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
                                   **********