Pennsylvania Breeders ‘Crippled’ By Holdup In Incentive Award Payments

by | 08.02.2016 | 12:32pm

It was all smiles on Feb. 23 when Pennsylvania Gov. Tom Wolf was surrounded by members of the Thoroughbred industry as he signed HB941 into law, creating a new racing commission and an accompanying funding mechanism.

Little did Pennsylvania breeders know that same bill included language changing the qualification language for incentive awards for horses bred in the Keystone State. The change, according to lawmakers and the organization representing Pennsylvania Thoroughbred breeders, was unintentional.

Before HB941 became law, Pennsylvania breeders received 30 percent in awards for top three finishes by horses conceived by registered Pennsylvania sires and foaled in the state. Pennsylvania foals by out-of-state stallions earned 20 percent in awards for finishing first, second or third.

In 2015, according to the Pennsylvania Horse Breeders Association, $11 million was paid out in breeder and stallion awards, $6 million in owner bonuses (they receive 10 percent for top 3 finishes by Pennsylvania-breds), and $14 million in restricted overnight races and stakes.

But HB941 contained language that seemingly disqualified the 20 percent awards for out-of-state sired runners that were foaled in Pennsylvania. As a result, the state's Department of Agriculture cut off all distributions after the law went into effect the day HB941 was signed by the governor. The last checks were distributed in May for races that took place prior to Feb. 23, so more than five months of awards have been held up

Many Pennsylvania breeders depend on the cash flow from incentive awards to survive.

Brian Sanfratello, executive director of the Pennsylvania Horse Breeders Association, said the mistake in language was detected after HB941 was approved by the House and moved to the Senate. “We went to the Senate and explained the discrepancy in the breeding wording,” Sanfratello said. “The Senate had an amendment ready, but it never opened for amendments because the entire process had taken three years to get this far and no one wanted to insert any amendments because it might jeopardize the final bill.”

Sanfratello added: “We have a letter from Sen. Vogel (a sponsor of the bill) that it was never the intention of the General Assembly to change any wording (relative to incentive awards).”

Subsequent efforts were made to change the language legislatively, but the General Assembly adjourned without taking action. The House will not reconvene until Sept. 19, with the Senate back in session Sept. 26.

In the meantime, the PHBA retained the Buchanan Ingersoll & Rooney law firm to convince the newly seated Pennsylvania Horse Racing Commission it had the authority to authorize distribution of the awards under the previous formula. The commission, whose members include owner-breeder Russell Jones, tabled the issue for at least a month at its recent July 27 meeting.

On July 29, the PHBA sent a letter, signed by Roger Legg, the president of the organization, to Gov. Wolf explaining the impact the changed language has had on the incentive program and Pennsylvania Thoroughbred breeders.

“The resulting, lengthy halt in breeder awards has crippled the Thoroughbred breeding industry in Pennsylvania and promoted a growing exodus of investors, breeders and skilled workers from the Commonwealth,” the letter reads. “Hundreds of breeders are now waiting for $3 to $4 million in held up awards. And the total grows each week as their produce compete and succeed on Pennsylvania's racetracks. These breeders say that they don't know what they will do if the award money is not soon released.

“These people are pleading with us to do whatever we can to get the (Secretary of Agriculture) to release these funds. Thus far, all we can say is that we have done everything possible to make sure that these awards are paid but we have failed.”

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