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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2512 Introduced in Senate (IS)]

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Thoroughbred Horse Industry 
Promotion and Research Act of 1994''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the breeding, buying, selling, training, and racing of 
        Thoroughbred horses is a significant component of agriculture 
        in the national economy because--
                    (A) Thoroughbred horses are bred and raised by 
                thousands of individual breeders, families, farmers, 
                ranchers, owners, and other horsemen throughout the 
                United States who employ tens of thousands of 
                agricultural workers on farms and at training centers, 
                sales venues, and racetracks;
                    (B) Thoroughbred horses are bought and sold and 
                compete in interstate and foreign commerce; and
                    (C) racing and parimutuel wagering on Thoroughbred 
                horseraces are televised and simulcast throughout the 
                United States and around the world;
            (2) the history and traditions of Thoroughbred horse 
        breeding and racing trace to colonial times and are worthy of 
        preservation and promotion;
            (3) the preservation and promotion of the Thoroughbred 
        horse industry also are necessary to ensure that rural green 
        spaces, farms, and other agribusiness entities that serve the 
        Thoroughbred industry can continue to exist and compete 
        efficiently and effectively in domestic and world markets;
            (4) the breeding and racing of Thoroughbred horses is 
        valuable as both business and sport because millions of 
        spectators and racing fans watch races on and off track and on 
        television, and racing is a historically leading spectator 
        sport that combines the most desired elements of business, 
        sport, and entertainment;
            (5) State associations of Thoroughbred breeders and owners 
        sponsor awards and incentive programs that promote Thoroughbred 
        racing and the ownership of State-bred Thoroughbred horses and 
        are valuable promoters of Thoroughbred horse breeding and 
        racing in State and regional markets;
            (6) Thoroughbred horses are valuable media of international 
        exchange because--
                    (A) the United States is the leading source of top 
                quality Thoroughbred bloodstock in the world; and
                    (B) sales of Thoroughbred horses to foreign buyers 
                contribute positively to the balance of trade of the 
                United States;
            (7) it is important to the agricultural economy of the 
        United States to ensure that--
                    (A) the high quality of American bloodlines of 
                Thoroughbred horses be maintained; and
                    (B) American-bred Thoroughbred horses be allowed to 
                compete fairly and efficiently in all racing and 
                entertainment markets;
            (8) the preservation of existing markets and the 
        development of new and improved markets are essential to the 
        continued economic health and well-being of the Thoroughbred 
        horse industry throughout the United States;
            (9) promotional and informational programs, including 
        advertising, will be an effective means of--
                    (A) maintaining and developing markets for 
                Thoroughbred race horses; and
                    (B) enlarging the share of the Thoroughbred horse 
                industry in sports and entertainment markets;
            (10) because the Thoroughbred industry is primarily 
        oriented to agriculture and comprised mainly of small- and 
        medium-size owners, breeders, and small business proprietors, 
        the development and implementation of coordinated national 
        marketing programs historically has been difficult to 
        accomplish;
            (11) an effective and coordinated means of organizing and 
        financing nationwide programs that include generic promotion 
        and market information is needed to ensure that the 
        Thoroughbred horse industry will be able to--
                    (A) carry out self-help measures; and
                    (B) provide promotional and market information 
                necessary for the industry to maintain, develop, and 
                expand markets for Thoroughbred race horses and 
                breeding stock; and
            (12) the most efficient method of financing the nationwide 
        program referred to in paragraph (11) is to assess revenues 
        derived from wagering carried out in connection with 
        Thoroughbred horseracing.

SEC. 3. DEFINITIONS.

    As used in this Act:
            (1) Board.--The term ``Board'' means the Thoroughbred Horse 
        Industry Promotion Board established under section 5(b).
            (2) Breeder.--The term ``breeder'' means a person who 
        breeds Thoroughbred horses.
            (3) Commerce.--The term ``commerce'' means interstate, 
        foreign, or intrastate commerce.
            (4) Conflict of interest.--The term ``conflict of 
        interest'' means a situation in which a member has a direct or 
        indirect financial interest in a corporation, partnership, sole 
        proprietorship, joint venture, or other business entity dealing 
        directly or indirectly with the Board.
            (5)  Department.--The term ``Department'' means the United 
        States Department of Agriculture.
            (6) District.--The term ``district'' means a geographical 
        area of the United States, determined by the Board and approved 
        by the Secretary, in which Thoroughbred horse breeding or 
        racing occurs.
            (7)  Handle.--The term ``handle'' means the gross amount of 
        money wagered on Thoroughbred horseraces at a licensed 
        racetrack or off-track wagering facility.
            (8) Horseman.--The term ``horseman'' means an owner, 
        trainer, or jockey.
            (9) Horsemen's organization.--The term ``horsemen's 
        organization'' means a trade association that represents 
        horsemen in their contractual relationships with racetrack 
        owners or racing associations.
            (10)  Industry information.--The term ``industry 
        information'' means information and programs that will lead to 
        the development of new markets and marketing strategies, 
        increased efficiency, and other promotional activities to 
        enhance the image of the Thoroughbred horse industry.
            (11) Jockey.--The term ``jockey'' means an individual who 
        rides a Thoroughbred horse in a race.
            (12) Market information.--The term ``market information'' 
        means information and programs that will assist breeders, 
        buyers, prospective owners, and other persons in making 
        evaluations and decisions regarding the purchase, use, and 
        enjoyment of Thoroughbred horses.
            (13) Member.--The term ``member'' means a member of the 
        Board.
            (14) Off-track wagering facility.--The term ``off-track 
        wagering facility'' means a facility, other than a racetrack, 
        licensed by a State to conduct parimutuel wagering on 
        Thoroughbred horseracing.
            (15) Owner.--The term ``owner'' means any person who owns, 
        or shares ownership of, a Thoroughbred horse in the United 
        States and who is licensed as an owner by a State.
            (16) Patron.--The term ``patron'' means a racing fan or 
        member of the general public who wagers on Thoroughbred 
        horseracing.
            (17) Person.--The term ``person'' means any individual, 
        group of individuals, partnership, corporation, association, 
        cooperative, joint venture, State, political subdivision of a 
        State, or any other organization or entity.
            (18) Plan.--The term ``plan'' means a plan issued under 
        section 4.
            (19) Promotion.--The term ``promotion'' means any action 
        taken by the Board pursuant to this Act to present a favorable 
        image of Thoroughbred horses to the public with the express 
        intent of improving the competitive position of Thoroughbred 
        horses in the marketplace, stimulating interest and 
        participation in the Thoroughbred horse industry, and 
        stimulating sales of Thoroughbred horses, including paid 
        advertising.
            (20) Purse.--The term ``purse'' means the total amount of 
        money awarded as a prize for the racing performance of a 
        Thoroughbred horse in a race conducted at a racetrack.
            (21) Race meeting.--The term ``race meeting'' means the 
        scheduled days that a racing association is licensed by a State 
        to conduct racing and parimutuel wagering on Thoroughbred 
        horseracing.
            (22) Racetrack.--The term ``racetrack'' means a racing 
        association or racetrack licensed by a State to conduct racing 
        or parimutuel wagering on Thoroughbred horseracing.
            (23) Racetrack owner.--The term ``racetrack owner'' means 
        the owner or operator of a racetrack.
            (24) Racing association.--The term ``racing association'' 
        means a racetrack or any other person licensed by a State to 
        conduct racing and parimutuel wagering on Thoroughbred 
        horseracing.
            (25) Research.--The term ``research'' means any type of 
        test, study, or analysis designed to advance the image, 
        desirability of ownership, speed, stamina, breeding, racing 
        soundness, or other marketable quality of Thoroughbred horses.
            (26) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
            (27) State.--The term ``State'' means any of the 50 States, 
        the District of Columbia, and the Commonwealth of Puerto Rico, 
        including a political subdivision or agency thereof that 
        regulates Thoroughbred horseracing (such as a State racing 
        commission).
            (28) Takeout.--The term ``takeout'' means the total handle, 
        less the amount paid to persons placing wagers on the race.
            (29) Thoroughbred.--The term ``Thoroughbred'' means a breed 
        of horse originally developed by crossing Arabian stallions 
        with European mares.
            (30) Trainer.--The term ``trainer'' means a person who 
        trains and conditions Thoroughbred horses.
            (31) United states.--The term ``United States'' means the 
        States collectively.

SEC. 4. ISSUANCE OF PLANS.

    (a) In General.--To carry out this Act, the Secretary shall, 
subject to the requirements of this Act, issue, and from time to time 
amend, plans applicable to racetracks and breeders and owners of 
thoroughbred horses. Each plan shall be national in scope. Not more 
than 1 plan shall be in effect under this Act at any time.
    (b) Procedure.--
            (1) Proposal for issuance of plan.--The Secretary may 
        propose the issuance of a plan under this section. An 
        association of racetracks, an association of owners and 
        breeders, or any other person who is affected by this Act may 
        request the issuance of, and submit a proposal for, the plan.
            (2) Proposed plan.--Not later than 60 days after the 
        receipt of a request, or at the time the Secretary proposes a 
        plan, under paragraph (1), the Secretary shall publish a 
        proposed plan and give notice and opportunity for public 
        comment on the proposed plan.
            (3) Issuance of plan.--After giving notice and opportunity 
        for public comment pursuant to paragraph (2), the Secretary 
        shall issue a plan, taking into consideration the comments 
        received pursuant to paragraph (2). The Secretary shall include 
        in the plan such provisions as are necessary to ensure that the 
        plan conforms with the requirements of this Act.
            (4) Effective date of plan.--The plan referred to in 
        paragraph (3) shall be issued, and become effective, not later 
        than 150 days after the date of publication of the proposed 
        plan referred to in paragraph (2).
    (c) Amendments.--From time to time, the Secretary may amend a plan. 
The provisions of this Act that apply to a plan shall apply to an 
amendment to a plan.

SEC. 5. REQUIRED TERMS IN PLANS.

    (a) In General.--Each plan shall contain the terms and conditions 
prescribed in this section.
    (b) Thoroughbred Horse Industry Promotion Board--
            (1) Establishment.--The plan shall establish a Thoroughbred 
        Horse Industry Promotion Board to assist the Secretary in 
        carrying out an effective, continuous, and coordinated program 
        of promotion, research, market information, and industry 
        information that is designed to strengthen the position of the 
        Thoroughbred horse industry in the marketplace.
            (2) Service to entire industry.--The Board shall assist the 
        Secretary in carrying out programs and projects that will 
        provide maximum economic and promotional benefit to the 
        Thoroughbred horse industry in all parts of the United States 
        and only generically promote the Thoroughbred horse industry.
            (3) Board membership.--The Secretary shall appoint 14 
        members to the Board as follows:
                    (A) 6 members shall be appointed to represent 
                owners and breeders.
                    (B) 6 members shall be appointed to represent 
                racetrack owners and operators.
                    (C) 1 member shall be appointed to represent 
                trainers.
                    (D) 1 member shall be appointed to represent 
                jockeys.
            (4) Representation of members.--
                    (A) Owners and breeders.--Of the members referred 
                to in paragraph (3)(A), the members of the Board shall 
                be selected to reflect an equitable representation of 
                districts.
                    (B) Modifying board membership.--In accordance with 
                regulations issued by the Secretary, not later than 3 
                years after the date of appointment of the members of 
                the initial board, and not less frequently than once 
                every 3 years thereafter, but not more frequently than 
                biennially, the Board shall--
                            (i) review the geographic distribution of 
                        Thoroughbred horse breeding and racing 
                        throughout the United States; and
                            (ii) if warranted, recommend to the 
                        Secretary that the Secretary reapportion a 
                        district in order to reflect the geographic 
                        distribution of Thoroughbred horse breeding and 
                        horseracing.
            (5) Selection process for members.--
                    (A) Publicity.--The Board shall solicit nominations 
                of individuals interested in being nominated for 
                membership on the Board.
                    (B) Eligibility.--Each member of a category 
                referred to in paragraph (3) shall be eligible to vote 
                for the nomination of the members in the category.
                    (C) Selection of nominees.--Each individual 
                referred to in subparagraph (B) shall have 1 vote. With 
                respect to each category, the 2 eligible candidates 
                that receive the largest number of votes for the 
                category shall be the nominees of the category.
                    (D) Certification.--Except for the establishment of 
                the initial Board, the nominations made under 
                subparagraph (C) shall be certified by the Board and 
                submitted to the Secretary not later than the May 1, or 
                such other date recommended by the Board and approved 
                by the Secretary, preceding the commencement of the 
                term of office for Board membership, as is established 
                under paragraph (6).
                    (E) Appointment.--To each vacant Board position, 
                the Secretary shall appoint 1 individual from among the 
                nominees certified and submitted under subparagraph 
                (D).
                    (F) Rejection of nominees.--The Secretary may 
                reject any nominee submitted under subparagraph (D). If 
                there are insufficient nominees from which to appoint 
                members to the Board as a result of the rejection by 
                the Secretary of the nominees, additional nominees 
                shall be submitted to the Secretary in the same manner 
                as the original nominees.
                    (G) Initial board.--The Secretary shall establish 
                an initial Board from among nominations solicited by 
                the Secretary from trade associations or organizations 
                representing members of categories described in 
                paragraph (3). For the purpose of obtaining nominations 
                for the members of the initial Board described in 
                paragraph (3), the Secretary shall perform such 
                functions of the Board under this subsection as the 
                Secretary determines are necessary and appropriate.
                    (H) Failure to nominate.--If the members of a 
                category described in paragraph (3) fail to nominate 
                individuals for appointment, the Secretary may appoint 
                members on a basis provided for in the plan. If the 
                Board fails to nominate a member pursuant to paragraph 
                (3), the member may be appointed without nomination.
            (6) Terms of office.--
                    (A) In general.--The members of the Board shall 
                serve for a term of 3 years, except that the members 
                appointed to the initial Board established under 
                paragraph (5)(G) shall serve, proportionately, for 
                terms of 1, 2, and 3 years, as determined by the 
                Secretary.
                    (B) Termination of terms.--Notwithstanding 
                subparagraph (C), each member shall continue to serve 
                until a successor is appointed by the Secretary.
                    (C) Limitation on terms.--No individual may serve 
                more than 2 consecutive 3-year terms as a member.
                    (D) Vacancies.--
                            (i) Submitting nominations.--To fill any 
                        vacancy created by the death, removal, 
                        resignation, or disqualification of any member 
                        of the Board, the Secretary shall request that 
                        at least 2 eligible nominations for a successor 
                        for each such vacancy be submitted by the Board 
                        in the manner provided in paragraph (5).
                            (ii) Lack of nominations.--If at least 2 
                        eligible nominations are not submitted under 
                        clause (i), the Secretary shall determine the 
                        manner of submission of nominations for the 
                        vacancy.
            (7) Compensation.--A member of the Board shall serve 
        without compensation, but shall be reimbursed for necessary and 
        reasonable expenses incurred in the performance of duties for, 
        and approved by, the Board.
    (c) Powers and Duties of the Board.--The plan shall define the 
powers and duties of the Board, including the power and duty--
            (1) to administer the plan in accordance with the terms and 
        conditions of the plan;
            (2) to issue regulations to carry out the terms and 
        conditions of the plan;
            (3) to meet, organize, and select from among members of the 
        Board a chairperson, and such other officers, committees, and 
        subcommittees, as the Board determines are appropriate;
            (4) to establish working committees of persons other than 
        Board members;
            (5) to employ such individuals, other than Board members, 
        as the Board considers necessary and to determine the 
        compensation and define the duties of the individuals;
            (6) to prepare and submit for the approval of the 
        Secretary, prior to the beginning of each fiscal period, a 
        recommended rate of assessment under section 7, and a fiscal 
        period budget of the anticipated expenses in the administration 
        of the plan, including the probable costs of all programs and 
        projects;
            (7) subject to subsection (d), to develop programs and 
        projects;
            (8) subject to subsection (e), to enter into contracts or 
        agreements to develop and carry out programs or projects of 
        promotion, research, market information, and industry 
        information;
            (9) to carry out promotion, research, market information, 
        and industry information, and to pay the costs of the programs 
        or projects with assessments collected pursuant to section 7;
            (10) to keep minutes, books, and records that reflect the 
        actions and transactions of the Board, and promptly report the 
        minutes of each meeting of the Board to the Secretary;
            (11) to appoint and convene, from time to time, working 
        committees comprised of owners, breeders, jockeys, trainers, 
        patrons, and members of the general public who engage in 
        parimutuel wagering on Thoroughbred horseraces for the 
        development of promotion, research, market information, and 
        industry information programs and projects;
            (12) to invest, pending disbursement under a program or 
        project, funds collected through assessments authorized under 
        section 7, only in--
                    (A) obligations of the United States or any agency 
                of the United States;
                    (B) general obligations of any State or any 
                political subdivision of a State;
                    (C) interest-bearing accounts or certificates of 
                deposit of a bank that is a member of the Federal 
                Reserve System; or
                    (D) obligations fully guaranteed as to principal 
                and interest by the United States;
        except that income from any invested funds may be used for any 
        purpose for which the invested funds may be used;
            (13) to receive, investigate, and report to the Secretary 
        complaints of violations of the plan;
            (14) to furnish the Secretary with such information as the 
        Secretary may request;
            (15) to recommend to the Secretary amendments to the plan; 
        and
            (16) to develop and recommend to the Secretary, for 
        approval, such regulations as may be necessary for the 
        development and execution of programs or projects, or as may 
        otherwise be necessary, to carry out the plan.
    (d) Programs and Budgets.--
            (1) Submission to secretary.--The plan shall provide that 
        the Board shall submit to the Secretary, for approval, any 
        program or project of promotion, research, market information, 
        or industry information. No program or project shall be carried 
        out prior to the approval by the Secretary of the program or 
        project.
            (2) Budgets.--The plan shall require the Board, prior to 
        the beginning of each fiscal period, or as may be necessary 
        after the beginning of the fiscal period (as determined by the 
        Secretary), to submit to the Secretary for approval budgets of 
        the anticipated expenses of the Board (including reimbursements 
        under subsection (b)(7)) and disbursements in the 
        implementation of the plan, including projected costs of 
        promotion, research, market information, and industry 
        information programs and projects.
            (3) Incurring expenses.--Subject to the requirements of 
        this Act, the Board may incur such expenses for programs or 
        projects of promotion, research, market information, or 
        industry information, and other expenses for the 
        administration, maintenance, and functioning of the Board, as 
        may be authorized by the Secretary, including any expenses 
        incurred by the Department in carrying out or administering a 
        program under this Act or conducting a referendum pursuant to 
        section 11.
            (4) Paying expenses.--The expenses referred to in paragraph 
        (3) shall be paid by the Board from assessments collected under 
        section 7 or funds borrowed pursuant to paragraph (5).
            (5) Authority to borrow.--In order to meet the expenses 
        referred to in paragraph (3), the Board shall have the 
        authority to borrow funds, as approved by the Secretary, for 
        capital outlays and startup costs.
            (6) Limitation on spending.--The Board shall not spend an 
        amount that is greater than 10 percent of the assessments 
        collected under section 7 for administration of the Board.
    (e) Contracts and Agreements.--
            (1) In general.--To ensure the efficient use of funds, the 
        plan shall provide that the Board may enter into contracts or 
        agreements for implementing and carrying out programs or 
        projects for research, market information, or industry 
        information, including contracts with owners, breeders, or 
        horsemen's organizations. The payment of the cost of the 
        contracts or agreements shall be made with funds received by 
        the Board under the plan.
            (2) Requirements.--A contract or agreement referred to in 
        paragraph (1) shall provide that--
                    (A) the contracting party shall develop and submit 
                to the Board a program or project and a budget for the 
                program or project that includes estimated costs that 
                will be incurred under the program or project;
                    (B) the program or project shall become effective 
                on the approval of the Secretary; and
                    (C) the contracting party shall--
                            (i) keep accurate records of all of the 
                        transactions of the party;
                            (ii) account for funds received and 
                        expended by the party;
                            (iii) make periodic reports to the Board of 
                        activities conducted by the party; and
                            (iv) make such other reports as the Board 
                        or the Secretary may require.
            (3) Owner, breeder, and horsemen's organizations.--The plan 
        shall provide that the Board may contract with owners, 
        breeders, and horsemen's organizations, for any other services. 
        The contract shall include provisions comparable to the 
        provisions required under paragraph (2).
    (f) Books and Records of Board.--
            (1) In general.--The plan shall require the Board to--
                    (A) maintain such books and records (which shall be 
                available to the Secretary for inspection and audit) as 
                the Secretary may prescribe;
                    (B) prepare and submit to the Secretary, from time 
                to time, such reports as the Secretary may prescribe; 
                and
                    (C) account for the receipt and disbursement of all 
                funds entrusted to the Board.
            (2) Audits.--The Board shall cause the books and records of 
        the Board to be audited by an independent auditor at the end of 
        each fiscal period, and a report of the audit to be submitted 
        to the Secretary.
    (g) Prohibition.--The Board shall not engage in any action to, or 
use any funds received by the Board under this Act to--
            (1) influence legislation or governmental action, other 
        than recommending to the Secretary amendments to the plan;
            (2) engage in any action that would be a conflict of 
        interest; or
            (3) engage in any advertising that may be false or 
        misleading.
    (h) Books and Records.--
            (1) In general.--The plan shall require that owners, 
        breeders, and other horsemen's organizations shall--
                    (A) maintain and submit to the Board any reports 
                considered necessary by the Secretary to ensure 
                compliance with this Act; and
                    (B) make available during normal business hours, 
                for inspection by employees of the Board or Secretary, 
                such books and records as are necessary to carry out 
                this Act, including such records as are necessary to 
                verify any required reports.
            (2) Records retention requirement.--The records required 
        under paragraph (1) shall be maintained for a period of 2 years 
        after the end of the fiscal period of the applicable records.
            (3) Confidentiality.--
                    (A) In general.--Except as otherwise provided in 
                this Act, all information obtained from books, records, 
                and reports required to be maintained under paragraph 
                (1) shall be kept confidential, and shall not be 
                disclosed to the public by any person.
                    (B) Disclosure.--Information referred to in 
                subparagraph (A) may be disclosed to the public only 
                if--
                            (i) the Secretary considers the information 
                        relevant;
                            (ii) the information is revealed in a suit 
                        or administrative hearing brought at the 
                        direction or on the request of the Secretary or 
                        to which the Secretary or any officer of the 
                        Department is a party; and
                            (iii) the information relates to the 
                        administration of this Act.
                    (C) Misconduct.--Any disclosure of confidential 
                information in violation of subparagraph (A) by any 
                Board member or employee of the Board, except as 
                otherwise required by law or permitted under 
                subparagraph (B) or (D), shall be a violation of this 
                Act.
                    (D) General statements.--Nothing in this paragraph 
                is intended to prohibit--
                            (i) the issuance of general statements, 
                        based on the reports, of the number of persons 
                        subject to the plan or statistical data 
                        collected from the persons, which statements do 
                        not identify the information furnished by any 
                        person; or
                            (ii) the publication, by direction of the 
                        Secretary, of the name of any person violating 
                        the plan, together with a statement of the 
                        particular provisions of the plan violated by 
                        the person.
            (4) Availability of information.--Except as otherwise 
        provided in this Act, information obtained under this Act may 
        be made available to another agency of the Federal Government 
        for a civil or criminal law enforcement activity if--
                    (A) the activity is authorized by law; and
                    (B) the head of the agency has made a written 
                request to the Secretary specifying the particular 
                information desired and the law enforcement activity 
                for which the information is sought.
            (5) Penalty.--Any person who knowingly violates this 
        subsection, on conviction, shall be subject, to a fine of not 
        more than $1,000 or to imprisonment for not more than 1 year, 
        or both. On conviction, an officer or employee of the Board or 
        the Department who knowingly violates this subsection shall be 
        removed from office.
            (6) Withholding of information.--Nothing in this Act is 
        intended to authorize the withholding of information from 
        Congress.
    (i) Use of Assessments.--The plan shall provide that the 
assessments collected under section 7 shall be used for the payment of 
the expenses incurred in carrying out this Act, with provision for a 
reasonable reserve, and to cover those administrative costs incurred by 
the Secretary in carrying out this Act, except for the salaries of 
employees of the Federal Government incurred in conducting referenda.
    (j) Other Terms and Conditions.--In addition to the terms and 
conditions described in subsections (a) through (i), the plan shall 
contain such terms and conditions consistent with this Act as the 
Secretary determines are necessary to carry out this Act.

SEC. 6. PERMISSIVE TERMS IN PLANS.

    (a) In General.--A plan may contain a term or condition described 
in this section.
    (b) Exemptions.--A plan may provide authority to exempt from the 
plan Thoroughbred horses used for nonracing uses and authority for the 
Board to require satisfactory safeguards against improper uses of the 
exemptions.
    (c) Promotion.--The plan may provide for the establishment, 
issuance, effectuation, and administration of appropriate programs or 
projects for the promotion of Thoroughbred horses and for the 
disbursement of funds that are necessary for the promotion, except 
that--
            (1) the program or project shall be directed toward 
        increasing market demand for Thoroughbred horses; and
            (2) the promotional activities shall comply with other 
        restrictions on the use of funds established under this Act.
    (d) Research and Information.--The plan may provide for--
            (1) establishing and carrying out research, market 
        information, and industry information programs and projects to 
        the extent that the marketing and utilization of Thoroughbred 
        horses is better understood and encouraged, expanded, improved, 
        or made more efficient; and
            (2) the disbursement of funds that are necessary for the 
        purposes specified in paragraph (1).
    (e) Reserve Funds.--The plan may provide the authority to 
accumulate reserve funds from assessments collected under section 7, to 
permit an effective and continuous coordinated program of promotion, 
research, market information, and industry information, during years in 
which the assessments may be reduced, except that the total reserve 
fund may not exceed the amount budgeted for the operation of the plan 
for 2 years.
    (f) Foreign Markets.--The plan may provide authority to use funds 
collected under this Act, with the approval of the Secretary, for the 
development and expansion of Thoroughbred horse sales in foreign 
markets.

SEC. 7. ASSESSMENTS AND CONTRIBUTIONS.

    (a) In General.--Except as provided in subsection (b), during the 
effective period of a plan, a mandatory assessment shall be deducted 
from the handle in an amount that is equal to 0.25 percent of the 
handle.
    (b) Adjustment of Assessment.--The Board, after receiving the 
approval of the Secretary, may increase or decrease the amount of a 
mandatory assessment required under subsection (a)(1).
    (c) Remitting Assessments.--
            (1) In general.--An assessment required under subsection 
        (a)(1) shall be remitted to the Board by not later than the 
        date that is 45 days after the last day of the race meeting 
        that is the subject of the assessment.
            (2) Contribution.--Each voluntary contribution under 
        subsection (a)(2) shall be made by the date specified in 
        paragraph (1).
            (3) Regulations.--The Secretary may issue such regulations 
        as may be necessary to carry out this section.
    (d) Late-Payment Charge.--
            (1) In general.--There shall be a late-payment charge 
        imposed on any person who fails to remit, on or before the due 
        date established by the Board under subsection (c)(1), to the 
        Board the total amount for which the person is liable.
            (2) Amount of charge.--The amount of the late-payment 
        charge imposed under paragraph (1) shall be prescribed by the 
        Board with the approval of the Secretary.
    (e) Refund of Assessments From Escrow Account.--
            (1) Establishment of escrow account.--During the period 
        beginning on the effective date of an initial plan and ending 
        on the date the referendum is conducted under section 11(a), 
        the Board shall--
                    (A) establish an escrow account to be used for 
                assessment refunds; and
                    (B) place funds in the account in accordance with 
                paragraph (2).
            (2) Placement of funds in account.--The Board shall place 
        in the account, from assessments collected during the period 
        referred to in paragraph (1), an amount equal to the product 
        obtained by multiplying the total amount of assessments 
        collected during the period by 10 percent.
            (3) Right to receive refund.--Subject to paragraphs (4), 
        (5), and (6), an owner or a racetrack shall have the right to 
        demand, and receive from the Board, a one-time refund of an 
        assessment paid by, or on behalf of, the person during the 
        period referred to in paragraph (1), if--
                    (A) the owners, as a group, and racetracks, as a 
                group, do not support the program established under 
                this Act;
                    (B) the owners, as a group, and racetracks, as a 
                group, demand the refund prior to the conduct of the 
                referendum under section 11(a); and
                    (C) the plan is not approved pursuant to the 
                referendum conducted under section 11(a).
            (4) Form of demand.--A demand under paragraph (3) shall be 
        made in accordance with rules, on a form, and within a time 
        period, prescribed by the Board.
            (5) Making of refund.--The refund shall be made on 
        submission of proof satisfactory to the Board that the 
        assessment for which a refund is demanded was paid.
            (6) Proration.--If--
                    (A) the amount in the escrow account required by 
                paragraph (1) is not sufficient to refund the total 
                amount of assessments demanded by eligible owners and 
                racetracks; and
                    (B) the plan is not approved pursuant to the 
                referendum conducted under section 11(a);
        the Board shall prorate the amount of the refunds among all 
        eligible owners and racetracks who demand a refund under 
        paragraph (3).
            (7) Approval of program.--If the plan is approved pursuant 
        to the referendum conducted under section 11(a), all funds in 
        the escrow account established under paragraph (1) shall be 
        returned to the Board for use by the Board in accordance with 
        this Act.

SEC. 8. PETITION AND REVIEW.

    (a) Petition.--
            (1) In general.--A person subject to a plan may file with 
        the Secretary a petition that--
                    (A) states that the plan, any provision of the 
                plan, or any obligation imposed in connection with the 
                plan is not in accordance with applicable law; and
                    (B) requests a modification of the plan or an 
                exemption from the plan.
            (2) Hearings.--A person who files a petition under 
        paragraph (1) shall be given the opportunity for a hearing on 
        the petition, on the record and in accordance with regulations 
        issued by the Secretary.
            (3) Ruling.--After holding a hearing under paragraph (2), 
        the Secretary shall issue a ruling on the petition that is the 
        subject of the hearing. The ruling shall be considered a final 
        agency action.
    (b) Judicial Review.--
            (1) Commencement of action.--During the 20-day period 
        beginning on the date on which the Secretary issues a ruling on 
        a petition pursuant to subsection (a)(3), the person who filed 
        the petition may obtain review of the ruling by filing a 
        complaint in the district court of the United States for any 
        district in which the person resides or conducts on business.
            (2) Process.--Service of process in judicial review 
        proceedings conducted pursuant to this subsection shall be in 
        accordance with the Federal Rules of Civil Procedure.
            (3) Remands.--If the court determines that the ruling that 
        is the subject of the judicial review conducted pursuant to 
        this subsection was not made in accordance with applicable law, 
        the court shall remand the matter to the Secretary with 
        directions--
                    (A) to make such ruling as the court shall 
                determine to be in accordance with applicable law; or
                    (B) to carry out such further proceedings as, in 
                the opinion of the court, are required under applicable 
                law.
            (4) Enforcement.--Pending proceedings instituted under 
        subsection (a) are not intended to impede, hinder, or delay the 
        Attorney General or the Secretary from taking any action under 
        section 10.

SEC. 9. ENFORCEMENT.

    (a) Jurisdiction.--The district courts of the United States shall 
have jurisdiction specifically to enforce, and to prevent and restrain 
a person from violating, this Act or any plan or regulation issued 
under this Act.
    (b) Referral to Attorney General.--A civil action brought under 
this section shall be referred to the Attorney General for appropriate 
action, except that the Secretary is not required to refer to the 
Attorney General a violation of this Act or any plan or regulation 
issued under this Act if the Secretary believes that the administration 
and enforcement of this Act would be adequately served by 
administrative action under subsection (c) or by providing a suitable 
written notice or warning to any person committing the violation.
    (c) Civil Penalties and Orders.--
            (1) Civil penalties.--
                    (A) In general.--Except as otherwise provided in 
                this Act, a person who willfully violates any provision 
                of this Act or any plan or regulation issued under this 
                Act, or who fails to pay, collect, or remit any 
                assessment or fee required of the person under this Act 
                or any plan or regulation issued under this Act, may be 
                assessed by the Secretary a civil penalty of not less 
                than $1,000 and not more than $10,000 for each 
                violation.
                    (B) Separate offense.--Each violation referred to 
                in subparagraph (A) shall be a separate offense.
            (2) Cease and desist orders.--In addition to, or in lieu 
        of, a civil penalty referred to in paragraph (1), the Secretary 
        may issue an order requiring the person to cease and desist 
        from continuing the violation.
            (3) Notice and hearing.--The Secretary may not assess a 
        penalty, or issue a cease and desist order, under this 
        subsection unless the Secretary gives the person against whom 
        the assessment is made, or order is issued, notice and 
        opportunity for a hearing on the record with respect to the 
        violation.
            (4) Finality.--The order of the Secretary assessing a 
        penalty or imposing a cease and desist order shall be final and 
        conclusive unless the person against whom the order is issued 
        files an appeal from the order of the Secretary in accordance 
        with subsection (d).
    (d) Review by District Court.--
            (1) Commencement of action.--A person against whom a civil 
        penalty is assessed or a cease and desist order is issued under 
        subsection (c) may obtain review of the penalty or order in the 
        district court of the United States for any district in which 
        the person resides or conducts business, or in the United 
        States District Court for the District of Columbia, by--
                    (A) filing, within the 30-day period beginning on 
                the date the penalty is assessed or order issued, a 
                complaint in the court; and
                    (B) simultaneously sending a copy of the complaint 
                by certified mail to the Secretary.
            (2) Record.--The Secretary shall promptly file in the court 
        a certified copy of the record on which the Secretary found 
        that the person committed a violation.
            (3) Standard of review.--A finding of the Secretary shall 
        be set aside only if the finding is found to be unsupported by 
        substantial evidence.
    (e) Failure to Obey Orders.--Any person who fails to obey a cease 
and desist order after the order has become final and unappealable, or 
after the appropriate district court has entered a final judgment in 
favor of the Secretary, shall be subject to a civil penalty assessed by 
the Secretary, after opportunity for a hearing on the record and for 
judicial review under the procedures specified in subsections (c) and 
(d), of not more than $1,000 for each offense. Each day during which 
the failure continues shall be considered a separate violation of the 
order.
    (f) Failure to Pay Penalty.--If a person fails to pay a civil 
penalty after the penalty is imposed by a final and unappealable order 
issued by the Secretary, or after the appropriate district court has 
entered a final judgment in favor of the Secretary, the Secretary shall 
refer the matter to the Attorney General for recovery of the amount 
assessed in the district court of the United States for any district in 
which the person resides or conducts business. In the action, the 
validity and appropriateness of the order imposing the civil penalty 
shall not be subject to review.

SEC. 10. INVESTIGATIONS AND POWER TO SUBPOENA.

    (a) In General.--The Secretary may make such investigations as the 
Secretary determines necessary--
            (1) for the effective administration of this Act; or
            (2) to determine whether a person has engaged in, or is 
        engaging in, any act or practice that constitutes a violation 
        of any provision of this Act, or of any plan, rule, or 
        regulation issued under this Act.
    (b) Power to Subpoena.--
            (1) Investigations.--For the purpose of an investigation 
        made under subsection (a), the Secretary may administer oaths 
        and affirmations and issue subpoenas to require the production 
        of any records that are relevant to the investigation. The 
        production of any records described in the preceding sentence 
        may be required from any location in the United States.
            (2) Administrative hearings.--For the purpose of an 
        administrative hearing held under section 8 or 9, the presiding 
        officer is authorized to administer oaths and affirmations, 
        subpoena witnesses, compel the attendance of the witnesses, 
        take evidence, and require the production of any records that 
        are relevant to the inquiry. The attendance of witnesses and 
        the production of any of the records described in the preceding 
        sentence may be required from any location in the United 
        States.
    (c) Aid of Courts.--In case of contumacy by, or refusal to obey a 
subpoena issued to, any person, the Secretary may invoke the aid of any 
court of the United States--
            (1) within the jurisdiction of which the investigation or 
        proceeding is carried out; or
            (2) where the person resides or conducts business;
in order to enforce a subpoena issued by the Secretary under subsection 
(b). The court may issue an order requiring the person to comply with 
the subpoena.
    (d) Contempt.--Any failure to obey an order of the court made under 
subsection (c) may be punished by the court as a contempt of the court.
    (e) Process.--Process in any case referred to in subsection (d) may 
be served in the judicial district--
            (1) in which the person resides or conducts business; or
            (2) where the person is found.
    (f) Hearing Site.--The site of any hearings held under section 8 or 
9 shall be within the judicial district where the person resides or has 
a principal place of business.

SEC. 11. REQUIREMENT OF REFERENDUM.

    (a) In General.--Not later than 3 years after the effective date of 
the initial plan, the Secretary shall conduct a referendum among owners 
and racetracks who, during a representative period determined by the 
Secretary, have been engaged in activities relating to Thoroughbred 
horseracing to determine whether they favor the continuation, 
termination, or suspension of the plan.
    (b) Other Referenda.--
            (1) In general.--After the referendum is conducted under 
        subsection (a), the Secretary shall hold a referendum on 
        request of the Board or 10 percent or more of the total number 
        of owners and racetracks to determine whether they favor the 
        termination or suspension of the plan.
            (2) Suspension or termination.--The Secretary shall 
        terminate or suspend the plan, in accordance with section 
        12(b), whenever the Secretary determines that the suspension or 
        termination is favored by a majority of those voting in a 
        referendum.
    (c) Costs of Referendum.--The Secretary shall be reimbursed, from 
any assessments collected by the Board, for any expenses incurred by 
the Department in connection with the conduct of any referendum under 
this section, except for the salaries of Federal Government employees.
    (d) Manner.--
            (1) In general.--Each referendum under this section shall 
        be conducted in a manner determined by the Secretary.
            (2) Advance registration.--An owner or a racetrack that 
        chooses to vote in any referendum conducted under this section 
        shall register--
                    (A) prior to the voting period; and
                    (B) with the State racing commission that licensed 
                the owner or racetrack, as determined by the Secretary.
            (3) Voting.--An owner or a racetrack that votes in a 
        referendum conducted under this Act shall vote in person at an 
        appropriate polling place, as determined by the Secretary, or 
        by mail to the Secretary.
            (4) Notice.--Not later than 30 days before a referendum is 
        conducted under this Act, the appropriate official of the 
        Department shall notify owners and racetracks. The notice shall 
        explain the registration and voting procedures established 
        under this subsection.

SEC. 12. SUSPENSION OR TERMINATION OF PLAN.

    (a) Suspension or Termination on the Basis of a Finding.--If the 
Secretary finds that a plan or any provision of the plan obstructs or 
does not carry out a policy of this Act, the Secretary shall terminate 
or suspend the operation of the plan or provision.
    (b) Suspension or Termination on the Basis of a Referendum.--If, on 
the basis of a result of any referendum conducted under section 11, the 
Secretary determines that suspension or termination of a plan is 
favored by a majority of the owners and racetracks who voted in the 
referendum, the Secretary shall--
            (1) not later than 180 days after making the determination, 
        suspend or terminate, as the case may be, the collection of 
        assessments under the plan; and
            (2) suspend or terminate, as the case may be, activities 
        under the plan in an orderly manner as soon as practicable.

SEC. 13. REGULATIONS.

    The Secretary may issue such regulations as are necessary to carry 
out this Act.

SEC. 14. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated such sums 
as are necessary to carry out this Act.
    (b) Administrative Expenses.--No funds made available by 
appropriations pursuant to this section, may be used for the expenses 
or expenditures of the Board in carrying out administrative functions 
under any provision of any plan.
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