Washington Horse Racing Commission
Meeting Minutes
January 11, 2007

Present were: Carol Smith-Merkulov, Chairperson; Jeff Colliton, Commissioner; Paul George, Commissioner; A.L. Hallowell, DVM, Commissioner; Hartly Kruger, Commissioner; Susan Carlson, Assistant Attorney General; Robert M. Leichner, Executive Secretary; Patty Sorby, Confidential Secretary.

Item #1. Approval of the meeting minutes of December 14, 2006.

Chairperson Smith-Merkulov requested that minutes be corrected on page 3 under Item #7 by changing two references to “members” to “Commission.”

Commissioner Kruger moved to approve the minutes with the corrections. Commissioner George seconded the motion. Unanimously approved.

Item #2. Chairperson’s report.

Chairperson Smith-Merkulov, who was not present at the December meeting, reported on the joint legislative committee meeting held November 30th on gambling issues. She said she received favorable feedback on removing the advance deposit wagering sunset provision.

Commissioner Kruger reported that he and Commissioner Colliton had visited Sun Downs race track on Friday, January 5th in Kennewick. They met with Cliff Schellinger, President, Tri-City Horse Racing Association and the Benton County Maintenance Manager to inspect the rail and barn renovations. Commissioner Kruger and Colliton were very pleased with the work. They expect more backing and support from Benton County and the Fair.

Commissioner Colliton said the WHRC test barn needed immediate attention.

Item #3. Emerald Downs’ report.

Mr. Ron Crockett, President, Northwest Racing Associates LP, updated the Commissioners on the simulcast handle. He said the terrible weather and the holidays were a factor in being down approximately $20,000 per day.

Mr. Crockett said the Muckleshoot Indian Tribe is again contributing money toward purses. Without their assistance the request for 2007 dates would have only been eighty days instead of ninety-one.

Commissioner Kruger said there are positive reports regarding the advance deposit wagering sunset clause legislation, and he asked Mr. Crockett’s if he felt similar. Mr. Crockett said he had also heard positive comments, and that having Senator Prentice’s signature on the bill is significant. Mr. Crockett thanked Bob Leichner and Chairperson Smith-Merkulov for all their good work on the bill.

Commissioner Colliton said he’d heard nothing negative regarding the legislation.

Mr. Crockett reported Paul Ryneveld, Racing Secretary, was receiving stall applications.

Item #4. Emerald Downs live 2007 race dates.

Mr. Leichner said he received a letter from Ron Crockett requesting ninety-one days for 2007 commencing April 20, 2007 and concluding on September 30, 2007. Post time for weekdays would be 6:00 PM and 2:00 PM on weekends and holidays with a special post time on June 30, 2007 of 5:00 PM.

Commissioner Kruger moved to approve the request from Emerald Downs for a ninety-one day meet in 2007. Commissioner Colliton seconded the motion. Unanimously approved.

Chairperson Smith-Merkulov moved item #5 and item #6 to later on the agenda.

Item #7. Proposed legislation by Class C race tracks on simulcasting.

Mr. Leichner said the Class C race meets ability to simulcast one race of regional or national interest had been unintentionally removed by the legislature from the simulcast statute. The legislation proposed by the Class C race meets would reinstate their ability to simulcast major races during their race meet such as the Kentucky Derby and the Preakness. The proposed language requests two simulcast races per day, but WHRC staff is recommending language that would only reinstate what they had lost, which is to simulcast one race of regional or national interest per race day. Mr. Leichner recommended this language to reduce potential concerns from legislators and others.

Mr. Leichner said in order to be effective for the Kentucky Derby on May 5, 2007, this would require an emergency clause as well as quick passage by the legislature and approval by the governor.

Mr. Crockett said he would support the Class C legislation for one simulcast race per live race day. In addition, the Class C race meets currently have the ability to receive Emerald Downs live races during their live meets.

Commissioner Kruger moved to support the Class C legislation for one simulcast race per day of regional or national interest. Commissioner Colliton seconded the motion. Unanimously approved.

Item #8. Executive Secretary’s report.

Mr. Leichner said he had received the accountant’s calendar year 2006 recap. Mr. Leichner said the wagering was down seven million from 2005.

a. Update Equine Incentive Funds.

Mr. Leichner updated the Commissioners on the grant awards. He said he had received word the research grant award agreement with WSU was being signed.

b. Accountant’s recap December 2005/2006.

Mr. Leichner said the calendar year recap showed down 4.8 percent compared to December 2005. Wagering per day was up 18 percent, but this was primarily due to a shorter race season in 2006 than in 2005.

c. 2005/2007 Budget.

Mr. Leichner explained the status of the revenues, expenditures and fund balance for the Commissioners.

Commissioner George asked about the Class C purse fund and the grant money, and expressed concern that the Commission could not afford to give as much as in 2006.

Chairperson Smith-Merkulov said Mr. Leichner had been keeping a close watch on the funding and hoped to have a report on the amount available in February or March.

Commissioner George also stated he felt the counties should be matching funding with the WHRC on these types of grants.

Commissioner Kruger said the county had provided the labor on the barn renovations and the rail renovations at the Sun Downs race track and that cost was more than the money WHRC awarded for renovations. He said the Commission budget continues to grow under Mr. Leichner’s leadership.

Mr. Leichner said the revenues are off a little but the interest that will go to the Class C purse fund may reduce the amount that has to be made up by the WHRC operating account to total the $300,000.

Item #5. Rules of Racing: Adoption Hearings:

a. WAC 260-24-510 Stewards. (Amendment)

Mr. Leichner said the CR 101 for this amendment had been filed on August 14, 2006 and proposed language was shared with stakeholders on December 6th.

The amendment limits the ability of individuals who pose a danger to the health, safety, or welfare of humans or equine participants to receive an automatic stay of their penalty.

Staff recommended adoption.

MaryAnn O’Connell, Executive Director, Horsemen’s Benevolent & Protective Association said this was in the best interest of racing and recommended adoption.

Commissioner Hallowell moved to adopt the amendment to WAC 260-24-510. Commissioner Kruger seconded the motion. Unanimously approved.

b. WAC 260-28-295 Trainer responsibility. (New Section)

Mr. Leichner explained the purpose of the new section was to move the trainer responsibility provisions from the Controlled Medication Program (chapter260-70 WAC into Ownerships, trainers and employees (chapter 260-28 WAC). The absolute insurer rule in WAC 260-28-180 is repealed because its language is included in the new rule, WAC 260-28-295. The trainer responsibility provisions in WAC 260-70-520 are repealed because they are moved into chapter 260-28 WAC. The CR101 was filed on March 10, 2006 and proposed language was shared with stakeholders on December 6, 2006. Staff recommended approval.

No public comment was received.

Commissioner Kruger moved to adopt WAC 260-28-295 Trainer responsibility (New Section) and repeal WAC 260-70-520 Trainer responsibility and WAC 260-28-180 Trainer insurer of condition of horse. Commissioner Colliton seconded the motion. Unanimously approved.

BREAK 10 AM. Reconvened 10:14 AM.

The Horsemen’s Benevolent & Protective Association’s newly elected president, Frank McDonald, was introduced. He spoke briefly about his background and was welcomed by the Commissioners.

c. WAC 260-34-030 Testing. (Amendment)

Mr. Leichner explained this amendment authorizes the drug and/or alcohol testing of any licensee on horseback. This is part of the safety enhancement effort intended to lower the number of Labor and Industries claims and discourage the use of prohibited substances. The CR101 for this amendment was filed on August 7, 2006 and language was shared with stakeholders on December 6, 2006. Staff recommended adoption.

Mary Ann O’Connell said she had initial concerns about taking people off horseback creating a problem and urged development of protocols. Mr. Leichner said protocols would be developed and a draft would be sent to the HBPA for comment.

Mr. McDonald commented that he had been a licensed counselor and asked about the procedures in place when giving a sample whether it was an observed sample or not. Mr. Leichner said they are not observed. Mr. Leichner said it was not necessary at this point, but could be implemented. The person to give the sample is escorted to the office but beyond that direct observation is not conducted.

Commissioner Kruger moved to adopt the amendment to WAC 260-34-030 Testing. Commissioners George and Hallowell seconded the motion. Unanimously approved.

d. WAC 260-70-680 Uniform classification guidelines. (Amendment)

Mr. Leichner said these amendments would adopt the Association of Racing Commissioners International (ARCI) model rules that include the recommendations of the Racing Medication and Testing Consortium (RMTC) reclassifying equine substances and penalties. Mr. Leichner said the CR101 for these amendments had been originally filed on January 13, 2006. An open public meeting was held at the Washington Thoroughbred Breeders Association on September 13, 2006. The proposed language was shared with stakeholders on December 5, 2006.

Mr. Leichner stated there hadn’t been any comments received regarding adoption of the drug list. Mr. Leichner said the drugs listed in the model rules must be adopted to be able to take enforcement action.

Susan Carlson stated that to be in compliance with the Administrative Procedures Act (APA) the list of drugs and their penalties must be in rule if they will be the basis for enforcement action against a licensee.

Chairperson Smith-Merkulov recommended adopting the amendments regarding the drug classes and penalties. She said it is a question of due process, to be able to know what is acceptable and list the consequence of what is not acceptable.

Commissioner Kruger asked if the Commission could adopt the drug list only, not the penalty portion.

Mary Ann O’Connell, HBPA, said she had commented on the list of drugs in her letter and that this was premature. No other jurisdiction has adopted the model rules in whole.

Dr. Gerald Bergsma said he had a problem with the reclassification of some of the everyday routinely used therapeutic drugs to a more severe penalty than is currently in rule.

Dr. Sally Calkins, WHRC veterinarian, said she thought that just making the change is scaring everyone. The problems that are being discussed have never been a problem in Washington racing. Dr. Calkins said the object and final goal of these amendments is to try to make every jurisdiction uniform in medications and penalties. There will be no difference in the testing that is now being done. Dr. Calkins recommended adoption.

Chairperson Smith-Merkulov said an article from the ARCI stated that California is recommending adoption of the model rules.

Commissioner Hallowell asked about lab uniformity. He felt without lab uniformity the results would all be returned showing different levels of detection.

Dr. Calkins said lab uniformity is also being discussed nationally.

Ms. O’Connell asked to not rush into adoption at this time.

Frank McDonald said he could not comment as he had just been elected and he had not had time to fully study and understand the issue. He stated he would like to bring this up for discussion at his next board meeting and asked that the Commission not adopt the amendments at this time. Commissioner Colliton asked when was the next board meeting. Mr. McDonald said February 28.

Ms. O’Connell said this could not be solved in thirty days and that Kentucky had adopted the model rules with changes.

Mark Babcock, DVM, spoke about concerns with the testing labs and stated they need to be standardized first. He was opposed to adopting the amendments.

Jack Hodge said he’d heard talk and most were opposed to adopting the amendments – he felt people were not ready for the amendments at this time. He commented that the veterinarians are uncomfortable with the drug classes and penalties.

Commissioner Kruger asked if not adopted today, when would it be possible to adopt the amendments. Mr. Leichner said that if a new CR102 needed to be filed, the process could take about five to six months.

Commissioner Kruger asked if the list of drugs only could be adopted without the column identifying the penalty class. Chairperson Smith-Merkulov said these amendments were filed over a year ago. At the public meeting there was no specific input presented on why these amendments should not be adopted. She felt the Commission needed to move forward and adopt the amendments today.

Commissioner Hallowell said this was a big issue, very complex, and ever changing. He said uniform labs are essential. He said there is no clear knowledge of thresholds and he felt he didn’t have enough information to make a decision on adoption at this time.

Commissioner Colliton said he was also uncomfortable adopting at this time.

Terry Garrison said there needed to be further study.

Jim Penney opposed adoption and wished to continue with the current program.

Mary Ann O’Connell said there are good parts in the amendments and didn’t want to throw it all out, but she felt there was no need to rush to adopt the amendments at this time.

Bryson Cooper felt that if these amendments were adopted today, it would preclude horses entering from other jurisdictions.

Commissioner Hallowell moved to table the adoption of the amendments to Chapter 260-70-680 with the strong recommendation that the WHRC, HBPA, Veterinarians and Emerald Downs go over the amendments line by line and see if they can come to agreement. Commissioner Colliton seconded the motion.

Commissioners Hallowell, Colliton and George voted yes. Chairperson Smith-Merkulov and Commissioner Kruger voted no. Motion passed with three yes votes.

BREAK 12:15 pm. Reconvened 12:27 pm.

e. WAC 260-84-060; 065. (Amendment)

Mr. Leichner said these rule amendments are updates to the penalties for L&I violations and clarifies penalties for possession of drugs for personal use and possession of drugs with intent to sell. The CR101 for these amendments was filed on August 7, 2006, and proposed language was shared with stakeholders on December 6, 2006. No stakeholder comments were received.

The amendment to WAC 260-84-060 changes the penalty for violation of L&I premium requirements from a flat fee to fifty percent of the premium owed. It also establishes a new standard penalty for licensees who fail to wear proper safety equipment.

The amendment to WAC 260-94-065 clarifies the penalties to distinguish between an individual who possesses a controlled substance for personal use and one who possesses with intent to sell.

Staff recommended adoption.

No public comment.

Commissioner Kruger moved to adopt the amendments to WAC 260-84-060 and WAC 260-84-065. Commissioner Colliton seconded the motion. Unanimously approved.

f. WAC 260-84-090; 110 (Amendment) 100; 120; 130 (Repealed).

Commissioner George moved to table WAC 260-84-090; 110 (Amendments) and WAC 260-84-100; 120; and 130 (Repeal) to allow additional work. Commissioner Hallowell seconded. Unanimously approved.

Item #9. Any other business that may be properly brought before the Commission.

Mary Ann O’Connell wished to acknowledge the efforts of Larry Hillis, past president of the HBPA, for his hard work for the horsemen and the industry.

Commissioner Kruger moved to have a letter prepared from the Commission acknowledging Mr. Hillis. Commissioner Colliton seconded the motion. Chairperson Smith-Merkulov agreed.

Item #6. Hearings:

a. Robert Lee Gutierrez.

Chairperson Smith-Merkulov opened the hearing for Robert Lee Gutierrez at 12:43 pm and introduced the WHRC members present. Michael S. Tribble, Assistant Attorney General represented staff. Mr. Gutierrez did not appear.

Mr. Tribble offered twenty-five exhibits which were admitted into evidence by Chairperson Smith-Merkulov. Walter E. Roderick, Investigator for the WHRC gave testimony. After considering the evidence, the Commission decided that Mr. Gutierrez’ license would be revoked and he would be banned from racing in the state of Washington. Hearing closed.

b. Sherrie L. Thomas.

Chairperson Smith-Merkulov opened the hearing for Sherrie L. Thomas at 1:10 pm. and introduced the WHRC members present. Michael S. Tribble, Assistant Attorney General, represented staff. Ms. Thomas did not appear.

Mr. Tribble offered seven exhibits these were admitted into evidence by Chairperson Smith-Merkulov. Walter E. Roderick, Investigator for the WHRC gave testimony. After considering the evidence, the Commission denied Ms. Thomas’ application for license and ruled she was ineligible for licensing. Hearing Closed.

Commissioner Hallowell asked about an issue regarding one race per day for Washington-bred horses. Mr. Leichner responded that he was working on the issue.

Meeting adjourned.

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Robert M. Leichner, Executive Secretary