On December 27, 2013, Indiana Governor Mike Pence issued Executive Order 13-27 which postponed the expiration of 91 administrative rules from January 1, 2014 to January 1, 2015. Under Indiana law, an administrative rule "expires January 1st of the seventh year after the year in which the rule takes effect." It's the responsibility of an administrative agency to readopt those rules prior to their expiration. If an administrative rule is not readopted prior to its expiration date, the Governor is authorized under Indiana law to postpone its expiration should "the failure to readopt the rule causes an emergency to exist." Three administrative agencies petitioned the Governor's office for extensions of administrative rules; the Indiana Department of Veterans' Affairs (6), the Indiana State Lottery Commission (7), and the Indiana Horse Racing Commission (78). Yes, the Indiana Horse Racing Commission (IHRC) needed to postpone the expiration of 78 different administrative rules.
The process for readopting administrative rules is usually quite simple with the an agency filing a Notice of Intent to Readopt with Indiana Register and after 30 days the administrative rules are considered readopted. A majority of the administrative rules in the IHRC's rule books, one for standardbred racing and one for flat racing, were due to expire on January 1, 2014. On July 31, 2013, the IHRC staff, without gaining approval from a majority vote of the commissioners at a public meeting, filed a Notice of Intent to Readopt for not only expiring administrative rules, but for entire articles, basically chapters, within the rule books. This was a short-cut. Instead of spelling out each individual expiring administrative rule, filing a Notice of Intent to Readopt for an entire article also brings non-expiring rules within that chapter up for readoption. Those articles in the Notice of Intent to Readopt, which is LSA Document #13-345, can be seen at the following link: http://www.in.gov/legislative/iac/20130731-IR-071130345RNA.xml.pdf.
If within the 30 days after the publication of the Notice of Intent to Readopt a request is made to have a rule, or rules, "considered separately," the expiring administrative rules must be readopted by going through the regular rulemaking process. In the history of the IHRC, only one administrative rule has gone through the regular rulemaking process (See: http://ibopindy.blogspot.com/2013/08/administrative-rule-of-month-71-iac-75.html) which includes a public notice, public hearing, a review by the Attorney General's office for legality, and a review by the Governor's office for any public policy concerns before the rule can be adopted or readopted as a final rule. This process could take up to six months. Within the 30 day post-filing period, Indiana Breeder & Owner Protection, Inc. (IBOP) petitioned for 84 of the IHRC's administrative rules included in the 'Notice' to be considered separately. Our Administrative Rule of the Month for September 2013 outlined our procedural request (See: http://ibopindy.blogspot.com/2013/09/administrative-rule-of-month-71-iac-15.html).
We fully expected, as the IHRC did with a similar request for a rule to be considered separately in 2012, these requests to be considered separately to be ignored (See: http://ibopindy.blogspot.com/2013/01/administrative-rule-of-month-71-iac-8-1.html). To our surprise, that didn't happen, but what happened next was rather interesting. Agenda item #8 for the IHRC's October 29, 2103 meeting was readoption of expiring rules. The commissioners were presented with 12 pages with two columns each of the administrative rules set to expire on January 1, 2014. Of course, they voted unanimously to readopt these rules which was almost three months after the IHRC staff had already filed the Notice of Intent to Readopt. The IHRC staff was covering themselves with this after-the-fact vote. However, the 84 administrative rules IBOP had requested to be considered separately were excluded from those presented to the commissioners. Those rules that were readopted by the commissioners were filed with the Indiana Register and became final readopted rules on December 25, 2013. That entire list can be viewed at this link: http://www.in.gov/legislative/iac/20131225-IR-071130345RFA.xml.pdf.
Because the IHRC staff chose not to attempt to complete the regular rulemaking process for the 84 administrative rules set to expire by the January 1, 2014, it was necessary to petition the Governor to postpone their expiration. As mentioned above, the Governor's Executive Order postponed the expiration of 78 administrative rules for the IHRC. This action gives the IHRC all of 2014 to complete the regular rulemaking readoption of those 78 administrative. The complete Executive Order extending the 78 administrative rules can be found here: http://freepdfhosting.com/f0e68b039c.pdf. What you'll see is that the rules that were extended range from minor rule issues that we've pointed out to the IHRC staff, but they failed to act on like for a 'maiden' race definition (See: http://ibopindy.blogspot.com/2013/06/administrative-rule-of-month-71-iac-15.html) to administrative rules that we've written extensively about in our newsletters like the 'out-of-competition testing' rules where we feel the IHRC has stepped well beyond their statutory authority.
Now, if you're following the math, IBOP requested 84 rules to be considered separately and the Governor extended 78 rules. So, what happened to the other six? Well, five of those administrative rules were modified by new emergency rules in 2013. Here's the list:
71 IAC 10-2-3 Summary Suspension & 71 IAC 10-2-7 Ruling - As part of our petition, we requested that the entirety of 71 IAC Due Process & Disciplinary Action be considered separately. Our rationale was that this particular article creates a complicated and parallel system of due process which in many instances is beyond what is authorized by ‘IC 4-31 Pari-Mutuel Wagering on Horse Racing.’ We felt that there are numerous administrative rules in this article that are in direct conflict with the changes to the 'Act' that were to go into effect on January 1, 2014. We also outlined our concerns that here were numerous administrative rules in this article that are in direct conflict with ‘IC 4-21.5 Administrative Orders and Procedures' which is the law in Indiana, not the IHRC's administrative variations. Plus, there are numerous administrative rules in this article, in our opinion, that do not avoid an unnecessary duplication of aspects of ‘IC 4-21.5 Administrative Orders and Procedures’ and ‘IC 4-31 Pari-Mutuel Wagering on Horse Racing’ which is a requirement for administrative rules required by another piece of Indiana law, IC 4-22-2-19.5(a)(4). In other words, the IHRC uses its rulemaking authority to, in our view, purposefully complicate the ability of horsemen to be treated a fairly under Indiana laws.
The 'Ruling" rule, which outlines hearing procedures and penalties and the 'Summary Suspension' rule, which allows for a suspension without first having a hearing, fall into the above mentioned categories of objection. Our objection to the Summary Suspension rule was the subject of our July, 2013 Administrative Rule of the Month: http://ibopindy.blogspot.com/2013/07/administrative-rule-of-month-71-iac-10.html. Not only did the IHRC use their emergency rulemaking process to modified 71 IAC 10-2-3 to avoid having to consider this rule separately, they ignored the requirements place upon them by new Indiana law. IBOP anticipated this, and purposefully filed a petition to modify 71 IAC 10-2-3 to conform with the change to Indiana law in March of 2013. That petition can be found in our 'Letters to the Commissioners' archive at: http://ibopindy.blogspot.com/2013/03/the-following-email-was-sent-to-indiana.html.
71 IAC 3-2-3 & 71 IAC 3.5-2-3 Disciplinary Action - These two rules, in part, outline the judge's and the steward's authority to penalize licensees. Again, what we saw was that portions of these particular administrative rules were in direct conflict with the versions of Indiana statutes that went into effect on January 1, 2014 (as well as being in conflict with ‘IC 4-21.5 Administrative Orders and Procedures’ Act in spite of numerous directive in Indiana law to defer to IC 4-21.5.) Beginning January 1, 2014, the new version of Indiana law allows for stewards and judges to issue fines up to $5,000 and suspension for up to a year. (These are increases from $1,000 and 60 days.) What the IHRC did was file administrative rules via emergency rulemaking that increased these penalties on December 23, 2013, a full eight days before Indiana law allowed for those levels of penalties. These premature increases to penalties violated Indiana law and will be the subject of an IBOP complaint to be filed with the Administrative Rules Oversight Committee which is a legislative committee that needs to get a sense for just how the IHRC operates where rulemaking is concerned. We'll have more on this at a later date.
71 IAC 5-1-13 License Denial - This particular rule, which is specific for standardbred racing, allows the IHRC or its designees to deny a license. While we have no object to a proper license denial, this particular administrative rule appeared to directly conflict with the language in IC 4-31-6-9 which states “the issuance, denial, suspension, or revocation of a license under this chapter is subject to IC 4-21.5” which, again, is the Administrative Orders and Procedures Act. What the IHRC does is force a person denied a license to work through the IHRC's view of due process through their convoluted 71 IAC 10 Due Process & Disciplinary Action. This rule was amended by emergency rule, but the flat racing counterpart, 71 IAC 5.5-1-13, was not and its expiration was postponed by the Governor's Executive Order. More great coordination by the IHRC staff (sarcasm included).
The sixth administrative rule that IBOP had asked to be considered separately with an expiration that was not postponed by the Governor simply expired. 71 IAC 5.5-1-10 Workers' Compensation, which is specific to the flat racing rule book, requires licensed employers to carry workers' compensation on their employees. Part of our basis for requesting this administrative rule to be considered separately is that Indiana statute does not authorize the IHRC to enforce workers' compensation laws. Doing so is reserved to the Workers' Compensation Board. What is interesting is that we requested the standardbred workers' compensation rule to be considered separately and its expiration was extended by the Governor as part of the executive order. The flat racing rule simply fell through the cracks and is now expired as of January 1st, so the IHRC can't compel flat racing employers to carry workers' comp, but we are fairly certain their process will do so irrespective of what their own rule book states.
As a reminder, IBOP's Administrative Rule of the Month indicates our topic is "Multiple Expired Administrative Rules." So far, we have one, 71 IAC 5.5-1-10, but there were two others that the IHRC let expire. With both of these rules, IBOP did not request them to be considered separately and the IHRC staff didn't request that the Governor extend them. Once the Indiana Register updates the IHRC's rule books for expired rules, these two rules will be labeled as expired:
71 IAC 1-1-42.1 "Foreign substance" defined
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 42.1. "Foreign substance" means all substances except those that exist naturally in an untreated horse at normal physiological concentration, and includes all narcotics, stimulants, depressants, or other drugs or medications of any type. (Indiana Horse Racing Commission; 71 IAC 1-1-42.1; emergency rule filed Mar 9, 1994, 2:50 p.m.: 17 IR 1629; readopted filed Oct 30,
2001, 11:50 a.m.: 25 IR 899; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA)
Yes, the standardbred definition of foreign substance expired on January 1, 2014. Way to go IHRC staff! Excellent job, you've earned your pay check on this one (sarcasm included). And, another thoroughbred rule has expired:
71 IAC 1.5-1-106 "Weigh in" defined
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 106. "Weigh in" means the presentation of a jockey to the clerk of scales for weighing after a race. (Indiana Horse Racing Commission; 71 IAC 1.5-1-106; emergency rule filed Jun 15, 1995, 5:00 p.m.: 18 IR 2824, 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)
Perhaps the IHRC staff believes that a 'weigh in' definition is no longer necessary in maintain the integrity of pari-mutuel racing. Another, great job (sarcasm included).
In continuing to document the IHRC staff's issues with these processes, there were two other administrative rules that IBOP had asked to be considered separately that the IHRC ultimately changed via emergency rulemaking after our petition was filed. Both 71 IAC 10-2-10 Stay & 71 IAC 10-3-1 Initiation of Proceedings fall into this category. Our concerns were similar to those mentioned above as being part of 71 IAC 10 Due Process & Disciplinary Action. Interestingly, the IHRC staff, in a blunder that's fairly consistent with their lack of attention to detail regarding administrative rules, asked the Governor to postpone their expiration date in his Executive Order and both were included. Our view on this means that both of these rules now have a new expiration date of January 1, 2015 and they will have to go through the regular rulemaking process in 2014. Ha!
During the course of 2014, we fully expect the IHRC to modify, or attempt to modify, many of these rules extended by the Governor through their emergency rulemaking process. We believe they will attempt to circumvent the regular rulemaking process for readoption that is mandated by Indiana law by making slight changes, or even major changes, to these rules. We see this happening especially with medication-related and due process-related administrative rules before the 2014 racing season begins. And, when they do, the IHRC will confirm and we will document what we've known for some time that they are biggest cheaters in Indiana horse racing. If you don't believe that statement, read more of our blog. Plus, we'll be developing this thought through even more examples in our upcoming newsletter.
