys' Guild, jockeys are generally not paid for exercising horses, but are paid a small mount fee of approximately $50 for each losing mount in a race. Beyond that, jockeys are paid a percentage of the purse if the horse wins. Qualifications to be a Jockey : Under CHRB rules, no person under 16 years of age shall be granted neither a jockey's license nor a license as an apprentice jockey. No person whose riding weight at the time of application exceeds 125 pounds shall be licensed as a jockey or apprentice jockey. No person who has never ridden in a race at a recognized meeting shall be granted a license as jockey or apprentice jockey; provided, however, that upon the recommendation of the stewards, the CHRB may issue a temporary license to, or otherwise grant permission to such person, for the purpose of riding in not more than four races to establish the qualifications and ability of such person for the license. Staff Comments: Horse racing is a dangerous sport and the potential for injury to a rider who is slightly over 100 pounds in a field of unpredictable, tightly packed, 1,000+ pound horses going about 40 miles per hour is very real. An accident can occur in an instant that changes a jockey's life forever. Horses kick, buck, bite, duck or bolt suddenly for no apparent reason. Over the years, numerous riders have been killed while riding at California racetracks. Almost every jockey riding today has had AB 1226 (Hall) continued Page 4 broken bones and a brush with death - some of whom return from injuries to ride again, while others have been permanently disabled. The Jockeys' Guild, Inc. is an American labor union, representing thoroughbred horse racing and American quarter horse professional jockeys. More than 60 years ago, the Jockeys' Guild was born out of meetings among riders that once were conducted in secret for fear of repercussions from unsympathetic horse owners and racetrack management. The origin of the organization was to assist injured and disabled riders. The Guild represents more than 1,100 active and retired jockeys in North America and has been instrumental in attaining a wide range of benefits to improve conditions for jockeys, including health and medical benefits, workers' compensation, a uniform mount fee scale, on-track ambulances, safer starting gates, safety rails, and other important concessions. PRIOR/RELATED LEGISLATION AB 1423 (Governmental Organization), 2013-14 Session. Would correct an oversight in existing Horse Racing Law governing the distribution of funds from advanced deposit wagering for harness racing by the California Exposition and State Fair (Cal Expo) and add clarity with respect to the time-frame for distribution of exchange wagering revenues that provide health and welfare benefits to jockeys and their dependents. (Pending in this Committee) AB 649 (Ma), Chapter 605, Statutes of 2007. Established in Horse Racing Law, a pay scale for the minimum jockey riding fees by the CHRB. AB 1180 (Torrico), Chapter 329, Statutes of 2005. Among other things, established various procedures, requirements, and standards for jockeys who are licensed by the CHRB to ride racehorses at racetracks throughout the state. . AB 701 (Jerome Horton), Chapter 40, Statutes of 2004. Among other things, generated new funds to be used to defray the costs of workers' compensation insurance incurred in connection with the horse racing industry by increasing the amount of the take-out by one-half of 1% percent in order to fund the payment. AB 1226 (Hall) continued Page 5 SUPPORT: As of June 21, 2013: California Teamsters Jockeys' Guild OPPOSE: None on file as of June 21, 2013. FISCAL COMMITTEE: Senate Appropriations Committee **********