Request to Repeal 71 IAC 10-3-20(b) Administrative Compliants Authority

Earlier this month, Indiana Breeder & Owner Protection, Inc. filed the following petition with the Indiana Horse Racing Commission (IHRC). Our request is to repeal of 71 IAC 10-3-20(b) which allows Executive Director Joe Gorajec to file what is called an administrative complaint to sanction anyone for a violation, not just licensees. In 2013, the Indiana Legislature removed the IHRC's ability to delegate this type of authority to Mr. Gorajec, yet the IHRC staff never included this administrative rule in those that they believed needed to be repealed per the changes in the law. We fully expect this petition to be heard or this administrative rule to be repealed at the next IHRC meeting. See what you think.

"February 10, 2014

To: Lea Ellingwood
General Counsel
Indiana Horse Racing Commission

Pursuant to ‘71 IAC 2-12-1 Procedures,’ Indiana Breeder & Owner Protection, Inc. (IBOP) is requesting that the Indiana Horse Racing Commission (IHRC) consider the striking (repeal) of ‘71 IAC 10-3-20(b)’ from the Indiana Administrative Code. Please consider this correspondence as IBOP’s official petition to do so. Our view, which is explained below, is that ‘71 IAC 10-3-20(b)’ was not modified as required by changes to IC 4-31-12-16 and IC 4-31-13-1 effective as of January 1, 2014. We would appreciate this request be considered as an agenda item at the next regularly scheduled IHRC meeting.

In the 2013 legislative session, Senate Bill 609 (SB 609) was designed to implement recommendations of Indiana's Inspector General (IG) stemming from the investigation into the practices of the Indiana Horse Racing Commission (IHRC). There were a number of reforms recommended to the IHRC and the legislature in the IG's report regarding the IHRC's due process and disciplinary action procedures. As part of the preamble to those recommendations the IG's report states, "Our investigation, however, revealed that this current system provides many challenges which may, in fact, be detrimental to the horse racing community as the adjudication is currently being applied by the HRC." In our review, the “current system” has changed very little in light of the IG’s recommendations and, more importantly, the changes to the IHRC authorizing statute made by SB 609.

IBOP sees SB 609 as modifying certain aspects of the IHRC's authority by removing specific language. Effective January 1, 2014, the following change was made to a portion of the 'Medication of Race Horses' section of Indiana law:

SECTION 8. IC 4-31-12-16 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2014]: Sec. 16. The commission or the commission's designee, as determined under the rules of the commission, on its own motion or in addition to a penalty assessed by the stewards and judges, may impose one (1) or more of the following sanctions against a licensee who violates sections 2 through 13 of this chapter:

(1) Revocation of a license held by the licensee.
(2) Suspension of a license held by the licensee.
(3) A civil penalty not to exceed five thousand dollars ($5,000).

One of the concerns that the IG had regarding adjudication of violations at the IHRC was the lack of involvement of the commission, meaning the commissioners themselves, in lieu of the Executive Director ("the commission's designee"). The IG's report expressed a concern that having to navigate through multiple levels of the IHRC staff is essentially ".....the same persons (or their co-workers) who have issued the violations, thereby challenging the appearance of impartiality." The IG also felt that "this current procedure loses the independence the HRC Commission could add by being the adjudicating body." SB 609 eliminated the language which allowed the IHRC to delegate their authority to fine a horseman or to revoke or to suspend a license to a “designee.” While the judges and stewards still have authority to issue fines and suspensions for violations, the Executive Director as a “designee” should not have that authority post-January 1, 2014. Simply put, IBOP’s view is that IC 4-31-12-16 does not have the same meaning after January 1, 2014, as it did before January 1, 2014. Otherwise, there would be no meaning or legislative intent to the removal of “designee” and the removal of "or in addition to a penalty assessed by the stewards and judges."

Similar to the “Medication of Race Horses” chapter, there are changes in the portion of the IHRC's authorizing statute regarding "Offenses and Enforcement" for non-medication violations. Using the same logic, removal of specific language from statute reduces the IHRC’s authority to delegate which, in turn, requires a modification of ‘71 IAC 10-3-20(b).’ The modifications as per SB 609 to IC 4-31-13-1 can be seen below:

SECTION 9. IC 4-31-13-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2014]: Sec. 1. (a) The commission or the commission's designee, as determined under the rules of the commission, on its own motion or in addition to a penalty assessed by the stewards and judges, may issue orders under IC 4-21.5 to:

(1) issue, deny, suspend, diminish, or revoke permits and licenses as authorized by this article; and
(2) impose civil penalties, in addition to any other penalty imposed by the commission on a person who violates this article or a rule or an order of the commission. and
(3)(b) The commission or the commission's designee, as determined under the rules of the commission, on its own motion or in addition to a penalty assessed by the stewards and judges, may issue orders under IC 4-21.5 to rule a person off one (1) or more permit holders' premises, if necessary in the public interest to maintain proper control over recognized meetings.
(b) Except as provided in IC 4-31-12-16, (c) A civil penalty imposed against a licensee under subsection (a)(2) may not exceed five thousand dollars ($5,000). For purposes of subsection (a)(2), each day during which a violation of this article or a rule or an order of the commission continues to occur constitutes a separate offense.
(c) (d) Civil penalties imposed under this article shall be deposited in the state general fund.

At the September 17, 2013 IHRC meeting, you presented the commissioners in attendance with emergency rules that were characterized as "the administrative rules that we believed would require some kind of adjustment, amendment, or creation" given the changes in the law. One of those changes was to '71 IAC 10-2-3 Summary suspension.' What you presented was a rule that removed subsection (d) which delegated the commission's authority to summarily suspend a license to the Executive Director. This change was approved. Eliminating the Executive Director's authority within this aspect of the disciplinary process was exactly what the IG had recommended and what was codified in SB 609. Here's how the change was presented to the commissioners:

71 IAC 10-2-3 Summary suspension
Authority: IC 4-31-3-9
Affected: IC 4-21.5-4; IC 4-31-13

Sec. 3. (a) If the judges determine that a licensee's actions constitute an immediate danger to the public health, safety, or welfare, or are not in the best interest of racing, or compromise the integrity of operations at a track or satellite facility, the judges may summarily suspend the license pending a hearing pursuant to the provisions of IC 4-21.5-4.
(b) A licensee whose license has been summarily suspended by the judges is entitled to a hearing following a written request by the licensee.
(c) The judges shall conduct a hearing on the summary suspension in the same manner as other disciplinary hearings. At a hearing on a summary suspension, the sole issue is whether the licensee's license should remain suspended pending a final disciplinary hearing and ruling.
(d) Notwithstanding the provisions of 71 IAC 10-3-20, the commission delegates to the executive director the authority to summarily suspend licenses at any time that a live race meeting is not being conducted on association premises or when the judges are not otherwise available. The commission delegates to the executive director the authority to summarily suspend licenses at satellite facilities at any time. In the event of a summary suspension by the executive director and if the licensee makes a written request for a hearing, a hearing on the summary suspension shall be conducted by the commission or an administrative law judge as quickly as is practicable.
(Indiana Horse Racing Commission; 71 IAC 10-2-3; emergency rule filed Feb 10, 1994, 9:20 a.m.: 17 IR 1198; emergency rule filed Jan 27, 1995, 3:30 p.m.: 18 IR 1505; emergency rule filed Nov 30, 1995, 1:00 p.m.: 19 IR 688; emergency rule filed Mar 25, 1997, 10:00 a.m.: 20 IR 2162; emergency rule filed Feb 13, 1998, 10:00 a.m.: 21 IR 2426; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA)

The impression you gave, which is confirmed by no further action prior to January 1, 2014, was that the staff's review of the administrative rules for SB 609-related changes was complete. We see the removal of ‘71 IAC 10-3-20(b)’ from the "Administrative Complaints" rule as necessary for the same reason ‘71 IAC 10-2-3(d)’ WAS removed.

As you may recall, prior to the IG's report, ‘71 IAC 10-3-20’ was titled as "Preliminary reports" instead of "Administrative complaints." In his report, the IG stated, "We also recommend the elimination or modification of the “preliminary report” procedure granted by promulgation to the HRC Executive Director. 71 IAC 10-3-20(b)." In January, 2012, instead of eliminating ‘71 IAC 10-3-20(b),’ the IHRC chose to modify the "preliminary report" rule by simply changing those two words to "administrative complaint" as they appear in the rule today. Given that the SB 609 removed, in two separate chapters of the pari-mutuel wagering statute, “commission’s designee” and "in addition to a penalty assessed by the stewards and judges,” ‘71 IAC 10-3-20(b)’ should have been modified by repeal. IBOP’s view is this should have been done prior to January 1, 2014. For your convenience, this administrative rule is copied below:

71 IAC 10-3-20 Administrative complaints
Authority: IC 4-31-3-9
Affected: IC 4-31-13

Sec. 20. (a) If the commission determines that a person regulated under the Act has violated the Act or a rule or order adopted under the Act in a manner that constitutes a ground for disciplinary action under the Act, the commission may assess an administrative penalty against that person as provided by this section.
(b) The commission delegates to the executive director the authority to prepare and issue administrative complaints pursuant to the Act. If, after examination of a possible violation and the facts relating to that possible violation, the executive director determines that a violation has occurred, the executive director shall issue an administrative complaint that states the facts on which the conclusion is based, the fact that an administrative penalty is to be imposed, the amount to be assessed, and any other proposed sanction, including suspension, or revocation. Furthermore, when the judges have issued a ruling that a violation has occurred, the executive director may issue an administrative complaint identifying the underlying ruling that serves as the basis for the administrative complaint, the fact that an administrative penalty is to be imposed, the additional amount to be assessed, and any other proposed sanction including additional suspension or revocation. The amount of the penalty may not exceed five thousand dollars ($5,000) for each violation. Each day or occurrence that a violation continues may be considered a separate violation. In determining the administrative penalty, the executive director shall consider the seriousness of the violation.

(Please note that subsections(c) through (f) were removed for brevity's sake yet would need some attention should 71 IAC 10-3-20(b) be repealed per this petition.)

(Indiana Horse Racing Commission; 71 IAC 10-3-20; emergency rule filed Feb 10, 1994, 9:20 a.m.: 17 IR 1208; emergency rule filed Jan 27, 1995, 3:30 p.m.: 18 IR 1507; errata filed Mar 23, 1995, 4:30 p.m.: 18 IR 2126; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; emergency rule filed Mar 20, 2007, 1:43 p.m.: 20070404-IR-071070198ERA, eff Mar 16, 2007 [IC 4-22-2-37.1 establishes the effectiveness of an emergency rule upon filing with the Publisher. LSA Document #07-198(E) was filed with the Publisher March 20, 2007.]; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA; emergency rule filed Jan 25, 2012, 12:20 p.m.: 20120201-IR-071120056ERA)

Effectively, the changes to SB 609 should have eliminated also the IHRC's authority to keep ‘71 IAC 10-3-20(b)’ in the administrative code. In that light, we see no difference between what was already removed in ‘71 IAC 10-2-3’ and what we are petitioning to be removed in ‘71 IAC 10-3-20.’ What we find interesting is that the first line of ‘71 IAC 10-3-20(b)’ states that the IHRC "delegates to the executive director.......pursuant to the Act," yet beginning January 1, 2014, the "Act" no longer allows for the delegation of the actions outlined. Also, per the changes established by SB 609, the IHRC should no longer have the authority, with the exception of ruling a person off, to add their own penalty to a ruling by the judges and stewards, yet ‘71 IAC 10-3-20(b)’ currently allows for this type of action as well.

Overall, we don't see any way in which ‘71 IAC 10-3-20(b)’ should have been allowed to exist ‘as is’ in the Indiana Administrative Code after January 1, 2014. Yet, this subsection still remains with the rule of law. Please contact me with any questions.

Thank You,

Jim Hartman
IBOP Vice-President

CC: Executive Director Gorajec
Chairman Diener
Vice-Chairman Schaefer
Commissioner Schenkel
Commissioner Weatherwax
Commissioner Pillow"

March 7, 2014 Update: At their March 5th meeting, the IHRC did consider our petition and voted to keep 71 IAC 10-3-20(b) as is by denying the petition. This was not unexpected given that the IHRC staff did not include this rule in their original group of those administrative rules that needed changed due to changes in the law required by SB 609. Our goal, which was to get on record via the official transcript the IHRC staff's rationalization, was accomplished. We never expected Executive Director Joe Gorajec to give up any of his authority even in spite of the recommendations of the Indiana Inspector General (IG) and in spite of changes to Indiana law to implement the IG's recommendation.

Clearly, further action from the legislature will be required. We raised our concerns in March 2013 to those involved with the wording of SB 609 that the IHRC would not make the appropriate changes to their administrative rules. With the transcript from this meeting, we will now have the "see, we told you so" details to share with the key leaders in the Senate.

Racino Slot Revenues Dive in January

Updated May 8, 2014 at 4:58 PM For April Results

According to the figures released by the Indiana Gaming Commission, slot revenues at the two racinos dropped dramatically in January. Even considering that slot revenues have been running below the prior year's figures, the severe winter weather during the month was no doubt a significant contributor to the decrease. In the month of January, slot revenues at Hoosier Park produced $13.3 in adjusted gross receipts (AGR) which is the magic number from which support to horse racing is calculated. To compare, in January of 2013, AGR at Hoosier Park was $17 million which makes this year's January down almost 22% from last year! The January figures were the worst full month of revenues from slots that Hoosier Park has ever experienced.

At Indiana Grand, this year's AGR was $15.56 million in January which is down from $19.1 million in 2013 for a drop of 18.5%. January's performance was the worst for Indiana Grand since they moved from their temporary facility in 2009. The results at both racinos could very easily impact racing in 2014 for all breeds.

As an example, even if both racinos are able to match 2013 revenues for the rest of the fiscal year (through May's results), which they had not been doing, the thoroughbred purse account revenues would be projected to receive $580,000 less than from the prior year's results. Given the change in the flow of slot revenues beginning in 2014, which will be explained further in an upcoming newsletter, in our example, revenues to the thoroughbred purse account from Hoosier Park would decline by $1.1 million with amounts from Indiana Grand increasing by $520,000. Considering that race days are set, a $580,000 net loss or more may impact the planned purse levels as well as the number of races run in 2014.

March 7, 2014 Update: According to a few attendees at the most recent Indiana HBPA meeting, which was held on February 24th, the numbers from this short article were used during the meeting to update the board. While we are flattered, we've also been told that board member Kim Hammond didn't trust our numbers and wondered why the Indiana HBPA was using them. Well, we wonder about that too, but any time she would like to submit her evaluation to us, we'll be glad to publish her thoughts, unedited on our website.

March 10, 2014 Update: With figures released today by the Indiana Gaming Commission, the February results for the two racinos were mixed with AGR at Indiana Grand increasing slightly (2.5%) over February 2013 with Hoosier Park coming in 6.6% less than the prior year. Assuming, again, that the final few months of this fiscal year could simply repeat 2013 revenues, the loss to the thoroughbred purse account would now be $590,000 for the fiscal year. The contribution from slots at Indiana Grand would go up by $536,000 while the contribution from Hoosier Park would drop $1.126 million.

April 8, 2014 Update: Today, the Indiana Gaming Commission released the slot results for the two racinos for March which indicate that revenues at both locations are down when compared to March, 2013. The AGR at Indiana Grand was down slightly with a drop of 1.18%. The significant declines at Hoosier Park continued with a drop of 6.25% when compared to last year's results for March. The net effect, of course, is less money toward racing. Continuing the example of the thoroughbred purse account, the decline in the current fiscal year would now expand to approximately $640,000 less in purse funds. Again, this is assuming that the last couple of months of the fiscal year have revenue flows at least as good as in 2013 which hasn't happened yet in 2014.

May 8, 2014 Update: The trend of 2014 slot revenues at the two racinos under performing 2013 results continued in the month of April as revenues were down again at Hoosier Park (-4.01%) and at Indiana Grand (-5.00%). Each month since February we've projected how these year-over-year declines would impact the thoroughbred purse account. We've done this by completing the balance of the fiscal year with the assumption that slot revenues would at least equal 2013's results for the remaining months. So far this year, slot result have not had one single month equal to or greater than when compared to 2013. Therefore, our projected decline in slot revenues to that purse account has gone from $580,000 to $590,000 to $640,000. With one month of slot revenues left to be credited in the State's fiscal year, and using that same projection method, the impact to the thoroughbred purse account now stands at a decrease of $697,000 which is a decrease of 4.66% from 2013.

In addition, and using the same projection methodology, the impact to the thoroughbred breed development fund is projected to be a decline of $479,000. When added the purse account decline to the breed development fund decline, the total decline in funding to thoroughbred racing is projected to be $1,176,000. Welcome to affects of the slot law that was passed in 2013!

June 12, 2014 Update: According to the Indiana Gaming Commission, strong results in May from the slot machine revenues at Indiana Grand and Hoosier Park produced the only month in the current fiscal year that exceeded the same month in the prior fiscal year. May revenues, which are due to purse accounts and breed development funds by June 15th, are the last month in the State's current fiscal year which ends on June 30th. Slot revenues at Hoosier Park and at Indiana Grand were up 12.3% and 6.2% respectively over May 2013. Even with a strong May, overall, slot revenues were down for the year.

To put this in perspective of the thoroughbred purse account and breed development fund, revenues were down 4%. In fiscal year 2014, slot revenues will produce $593,963 less to the thoroughbred purse account than in fiscal year 2013. The thoroughbred breed development fund will receive $408,222 less for a total impact to thoroughbred racing of just over $1 million.

Request to Repeal "Foreign Substance" Defintion

On February 6, 2014, Indiana Breeder & Owner Protection, Inc. petitioned the Indiana Horse Racing Commission to repeal the definition of 'foreign substance' in the flat racing rulebook. On the surface this petition may seem quite strange. In addition, we only petitioned for the 'foreign substance' definition be repealed from the flat racing rulebook, but not the standardbred rulebook. As you read our petition, you'll get a better sense for our position which is as follows:

"February 6, 2014

To: Lea Ellingwood
General Counsel
Indiana Horse Racing Commission

Pursuant to ‘71 IAC 2-12-1 Procedures,’ Indiana Breeder & Owner Protection, Inc. (IBOP) is requesting that the Indiana Horse Racing Commission (IHRC) consider the striking (repeal) of ‘71 IAC 1.5-1-40 “Foreign substance” defined’ from the Indiana Administrative Code. Please consider this correspondence as IBOP’s official petition to do so. Our view, which is supported by Indiana statue, is that this definition is an unnecessary duplication of ‘IC 4-31-2-7 “Foreign substances.”’ We would appreciate this request be considered as an agenda item at the next regularly scheduled IHRC meeting.

For you convenience, this administrative rule appears in ‘71 IAC 1.5. Flat Racing; Definitions’ and is copied below:

71 IAC 1.5-1-40 "Foreign substance" defined
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 40. "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 1.5-1-40; emergency rule filed Jun 15, 1995, 5:00 p.m.: 18 IR 2818, 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; readopted filed Nov 26, 2013, 11:25 a.m.: 20131225-IR-071130345RFA)

Clearly, ‘71 IAC 1.5-1-40’ copies verbatim the definition of “Foreign substances” found in ‘IC 4-31-2-7,’ which is copied below for your convenience:

IC 4-31-2-7
"Foreign substances"
Sec. 7. "Foreign substances" 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.
As added by P.L.341-1989(ss), SEC.2.

Given this obvious and direct duplication of Indiana statute, we believe that ‘71 IAC 1.5-1-40’ does not meet the standard for administrative rules as cited by ‘IC 4-22-2-19.5(a)(3)’ which is copied below for your convenience:

IC 4-22-2-19.5
Standards for rules
Sec. 19.5. (a) To the extent possible, a rule adopted under this article or under IC 13-14-9.5 shall comply with the following:
(1) Minimize the expenses to:
(A) regulated entities that are required to comply with the rule;
(B) persons who pay taxes or pay fees for government services affected by the rule; and
(C) consumers of products and services of regulated entities affected by the rule.
(2) Achieve the regulatory goal in the least restrictive manner.
(3) Avoid duplicating standards found in state or federal laws.
(4) Be written for ease of comprehension.
(5) Have practicable enforcement.
(b) Subsection (a) does not apply to a rule that must be adopted in a certain form to comply with federal law.
As added by P.L.17-1996, SEC.2.

We see the approval of this petition as possible given the standard of “To the extent possible” in ‘IC 4-22-2-19.5.’ This is especially true given that the ‘Foreign substance’ definition in ‘71 IAC 1. Definitions,’ the portion of the administrative code dealing with standardbred racing, was not readopted in 2013 and no longer exists. That portion of the Indiana Administrative Code now reads as follows:

71 IAC 1-1-42.1 "Foreign substance" defined (Expired)
Sec. 42.1. (Expired under IC 4-22-2.5, effective January 1, 2014.)

Logic dictates that neither ‘71 IAC 1-1-42.1’ and ‘71 IAC 1.5-1-40’ were ever necessary given the exact same definition exists in ‘IC 4-31-2-7,’ and therefore, applies to both flat racing and standardbred racing without any further need for the same definition in the Indiana Administrative Code. Should you believe otherwise, then efforts should be made to promulgate another “Foreign substance” definition within the standardbred rulebook via 71 IAC 1. Definitions.

Thank You,


Jim Hartman
IBOP Vice-President

CC: Executive Director Gorajec
Chairman Diener
Vice-Chairman Schaefer
Commissioner Schenkel
Commissioner Weatherwax
Commissioner Pillow"

March 7, 2014 Update: At the March 5th IHRC meeting, the IBOP petition was considered, but not approved just as we expected. The goal of our petition was to point out that the IHRC has allowed the "Foreign substance" definition to expire. While the IHRC staff and commissioners didn't seem too concerned with the definition's expiration, we'll share why they should have been in the April edition of the 'Administrative Rule of the Month.'

Administrative Rule of the Month - Proposed 71 IAC 1.5-1-94.1 "Sample" Defined

The Indiana Horse Racing Commission (IHRC) is proposing medication rule changes that would align Indiana's medication rules with the Association of Racing Commissioners International's (ARCI) Controlled Therapeutic Medication Schedule. This schedule is comprised of 24 therapeutic medications that 'supposedly' (the use of this term will be explained in detail at a later date) have a threshold where a post-race test would not be considered a positive test subject to penalization. The ARCI's schedule is an attempt to nationalize medication rules across all racing jurisdictions. The ARCI's Controlled Therapeutic Medication Schedule can be found at the following link: http://arcicom.businesscatalyst.com/assets/1arci-controlled-therapeutic-medication-schedule---version-1.0.pdf.

As a part of this effort, the IHRC has included the following proposed rule:

"71 IAC 1.5-1-94.1 “Sample” defined
Authority: IC 4-31-3-9
Affected: IC 4-31-12
“Sample” when used in the context of being removed from or collected from a horse, means any amount of urine, saliva, blood, or other acceptable specimen derived from a horse. All samples become property of the commission at the time they are cleared by the testing laboratory and may be used for research and/or investigative purposes."

While the industry's comment period on this proposed administrative rule has passed, we fully expect this rule, as is, to be considered at the next IHRC meeting later this month. Therefore, we are making '71 IAC 1.5-1-94.1 "Sample" defined' as proposed the Indiana Breeder & Owner Protection, Inc. (IBOP) Administrative Rule of the Month for February. (As usual there is a corresponding version for the standardbred rulebook.) Given the IHRC's adopted policy as to when proposed rules should be considered an emergency, and therefore allowing the emergency rulemaking process to be used, we also fully expect the IHRC staff to spin this proposed rule to the commissioners as being part of the ARCI efforts. The IHRC's policy is to use their emergency rulemaking authority, which has no substantive review for legality or for public policy beyond the IHRC staff, when ARCI Model Rules are being considered. Their assumption, albeit an incorrect one, is that ARCI Model Rules fit within the IHRC's statutory authorizations.

The fact is that '71 IAC 1.5-1-94.1' goes well beyond being considered an adoption of an ARCI rule. This should be reason enough for the IHRC to utilize the regular rulemaking process so there is more scrutiny of this proposed rule. Here's why. The ARCI definition of 'sample' is as follows:

ARCI-001-010 Terms - "Sample is a portion of any bodily substance or fluid, including but not limited to, tissue, hair, blood or urine obtained from a horse (or greyhound) at the direction of the commission for the purposes of determining the presence and/or concentration of regulatory analytes."

In reading both, you could easily say that the first sentence of the IHRC's proposed rule is similar to the concept behind the ARCI's model rule definition, a 'paraphrase' if you will. We agree. However, our concern lies with the second sentence which does not appear in the ARCI Model Rule, "All samples become property of the commission at the time they are cleared by the testing laboratory and may be used for research and/or investigative purposes." The IHRC staff wants to add this definition to the administrative rulebooks solely for the purpose of the second sentence. After all, Indiana Code, which should in all cases supersede any definition created by the IHRC staff, already defines 'test sample' as follows:

IC 4-31-2-23
"Test sample"
Sec. 23. "Test sample" means a body substance taken from a horse for the purpose of analysis, under the supervision of the commission
or state veterinarian and in the manner prescribed by the commission.
As added by P.L.341-1989(ss), SEC.2.

Based upon an Indiana law that states administrative rules should not duplicate what is spelled out in the law, this proposed rule should never be allowed on the books. Period. However, our confidence level for any of the five commissioners to recognize this aspect of rulemaking is quite low. And, so is our confidence in them to recognize the significance of samples becoming "property of the commission" or "for research and/or investigative purposes." Without statutory authorization, and possibly with no constitutional authority, the IHRC is claiming a property right in your horse's medication testing sample. In other words, the IHRC staff will be able to do anything they want with those samples including what is spelled out as further "investigative purposes." Basically, this means they can have 'their' sample retested at any time.

As you will see below, the Indiana legislature does grant the IHRC the authority to freeze "samples for future analysis." Yet, in an oversight, this statute doesn't provide any direction as to what may come of this "future analysis."

IC 4-31-12-11
Official laboratory
Sec. 11. The commission may direct the official laboratory to retain and preserve by freezing samples for future analysis.
As added by P.L.341-1989(ss), SEC.2.

The IHRC has, beyond its statutory authority (what else is new there), modified IC 4-31-12-11 by adding '71 IAC 8.5-2-4(b)' to their rulebooks which states, "The commission has the authority to direct the approved laboratory to retain and preserve samples for future analysis." A minor aspect of '71 IAC 8.5-2-4(b),' which further illustrates why the IHRC should have more outside scrutiny of its rulemaking, is that it expands the IHRC's authority from simply "freezing" per Indiana law to now any means possible of preserving a test sample. This could entail freeze drying, stains on microscope slide, or being placed in an hermetically sealed mayonnaise jar on Funk and Wagnall's back porch. The overriding point is that there is no direction from statute and, given the IHRC proposed definition, there are no administrative rules that place limits on the IHRC's uses of any preserved test samples.

Assuming for a moment that there aren't constitutional issues, the IHRC staff first needs to spell out WHOSE "research" and why the research is necessary. If the goal is to allow for laboratories to fine tune their testing for designer drugs or venoms that can't be detected today, we're all for that. At minimum then, get the permission of the owner of the horse from which the sample was taken before doing so. In addition, the IHRC staff should spell out what can and can't be done with any "researched" sample. Because that is the bigger issue. As written there are significant due process questions, especially when considering the specific reference to "investigative purposes" in the proposed administrative rule. The IHRC staff will be able to cite this rule to justify any of their actions pertaining to 'their' samples.

If this proposed administrative rule is approved, can the results of any samples used for "research" be evidence to prosecute a trainer or an owner for an on-track medication violation? Can the "investigative purposes" be used to prosecute a breeder whose horse was subject to an out-of-competition test? You might say 'no', but think what the IHRC's position would be given no other direction from state law or administrative rules. We can see it happening, especially as testing improves to beyond a billionth and a trillionth of a particle per specimen.

Imagine being the owner of a winning horse where the primary test has cleared, but the balance of the test sample including the split sample, which is now the property of the IHRC, is not destroyed but held for further "investigative purposes." Theoretically, advancements in testing could be used against you two or three years down the road. As of January 1, 2014, Indiana law requires that the stewards and judges penalize offenders of medication violations within a year from the violation date, which would be the date of the race. The IHRC has never adhered to any statute of limitations for penalties issued by the Executive Director. In fact, the IHRC has created administrative rules to guarantee the Executive Director an open-ended length of time to issue a penalty. (See our October, 2013 Administrative Rule of the Month: http://www.ibopindy.blogspot.com/2013/10/administrative-rule-of-month-71-iac-10_16.html).

Now, imagine being in the position of an owner or a trainer who has requested a split sample be tested due to a primary sample testing as positive for a banned substance or an overage of a therapeutic medication. Imagine YOUR split sample, not the IHRC's split sample, comes back negative. According to IHRC rules via "71 IAC 8.5-3-4(b) No action shall be taken against the trainer or owner if the results of split sample testing are negative." Ah, but what about a third or fourth test derived from samples that were preserved by the IHRC from what was left of the primary sample and sent to a third laboratory for "investigative purposes?" The IHRC can easily define "future," which is a time yet to come, as the day after they receive the notification of the split sample results being negative. A third test could be ordered immediately. Or, they could wait six months, a year, or any other length of time as this proposed administrative rule creates an open-ended opportunity.

This proposed administrative rule has significant issues with constitutionality, with statutory authority, with due process rights, and you better believe chain of custody issues as the IHRC will be enabled to use 'their' samples for "research" or for 'their' very ominous "investigative purposes." Imagine being a trainer whose split sample came back inconclusive for the drug being tested due to a laboratory mistake in standard testing protocols. You could spend years and hundreds of thousands of dollars unnecessarily fighting the impacts of this administrative rule which can include the results of a third or a fourth test. IBOP challenges the IHRC to move this proposed administrative rule through the regular rulemaking process so these issues can be raised to the Indiana Attorney General and Governor Mike Pence. We'd love to have them read our brief on this proposed administrative rule so they can see, once again, how the IHRC operates without any meaningful oversight via their emergency rulemaking.