BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 777
                                                                  Page  1

          Date of Hearing:   March 6, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                 SB 777 (Hernandez) - As Amended:  February 25, 2014

          Policy Committee:                             Governmental  
          Organization Vote:                            16-0
                       Insurance                              9-0

          Urgency:     Yes                  State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill reestablishes provisions in the Horse Racing Law  
          relating to workers' compensation that sunsetted on January 1,  
          2014.  The provisions required any thoroughbred racing  
          association or fair that conducts thoroughbred racing, and  
          allowed any quarter horse racing association, harness racing  
          association, or fair that conducts horse racing for other  
          breeds, to deduct a percentage of the amount handled in  
          parimutuel pools for the purposes of defraying the costs of  
          workers' compensation insurance for trainers and owners incurred  
          in connection with horse racing.

           FISCAL EFFECT 

          Insignificant General Fund costs to the California Horse Racing  
          Board in connection with monitoring the programs.  Funds for the  
          programs will come from the parimutuel handle.

           COMMENTS  

          1)  Purpose.   The programs were designed to provide relief from  
            the increasing costs of workers' compensation insurance to the  
            horse racing industry by allowing the industry to create its  
            own insurance programs.  Funds for the programs came from the  
            parimutuel handle, proceeds that would otherwise have been  
            paid to the owners of winning horses and successful bettors.   
            According to the author, the programs inadvertently sunsetted  
            on January 1, 2014.  This bill would reestablish the workers'  
            compensation programs in their previous forms but without any  
            future sunset provision.








                                                                  SB 777
                                                                  Page  2


          2)  The programs.   The program for thoroughbred racing was  
            established in 2004 and extended in 2008, while the quarter  
            horse and harness racing programs were created in 2008 and the  
            other breed racing program was created in 2009.  Funding for  
            each program was as follows:

             a)   Thoroughbreds: required assocs./fairs to deduct 0.5% of  
               the exotic parimutuel handle.

             b)   Quarter horses: allowed associations to deduct 0.5% of  
               the exotic parimutuel handle.

             c)   Harness: allowed associations to deduct 1.0% of the  
               conventional parimutuel handle.

             d)   Other breeds: allowed fairs to deduct 0.5% of the exotic  
               parimutuel handle.

           Analysis Prepared by  :    Joel Tashjian / APPR. / (916) 319-2081