Gen. 25] 25

RACING

BUDGETARY ADMINISTRATION – ADMINISTRATIVE LAW –

DELEGATION AND SUBDELEGATION – MARYLAND RACING

COMMISSION MAY DELEGATE MINISTERIAL DUTIES

RELATED TO ADMINISTRATION OF BRED FUNDS

February 10, 2003

J. Michael Hopkins

Acting Executive Director

Prompted by questions from the Legislative Auditor, your

predecessor asked for our opinion about the extent to which the

Maryland Racing Commission (the “Commission”) may delegate

administration of two funds established under the Maryland Horse

Racing Act. With respect to administration of the Maryland-Bred

Race Fund, which subsidizes races and related awards involving

thoroughbred horses bred in Maryland, the Commission has assigned

certain functions to the Maryland Horse Breeders Association, Inc.

(“MHBA”). With respect to the Maryland Standardbred Race Fund,

which subsidizes races and related awards involving standardbred

horses bred in Maryland, the Commission has assigned similar

functions to an administrator – a staff position that the Commission

has created by regulation.

For the reasons stated below, it is our opinion that the

Commission may delegate administrative and ministerial duties

related to the Maryland-Bred Race Fund to the MHBA, in light of

functions assigned to that entity by the Legislature. The delegation

of similar duties with respect to the Maryland Standardbred Race

Fund to an administrator employed by the Commission is also

permissible. In either instance, the Commission may not delegate

discretionary functions specifically assigned to the Commission by

statute. For example, the MHBA and the administrator may devise

schedules of races subsidized by the respective funds, but those

schedules are subject to the Commission’s approval.
26 [88 Op. Att’y

In particular, the tracks are required to allocate to the Fund 1

designated percentages of the “breakage” and “takeout” from each

parimutuel pool. BR §§11-515, 11-525(d). 

A parimutuel pool consists of the total amount wagered on a race.

The “takeout” is the part of the parimutuel pool not returned to bettors.

The “breakage” is the cumulative amount remaining after the winnings of

successful bettors are rounded down to the next lowest multiple of 10

cents. BR §11-101(b), (e), (l), (u). 

 Under BR §11-804, the breakage and takeout derived from bets 2

made on out-of-state races are allocated “in a way normally applicable to

parimutuel betting on racing the licensee holds.” Under BR §11-804.1,

paymentsreceived by a Maryland track with respect to simulcasting of its

races to other jurisdictions are allocated to various purposes, including the

applicable Bred Fund, pursuant to an agreement between the track and

other components of the racing industry.

I

The Bred Funds

The General Assembly has created two funds (collectively

referred to as the “Bred Funds”) under the auspices of the

Commission to promote, respectively, the thoroughbred and

standardbred (harness) industries in the State. 

A. Maryland-Bred Race Fund

The Maryland-Bred Race Fund was created in 1962. Chapter

137, Laws of Maryland 1962, now codified at Annotated Code of

Maryland, Business Regulation Article (“BR”), §§11-529 through

11-541. Each thoroughbred track in Maryland must allocate certain

percentages of the parimutuel pools for its races to the Fund. The 1

Fund may also receive money from other sources. See, e.g., BR

§§11-804 (payments derived from bets made on out-of-state races);

11-804.1 (payments received with respect to the simulcasting of

standardbred races in Maryland to other jurisdictions).2

The Maryland-Bred Race Fund provides financial support for

the “Maryland-Bred Race Program,” a series of races in which only
Gen. 25] 27

 In addition, up to 5% of the Fund may be devoted to special races 3

for horses conceived, but not necessarily foaled (i.e., born), in Maryland.

BR §11-535(d). 

 In order to qualify for registration a horse must have been foaled 4

in Maryland and one of the following criteria must be satisfied:

(1) the breeder of the horse has maintained

a place of abode in Maryland for more than nine

months immediately before registration;

(2) the breeder of the horse keeps breeding

stock continually in Maryland;

(3) the horse was conceived in Maryland

during the previous [breeding] season; or

(4) the horse’s [mother] was sent to

Maryland to foal and after foaling, [attempts were

made to impregnate the mother] by a Maryland

stallion during the season of the horse’s birth. 

BR §11-538. According to its website, the MHBA charges a fee ranging

from $50 to $300 for registration. See <www.mdhorsebreeders.com/Md

BdFn.cfm>.

thoroughbred horses bred in Maryland may participate. Each 3

thoroughbred track is to provide for the running of such races as part

of that program. BR §11-536. In order to be eligible for those races,

a horse must be registered with the MHBA, a private entity. BR

§11-537. The criteria for such registration with the MHBA are

established by statute. BR §11-538. An owner or breeder

4

aggrieved by an MHBA decision not to register a horse may appeal

that decision to the Commission. COMAR 09.10.01.49B. 

B. Maryland Standardbred Race Fund

The Maryland Standardbred Race Fund (the “Standardbred

Fund”), a similar fund for harness racing, was created in 1971.

Chapter 771, Laws of Maryland 1971, now codified at BR §§11-623

through 11-636. Like the thoroughbred tracks, harness tracks are

required to forward to the Fund designated percentages of the

takeout and the breakage from each parimutuel pool. BR §§11-

613(a)(2)(i), 11-615(a), 11-617(b). Also, like the Maryland-Bred

Race Fund, the Standardbred Fund may receive monies from other

sources, as well. See BR §11-403(a)(8) (distributions from Special

Fund consisting of various fees and taxes); BR §11-804 (payments
28 [88 Op. Att’y

 The horse’s sire must have been at stud in Maryland for a full 5

breeding season, and the offspring must have been conceived during that

season. BR§11-633(2)-(3).

The Maryland-Bred Race Fund Advisory Committee consists 6

of five members appointed by the Commission with the approval of the

Secretary of Labor, Licensing and Regulation. One of the members must

also be a member of the Commission. The other four members of the

Advisory Committee are to be appointed on the recommendation of

racing-related entities: two must be recommended by and be members of

(continued...)

derived from bets made on out-of-state races); BR §11-804.1

(payments received with respect to the simulcasting of standardbred

races in Maryland to other jurisdictions).

The Standardbred Fund provides financial support for two

racing programs that include races run at each of the harness tracks

in the State. BR §11-631. First, the Foaled Stakes Program is a

series of races in which only standardbred horses foaled (born) in

Maryland may compete. To be eligible for those races, a horse must

be registered with the Maryland Standardbred Race Fund Advisory

Committee, an entity created by statute. BR §§11-625, 11-632. The

statutory registration criteria are similar to those for the MarylandBred Race Fund. BR §11-632. An owner or breeder may appeal to

the Commission from a refusal of the Advisory Committee to

register a horse. COMAR 09.10.02.43D. 

Second, the Sires Stakes Program is a series of races in which

only standardbred horses sired by Maryland stallions may

participate. For a horse to be eligible for those races, the horse’s sire

(father) must be registered with both the Advisory Committee and

the United States Trotting Association, and certain other criteria

must be satisfied. BR §11-633. A denial of registration by the 5

Advisory Committee may be appealed to the Commission. COMAR

09.10.02.53H. 

C. Administration of the Bred Funds

The Legislature has charged the Commission with

administering the Bred Funds. BR §§11-535(a)(1), 11-629(a)(1).

With respect to each fund, the Commission is to rely on the “help

and advice” of an Advisory Committee consisting of representatives

from various segments of the pertinent racing industry. Id. The 6
Gen. 25] 29

 (...continued) 6

the MHBA; one must be recommended by the mile thoroughbred track

licensees, and one must be recommended by the Maryland State Fair and

Agricultural Society, Inc. (Timonium). BR §11-532. 

The Maryland Standardbred Race Fund Advisory Committee is also

appointed by the Commission with the approval ofthe Secretary of Labor,

Licensing and Regulation. One of the members is to be nominated by the

Chairman of the Commission and be a member of the Commission. One

member is to be nominated by the Chairman to represent a harness racing

licensee. Two members are to be nominated by the organization

representing a majority of the standardbred breeders in the State (with one

being a “commercial breeder”). One member is to be nominated by the

Cloverleaf Standardbred Owners Association, Inc. (a group representing

a majority of the standardbred owners and trainers in the State). BR §11-

626. 

In each case, the member of the Commission who serves on an

Advisory Committee is the chairman of that Advisory Committee. BR

§11-533; BR §11-627.

 In addition to these conditions, with respect to Standardbred Fund 7

races, the Commission also is to set the nomination and registration

procedures for horses, again on the recommendation of the Advisory

Committee. BR §11-634(b)(6).

Commission is to deposit with a bank or trust company the monies

allocated to the Bred Funds, and to ensure that those funds are

secured by collateral. BR §§11-535(b), 11-629(b). Payments may

be made from the Bred Funds only upon order of the Commission.

BR §§11-535(a)(2), 11-629(a)(2). 

On the recommendation of the respective Advisory

Committees, the Commission is to set the parameters for the race

programs supported by the Bred Funds – i.e., the Commission is to

determine the number of races in each program and, for each race,

the amount of the purse, the date of the race, the distance, and the

amount of the breeder’s awards. BR §§11-539(a)(1)-(5), 11-

634(b)(1)-(5). In addition, the Commission is to set “any other

condition necessary to carry out the purpose” of the Bred Fund races.

BR §§11-539(a)(6), 11-634(b)(7).7

We understand that the Commission relies on the MHBA for

administration of the programs supported by the Maryland-Bred

Race Fund. In particular, the Commission looks to the MHBA to

ensure that registered thoroughbreds meet the requirements for

Maryland-bred horses; to oversee the deposit of monies into the
30 [88 Op. Att’y

Monies allocated to the Standardbred Fund by harness track 8

licensee are deposited into an account in the names of the Standardbred

Fund and the Commission (using the Commission’s tax identification

number). The Commission conducts an accounting of these deposits at

the end of the calendar year. A reconciliation is then made regarding any

overpayment or underpayment by the tracks to the Fund.

Fund’s bank account; to calculate and distribute awards from the

Fund; to maintain records of payments from the Fund; and to

coordinate the race schedule for the Maryland-Bred Race Program.

Pertinent to the functions performed by the MHBA, the Commission

has adopted a regulation that governs the day-to-day administration

of the Maryland-Bred Race Fund. That regulation details the

allocation of the Fund to race purses, owner’s awards, breeder and

stallion awards, and other purposes related to Maryland-bred

thoroughbreds. COMAR 09.10.01.49A, C, F-P. 

Under that regulation, the MHBA receives 5% of all monies

allocated to the Maryland-Bred Race Fund, after the deduction of

prescribed amounts, as compensation for administration of the Fund.

COMAR 09.10.01.49D. The regulation also requires that the

MHBA render a satisfactory accounting to the Commission of

monies it receives. COMAR 09.10.01.49E. 

With respect to the Standardbred Fund, the Commission has

adopted regulations governing registration of standardbred horses,

for the Foaled Stakes and Sired Stakes programs, eligibility of horses

to start in Fund races, the amount and distribution of purses and

breeder awards, and related matters. COMAR 09.10.02.43, .53. The

regulations also provide for the appointment by the Commission of

an administrator to supervise the daily operation of the Standardbred

Fund. COMAR 09.10.02.54-1. The administrator is to be selected

by the Advisory Committee, but serves at the pleasure of the

Commission, which also determines the administrator’s

compensation and benefits. Id. 

Currently, the administrator works from an office at Rosecroft

Raceway where she oversees the collection of revenue due the

Standardbred Fund, verifies eligibility of participants in 8

Standardbred Fund races, generates lists of eligible horses,

supervises certain aspects of the races, and calculates and distributes

awards from the Fund. In addition, the administrator inspects

Maryland breeding farms and their horses and performs other duties
Gen. 25] 31

 Strictly speaking, the term “delegation” typically refers to a grant 9

of authority by a legislature to an administrative agency. See, e.g., Christ

v. Department of Natural Resources, 335 Md. 427, 445, 644 A.2d 34

(1994). In this opinion, we use that term to refer to the subdelegation of

authority by the administrative agency to an entity or an employee.

to ensure that horses being registered to participate in Standardbred

Fu n d rac es s a tisf y th e sta tu to ry c rite ri a . See

<www.msrfonline.com/pages/About_MSRF.htm> (Standardbred

Fund website).

D. Legislative Audit

During a recent audit of the Commission, the Legislative

Auditor questioned whether the Commission had delegated its

responsibilities for the Bred Funds contrary to State law. The

Legislative Auditor recommended that the Commission assume

responsibility for administering the Funds “unless an Opinion from

the Office of the Attorney General is obtained that supports the

delegation of administering the Funds to private entities.” 

II

Analysis

A. Delegation of Authority by an Administrative Agency

It is not unusual for the Legislature to delegate a measure of

governmental power to a private organization. See 71 Opinions of 9

the Attorney General 189, 190-93 & n.2 (1986). Nevertheless, it is

also a general principle of administrative law that an administrative

agency cannot, in the absence of express legislative authorization,

delegate its statutory powers or functions such that it abdicates the

exercise of discretion or judgment in favor of that of a private entity.

Opinion No. 94-050 (October 5, 1994) (unpublished). “This

nondelegation doctrine arises largely from concern for the loss of

public accountability that would result from the relinquishment by

an administrative agency of its powers and functions to a private

entity.” 73 Opinions of the Attorney General 295, 302 (1988); see

also Perot v. Federal Election Commission, 97 F.3d 553, 559

(D.C.Cir. 1996) (when the legislature specifically vests an agency

with authority to administer a statute, the agency may not shift that

responsibility to a private actor).
32 [88 Op. Att’y

Even within an agency, the delegation of authority may be

restricted in some instances. See Quesenberry v. Washington

Suburban Sanitary Commission, 311 Md. 417, 425, 535 A.2d 481

(1988) (official specifically charged with making a quasi-judicial

administrative decision could not delegate ultimate responsibility for

that decision within the agency). In other instances, a board or

commission may not delegate discretionary functions specifically

conferred on it by the Legislature without providing prior instruction

and subsequent review of the exercise of the delegated authority.

See 61 Opinions of the Attorney General 734 (1976) (delegation by

Board of Public Works to its administrator); 50 Opinions of the

Attorney General 180 (1965) (delegation by Board of Trustees of

State Colleges to its administrative assistant).

However, these limitations on delegation do not mean that an

agency may not delegate administrative duties that are ministerial in

nature. 61 Opinions of the Attorney General at 736; see also 73 C.J.S.

Public Administrative Law and Procedure, §56, pp. 513-15; Krug v.

Lincoln Nat. Life Ins. Co., 245 F.2d 848, 853 (5th Cir. 1957).

Express statutory authority is not required for the delegation of such

authority, and legislative intent to permit delegation within an

agency may be inferred. EEOC v. Raymond Metals Products Co.,

385 F. Supp. 907, 921-22 (D.Md. 1974), aff’d in part and rev’d in

part on other grounds, 530 F.2d 590 (4 Cir. 1976). In short, the th

delegation of ministerial duties is permitted when it is not

inconsistent with the enabling statute. 

Finally, the grant of broad rulemaking authority to an agency

may be a source of authority for delegation of some of its functions.

Fleming v. Mohawk Wrecking and Lumber Co., 331 U.S. 111, 121-

22 (1947); District of Columbia v. White, 435 A.2d 1055, 1056-57

(D.C.App. 1981). 

Applying the general principles outlined above, we think the

Commission may delegate many of its duties with respect to

administration of the Bred Funds.

B. Administration of Maryland-Bred Race Fund by MHBA

In the legislation establishing the Maryland Bred Race Fund,

the General Assembly delegated to the MHBA the administrative

function of assessing the qualifications of thoroughbred horses and

registering them to participate in the Maryland-Bred Race Program.
Gen. 25] 33

It seems a logical division of labor for the same entity to make the

initial determination of other details of the program. Thus, the

Commission may rely on the MHBA to assist with other functions

related to the Maryland Bred Race Program. The MHBA may

propose when the Bred Fund races are to be run, how many there

shall be, the distance provisions for such races, the purses, and the

amounts of the breeders’ awards assigned to each race. 

The Commission’s regulation reflects the agency’s

longstanding administrative construction of the Bred Fund statutes,

which gives rise to a strong presumption that its construction is

correct. Lussier v. Maryland Racing Commission, 343 Md. 681,

696-97, 684 A.2d 804 (1996). Moreover, the actions of the MHBA

regarding the administration of the Maryland-Bred Race Fund are

also subject to the review of the Advisory Committee, which is

directed by statute to help and advise the Commission. BR §§11-

531 through 11-534. 

In our view, the Commission’s delegation to the MHBA is

permissible if the Commission provides the necessary prior

instruction to the MHBA and retains final authority with respect to

those decisions that the Legislature specifically assigned to the

Commission. For example, the Commission may delegate to the

MHBA the task of arranging a schedule of Fund-supported races

and, in accordance with the Commission’s regulations, computing

the awards and other payments due from the Fund. For that

purpose, the Commission has set forth in regulation elaborate

instructions as to the criteria for the scheduling of races and the

computation of awards. But the Commission must not abdicate its

statutory role. The actual schedule of races and payments from the

Fund must remain subject to Commission approval. The

Commission must retain and exercise ultimate control over the

administration of the Funds. The Commission must maintain a bank

account into which funds are deposited and ensure that the funds are

secured by collateral. 

In sum, it is not inappropriate for the Commission to delegate

ministerial functions to the MHBA, so long as it retains ultimate

authority for those discretionary decisions that the Legislature has

assigned to the Commission. 
34 [88 Op. Att’y

 The Legislature has granted the Racing Commission broad 10

authority to adopt rules governing horse racing in Maryland. See BR §11-

210. In a case involving a challenge to regulations adopted by the Racing

Commission, the Court of Appeals stated that “where the Legislature has

delegated such broad authority to a state administrative agency to

promulgate regulations in an area, the regulations are valid under the

statute if they do not contradict the statutory language or purpose.”

Lussier v. Maryland Racing Commission, 343 Md. 681, 688, 684 A.2d

804 (1996).

 A popular dictionary defines “employee” as “a person hired by 11

another, or by a business firm, etc., to work for wages or salary.”

Webster’s New World Dictionary (2d ed.), p.459.

We have not been asked, and therefore do not address, what other

personnel laws may apply to the administrator.

 From 1977 to 1984, the Commission was bifurcated into the 12

Thoroughbred Racing Board and the Harness Racing Board. See Chapter

728, Laws of Maryland 1977; Chapter 500, Laws of Maryland 1984. 

C. Administration of Standardbred Fund

With respect to administration of the Standardbred Fund, the

Commission has by regulation created the position of administrator

of the Fund. The administrator of the Standardbred Fund is 10

appointed by the Commission, serves at the pleasure of the

Commission, and is paid the salary and benefits determined by the

Commission. We understand that the administrator performs duties

assigned by the Commission in accordance with Commission

regulations governing the Standardbred Fund. By virtually any

definition, the administrator is an employee of the Commission. 

11

In an opinion issued approximately 25 years ago, Attorney

General Burch recognized the need for the Commission’s Harness

Racing Board, which then had responsibility for the Standardbred 12

Fund, to rely on an employee to carry out its responsibility to

promote Maryland-bred racing through the Fund. See 62 Opinions

of the Attorney General 755 (1977). That opinion discussed whether

the statute establishing the Standardbred Fund implicitly authorized

payments from the Fund for the salary and expenses of an employee

to administer the Fund and to “perform the duties of planning and

preparation for the races funded by it.” Id. at 755. Noting that the

relevant portions of the statute regarding the Fund were identical to
Gen. 25] 35

 This opinion overruled a 1963 opinion that concluded that the 13

statute creating the Maryland-Bred Race Fund did not authorize

expenditures from that Fund to defray the expenses of an employee to

promote racing supported by the Fund. See 48 Opinions of the Attorney

General 372 (1963). 

those regarding the Maryland-Bred Race Fund and that, by law, both

Funds were to be administered by the Commission, the opinion

concluded that “the expenses of administration and promotion that

reasonably relate to the purposes of the creation of the Fund and the

advancement of standardbred racing may properly be paid out of the

Fund.” Id. at 756 (emphasis added).13

The designation of an administrator does not entail any unusual

or unwarranted delegation of the Commission’s responsibilities. In

our view, the situation is no different than if the Commission

assigned its regular staff to carry out the ministerial functions

involved in administering the Fund. Moreover, the administrator’s

decisions concerning administration of the Fund are subject to the

review of the Advisory Committee that is designated by statute to

help and advise the Commission. So long as the Commission

remains ultimately responsible for decisions as to the number, dates,

and distances of races, the amounts of purses and breeder’s awards,

and the other responsibilities assigned to it by the General Assembly,

the Commission may look to its staff to provide the necessary

assistance to accomplish those purposes. 

III

Conclusion

In our opinion, the Commission may delegate to the MHBA

administrative and ministerial duties related to the Maryland-Bred

Race Fund. Similarly, the Commission may delegate to an

administrator employed for that purpose administrative and

ministerial duties related to the Maryland Standardbred Race Fund.

In either case, the Commission may not delegate discretionary

functions assigned to it by the General Assembly without providing
36 [88 Op. Att’y

prior instruction and subsequent review for the MHBA and the

administrator, and the Commission must retain final authority over

those discretionary functions.

J. Joseph Curran, Jr.

Attorney General

Bruce C. Spizler

Assistant Attorney General

Robert N. McDonald

Chief Counsel

 Opinions and Advice