BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1499|
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THIRD READING
Bill No: AB 1499
Author: Evans (D)
Amended: As introduced
Vote: 27 - Urgency
SENATE GOVERNMENTAL ORG. COMMITTEE : 9-0, 6/9/09
AYES: Wright, Harman, Benoit, Calderon, Denham, Negrete
McLeod, Padilla, Wiggins, Yee
NO VOTE RECORDED: Florez, Oropeza, Wyland, Vacancy
SENATE APPROPRIATIONS COMMITTEE : 11-0, 6/29/09
AYES: Kehoe, Cox, Corbett, Leno, Oropeza, Price, Runner,
Walters, Wolk, Wyland, Yee
NO VOTE RECORDED: Denham, Hancock
ASSEMBLY FLOOR : 73-0, 5/14/09 - See last page for vote
SUBJECT : Horse racing: workers compensation
SOURCE : Author
DIGEST : This bill reauthorizes a fair to deduct an
additional 0.5 percent of the total amount handled in
exotic pari-mutuel pools of races for any breed, other than
races solely for thoroughbreds, to defray workers'
compensation insurance costs for trainers and owners who
race at an applicable fair.
ANALYSIS :
CONTINUED
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Existing law:
1. Provides that the California Horse Racing Board (CHRB)
regulate the various forms of horse racing authorized in
this state.
2. Requires various deductions and distributions to be made
from pari-mutuel pools, as specified.
3. Provides that until January 1, 2014, thoroughbred
associations or fairs may deduct 0.5 percent of the
amount of exotic pari-mutuel wagering on thoroughbred
races to defray the costs of workers' compensation
insurance. Provides that this deduction 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.
4. Provides that funds not expended for workers'
compensation costs shall 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.
5. Provides that if the racing association and the
organization representing horsemen and horsewomen cannot
agree on the manner of distribution of these funds to
defray the costs of workers' compensation insurance, the
matter is required to be submitted to CHRB for a
decision.
This bill:
1. Authorizes a fair to deduct an additional 0.5 percent of
the total amount handled in exotic pari-mutuel pools of
races for any breed, other than races solely for
thoroughbreds. The additional deduction shall only be
permitted for a breed's races with the approval of the
organization representing the horsemen and horsewomen of
that breed at the fair.
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2. Provides the amounts distributed to the organization, as
described, and shall be deposited in a separate account
to defray workers' compensation insurance costs for
trainers and owners who are racing breeds other than
thoroughbreds at the applicable fair. Any funds not
expended for this purpose in the calendar year in which
they are collected may either be used for the following
year's workers' compensation costs, or to benefit the
purse pool of each breed at the particular fair where
the funds are generated in the same proportions as each
breed generated at that fair in the year the funds are
collected.
3. Requires fairs and the organizations representing the
horsemen and horsewomen of each breed for which
deductions have been approved to form an organization to
which any funds deducted, as defined, shall be
distributed. The fairs collectively shall have
representation equal to the collective representation of
the organizations representing horsemen and horsewomen
on the governing board of the organization formed
pursuant to this subdivision.
4. Provides that if the fairs and the organizations
representing horsemen and horsewomen cannot agree on the
manner for distributing these funds to defray the costs
of workers' compensation insurance, the matter shall be
submitted to the CHRB, as specified.
5. Sunsets the authorization created by the bill on January
1, 2014.
6. Becomes effective immediately upon enactment in order to
ensure that trainers and owners of certain horse racing
breeds continue to receive assistance in defraying
workers' compensation insurance costs, as is currently
done for trainers and owners of other horse racing
breeds.
Comments
According to the author's office, AB 2103 (Plescia),
Chapter 443, Statutes of 2008, extended the sunset date
from January 1, 2009 to January 1, 2014, for the law which
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established an internal workers compensation insurance
program for California's Horse Racing Industry. AB 2103
allowed a fair race meet to deduct 0.5 percent from the
exotic wagering pools to help cover the costs of workers'
compensation for thoroughbreds but not the other breeds
(mules, appaloosas, quarter horses, and Arabians) that race
on the northern California Summer Fair Circuit. Those
specific breeds were inadvertently omitted from AB 2103
(Plescia).
This bill reinstates the 0.5 percent workers compensation
insurance program deduction for non-thoroughbred breeds
that race at the fairs. This bill contains an urgency
clause to prevent adverse affects on the non-thoroughbred
owners and trainers who race on the northern California
Fair Racing Circuit when racing commences in June. The
author's office notes, that a sunset date was added to this
bill to stay consistent with AB 2103 (Plescia) of 2008.
Background . Over the years, California's horse 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. In 2004, 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
percent of the pari-mutuel handle on exotic wagers for
thoroughbred associations and live racing fairs. The bill
passed with the industry in agreement that a trial period
was in order and therefore a January 1, 2009 sunset
provision was included in the bill.
Last year, the provisions of AB 701 relating to
thoroughbreds were extended until January 1, 2014 in AB
2103 (Plescia), Chapter 443, Statutes of 2008.
The funds generated from the two bills have been used to
defray the costs of workers' compensation insurance
incurred in connection with horses that race in this state
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
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start, in order to reimburse them for the costs of workers'
compensation insurance directly or indirectly incurred by
them, and other appropriate payments.
Impact of workers' compensation relief bills . After the
passage of AB 701 in 2004, the industry established its own
captive insurance program, referred to as the California
Horsemen's Safety Alliance (CHSA). According to various
segments within the horse racing industry, the CHSA has
produced the following results:
1. Workers' compensation costs have been reduced.
2. The exodus of trainers and owners has decreased and new
trainers and owners are bringing horses into California.
3. The CHSA established industry safety training programs,
treatment oversight programs, return to work programs,
and safety equipment research programs, which reduced
the number of accidents and cost of resulting claims.
4. Reductions of premiums and claim costs have occurred.
In a six month period (12/02 - 7/03) prior to the law,
there were 123 insured participants with total premiums
of $2,929,585 and claims paid of $2,617,716. In
contrast, in the 12-month policy period between July
2006 to June 2007, there were 399 insured participants
with premiums of $8,757,818 and claims paid of
$2,830,121
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
CHRB admin expenses----------minor,
absorbable---------General
SUPPORT : (Verified 7/1/09)
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American Mule Association
California Authority of Racing Fairs
ASSEMBLY FLOOR :
AYES: Adams, Anderson, Arambula, Beall, Bill Berryhill,
Tom Berryhill, Blakeslee, Block, Blumenfield, Brownley,
Buchanan, Caballero, Charles Calderon, Carter, Chesbro,
Conway, Cook, Coto, Davis, De La Torre, De Leon, DeVore,
Duvall, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,
Fuller, Furutani, Galgiani, Gilmore, Hagman, Hall,
Harkey, Hayashi, Hernandez, Hill, Huber, Huffman,
Jeffries, Jones, Knight, Krekorian, Lieu, Logue, Bonnie
Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande,
Niello, Nielsen, John A. Perez, V. Manuel Perez,
Portantino, Price, Ruskin, Salas, Silva, Skinner,
Solorio, Audra Strickland, Swanson, Torlakson, Torres,
Torrico, Tran, Villines, Yamada
NO VOTE RECORDED: Ammiano, Fuentes, Gaines, Garrick,
Saldana, Smyth, Bass
TSM:do 7/1/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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