September 2016 | Thoroughbred Breeders Suffer Financially Due to Wording Change in Racing Bill
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Thoroughbred Breeders Suffer Financially Due to Wording Change in Racing Bill

Suzanne Bush - September 2016

Governor Wolf signing HB941 into law

There were smiling faces all around the table on February 23 when Governor Wolf signed HB941 into law. That was the legislation that promised long-sought reform for Pennsylvania’s horse racing industry. The bloom came off that rose pretty quickly, when it became clear there was a problem with the way the final bill described breeders’ awards.

Under the legislation that previously governed Pennsylvania racing, special breeders’ awards were offered for Thoroughbred horses that were PA-Bred, that is, horses that met at least one of these conditions, as described by the Pennsylvania Horse Breeders Association (PHBA):

  • Horses that were foaled in Pennsylvania, and whose dams had resided in the state from October 1 of the year of conception through foaling.
  • Foals born in Pennsylvania from a dam purchased at auction after October 1 of the year of conception provided the dam was brought into the state within 14 days of the auction, and remained in the state continuously for at least 90 days.
  • Foals born of dams bred to Pennsylvania stallions.

In the final bill, the language specified that breeders’ awards would go to owners of horses that were “sired in this commonwealth.” The revised language shocked industry executives who had been working with the legislature on the reform; and very soon afterward they realized that the machinery of government is complicated and unyielding.

“The purpose of this bill was to create a commission and the funding of that commission. To move two commissions into one basically and to properly fund that commission. Nothing else was supposed to be done,” Brian Sanfratello explained. He’s the Executive Secretary of PHBA. He says that everyone agrees the language change created unintended consequences for the state’s Thoroughbred industry.

But fixing the language requires a legislative remedy. And the Senate has adjourned until September 26. The House reconvened on August 26. Any revision to the law will require approval from both the House and the Senate. In the meantime, all breeders’ awards have been withheld since February.

Breeders Facing Possible Bankruptcy
Sanfratello says that the legislative snafu is hurting the state’s horse breeders. “Right now there’s somewhere between three and four million dollars that has not been paid to breeders, stallion owners and reimbursements to racetracks. I talk to people every day telling me that they are at their max credit with their feed companies, their hay people and they don’t know what they’re going to do if the money isn’t released soon.”

He says that the legislature had the opportunity to fix the language, but they failed to act, because they were worried that opening the bill for revision would result in a flood of amendments that would undo or radically change the bill’s purpose and focus.

He’s worried about what’s going to happen to the state’s promising horse breeding industry. “I’m afraid for the horses because if they can’t be fed properly, who knows? I don’t want to say ‘oh we better get this done because the horses are going to suffer,’ but if you can’t get your feed and your hay to properly take care of your horses…Aren’t horses what this business is all about?”

Vastly Different Versions of the Story
Roger Legg, President of PHBA, wrote to Governor Wolf in July asking for help in getting the funds released. In response, the Governor said that it was up to the legislature to fix the language, but he also noted that “the Breeding Fund language change at the heart of our present dilemma was not raised during the many months of negotiations over the bill’s language in which your organization and many others participated.” 

Sanfratello disagrees. He says that during the months of negotiations among all the stakeholders, many things within the law were discussed. But the language defining breeders’ awards was not part of the discussion. “The bottom line was that we were told that it was not supposed to change, and we also were not privy to the final bill before it was approved by the House, when it became 941.” He said that the group of industry stakeholders was scheduled to come to another meeting. “We were supposed to meet again and were told not to come back. At that point the Ag department and the Ag committee members took it from that point and then it went to the House for approval. We never got to see the final drafting. If there was anything that had changed, we would have found it.”

In his letter to Legg, Wolf also pointed out that it was more than a month after the bill became law before anyone brought the language problem to the attention of the Department of Agriculture. Again, Sanfratello disagrees. “The day after it was approved by the House, and I could view the final draft, I saw the discrepancy in the wording, which was—I’m not sure the exact date when it was passed, but I’m guessing it was January, maybe. I went to the Senate Ag committee and I said there are a couple of words here that are incorrect.”

Even the night the bill was signed into law, Sanfratello says he notified the Department of Agriculture of the language problem. “The night it was signed I stood there with a representative from the Ag department, and I let him know the wording was incorrect, and I was told that everyone that was involved would try to get this wording put back.”

Send in the Lawyers
PHBA hired private attorneys from Buchanan Ingersoll & Rooney, to see if there was a way to get the money out of the breeders’ fund and into the hands of the breeders. “We don’t hold the money,” Sanfratello said. “We have a restricted account held by the Treasury Department. We hired a lawyer, because we felt the discrepancy in the wording made no sense at all.” The attorneys wrote to the newly-formed State Horse Racing Commission, asking for the breeders’ awards to be released. The Governor explained that the Commission “cannot ignore the parameters set forth in Act 7, regardless of how convenient it may be to do so.”

And there it stands. The horse breeders are struggling to pay their bills. The Senate is not in session. The much-celebrated reform legislation fixed some things, but fractured others. The old saying that starts “for want of a nail a shoe was lost” applies here. Sanfratello says that nobody knows how or why the wording was changed. “No one knows why it was changed, or no one will admit to changing it,” he said. “The problem looks like someone thought that ‘PA registered’ and ‘sired in the Commonwealth’ meant the same thing. I think it was a simple mistake. Everywhere we saw PA bred it was replaced by sired in the commonwealth.” For want of an editor who understood the distinction, an industry is suffering. “It was never intended to change the distribution of the fund, as noted by Senator Vogel who was the original sponsor,” Sanfratello says.