BILL ANALYSIS �
Bill No: AB
1421
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2011-2012 Regular Session
Staff Analysis
AB 1421 Author: Committee on Governmental Organization
As Introduced: March 21, 2011
Hearing Date: June 14, 2011
Consultant: Art Terzakis
SUBJECT
Horse Racing
DESCRIPTION
AB 1421 requires the organization formed by the Harness
Racing Association and the harness racing horsemen and
horsewomen to oversee workers' compensation insurance to
obtain an independent audit of their workers' compensation
fund expenditures. Specifically, this measure:
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
Existing 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.
AB 1421 (Committee on Governmental Organization)
continuedPage 2
Existing law vests jurisdiction and supervision over all
horse racing meetings, including harness races, in this
state with the CHRB.
Existing law 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.
BACKGROUND
Purpose of AB 1421: Currently, the Thoroughbred and
quarter horse industry must adhere to reporting and audit
requirements in order to receive workers' compensation
insurance funds. This measure would simply establish a
similar requirement for harness racing. AB 1421 is
intended to give the CHRB needed fiscal information to
ensure that the designated harness racing workers'
compensation funds are being properly utilized and
disbursed to reduce workers' compensation insurance
premiums for harness trainers in the state.
Staff Comments: Over the years, the California racing
industry has been hampered by the escalating cost of
workers' compensation insurance. Specifically, high costs
have caused horses and trainers to leave this state and
have also discouraged owners and trainers from bringing
horses into California to race. In 2004, AB 701 (J.
Horton), Chapter 40, was enacted to provide the harness
racing industry with some workers' compensation relief
through the redistribution of 1% of the pari-mutuel handle
(conventional wagers) on live harness races run in
California. The funds generated from AB 701 have been used
to reduce the workers' compensation insurance costs for
trainers at the harness racing association meets. Even
with recent comprehensive workers' compensation relief, the
California horse racing industry is still faced with rates
which are excessive compared to other states, which conduct
live harness racing.
PRIOR/RELATED LEGISLATION
AB 1421 (Committee on Governmental Organization)
continuedPage 3
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. Made 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.
SUPPORT: None on file as of June 10, 2011.
OPPOSE: None on file as of June 10, 2011.
FISCAL COMMITTEE: Senate Appropriations Committee
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