II

103D CONGRESS

2D SESSION S. 2512

To require the Secretary of Agriculture to issue an order to establish a

Thoroughbred horse industry promotion program, and for other purposes.

IN THE SENATE OF THE UNITED STATES

OCTOBER 6 (legislative day, SEPTEMBER 12), 1994

Mr. MCCONNELL (for himself and Mr. FORD) introduced the following bill;

which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry

A BILL

To require the Secretary of Agriculture to issue an order

to establish a Thoroughbred horse industry promotion

program, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Thoroughbred Horse

5 Industry Promotion and Research Act of 1994’’.

6 SEC. 2. FINDINGS.

7 Congress finds that—

8 (1) the breeding, buying, selling, training, and

9 racing of Thoroughbred horses is a significant com-
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1 ponent of agriculture in the national economy be2 cause—

3 (A) Thoroughbred horses are bred and

4 raised by thousands of individual breeders, fam5 ilies, farmers, ranchers, owners, and other

6 horsemen throughout the United States who

7 employ tens of thousands of agricultural work8 ers on farms and at training centers, sales

9 venues, and racetracks;

10 (B) Thoroughbred horses are bought and

11 sold and compete in interstate and foreign com12 merce; and

13 (C) racing and parimutuel wagering on

14 Thoroughbred horseraces are televised and si15 mulcast throughout the United States and

16 around the world;

17 (2) the history and traditions of Thoroughbred

18 horse breeding and racing trace to colonial times

19 and are worthy of preservation and promotion;

20 (3) the preservation and promotion of the Thor21 oughbred horse industry also are necessary to ensure

22 that rural green spaces, farms, and other agri23 business entities that serve the Thoroughbred indus24 try can continue to exist and compete efficiently and

25 effectively in domestic and world markets;
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1 (4) the breeding and racing of Thoroughbred

2 horses is valuable as both business and sport be3 cause millions of spectators and racing fans watch

4 races on and off track and on television, and racing

5 is a historically leading spectator sport that com6 bines the most desired elements of business, sport,

7 and entertainment;

8 (5) State associations of Thoroughbred

9 breeders and owners sponsor awards and incentive

10 programs that promote Thoroughbred racing and

11 the ownership of State-bred Thoroughbred horses

12 and are valuable promoters of Thoroughbred horse

13 breeding and racing in State and regional markets;

14 (6) Thoroughbred horses are valuable media of

15 international exchange because—

16 (A) the United States is the leading source

17 of top quality Thoroughbred bloodstock in the

18 world; and

19 (B) sales of Thoroughbred horses to for20 eign buyers contribute positively to the balance

21 of trade of the United States;

22 (7) it is important to the agricultural economy

23 of the United States to ensure that—

24 (A) the high quality of American bloodlines

25 of Thoroughbred horses be maintained; and
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1 (B) American-bred Thoroughbred horses

2 be allowed to compete fairly and efficiently in

3 all racing and entertainment markets;

4 (8) the preservation of existing markets and the

5 development of new and improved markets are es6 sential to the continued economic health and well7 being of the Thoroughbred horse industry through8 out the United States;

9 (9) promotional and informational programs,

10 including advertising, will be an effective means of—

11 (A) maintaining and developing markets

12 for Thoroughbred race horses; and

13 (B) enlarging the share of the Thorough14 bred horse industry in sports and entertainment

15 markets;

16 (10) because the Thoroughbred industry is pri17 marily oriented to agriculture and comprised mainly

18 of small- and medium-size owners, breeders, and

19 small business proprietors, the development and im20 plementation of coordinated national marketing pro21 grams historically has been difficult to accomplish;

22 (11) an effective and coordinated means of or23 ganizing and financing nationwide programs that in24 clude generic promotion and market information is
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1 needed to ensure that the Thoroughbred horse in2 dustry will be able to—

3 (A) carry out self-help measures; and

4 (B) provide promotional and market infor5 mation necessary for the industry to maintain,

6 develop, and expand markets for Thoroughbred

7 race horses and breeding stock; and

8 (12) the most efficient method of financing the

9 nationwide program referred to in paragraph (11) is

10 to assess revenues derived from wagering carried out

11 in connection with Thoroughbred horseracing.

12 SEC. 3. DEFINITIONS.

13 As used in this Act:

14 (1) BOARD.—The term ‘‘Board’’ means the

15 Thoroughbred Horse Industry Promotion Board es16 tablished under section 5(b).

17 (2) BREEDER.—The term ‘‘breeder’’ means a

18 person who breeds Thoroughbred horses.

19 (3) COMMERCE.—The term ‘‘commerce’’ means

20 interstate, foreign, or intrastate commerce.

21 (4) CONFLICT OF INTEREST.—The term ‘‘con22 flict of interest’’ means a situation in which a mem23 ber has a direct or indirect financial interest in a

24 corporation, partnership, sole proprietorship, joint
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1 venture, or other business entity dealing directly or

2 indirectly with the Board.

3 (5) DEPARTMENT.—The term ‘‘Department’’

4 means the United States Department of Agriculture.

5 (6) DISTRICT.—The term ‘‘district’’ means a

6 geographical area of the United States, determined

7 by the Board and approved by the Secretary, in

8 which Thoroughbred horse breeding or racing oc9 curs.

10 (7) HANDLE.—The term ‘‘handle’’ means the

11 gross amount of money wagered on Thoroughbred

12 horseraces at a licensed racetrack or off-track wa13 gering facility.

14 (8) HORSEMAN.—The term ‘‘horseman’’ means

15 an owner, trainer, or jockey.

16 (9) HORSEMEN’S ORGANIZATION.—The term

17 ‘‘horsemen’s organization’’ means a trade associa18 tion that represents horsemen in their contractual

19 relationships with racetrack owners or racing asso20 ciations.

21 (10) INDUSTRY INFORMATION.—The term ‘‘in22 dustry information’’ means information and pro23 grams that will lead to the development of new mar24 kets and marketing strategies, increased efficiency,
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1 and other promotional activities to enhance the

2 image of the Thoroughbred horse industry.

3 (11) JOCKEY.—The term ‘‘jockey’’ means an

4 individual who rides a Thoroughbred horse in a race.

5 (12) MARKET INFORMATION.—The term ‘‘mar6 ket information’’ means information and programs

7 that will assist breeders, buyers, prospective owners,

8 and other persons in making evaluations and deci9 sions regarding the purchase, use, and enjoyment of

10 Thoroughbred horses.

11 (13) MEMBER.—The term ‘‘member’’ means a

12 member of the Board.

13 (14) OFF-TRACK WAGERING FACILITY.—The

14 term ‘‘off-track wagering facility’’ means a facility,

15 other than a racetrack, licensed by a State to con16 duct parimutuel wagering on Thoroughbred horse17 racing.

18 (15) OWNER.—The term ‘‘owner’’ means any

19 person who owns, or shares ownership of, a Thor20 oughbred horse in the United States and who is li21 censed as an owner by a State.

22 (16) PATRON.—The term ‘‘patron’’ means a

23 racing fan or member of the general public who wa24 gers on Thoroughbred horseracing.
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1 (17) PERSON.—The term ‘‘person’’ means any

2 individual, group of individuals, partnership, cor3 poration, association, cooperative, joint venture,

4 State, political subdivision of a State, or any other

5 organization or entity.

6 (18) PLAN.—The term ‘‘plan’’ means a plan is7 sued under section 4.

8 (19) PROMOTION.—The term ‘‘promotion’’

9 means any action taken by the Board pursuant to

10 this Act to present a favorable image of Thorough11 bred horses to the public with the express intent of

12 improving the competitive position of Thoroughbred

13 horses in the marketplace, stimulating interest and

14 participation in the Thoroughbred horse industry,

15 and stimulating sales of Thoroughbred horses, in16 cluding paid advertising.

17 (20) PURSE.—The term ‘‘purse’’ means the

18 total amount of money awarded as a prize for the

19 racing performance of a Thoroughbred horse in a

20 race conducted at a racetrack.

21 (21) RACE MEETING.—The term ‘‘race meet22 ing’’ means the scheduled days that a racing asso23 ciation is licensed by a State to conduct racing and

24 parimutuel wagering on Thoroughbred horseracing.
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1 (22) RACETRACK.—The term ‘‘racetrack’’

2 means a racing association or racetrack licensed by

3 a State to conduct racing or parimutuel wagering on

4 Thoroughbred horseracing.

5 (23) RACETRACK OWNER.—The term ‘‘race6 track owner’’ means the owner or operator of a race7 track.

8 (24) RACING ASSOCIATION.—The term ‘‘racing

9 association’’ means a racetrack or any other person

10 licensed by a State to conduct racing and parimutuel

11 wagering on Thoroughbred horseracing.

12 (25) RESEARCH.—The term ‘‘research’’ means

13 any type of test, study, or analysis designed to ad14 vance the image, desirability of ownership, speed,

15 stamina, breeding, racing soundness, or other mar16 ketable quality of Thoroughbred horses.

17 (26) SECRETARY.—The term ‘‘Secretary’’

18 means the Secretary of Agriculture.

19 (27) STATE.—The term ‘‘State’’ means any of

20 the 50 States, the District of Columbia, and the

21 Commonwealth of Puerto Rico, including a political

22 subdivision or agency thereof that regulates Thor23 oughbred horseracing (such as a State racing com24 mission).
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1 (28) TAKEOUT.—The term ‘‘takeout’’ means

2 the total handle, less the amount paid to persons

3 placing wagers on the race.

4 (29) THOROUGHBRED.—The term ‘‘Thorough5 bred’’ means a breed of horse originally developed by

6 crossing Arabian stallions with European mares.

7 (30) TRAINER.—The term ‘‘trainer’’ means a

8 person who trains and conditions Thoroughbred

9 horses.

10 (31) UNITED STATES.—The term ‘‘United

11 States’’ means the States collectively.

12 SEC. 4. ISSUANCE OF PLANS.

13 (a) IN GENERAL.—To carry out this Act, the Sec14 retary shall, subject to the requirements of this Act, issue,

15 and from time to time amend, plans applicable to race16 tracks and breeders and owners of thoroughbred horses.

17 Each plan shall be national in scope. Not more than 1

18 plan shall be in effect under this Act at any time.

19 (b) PROCEDURE.—

20 (1) PROPOSAL FOR ISSUANCE OF PLAN.—The

21 Secretary may propose the issuance of a plan under

22 this section. An association of racetracks, an asso23 ciation of owners and breeders, or any other person

24 who is affected by this Act may request the issuance

25 of, and submit a proposal for, the plan.
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1 (2) PROPOSED PLAN.—Not later than 60 days

2 after the receipt of a request, or at the time the Sec3 retary proposes a plan, under paragraph (1), the

4 Secretary shall publish a proposed plan and give no5 tice and opportunity for public comment on the pro6 posed plan.

7 (3) ISSUANCE OF PLAN.—After giving notice

8 and opportunity for public comment pursuant to

9 paragraph (2), the Secretary shall issue a plan, tak10 ing into consideration the comments received pursu11 ant to paragraph (2). The Secretary shall include in

12 the plan such provisions as are necessary to ensure

13 that the plan conforms with the requirements of this

14 Act.

15 (4) EFFECTIVE DATE OF PLAN.—The plan re16 ferred to in paragraph (3) shall be issued, and be17 come effective, not later than 150 days after the

18 date of publication of the proposed plan referred to

19 in paragraph (2).

20 (c) AMENDMENTS.—From time to time, the Sec21 retary may amend a plan. The provisions of this Act that

22 apply to a plan shall apply to an amendment to a plan.

23 SEC. 5. REQUIRED TERMS IN PLANS.

24 (a) IN GENERAL.—Each plan shall contain the terms

25 and conditions prescribed in this section.
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1 (b) THOROUGHBRED HORSE INDUSTRY PROMOTION

2 BOARD—

3 (1) ESTABLISHMENT.—The plan shall establish

4 a Thoroughbred Horse Industry Promotion Board to

5 assist the Secretary in carrying out an effective, con6 tinuous, and coordinated program of promotion, re7 search, market information, and industry informa8 tion that is designed to strengthen the position of

9 the Thoroughbred horse industry in the marketplace.

10 (2) SERVICE TO ENTIRE INDUSTRY.—The

11 Board shall assist the Secretary in carrying out pro12 grams and projects that will provide maximum eco13 nomic and promotional benefit to the Thoroughbred

14 horse industry in all parts of the United States and

15 only generically promote the Thoroughbred horse in16 dustry.

17 (3) BOARD MEMBERSHIP.—The Secretary shall

18 appoint 14 members to the Board as follows:

19 (A) 6 members shall be appointed to rep20 resent owners and breeders.

21 (B) 6 members shall be appointed to rep22 resent racetrack owners and operators.

23 (C) 1 member shall be appointed to rep24 resent trainers.
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1 (D) 1 member shall be appointed to rep2 resent jockeys.

3 (4) REPRESENTATION OF MEMBERS.—

4 (A) OWNERS AND BREEDERS.—Of the

5 members referred to in paragraph (3)(A), the

6 members of the Board shall be selected to re7 flect an equitable representation of districts.

8 (B) MODIFYING BOARD MEMBERSHIP.—In

9 accordance with regulations issued by the Sec10 retary, not later than 3 years after the date of

11 appointment of the members of the initial

12 board, and not less frequently than once every

13 3 years thereafter, but not more frequently

14 than biennially, the Board shall—

15 (i) review the geographic distribution

16 of Thoroughbred horse breeding and racing

17 throughout the United States; and

18 (ii) if warranted, recommend to the

19 Secretary that the Secretary reapportion a

20 district in order to reflect the geographic

21 distribution of Thoroughbred horse breed22 ing and horseracing.

23 (5) SELECTION PROCESS FOR MEMBERS.—
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1 (A) PUBLICITY.—The Board shall solicit

2 nominations of individuals interested in being

3 nominated for membership on the Board.

4 (B) ELIGIBILITY.—Each member of a cat5 egory referred to in paragraph (3) shall be eligi6 ble to vote for the nomination of the members

7 in the category.

8 (C) SELECTION OF NOMINEES.—Each in9 dividual referred to in subparagraph (B) shall

10 have 1 vote. With respect to each category, the

11 2 eligible candidates that receive the largest

12 number of votes for the category shall be the

13 nominees of the category.

14 (D) CERTIFICATION.—Except for the es15 tablishment of the initial Board, the nomina16 tions made under subparagraph (C) shall be

17 certified by the Board and submitted to the

18 Secretary not later than the May 1, or such

19 other date recommended by the Board and ap20 proved by the Secretary, preceding the com21 mencement of the term of office for Board

22 membership, as is established under paragraph

23 (6).

24 (E) APPOINTMENT.—To each vacant

25 Board position, the Secretary shall appoint 1
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1 individual from among the nominees certified

2 and submitted under subparagraph (D).

3 (F) REJECTION OF NOMINEES.—The Sec4 retary may reject any nominee submitted under

5 subparagraph (D). If there are insufficient

6 nominees from which to appoint members to the

7 Board as a result of the rejection by the Sec8 retary of the nominees, additional nominees

9 shall be submitted to the Secretary in the same

10 manner as the original nominees.

11 (G) INITIAL BOARD.—The Secretary shall

12 establish an initial Board from among nomina13 tions solicited by the Secretary from trade asso14 ciations or organizations representing members

15 of categories described in paragraph (3). For

16 the purpose of obtaining nominations for the

17 members of the initial Board described in para18 graph (3), the Secretary shall perform such

19 functions of the Board under this subsection as

20 the Secretary determines are necessary and ap21 propriate.

22 (H) FAILURE TO NOMINATE.—If the mem23 bers of a category described in paragraph (3)

24 fail to nominate individuals for appointment,

25 the Secretary may appoint members on a basis
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1 provided for in the plan. If the Board fails to

2 nominate a member pursuant to paragraph (3),

3 the member may be appointed without nomina4 tion.

5 (6) TERMS OF OFFICE.—

6 (A) IN GENERAL.—The members of the

7 Board shall serve for a term of 3 years, except

8 that the members appointed to the initial Board

9 established under paragraph (5)(G) shall serve,

10 proportionately, for terms of 1, 2, and 3 years,

11 as determined by the Secretary.

12 (B) TERMINATION OF TERMS.—Notwith13 standing subparagraph (C), each member shall

14 continue to serve until a successor is appointed

15 by the Secretary.

16 (C) LIMITATION ON TERMS.—No individ17 ual may serve more than 2 consecutive 3-year

18 terms as a member.

19 (D) VACANCIES.—

20 (i) SUBMITTING NOMINATIONS.—To

21 fill any vacancy created by the death, re22 moval, resignation, or disqualification of

23 any member of the Board, the Secretary

24 shall request that at least 2 eligible nomi25 nations for a successor for each such va-
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1 cancy be submitted by the Board in the

2 manner provided in paragraph (5).

3 (ii) LACK OF NOMINATIONS.—If at

4 least 2 eligible nominations are not submit5 ted under clause (i), the Secretary shall de6 termine the manner of submission of nomi7 nations for the vacancy.

8 (7) COMPENSATION.—A member of the Board

9 shall serve without compensation, but shall be reim10 bursed for necessary and reasonable expenses in11 curred in the performance of duties for, and ap12 proved by, the Board.

13 (c) POWERS AND DUTIES OF THE BOARD.—The plan

14 shall define the powers and duties of the Board, including

15 the power and duty—

16 (1) to administer the plan in accordance with

17 the terms and conditions of the plan;

18 (2) to issue regulations to carry out the terms

19 and conditions of the plan;

20 (3) to meet, organize, and select from among

21 members of the Board a chairperson, and such other

22 officers, committees, and subcommittees, as the

23 Board determines are appropriate;

24 (4) to establish working committees of persons

25 other than Board members;
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1 (5) to employ such individuals, other than

2 Board members, as the Board considers necessary

3 and to determine the compensation and define the

4 duties of the individuals;

5 (6) to prepare and submit for the approval of

6 the Secretary, prior to the beginning of each fiscal

7 period, a recommended rate of assessment under

8 section 7, and a fiscal period budget of the antici9 pated expenses in the administration of the plan, in10 cluding the probable costs of all programs and

11 projects;

12 (7) subject to subsection (d), to develop pro13 grams and projects;

14 (8) subject to subsection (e), to enter into con15 tracts or agreements to develop and carry out pro16 grams or projects of promotion, research, market in17 formation, and industry information;

18 (9) to carry out promotion, research, market in19 formation, and industry information, and to pay the

20 costs of the programs or projects with assessments

21 collected pursuant to section 7;

22 (10) to keep minutes, books, and records that

23 reflect the actions and transactions of the Board,

24 and promptly report the minutes of each meeting of

25 the Board to the Secretary;
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1 (11) to appoint and convene, from time to time,

2 working committees comprised of owners, breeders,

3 jockeys, trainers, patrons, and members of the gen4 eral public who engage in parimutuel wagering on

5 Thoroughbred horseraces for the development of

6 promotion, research, market information, and indus7 try information programs and projects;

8 (12) to invest, pending disbursement under a

9 program or project, funds collected through assess10 ments authorized under section 7, only in—

11 (A) obligations of the United States or any

12 agency of the United States;

13 (B) general obligations of any State or any

14 political subdivision of a State;

15 (C) interest-bearing accounts or certifi16 cates of deposit of a bank that is a member of

17 the Federal Reserve System; or

18 (D) obligations fully guaranteed as to prin19 cipal and interest by the United States;

20 except that income from any invested funds may be

21 used for any purpose for which the invested funds

22 may be used;

23 (13) to receive, investigate, and report to the

24 Secretary complaints of violations of the plan;
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1 (14) to furnish the Secretary with such infor2 mation as the Secretary may request;

3 (15) to recommend to the Secretary amend4 ments to the plan; and

5 (16) to develop and recommend to the Sec6 retary, for approval, such regulations as may be nec7 essary for the development and execution of pro8 grams or projects, or as may otherwise be necessary,

9 to carry out the plan.

10 (d) PROGRAMS AND BUDGETS.—

11 (1) SUBMISSION TO SECRETARY.—The plan

12 shall provide that the Board shall submit to the Sec13 retary, for approval, any program or project of pro14 motion, research, market information, or industry

15 information. No program or project shall be carried

16 out prior to the approval by the Secretary of the

17 program or project.

18 (2) BUDGETS.—The plan shall require the

19 Board, prior to the beginning of each fiscal period,

20 or as may be necessary after the beginning of the

21 fiscal period (as determined by the Secretary), to

22 submit to the Secretary for approval budgets of the

23 anticipated expenses of the Board (including reim24 bursements under subsection (b)(7)) and disburse25 ments in the implementation of the plan, including
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1 projected costs of promotion, research, market infor2 mation, and industry information programs and

3 projects.

4 (3) INCURRING EXPENSES.—Subject to the re5 quirements of this Act, the Board may incur such

6 expenses for programs or projects of promotion, re7 search, market information, or industry information,

8 and other expenses for the administration, mainte9 nance, and functioning of the Board, as may be au10 thorized by the Secretary, including any expenses in11 curred by the Department in carrying out or admin12 istering a program under this Act or conducting a

13 referendum pursuant to section 11.

14 (4) PAYING EXPENSES.—The expenses referred

15 to in paragraph (3) shall be paid by the Board from

16 assessments collected under section 7 or funds bor17 rowed pursuant to paragraph (5).

18 (5) AUTHORITY TO BORROW.—In order to meet

19 the expenses referred to in paragraph (3), the Board

20 shall have the authority to borrow funds, as ap21 proved by the Secretary, for capital outlays and

22 startup costs.

23 (6) LIMITATION ON SPENDING.—The Board

24 shall not spend an amount that is greater than 10
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1 percent of the assessments collected under section 7

2 for administration of the Board.

3 (e) CONTRACTS AND AGREEMENTS.—

4 (1) IN GENERAL.—To ensure the efficient use

5 of funds, the plan shall provide that the Board may

6 enter into contracts or agreements for implementing

7 and carrying out programs or projects for research,

8 market information, or industry information, includ9 ing contracts with owners, breeders, or horsemen’s

10 organizations. The payment of the cost of the con11 tracts or agreements shall be made with funds re12 ceived by the Board under the plan.

13 (2) REQUIREMENTS.—A contract or agreement

14 referred to in paragraph (1) shall provide that—

15 (A) the contracting party shall develop and

16 submit to the Board a program or project and

17 a budget for the program or project that in18 cludes estimated costs that will be incurred

19 under the program or project;

20 (B) the program or project shall become

21 effective on the approval of the Secretary; and

22 (C) the contracting party shall—

23 (i) keep accurate records of all of the

24 transactions of the party;
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1 (ii) account for funds received and ex2 pended by the party;

3 (iii) make periodic reports to the

4 Board of activities conducted by the party;

5 and

6 (iv) make such other reports as the

7 Board or the Secretary may require.

8 (3) OWNER, BREEDER, AND HORSEMEN’S ORGA9 NIZATIONS.—The plan shall provide that the Board

10 may contract with owners, breeders, and horsemen’s

11 organizations, for any other services. The contract

12 shall include provisions comparable to the provisions

13 required under paragraph (2).

14 (f) BOOKS AND RECORDS OF BOARD.—

15 (1) IN GENERAL.—The plan shall require the

16 Board to—

17 (A) maintain such books and records

18 (which shall be available to the Secretary for in19 spection and audit) as the Secretary may pre20 scribe;

21 (B) prepare and submit to the Secretary,

22 from time to time, such reports as the Sec23 retary may prescribe; and

24 (C) account for the receipt and disburse25 ment of all funds entrusted to the Board.
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1 (2) AUDITS.—The Board shall cause the books

2 and records of the Board to be audited by an inde3 pendent auditor at the end of each fiscal period, and

4 a report of the audit to be submitted to the Sec5 retary.

6 (g) PROHIBITION.—The Board shall not engage in

7 any action to, or use any funds received by the Board

8 under this Act to—

9 (1) influence legislation or governmental action,

10 other than recommending to the Secretary amend11 ments to the plan;

12 (2) engage in any action that would be a con13 flict of interest; or

14 (3) engage in any advertising that may be false

15 or misleading.

16 (h) BOOKS AND RECORDS.—

17 (1) IN GENERAL.—The plan shall require that

18 owners, breeders, and other horsemen’s organiza19 tions shall—

20 (A) maintain and submit to the Board any

21 reports considered necessary by the Secretary

22 to ensure compliance with this Act; and

23 (B) make available during normal business

24 hours, for inspection by employees of the Board

25 or Secretary, such books and records as are
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1 necessary to carry out this Act, including such

2 records as are necessary to verify any required

3 reports.

4 (2) RECORDS RETENTION REQUIREMENT.—The

5 records required under paragraph (1) shall be main6 tained for a period of 2 years after the end of the

7 fiscal period of the applicable records.

8 (3) CONFIDENTIALITY.—

9 (A) IN GENERAL.—Except as otherwise

10 provided in this Act, all information obtained

11 from books, records, and reports required to be

12 maintained under paragraph (1) shall be kept

13 confidential, and shall not be disclosed to the

14 public by any person.

15 (B) DISCLOSURE.—Information referred to

16 in subparagraph (A) may be disclosed to the

17 public only if—

18 (i) the Secretary considers the infor19 mation relevant;

20 (ii) the information is revealed in a

21 suit or administrative hearing brought at

22 the direction or on the request of the Sec23 retary or to which the Secretary or any of24 ficer of the Department is a party; and
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1 (iii) the information relates to the ad2 ministration of this Act.

3 (C) MISCONDUCT.—Any disclosure of con4 fidential information in violation of subpara5 graph (A) by any Board member or employee of

6 the Board, except as otherwise required by law

7 or permitted under subparagraph (B) or (D),

8 shall be a violation of this Act.

9 (D) GENERAL STATEMENTS.—Nothing in

10 this paragraph is intended to prohibit—

11 (i) the issuance of general statements,

12 based on the reports, of the number of per13 sons subject to the plan or statistical data

14 collected from the persons, which state15 ments do not identify the information fur16 nished by any person; or

17 (ii) the publication, by direction of the

18 Secretary, of the name of any person vio19 lating the plan, together with a statement

20 of the particular provisions of the plan vio21 lated by the person.

22 (4) AVAILABILITY OF INFORMATION.—Except

23 as otherwise provided in this Act, information ob24 tained under this Act may be made available to an-
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1 other agency of the Federal Government for a civil

2 or criminal law enforcement activity if—

3 (A) the activity is authorized by law; and

4 (B) the head of the agency has made a

5 written request to the Secretary specifying the

6 particular information desired and the law en7 forcement activity for which the information is

8 sought.

9 (5) PENALTY.—Any person who knowingly vio10 lates this subsection, on conviction, shall be subject,

11 to a fine of not more than $1,000 or to imprison12 ment for not more than 1 year, or both. On convic13 tion, an officer or employee of the Board or the De14 partment who knowingly violates this subsection

15 shall be removed from office.

16 (6) WITHHOLDING OF INFORMATION.—Nothing

17 in this Act is intended to authorize the withholding

18 of information from Congress.

19 (i) USE OF ASSESSMENTS.—The plan shall provide

20 that the assessments collected under section 7 shall be

21 used for the payment of the expenses incurred in carrying

22 out this Act, with provision for a reasonable reserve, and

23 to cover those administrative costs incurred by the Sec24 retary in carrying out this Act, except for the salaries of
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1 employees of the Federal Government incurred in conduct2 ing referenda.

3 (j) OTHER TERMS AND CONDITIONS.—In addition to

4 the terms and conditions described in subsections (a)

5 through (i), the plan shall contain such terms and condi6 tions consistent with this Act as the Secretary determines

7 are necessary to carry out this Act.

8 SEC. 6. PERMISSIVE TERMS IN PLANS.

9 (a) IN GENERAL.—A plan may contain a term or con10 dition described in this section.

11 (b) EXEMPTIONS.—A plan may provide authority to

12 exempt from the plan Thoroughbred horses used for

13 nonracing uses and authority for the Board to require sat14 isfactory safeguards against improper uses of the exemp15 tions.

16 (c) PROMOTION.—The plan may provide for the es17 tablishment, issuance, effectuation, and administration of

18 appropriate programs or projects for the promotion of

19 Thoroughbred horses and for the disbursement of funds

20 that are necessary for the promotion, except that—

21 (1) the program or project shall be directed to22 ward increasing market demand for Thoroughbred

23 horses; and
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1 (2) the promotional activities shall comply with

2 other restrictions on the use of funds established

3 under this Act.

4 (d) RESEARCH AND INFORMATION.—The plan may

5 provide for—

6 (1) establishing and carrying out research, mar7 ket information, and industry information programs

8 and projects to the extent that the marketing and

9 utilization of Thoroughbred horses is better under10 stood and encouraged, expanded, improved, or made

11 more efficient; and

12 (2) the disbursement of funds that are nec13 essary for the purposes specified in paragraph (1).

14 (e) RESERVE FUNDS.—The plan may provide the au15 thority to accumulate reserve funds from assessments col16 lected under section 7, to permit an effective and continu17 ous coordinated program of promotion, research, market

18 information, and industry information, during years in

19 which the assessments may be reduced, except that the

20 total reserve fund may not exceed the amount budgeted

21 for the operation of the plan for 2 years.

22 (f) FOREIGN MARKETS.—The plan may provide au23 thority to use funds collected under this Act, with the ap24 proval of the Secretary, for the development and expansion

25 of Thoroughbred horse sales in foreign markets.
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1 SEC. 7. ASSESSMENTS AND CONTRIBUTIONS.

2 (a) IN GENERAL.—Except as provided in subsection

3 (b), during the effective period of a plan, a mandatory as4 sessment shall be deducted from the handle in an amount

5 that is equal to 0.25 percent of the handle.

6 (b) ADJUSTMENT OF ASSESSMENT.—The Board,

7 after receiving the approval of the Secretary, may increase

8 or decrease the amount of a mandatory assessment re9 quired under subsection (a)(1).

10 (c) REMITTING ASSESSMENTS.—

11 (1) IN GENERAL.—An assessment required

12 under subsection (a)(1) shall be remitted to the

13 Board by not later than the date that is 45 days

14 after the last day of the race meeting that is the

15 subject of the assessment.

16 (2) CONTRIBUTION.—Each voluntary contribu17 tion under subsection (a)(2) shall be made by the

18 date specified in paragraph (1).

19 (3) REGULATIONS.—The Secretary may issue

20 such regulations as may be necessary to carry out

21 this section.

22 (d) LATE-PAYMENT CHARGE.—

23 (1) IN GENERAL.—There shall be a late-pay24 ment charge imposed on any person who fails to

25 remit, on or before the due date established by the
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1 Board under subsection (c)(1), to the Board the

2 total amount for which the person is liable.

3 (2) AMOUNT OF CHARGE.—The amount of the

4 late-payment charge imposed under paragraph (1)

5 shall be prescribed by the Board with the approval

6 of the Secretary.

7 (e) REFUND OF ASSESSMENTS FROM ESCROW AC8 COUNT.—

9 (1) ESTABLISHMENT OF ESCROW ACCOUNT.—

10 During the period beginning on the effective date of

11 an initial plan and ending on the date the referen12 dum is conducted under section 11(a), the Board

13 shall—

14 (A) establish an escrow account to be used

15 for assessment refunds; and

16 (B) place funds in the account in accord17 ance with paragraph (2).

18 (2) PLACEMENT OF FUNDS IN ACCOUNT.—The

19 Board shall place in the account, from assessments

20 collected during the period referred to in paragraph

21 (1), an amount equal to the product obtained by

22 multiplying the total amount of assessments col23 lected during the period by 10 percent.

24 (3) RIGHT TO RECEIVE REFUND.—Subject to

25 paragraphs (4), (5), and (6), an owner or a race-
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1 track shall have the right to demand, and receive

2 from the Board, a one-time refund of an assessment

3 paid by, or on behalf of, the person during the pe4 riod referred to in paragraph (1), if—

5 (A) the owners, as a group, and race6 tracks, as a group, do not support the program

7 established under this Act;

8 (B) the owners, as a group, and race9 tracks, as a group, demand the refund prior to

10 the conduct of the referendum under section

11 11(a); and

12 (C) the plan is not approved pursuant to

13 the referendum conducted under section 11(a).

14 (4) FORM OF DEMAND.—A demand under para15 graph (3) shall be made in accordance with rules, on

16 a form, and within a time period, prescribed by the

17 Board.

18 (5) MAKING OF REFUND.—The refund shall be

19 made on submission of proof satisfactory to the

20 Board that the assessment for which a refund is de21 manded was paid.

22 (6) PRORATION.—If—

23 (A) the amount in the escrow account re24 quired by paragraph (1) is not sufficient to re-
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1 fund the total amount of assessments demanded

2 by eligible owners and racetracks; and

3 (B) the plan is not approved pursuant to

4 the referendum conducted under section 11(a);

5 the Board shall prorate the amount of the refunds

6 among all eligible owners and racetracks who de7 mand a refund under paragraph (3).

8 (7) APPROVAL OF PROGRAM.—If the plan is ap9 proved pursuant to the referendum conducted under

10 section 11(a), all funds in the escrow account estab11 lished under paragraph (1) shall be returned to the

12 Board for use by the Board in accordance with this

13 Act.

14 SEC. 8. PETITION AND REVIEW.

15 (a) PETITION.—

16 (1) IN GENERAL.—A person subject to a plan

17 may file with the Secretary a petition that—

18 (A) states that the plan, any provision of

19 the plan, or any obligation imposed in connec20 tion with the plan is not in accordance with ap21 plicable law; and

22 (B) requests a modification of the plan or

23 an exemption from the plan.

24 (2) HEARINGS.—A person who files a petition

25 under paragraph (1) shall be given the opportunity
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1 for a hearing on the petition, on the record and in

2 accordance with regulations issued by the Secretary.

3 (3) RULING.—After holding a hearing under

4 paragraph (2), the Secretary shall issue a ruling on

5 the petition that is the subject of the hearing. The

6 ruling shall be considered a final agency action.

7 (b) JUDICIAL REVIEW.—

8 (1) COMMENCEMENT OF ACTION.—During the

9 20-day period beginning on the date on which the

10 Secretary issues a ruling on a petition pursuant to

11 subsection (a)(3), the person who filed the petition

12 may obtain review of the ruling by filing a complaint

13 in the district court of the United States for any dis14 trict in which the person resides or conducts on

15 business.

16 (2) PROCESS.—Service of process in judicial re17 view proceedings conducted pursuant to this sub18 section shall be in accordance with the Federal

19 Rules of Civil Procedure.

20 (3) REMANDS.—If the court determines that

21 the ruling that is the subject of the judicial review

22 conducted pursuant to this subsection was not made

23 in accordance with applicable law, the court shall re24 mand the matter to the Secretary with directions—
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1 (A) to make such ruling as the court shall

2 determine to be in accordance with applicable

3 law; or

4 (B) to carry out such further proceedings

5 as, in the opinion of the court, are required

6 under applicable law.

7 (4) ENFORCEMENT.—Pending proceedings in8 stituted under subsection (a) are not intended to im9 pede, hinder, or delay the Attorney General or the

10 Secretary from taking any action under section 10.

11 SEC. 9. ENFORCEMENT.

12 (a) JURISDICTION.—The district courts of the United

13 States shall have jurisdiction specifically to enforce, and

14 to prevent and restrain a person from violating, this Act

15 or any plan or regulation issued under this Act.

16 (b) REFERRAL TO ATTORNEY GENERAL.—A civil ac17 tion brought under this section shall be referred to the

18 Attorney General for appropriate action, except that the

19 Secretary is not required to refer to the Attorney General

20 a violation of this Act or any plan or regulation issued

21 under this Act if the Secretary believes that the adminis22 tration and enforcement of this Act would be adequately

23 served by administrative action under subsection (c) or by

24 providing a suitable written notice or warning to any per25 son committing the violation.
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1 (c) CIVIL PENALTIES AND ORDERS.—

2 (1) CIVIL PENALTIES.—

3 (A) IN GENERAL.—Except as otherwise

4 provided in this Act, a person who willfully vio5 lates any provision of this Act or any plan or

6 regulation issued under this Act, or who fails to

7 pay, collect, or remit any assessment or fee re8 quired of the person under this Act or any plan

9 or regulation issued under this Act, may be as10 sessed by the Secretary a civil penalty of not

11 less than $1,000 and not more than $10,000

12 for each violation.

13 (B) SEPARATE OFFENSE.—Each violation

14 referred to in subparagraph (A) shall be a sepa15 rate offense.

16 (2) CEASE AND DESIST ORDERS.—In addition

17 to, or in lieu of, a civil penalty referred to in para18 graph (1), the Secretary may issue an order requir19 ing the person to cease and desist from continuing

20 the violation.

21 (3) NOTICE AND HEARING.—The Secretary

22 may not assess a penalty, or issue a cease and desist

23 order, under this subsection unless the Secretary

24 gives the person against whom the assessment is
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1 made, or order is issued, notice and opportunity for

2 a hearing on the record with respect to the violation.

3 (4) FINALITY.—The order of the Secretary as4 sessing a penalty or imposing a cease and desist

5 order shall be final and conclusive unless the person

6 against whom the order is issued files an appeal

7 from the order of the Secretary in accordance with

8 subsection (d).

9 (d) REVIEW BY DISTRICT COURT.—

10 (1) COMMENCEMENT OF ACTION.—A person

11 against whom a civil penalty is assessed or a cease

12 and desist order is issued under subsection (c) may

13 obtain review of the penalty or order in the district

14 court of the United States for any district in which

15 the person resides or conducts business, or in the

16 United States District Court for the District of Co17 lumbia, by—

18 (A) filing, within the 30-day period begin19 ning on the date the penalty is assessed or

20 order issued, a complaint in the court; and

21 (B) simultaneously sending a copy of the

22 complaint by certified mail to the Secretary.

23 (2) RECORD.—The Secretary shall promptly file

24 in the court a certified copy of the record on which
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1 the Secretary found that the person committed a

2 violation.

3 (3) STANDARD OF REVIEW.—A finding of the

4 Secretary shall be set aside only if the finding is

5 found to be unsupported by substantial evidence.

6 (e) FAILURE TO OBEY ORDERS.—Any person who

7 fails to obey a cease and desist order after the order has

8 become final and unappealable, or after the appropriate

9 district court has entered a final judgment in favor of the

10 Secretary, shall be subject to a civil penalty assessed by

11 the Secretary, after opportunity for a hearing on the

12 record and for judicial review under the procedures speci13 fied in subsections (c) and (d), of not more than $1,000

14 for each offense. Each day during which the failure contin15 ues shall be considered a separate violation of the order.

16 (f) FAILURE TO PAY PENALTY.—If a person fails to

17 pay a civil penalty after the penalty is imposed by a final

18 and unappealable order issued by the Secretary, or after

19 the appropriate district court has entered a final judgment

20 in favor of the Secretary, the Secretary shall refer the

21 matter to the Attorney General for recovery of the amount

22 assessed in the district court of the United States for any

23 district in which the person resides or conducts business.

24 In the action, the validity and appropriateness of the order

25 imposing the civil penalty shall not be subject to review.
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1 SEC. 10. INVESTIGATIONS AND POWER TO SUBPOENA.

2 (a) IN GENERAL.—The Secretary may make such in3 vestigations as the Secretary determines necessary—

4 (1) for the effective administration of this Act;

5 or

6 (2) to determine whether a person has engaged

7 in, or is engaging in, any act or practice that con8 stitutes a violation of any provision of this Act, or

9 of any plan, rule, or regulation issued under this

10 Act.

11 (b) POWER TO SUBPOENA.—

12 (1) INVESTIGATIONS.—For the purpose of an

13 investigation made under subsection (a), the Sec14 retary may administer oaths and affirmations and

15 issue subpoenas to require the production of any

16 records that are relevant to the investigation. The

17 production of any records described in the preceding

18 sentence may be required from any location in the

19 United States.

20 (2) ADMINISTRATIVE HEARINGS.—For the pur21 pose of an administrative hearing held under section

22 8 or 9, the presiding officer is authorized to admin23 ister oaths and affirmations, subpoena witnesses,

24 compel the attendance of the witnesses, take evi25 dence, and require the production of any records

26 that are relevant to the inquiry. The attendance of
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1 witnesses and the production of any of the records

2 described in the preceding sentence may be required

3 from any location in the United States.

4 (c) AID OF COURTS.—In case of contumacy by, or

5 refusal to obey a subpoena issued to, any person, the Sec6 retary may invoke the aid of any court of the United

7 States—

8 (1) within the jurisdiction of which the inves9 tigation or proceeding is carried out; or

10 (2) where the person resides or conducts busi11 ness;

12 in order to enforce a subpoena issued by the Secretary

13 under subsection (b). The court may issue an order requir14 ing the person to comply with the subpoena.

15 (d) CONTEMPT.—Any failure to obey an order of the

16 court made under subsection (c) may be punished by the

17 court as a contempt of the court.

18 (e) PROCESS.—Process in any case referred to in sub19 section (d) may be served in the judicial district—

20 (1) in which the person resides or conducts

21 business; or

22 (2) where the person is found.

23 (f) HEARING SITE.—The site of any hearings held

24 under section 8 or 9 shall be within the judicial district
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1 where the person resides or has a principal place of busi2 ness.

3 SEC. 11. REQUIREMENT OF REFERENDUM.

4 (a) IN GENERAL.—Not later than 3 years after the

5 effective date of the initial plan, the Secretary shall con6 duct a referendum among owners and racetracks who,

7 during a representative period determined by the Sec8 retary, have been engaged in activities relating to Thor9 oughbred horseracing to determine whether they favor the

10 continuation, termination, or suspension of the plan.

11 (b) OTHER REFERENDA.—

12 (1) IN GENERAL.—After the referendum is con13 ducted under subsection (a), the Secretary shall hold

14 a referendum on request of the Board or 10 percent

15 or more of the total number of owners and race16 tracks to determine whether they favor the termi17 nation or suspension of the plan.

18 (2) SUSPENSION OR TERMINATION.—The Sec19 retary shall terminate or suspend the plan, in ac20 cordance with section 12(b), whenever the Secretary

21 determines that the suspension or termination is fa22 vored by a majority of those voting in a referendum.

23 (c) COSTS OF REFERENDUM.—The Secretary shall be

24 reimbursed, from any assessments collected by the Board,

25 for any expenses incurred by the Department in connec-
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1 tion with the conduct of any referendum under this sec2 tion, except for the salaries of Federal Government em3 ployees.

4 (d) MANNER.—

5 (1) IN GENERAL.—Each referendum under this

6 section shall be conducted in a manner determined

7 by the Secretary.

8 (2) ADVANCE REGISTRATION.—An owner or a

9 racetrack that chooses to vote in any referendum

10 conducted under this section shall register—

11 (A) prior to the voting period; and

12 (B) with the State racing commission that

13 licensed the owner or racetrack, as determined

14 by the Secretary.

15 (3) VOTING.—An owner or a racetrack that

16 votes in a referendum conducted under this Act shall

17 vote in person at an appropriate polling place, as de18 termined by the Secretary, or by mail to the Sec19 retary.

20 (4) NOTICE.—Not later than 30 days before a

21 referendum is conducted under this Act, the appro22 priate official of the Department shall notify owners

23 and racetracks. The notice shall explain the registra24 tion and voting procedures established under this

25 subsection.
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1 SEC. 12. SUSPENSION OR TERMINATION OF PLAN.

2 (a) SUSPENSION OR TERMINATION ON THE BASIS OF

3 A FINDING.—If the Secretary finds that a plan or any

4 provision of the plan obstructs or does not carry out a

5 policy of this Act, the Secretary shall terminate or suspend

6 the operation of the plan or provision.

7 (b) SUSPENSION OR TERMINATION ON THE BASIS OF

8 A REFERENDUM.—If, on the basis of a result of any ref9 erendum conducted under section 11, the Secretary deter10 mines that suspension or termination of a plan is favored

11 by a majority of the owners and racetracks who voted in

12 the referendum, the Secretary shall—

13 (1) not later than 180 days after making the

14 determination, suspend or terminate, as the case

15 may be, the collection of assessments under the plan;

16 and

17 (2) suspend or terminate, as the case may be,

18 activities under the plan in an orderly manner as

19 soon as practicable.

20 SEC. 13. REGULATIONS.

21 The Secretary may issue such regulations as are nec22 essary to carry out this Act.

23 SEC. 14. AUTHORIZATION OF APPROPRIATIONS.

24 (a) IN GENERAL.—There are authorized to be appro25 priated such sums as are necessary to carry out this Act.
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1 (b) ADMINISTRATIVE EXPENSES.—No funds made

2 available by appropriations pursuant to this section, may

3 be used for the expenses or expenditures of the Board in

4 carrying out administrative functions under any provision

5 of any plan.

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