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Legislators OK Task Force Rules

Kentucky legislators embraced recommendations of the Sales Integrity Task Force.

Legislators embraced recommendations of self-regulation for Kentucky horse auctions during a committee session Nov. 9, and applauded the effort of the Sales Integrity Task Force that formulated them.

The recommendations, which were the result of nine months of work by the 36-member task force, were presented to a quorum of the Joint Committee on Licensing and Occupations during the legislative group’s meeting at the Capitol Annex in Frankfort, Ky.

Asking for a chance to self-police issues singled out in proposed legislation in February, task force members made their case for allowing the industry to first tackle issues such as problems related to regulation of agents, and ownership and medical disclosure.

The task force was charged with developing recommendations as a compromise to tabling the original legislation. Task force moderator Alex Waldrop, president and chief executive officer of the National Thoroughbred Racing Association, told regulators the results exceeded his expectations.

“I entered this process concerned, because of how it was begun, it would end in frustration and acrimony,” Waldrop said. “I am happy to report today, that despite early challenges, the task force members were ultimately able to rise to the challenge in a very positive and constructive manner.

“The recommendations have real teeth, and tough consequences for bad actors. Kentucky can ill-afford to be put at a competitive disadvantage to other states by legislative action that goes too far and alienates buyers and sellers in the process.”

All of the legislators who spoke toward the end of the 45-minute presentation praised the task force for its effort, including Democratic Rep. Larry Clark, a co-sponsor of the original legislation who was somewhat critical of the preliminary recommendations when they were publicly unveiled in October.

“On Feb. 14, we met on this bill and reached a compromise, and you honored it to a T," said Clark, who expressed admiration for the sales industry based on his attendance at the Nov. 5 Fasig-Tipton selected sale. “The greatest thing out of this is that we have a dialogue. We found out that we want to work with a very important industry in our state. We don’t want to over-regulate, but we did feel there was some need there.

“You've got my word that I want to continue to work with you, and if there are any issues we need to communicate to our co-chairs, then we want to have a positive impact on working with you in the future. I want to personally thank you for following through on everything you said you were going to do.”

An attorney for task force member Jess Jackson, who backed the original legislation that sought stringent transparency in the auction arena, said in a telephone interview the prominent owner/breeder had reached “partial consensus” on the recommendations.

“While he reached consensus on those recommendations, he would hope that there would be broader application to private sales, and basically a no-tolerance policy toward medication or procedures that alter the performance or appearance of the horse,” attorney Kevin McGee said of Jackson, who did not attend the meeting. “He agrees with what they have done, but he wants more to be done.”

McGee said no decision had been made on whether Jackson, who was openly critical of the preliminary recommendations, would try and re-introduce legislation during the 2008 Kentucky General Assembly, which convenes in January and runs through March.

After the meeting, Waldrop said Jackson had reached some sort of common ground with other task force members.

“This was not Jess Jackson against the task force,” he said. “While Jess was clearly the most vocal critic of the recommendations, it does not mean others didn’t agree with him in some ways. Ultimately, however, these recommendations were a compromise among a variety of viewpoints.”

Task force member Nick Nicholson, president and chief executive officer of Keeneland, told legislators the $10.5-million record sale of broodmare Playful Act Nov. 6 at his company’s mixed sale exemplifies what is at stake in regulating the Kentucky auction industry. Nicholson spoke of the heritage of Playful Act, who was bred in Ireland by the late Robert Sangster, noting the horse was foaled, raised, and raced in Europe, but was brought to Kentucky when it counted.

“She came here to be bred, and when the family of this man was looking for the best place to come to sell their horse, they picked Lexington,” Nicholson said. “The world record says that the world trusts us. Indeed, this market is not broken. But it’s not the time to be complacent, either.”

Waldrop said comments received following the Oct. 15 public forum at Keeneland prompted the inclusion of a committee to work on disclosure of conformation-altering procedures. Also, a separate committee operating under the guidance of the Thoroughbred Owners and Breeders Association will monitor progress of all of the recommendations.

Fasig-Tipton president Walt Robertson told legislators the sale company would implement the recommendations in all facets of its sales empire, including those auctions held in Florida, Kentucky, Maryland, New York, and Texas.

“This is a work in progress,” he said. “This will not stop here.”

Sales Integrity Task Force Final Recommendations