BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1152|
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THIRD READING
Bill No: AB 1152
Author: Anderson (R)
Amended: 6/3/10 in Senate
Vote: 27 - Urgency
SENATE GOVERNMENTAL ORG. COMMITTEE : 7-0, 4/27/10
AYES: Wright, Denham, Florez, Negrete McLeod, Price,
Wyland, Yee
NO VOTE RECORDED: Harman, Calderon, Oropeza, Padilla
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : Not relevant
SUBJECT : Horse racing
SOURCE : Jockeys Guild
DIGEST : This bill strikes outriders from the list of
racing officials for licensure purposes and places them
back amongst the list of racing personnel. Deletes the
vesting requirements of the jockeys retirement program for
purposes of conforming to federal tax law, and makes
changes to advance deposit wagering provisions of horse
racing law.
ANALYSIS :
Existing law
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1. Existing law authorizes parimutuel wagering on horse
racing at or disseminated by licensed racing
associations and fairs. Racing was legalized through
constitutional amendment in 1933. The California Horse
Racing Board (CHRB) has complete jurisdiction and
supervision over all racing activities in the State of
California.
2. Existing law authorizes and defines "advance deposit
wagering" as a form of parimutuel wagering in which a
person "establishes an account with a board-approved
betting system or wagering hub where the account owner
provides 'wagering instructions' authorizing the entity
holding the account to place wagers on the owner's
behalf."
3. Under current law, a percentage of advanced deposit
wagering wagers is used to establish and administer a
defined contribution retirement plan for California
licensed jockeys who retired from racing on or after
January 1, 2009. The revenue paid into this fund shall
not exceed $1 million annually.
4. Existing law defines "racing official" as the starter,
outrider, timer, paddock judge, horseshoe inspector,
horse identifier, official veterinarian, racing
veterinarian, associate judge, placing judge, patrol
judge, clerk of scales, clerk of the course, and any
other person acting as an official at any horse racing
meeting.
5. Existing law provides that every steward and racing
official shall be licensed and subject to both written
and oral examinations.
6. Existing law requires persons who participate in a horse
race without proper licensure are guilty of a
misdemeanor.
This bill:
1. Requires the licensure of outriders by the CHRB pursuant
to the provisions of law listing the persons required to
be licensed who participate in, or have anything to do
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with, the racing of horses.
2. Provides that the CHRB may adopt regulations to require
outrider license applicants to pass both a written and
an oral examination and to authorize outriders to
exercise the duties and powers as prescribed by the
CHRB.
3. Deletes the provisions requiring a jockey to have ridden
in a minimum of 1,250 parimutuel races conducted in
California in order to be vested in the jockeys'
retirement pension program.
4. Exempts California harness racing meetings from
participating in the jockeys' retirement pension
program.
5. Requires amounts distributed under certain provisions of
law relating to advance deposit wagering to be
proportionally reduced by an amount equal to 0.00295
multiplied by the amount handled on advance deposit
wagers originating in California for each harness racing
meeting, not to exceed $500,000, and requires the amount
deducted to be distributed to a certain welfare fund
established for the benefit of horsemen and backstretch
personnel, as provided, and the amount remaining, if
any, for the benefit of the horsemen, as specified.
6. Provides that notwithstanding any other provision of
law, commencing July 1, 2010, if a racetrack located in
the central zone is not available for use by a
thoroughbred association that was licensed by the CHRB
to conduct a live race meet at that racetrack in 2009,
the CHRB shall be authorized to allocate racing dates to
that association to be operated at a racetrack in the
central zone or the southern zone for racing in 2010, or
thereafter, in accordance with the rules and regulations
of the CHRB.
Comments
Jockey retirement plans . In 2007, the Legislature passed
AB 765 (Evans), Chapter 613, Statutes of 2007, which
extended the authorization for advanced deposit wagering
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horse racing. A portion of that bill directed some of the
proceeds to fund a "defined contribution" retirement plan
for California licensed jockeys. At the time, the bill
included a vesting requirement of 1,250 races run in
California.
Upon implementing that legislation, the law firm hired by
the CHRB has been informed by the Internal Revenue Service
(IRS) that the vesting requirement is inconsistent with
federal law. A defined contribution plan (e.g., IRA, 401K,
etc.) cannot have a vesting requirement. It must vest with
the first dollar contributed, otherwise, it loses its
tax-deferred status.
This bill corrects this problem by removing the vesting
provisions to ensure that the plan is consistent with
federal law and qualifies as a "defined contribution plan".
Classification of racetrack personnel . Additionally, in
2009, the Legislature passed AB 1575 (Governmental
Organization), Chapter 650, Statutes of 2009, which changed
the licensure classification for outriders from "barn
personnel" to "racing officials". This change was intended
to recognize the significant amount of responsibility that
outriders exercise on-track, working in close
communications with the race steward, and thereby requiring
outriders to demonstrate a higher level of qualification.
Unfortunately, the bill had an unexpected effect of placing
outriders in a different collective bargaining unit.
This bill corrects the problem without undoing the intent
of AB 1575 of last year. The change reclassifies outriders
as "general racing personnel" who must be licensed. The
bill also specifies that the CHRB may administer written
and oral examinations of outriders to certify that they are
qualified.
According to the proponents of Section 3 of this bill (#6
above), "The Oak Tree Racing Association has been in
operation since 1969, when they entered into the lease
agreement with the owners of the Santa Anita Race Track.
It has been a successful meet ever since. Oak Tree has
been known as the "Ambassador of Racing," operating as a
not-for-profit, non-dividend-paying group of California
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owners and breeders whose directors serve without
compensation. Oak Tree has contributed over 26 million
dollars in projects benefiting the racing industry. The
largest grants for industry support have included more than
4.6 million dollars in support of projects at the UC Davis
Center for Equine Health and Performance.
"The new owners of the Santa Anita Race Track have
terminated Oak Tree's lease to run this fall. The
California Horse Racing Board, at their last meeting,
granted Oak Tree it's racing dates to allow them to run at
an alternative track in either the central or southern
zone. This bill clarifies the right of the Board to award
these dates to Oak Tree so they can race at either
Hollywood Park or Del Mar."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 6/15/10)
Jockeys' Guild (source)
California Exposition and State Fair
Del Mar Thoroughbred Club
Los Angeles County Fair: Fairplex
Oak Tree Racing Association
TSM:do 6/16/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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