There does not appear to be immediate relief in sight for Pennsylvania breeders whose incentive awards were cut off earlier this year by what is being called an inadvertent change in wording of legislation that was widely supported by the Thoroughbred industry.
At least that's what Gov. Tom Wolf said in an Aug. 5 letter to Roger Legg, president of the Pennsylvania Horse Breeders Association. Writing in response to an appeal from Legg for the governor to help release monetary awards that have been held up for months, Wolf said his office does not “possess the latitude to deviate from the law barring a remedy by the Pennsylvania General Assembly.”
The change to the current law, as Wolf summarized, means that “in order for a horse to earn a breeding fund award for its owner, breeder or the owner of the horse's sire, it no longer need be 'Pennsylvania-bred' as under the repealed Race Horse Industry Reform Act, and is now required to be 'sired in this commonwealth.'”
The law primary dealt with creating and funding a new horse racing commission for Pennsylvania.
No awards have been paid for races run after the law went into effect in February. In his letter to the governor, Legg said the “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.”
Wolf appeared to blame the PHBA for not catching the change in language early enough to have it amended during the legislative process.
“This Breeding Fund language change in Act 7 was present in SB352 when it was first introduced in the Pennsylvania Senate on Jan. 28, 2015,” Wolf wrote. “Between Jan. 28, 2015, and when Act 7 was signed into law on Feb. 23, 2016, it was never brought to the attention of my staff or the staff of the Pennsylvania Department of Agriculture that the language was not the intended product of the Pennsylvania Horse Breeders Association (PHBA).
“On March 30, 2016, approximately one month after Act 7 was signed into law, the problematic Breeding Fund language was first brought to the attention of the Department of Agriculture by another party,” Wolf continued. “The Department reached out for your input and held extensive discussions and a series of meetings in which your organization participated along with the four legislative caucuses. Senate Bill 1229 was introduced to reinstate the previous Breeding Fund language and distribution scheme, and the bill worked its way through the legislative process. … Unfortunately, Senate Bill 1229 did not pass both chambers before the July 11 adjournment. We look forward to the resumption of efforts to achieve the necessary legislative fix upon the General Assembly's return to session shortly.”
The House is now scheduled to reconvene Aug. 18, but the Senate will not be back in session until Sept. 26.
The PHBA hired a law firm to persuade the newly seated Pennsylvania State Horse Racing Commission to distribute funds under the previous law, but the commission tabled a motion to do so at a July 27 meeting. The next commission meeting is scheduled Aug. 24.
Wolf cautioned against the regulatory board having the authority to distribute the awards without legislative action.
“At this time, according to law, the matter must remain with the State Horse Racing Commission. The commission cannot ignore the parameters set forth in Act 7, regardless of how convenient it may be to do so,” wrote Wolf.
“The financial impact that the cessation of Pennsylvania Breeding Fund payments is having upon individual horse breeders and their employees is extremely concerning, and we realize it could be potentially devastating if continued,” he concluded. “Hence, a statutory fix should be enacted as soon as possible. My administration stands ready to continue engaging in negotiations upon the General Assembly's return to session.”
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.
UPDATE: Late Monday afternoon, the Pennsylvania Department of Agriculture issued the following statement from Michael Smith, executive deputy secretary, Pennsylvania Department of Agriculture:
“The hardships to Thoroughbred breeders throughout Pennsylvania that has resulted from changes in the law is not lost on the department or the Horse Racing Commission. Unfortunately – even though the change was unintentional as has been stated by members of the General Assembly – the commonwealth does not have the latitude to ignore the law, regardless of how convenient it may be to do so.
“When the unintended consequence of this legislative change was brought to our attention – approximately one month after Act 7 went into effect – the department tried to negotiate a fix with members of the General Assembly and the state's breeders, but despite those efforts, the legal remedy, Senate Bill 1229, did not pass both the House and Senate before the legislature adjourned. In addition, we have deep concerns about an amendment on an unrelated issue that has made its way into Senate Bill 1229 P.N 2020.
“We are 100 percent committed to working with the General Assembly and breeders to achieve the necessary legislative fix when the General Assembly returns to session. Until then, the authority to authorize payments from the Pennsylvania Breeding Fund rests with the Commission, which has voted to table the industry's request for now because the law's provisions cannot be ignored.
“Again, we recognize that breeders not receiving the award payments they have earned is causing hardship. That is certainly concerning to us, but the legal reality is that resuming those payments in their entirety requires a statutory fix, which is all the more reason to enact that change as soon as possible.”
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