BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 777|
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UNFINISHED BUSINESS
Bill No: SB 777
Author: Hernandez (D), et al.
Amended: 2/25/14
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR : 73-0, 3/13/14 - See last page for vote
SUBJECT : Horse racing: workers' compensation
SOURCE : California Authority of Racing Fairs
California Thoroughbred Breeders Association
California Thoroughbred Trainers
Del Mar Thoroughbred Club
Los Angeles Turf Club, Inc.
Oak Tree Racing Association
Santa Anita Park
Thoroughbred Owners of California
DIGEST : This bill reestablishes provisions in Horse Racing
Law which sunsetted on January 1, 2014. The provisions required
a Thoroughbred racing association, racing fair, quarter horse
racing association or harness racing association that conducts a
racing meeting to deduct a specified percentage of the total
amount handled in exotic pari-mutuel pools on live races, to be
distributed to a specified organization for the purpose of
defraying costs of workers' compensation insurance for trainers
and owners in connection with live horse racing, as defined.
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SB 777
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Assembly Amendments delete the Senate version of the bill
relating to fireworks and insert the current language. The
bill's author has also changed from Senator Calderon to Senator
Hernandez.
ANALYSIS :
Existing law:
1.Authorizes that the California Horse Racing Board (CHRB) to
regulate the various forms of horse racing authorized in this
state.
2.Requires a Thoroughbred association, quarter horse
association, and racing fairs, until January 1, 2014, to
deduct 0.5% of the total amount handled in exotic pari-mutuel
pools of thoroughbred races in order to defray the costs of
workers' compensation insurance. This additional deduction
shall only be permitted with the approval of the organization
representing horsemen and horsewomen at the applicable racing
association meeting.
3.Requires a harness racing association until January 1, 2014,
to deduct an additional 1% of the total amount handled in
conventional pari-mutuel pools of harness races, as defined.
4.Provides that these deductions shall pay for supplemental
premiums that reduce rates, pay for benefits of trainers and
owners of thoroughbred horses, and to reimburse these trainers
and owners for the costs of workers' compensation insurance,
as defined.
5.Requires that funds not expended on workers' compensation
costs to be carried forward to the subsequent year, or used
for the cost of health and safety programs, research or safety
equipment, or to make capital improvements to prevent
workplace accidents and to increase the safety of jockeys,
exercise riders, backstretch employees, and other racetrack
personnel.
6.Requires that the deductions be managed by an organization
formed by the Thoroughbred racing association and the owners
of thoroughbred horses. Requires the organization to account
annually to CHRB with respect to the expenditure and
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distribution of funds received by the organization and obtain
an independent audit of funds generated and distributed.
7.Sunsets the deduction for the horse racing workers'
compensation insurance program on December 31, 2013.
This bill reestablishes provisions in Horse Racing Law which
sunsetted on
January 1, 2014. The provisions required a Thoroughbred racing
association, racing fair, quarter horse racing association or
harness racing association that conducts a racing meeting to
deduct a specified percentage of the total amount handled in
exotic pari-mutuel pools on live races, to be distributed to a
specified organization for the purpose of defraying costs of
workers' compensation insurance for trainers and owners in
connection with live horse racing, as defined.
Background
Over the years, the California racing industry has been
significantly threatened by the escalating cost of workers'
compensation insurance, in that the costs are not only causing
horses and trainers to leave this state, but also discouraging
owners and trainers from bringing horses into California to
race. AB 701 (J. Horton, Chapter 40, Statutes of 2004) was
enacted to provide the horse racing industry with some workers'
compensation relief through the redistribution of 0.5% of the
pari-mutuel handle on exotic wagers for Thoroughbred
associations and live racing fairs.
The California Thoroughbred Business League, a group comprised
of racing associations, horsemen's organizations and fairs, is
responsible for overseeing the funds that are utilized for
providing workers' compensation insurance relief to trainers and
owners. In 2013, approximately $8.1 million was deducted from
pari-mutuel wagering on horse racing for defraying costs.
Industry rates have declined by over 70%, which has helped to
prevent the exodus of trainers and horses from California.
Generated funds have been used to defray the costs of workers'
compensation insurance through the payment of supplemental
premiums that reduce rates, payment to or for the benefit of
trainers and owners of such horses, based on the number of such
horses they start, in order to reimburse them for the costs of
workers' compensation insurance directly or indirectly incurred
by them, and other appropriate payments.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee,
insignificant General Fund costs to the CHRB in connection with
monitoring the programs. Funds for the programs will come from
the pari-mutuel handle.
SUPPORT : (Verified 3/14/14)
California Authority of Racing Fairs (co-source)
California Thoroughbred Breeders Association (co-source)
California Thoroughbred Trainers (co-source)
Del Mar Thoroughbred Club (co-source)
Los Angeles Turf Club, Inc. (co-source)
Oak Tree Racing Association (co-source)
Santa Anita Park (co-source)
Thoroughbred Owners of California (co-source)
Jockeys' Guild
Los Angeles County Fair, Fairplex
ARGUMENTS IN SUPPORT : According to the author, "SB 777 aims
to protect California's horse racing tradition by requiring
thoroughbred associations and fairs to deduct 0.5% of the total
amount handled in exotic pari-mutuel pools of thoroughbred,
quarter horse, and harness races as well as pari-mutuel pools of
races of any breed to defray workers' compensation costs.
Specifically, SB 777 would reinstate sunsetted B&P codes
19605.76, 19605.77 and 19605.78, and prevent 19605.75 from full
repeal on January 1, 2015."
Proponents state, like other businesses, the horse racing
industry in California has suffered from the tremendous
increases in workers' compensation costs. As a result, this
bill is necessary because it will further help defray the costs
borne by trainers and owners in obtaining workers' compensation
coverage. Moreover, it will prevent Thoroughbred racehorses
from leaving this state. Supporters feel this bill will help
restore California's racing industry to a level where the best
horses race and the best trainers and jockeys compete.
ASSEMBLY FLOOR : 73-0, 3/13/14
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow,
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Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Holden,
Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Mansoor, Medina, Melendez, Morrell, Mullin, Muratsuchi,
Nazarian, Nestande, Olsen, Pan, Patterson, Perea, Quirk,
Quirk-Silva, Rendon, Rodriguez, Salas, Skinner, Stone, Ting,
Wagner, Weber,
Wieckowski, Wilk, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Bloom, Eggman, Gorell, Maienschein, V. Manuel
Pérez, Ridley-Thomas, Waldron
MW:e 3/14/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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