BILL ANALYSIS �
AB 1421
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Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Isadore Hall, Chair
AB 1421 (Committee on Governmental Organization) - As
Introduced: March 21, 2011
SUBJECT : Harness racing organizations.
SUMMARY : Includes a reporting requirement to the manner in
which workers' compensation funds are distributed by a
designated organization, as described, to reduce the workers'
compensation insurance costs for harness racing trainers in
California. Specifically, this bill :
1) Requires the designated organization to account to the
California Horse Racing Board (CHRB) on or before August 1 of
each year with respect to the distribution of harness racing
workers' compensation funds received during the immediately
preceding fiscal year and to obtain an independent audit of
those funds.
2) Requires that a copy of the completed audit be forwarded to
the CHRB within 45 days of its receipt by the organization.
EXISTING LAW :
1) Existing law, the Horse Racing Law, governs, among other
types of horse races, harness horse racing, in which horses that
meet specified criteria are harnessed to a sulky or similar
vehicle and raced at either the trotting or pacing gait.
2) Vests jurisdiction and supervision over all horse racing
meetings, including harness races, in this state with the CHRB.
3) Requires, until January 1, 2014, the harness racing
association and the organization representing harness horsemen
and horsewomen to form an organization to which certain funds,
that may be deducted from the total amount handled in
conventional pari-mutuel pools of harness races, are distributed
for purposes of reducing the workers' compensation insurance
costs for trainers who are racing horses at the applicable
harness racing association meet, as specified.
FISCAL EFFECT : Unknown.
AB 1421
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COMMENTS :
Purpose of the bill : This bill will require the organization
formed under current law to reduce workers' compensation
insurance costs for harness racing trainers to account to the
CHRB on or before August 1 of each year, with respect to funds
received (approximately $170,000 in 2010) during the immediately
preceding fiscal year. The organization will be required to
obtain an independent audit of those funds. A copy of the
completed audit shall be forwarded to the CHRB within 45 days of
its receipt by the organization.
This reporting and audit requirement codifies in existing law
the same requirement for which the Thoroughbred and quarter
horse racing industry must adhere to for receiving workers'
compensation insurance funds, as described, in statute.
AB 1421 will give the CHRB the needed fiscal information to
ensure that these designated funds are being properly utilized
and disbursed to reduce workers' compensation insurance premiums
for harness trainers in the state.
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. In 2004, AB 701 (J. Horton), Chapter 40, Statutes of 2004
was enacted to provide the harness racing industry with some
workers' compensation relief through the redistribution of 1
percent of the pari-mutuel handle (conventional wagers) on live
harness races run in California.
The funds generated from AB 701 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 start, in order to reimburse them for
the costs of workers' compensation insurance directly or
indirectly incurred by them, and other appropriate payments.
The author adds, even with the recent comprehensive workers'
compensation package, the California horse racing industry is
AB 1421
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still faced with rates, which are excessive compared to other
industries, and other states, which conduct live harness racing.
Prior legislation : AB 701 (Price), Chapter 430, Statutes of
2008. Extended the sunset date (until January 1, 2014) on a
program to provide an additional take-out from wagers for
defraying workers' compensation insurance premiums for the
harness racing industry.
AB 813 (Portantino), Chapter 19, Statutes of 2008. Provided
that, with respect to harness meetings, if there are funds
unexpended in the horse racing promotion account, those funds
may be expended for other purposes with the consent of the
horsemen and the racing association to benefit the horsemen, or
the racing association, or both, pursuant to their agreement.
AB 2103 (Plescia), Chapter, Statutes of 2008. Extended the
sunset date, from January 1, 2009, to January 1, 2014, on a
deduction from pari-mutuel wagering on Thoroughbred horse racing
in order to defray the costs of workers' compensation insurance.
AB 701 (Horton), Chapter 40, Statutes of 2004. Makes changes to
existing Horse Racing Law which prescribes the amount deducted
from the pari-mutuel pools, as specified, in order to reduce
workers' compensation costs within the California horse racing
industry.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531