Administrative Rule of the Month - Breeder Definition

Disclaimer: Even though IBOP is adding April's Administrative Rule of the Month to our blog on April 1st, this is not an April Fools' Day edition at all!

The Indiana horse racing industry has come to know that the Indiana Horse Racing Commission (IHRC) has two rule books; one that applies to standardbred racing and another that applies to thoroughbreds and quarter horse racing. In part, this is because standardbred races began in Indiana before the flat racing breeds. Sometimes, however, a two rule book system doesn't work quite so well.

Here's how IHRC Executive Director Joe Gorajec explained the two rule book system to the commissioners in attendance at the IHRC's January 24, 2012 meeting:

"The way our rule book is constructed, we have certain articles. We have a standardbred rule book and we have a thoroughbred/quarter horse rule book, and there are articles or sections of that rule book that are identical for both breeds. When you talk about the duties of the Commission or responsibility of the Commission, that's identical for both breeds. When you go to the chapter on due process, identical. Pari-mutuel wagering, identical. There are a number of articles, a number of sections that are different just because there are differences within the breeds. So in those cases where a rule falls within an article, okay, in which it's a separate rule book, then we have two rules because we have two rule numbers, one for standardbred, one for thoroughbred. If the first number after the IAC is a number without a period, then it's standardbred. If it has a period, like in the second track security, 4.5, is thoroughbred and quarter horses."

There are two rules copied below. They look somewhat similar with both spelling out which definitions of terms apply to what articles of the rule books. Because of the differences between flat racing and harness racing, having two sets of definitions makes perfect sense. The first number after the '71 IAC' is the Article, so the first rule copied below is Article 1 and the second is Article 1.5. By Mr. Gorajec's explanation of the numbering system, which of the following two rules applies to thoroughbreds and quarter horses? This shouldn't be a difficult question to answer.

Rule 1. Definitions
71 IAC 1-1-1 Applicability
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 1. The definitions in this rule apply to [sic.] throughout this title. (Indiana Horse Racing Commission; 71 IAC 1-1-1; emergency rule filed Feb 10, 1994, 9:20 a.m.: 17 IR 1113; emergency rule filed Jun 15, 1995, 5:00 p.m.: 18 IR 2814, eff Jul 1, 1995; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; emergency rule filed Apr 21, 2004, 3:45 p.m.: 27 IR 2753; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA)
(Please Note: Included in 71 IAC Article 1 are definitions that range from 71 IAC 1-1-2 which defines the "Act," the pari-mutuel wagering act through 71 IAC 1-1-115 which defines the word "Year" to mean a calendar year. 71 IAC 1-1-1 applies those defintions in the rule books.)

Rule 1. Definitions
71 IAC 1.5-1-1 Applicability
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 1. The definitions in this rule apply to articles 1.5, 2, 3.5, 4.5, 5.5, 6.5, 7.5, 8.5, 9, 10, 11, and 12 of this title. (Indiana Horse Racing Commission; 71 IAC 1.5-1-1; emergency rule filed Jun 15, 1995, 5:00 p.m.: 18 IR 2815, eff Jul 1, 1995; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA)
(Please Note: Included in 71 IAC Article 1.5 are definitions that range from 71 IAC 1.5-1-2 which defines the "Act," the pari-mutuel wagering act through 71 IAC 1.5-1-110 which defines the word "Year" to mean a calendar year. So, 71 IAC Article 1.5 is very similar to 71 IAC Article 1, and applies those definitions.)

Based upon the explanation provided, any article with the extension of .5 is a thoroughbred and quarter horse rule. So, 71 IAC 1.5-1-1 is the flat racing rule that applies to the definitions of terms to thoroughbred and quarter horse racing. Now, a tougher question, and you'll have to carefully read both rules to find the answer. Which of these two rules applies the definitions of terms to Article 13.5? Hint: The word 'title' refers to the entire Title 71 Indiana Horse Racing Commission which is shortened in administrative rules to 71 IAC.

As you can see, there's a list of 12 articles specifically mentioned in 71 IAC 1.5-1-1 and that list does not include Article 13.5. So, the answer is not 71 IAC 1.5-1-1. Conversely, 71 IAC 1-1-1 applies the definitions in that article "throughout this title" with, again, the title being any article under Title 71. Therefore, the ordinary and plain meaning of the language used in these two rules would indicate that the definitions in 71 IAC Article 1 would apply to Article 13.5. Here's the problem: Article 13.5 covers the Thoroughbred Breed Development Program. What this means is that the definition of 'breeder' from the standardbred rule book is technically what is in effect, as applied by the commission rules, for the Thoroughbred Breed Development Program! The definition of breeder applied to the thoroughbred breed development program from Article 1 would then be as follows:

71 IAC 1-1-18 "Breeder" defined
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 18. "Breeder" means the owner or lessee of the horse's dam at the time of breeding. (Indiana Horse Racing Commission; 71 IAC 1-1-18; emergency rule filed Feb 10, 1994, 9:20 a.m.: 17 IR 1115; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA)

71 IAC 1-1-18 is the definition of breeder from the standardbred rule book. The standardbred definition of breeder, along with the quarter horse definition, is the owner of the mare (dam) at the time of breeding, not at the time of foaling. This definition of breeder in 71 IAC 1-1-18 is contrary to the recognized thoroughbred breeding industry definition and contrary to The Jockey Club definition of a thoroughbred breeder. We recognize that as a current practice the IHRC staff has been paying thoroughbred breeder awards as to the recognized thoroughbred breeding industry standards, and not to the definition in 71 IAC 1-1-18. Paying awards to the owner of the mare at foaling is the correct course of action for the thoroughbred breeding program in Indiana. However, the intent and the execution of the thoroughbred program clearly does not match the IHRC's own rules. To do so, Article 13.5 would need to be listed in 71 IAC 1.5-1-1 to apply the correct definition to the program

IBOP has petitioned the IHRC to consider an amendment to '71 IAC 1.5-1-1 Applicability' to include, at minimum, Article 13.5 Thoroughbred Development Program to the list of articles specifically mentioned in the rule. We have requested this amendment to be considered as an agenda item at the next regularly scheduled IHRC meeting. Doing so would apply the correct definition of a thoroughbred breeder (which is actually found in 71 IAC 1.5-1-19) to the thoroughbred breed development program. Without 'Article 13.5 Thoroughbred Development Program' being applied via 71 IAC 1.5-1-1, the owner of a mare at breeding, if different than the owner of the mare at foaling, would have a claim to breeder awards already paid. Any person who has sold a mare in foal, where the resulting foal has become a registered Indiana-bred thoroughbred, has a claim to any breeder awards based upon the performance of that foal. When the owner of the mare is different at foaling than at breeding, any breeder award paid to the mare owner at the time of foaling can be challenged under the IHRC's own rules. That creates a potential liability for the IHRC.

Any liability is especially difficult to quantify given the significant increases in the thoroughbred foal crops in Indiana over the last five years. Many breeders and owners grew their operations through the acquisition of in foal mares either privately or via public sale to foal in Indiana. In reviewing just one of ITOBA's 2011 champions, we found an example of a potential claim of $25,000 from just races in 2011 where the owner of the mare at her breeding was different than the owner of the mare at the foal's birth. In addition, any potential liability expands as the larger thoroughbred foal crops begin to compete and to earn breeder awards. Plus, thoroughbred mares are being bred in the 2012 breeding season that would fall under the standardbred breeder definition in 71 IAC 1-1-18.

We believe that any liability for claims against breeder awards paid and those that will be paid lies clearly with the IHRC and not those who have already received breeder award payments. A foal's Certificate of Indiana Bred has a 'Bred By' section which defines the breeder very clearly. It's just their rules don't, and that is the IHRC's problem to fix.