Can the Texas Racing Commission change the rules so a thoroughbred's 'breeder' award goes to the owner at foaling instead of at conception?

Texas AG Opinion JM-1104: Can the Racing Commission Redefine "Breeder" for Thoroughbreds?

Plain-English summary

The Texas Racing Act sets up a Texas Bred Incentive Program that pays a share of racetrack "breakage" (the leftover odd cents on winning bets) to the breeders of accredited Texas-bred horses. The catch that landed on the Racing Commission's desk was the definition of "breeder." The Act defines a breeder as the person who is the owner of record of the mare at the time of conception of the accredited Texas-bred horse. That works fine for quarter horses, where it matches the industry's uniform definition. But it does not match how the thoroughbred world defines "breeder" anywhere else in the country, where the breeder is the owner at the time of foaling (birth), not conception. The commission asked the Attorney General whether it had to pay thoroughbred breeders' awards using the conception-based statutory definition, or whether it could apply the national foaling-based custom instead.

The Attorney General said the commission is stuck with the statute. When a statute is unambiguous, a court, and an agency, must follow its clear language. Conception and foaling are plainly different events, so the definition leaves no room for interpretation. The commission's argument that applying the conception rule to thoroughbreds produced an "absurd result," because it could pay awards to people the rest of the industry would not consider the breeder, did not change the analysis; a court finds a statute's intent in its words, not in what would be more sensible policy. The opinion pointedly noted that the commission had already asked the Legislature to fix this by amending the Act to track each breed registry's own rules, but the Legislature declined to pass either bill that would have done so (S.B. 448 and H.B. 1232 in 1989). Because the Legislature had left the conception-based definition in place, neither the Attorney General nor the commission had authority to rewrite it. The remedy, if any, was a legislative amendment, not an agency rule.

Currency note

This opinion was issued in 1989. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Texas Racing Act, cited here as article 179e, V.T.C.S., was later recodified into the Texas Occupations Code, and the Legislature has amended the breeders'-award and definitional provisions since 1989. The very mismatch this opinion identified may have been addressed by later legislation. Anyone dealing with a present-day Texas Bred Incentive Program question should check the current Occupations Code and Racing Commission rules rather than the 1989 section numbers here.

Who this opinion affected (as of 1989)

The Texas Racing Commission: The opinion told the commission it could not use its rulemaking power to substitute the national foaling-based definition of "breeder" for the conception-based one in the statute. Its hands were tied until the Legislature acted.

Thoroughbred owners and breeders: For owners, the opinion meant breeders' awards would go to whoever owned the mare at conception, which could differ from the person the thoroughbred registry recognized as the breeder at foaling. That mismatch could not be cured administratively.

The Legislature: The opinion effectively put the issue back on the Legislature's desk, noting it had already declined to pass the amendment the commission wanted.

Common questions

Can the Racing Commission change who counts as a thoroughbred's "breeder"?
No. The Attorney General concluded the commission has no authority to disregard or redefine the statutory definition. The Texas Racing Act sets it, and only the Legislature can change it.

Who is the "breeder" under the statute?
The owner of record of the mare at the time of conception of the accredited Texas-bred horse. That applies to thoroughbreds even though the national custom uses the owner at foaling.

Isn't it absurd to pay the award to someone the industry doesn't call the breeder?
The commission raised that argument, but the Attorney General held that a court must apply the clear language of an unambiguous statute regardless. Intent is found in the words, not in what would be a more sensible outcome.

How could this be fixed?
Only by the Legislature. The commission had asked for an amendment to tie "breeder" to each breed registry's rules, but the Legislature did not pass the bills (S.B. 448 and H.B. 1232, 71st Legislature) that would have done so.

Background and statutory framework

The Texas Racing Act, article 179e, V.T.C.S., directs that a percentage of the breakage be paid to breeders of Texas-bred horses. V.T.C.S. art. 179e, § 6.08(c)(2). "Breakage" is defined as the odd cents by which the amount payable on each dollar wagered exceeds a multiple of ten cents (in multiples of five cents for a minus pool). Id. § 1.03(20). Section 6.08(d)(2) defines a "breeder" as "a person who is owner of record, at the time of conception, of the mare that foaled the accredited Texas-bred horse." That is the uniform definition for quarter horses but not for thoroughbreds, whose breeder is nationally recognized as the owner at the time of foaling. The commission had urged the Legislature to amend the Act so that "breeder" would follow the rules of the appropriate state horse breed registry, but the Legislature enacted neither bill that would have done so. See S.B. 448, 71st Leg. (1989); H.B. 1232, 71st Leg. (1989).

The Attorney General applied the settled rule that, unless a statute is ambiguous, a court must follow its clear language. RepublicBank Dallas, N.A. v. Interkal, Inc., 691 S.W.2d 605, 607 (Tex. 1985). The opinion also quoted Simmons v. Arnim, 220 S.W. 66, 70 (Tex. 1920), stressing that courts "must take statutes as they find them," searching out legislative intent in the statute's language and not elsewhere, because they are not the law-making body and are not responsible for omissions in legislation. However problematic the conception-based definition might be for thoroughbreds, it was not ambiguous: conception and foaling are clearly distinct events. Accordingly, neither the Attorney General nor the Racing Commission had authority to define "breeder of a thoroughbred" for purposes of section 6.08 as the owner at the time of foaling rather than the time of conception.

Citations

Statutory authorities (Texas Racing Act, V.T.C.S. art. 179e):

• § 6.08 (Texas Bred Incentive Program; § 6.08(c)(2) payment of breakage to breeders; § 6.08(d)(2) definition of "breeder" as owner of record of the mare at the time of conception)
• § 1.03(20) (definition of "breakage")

Cases:

• RepublicBank Dallas, N.A. v. Interkal, Inc., 691 S.W.2d 605 (Tex. 1985) (a court must follow the clear language of an unambiguous statute)
• Simmons v. Arnim, 220 S.W. 66 (Tex. 1920) (courts must take statutes as they find them and find intent in the statute's language)

Legislation referenced:

• S.B. 448, 71st Leg. (1989); H.B. 1232, 71st Leg. (1989) (proposed but not enacted amendments to the definition of "breeder")

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1104
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1989/jm1104.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor OCR errors may remain; the linked PDF is authoritative. The addressee on page 1 is Mr. Hilary B. Doran, Jr.; the running headers on later pages print a different name, apparently a clerical error in the original.

October 3, 1989

Mr. Hilary B. Doran, Jr.
Chairman
Texas Racing Commission
P. O. Box 12080
Austin, Texas 78711-2080

Opinion No. JM-1104

Re: Authority of Texas Racing Commission to redefine by rule the term "breeder" (RQ-1795)

Dear Mr. Doran:

You ask the following question about the Texas Racing Act, article 179e, V.T.C.S.:

Does the Section 6.08 of the Texas Racing Act require the Texas Racing Commission to pay breeders' awards, under the Texas Bred Incentive Program for thoroughbred horses, to the owner of the mare at the time of conception of the accredited Texas-bred horse?

The Racing Act provides for a certain percentage of the breakage[1] to be paid to breeders of Texas-bred horses. V.T.C.S. art. 179e, § 6.08(c)(2). Your question involves the definition of "breeder" for purposes of section 6.08(c)(2). Section 6.08(d)(2) defines "breeder" as "a person who is owner of record, at the time of conception, of the mare that foaled the accredited Texas-bred horse." You explain that although the preceding definition is the uniform definition of "breeder" for quarter horses, it is not the uniform definition of "breeder" for thoroughbreds. You state that throughout the United States the "breeder" of a thoroughbred is the owner at the time of foaling.

[1] The "breakage" is "the odd cents by which the amount payable on each dollar wagered exceeds a multiple of 10 cents, except in the event a minus pool occurs, in which case the breakage shall be in multiples of five cents." V.T.C.S. art. 179e, § 1.03(20).

You also state that the Racing Commission urged the legislature to bring Texas law into line with standard practice by amending article 179e to define "breeder" as the person who is the breeder according to rules of the appropriate state horse breed registry. The legislature, however, did not enact either of the bills that would have done so. See S.B. 448, 71st Leg. (1989); H.B. 1232, 71st Leg. (1989).

Your question is whether the Racing Commission must apply the definition of "breeder" set out in section 6.08(d)(2) when it distributes the breakage to breeders of thoroughbreds. You suggest that the definition of "breeder" set out in section 6.08 should not be applied to thoroughbreds because it is inconsistent with the purposes of the statute, one of which is to encourage the horse-breeding industry. You also state that "[t]o require the payment of breeders' awards to persons who, traditionally and according to other states' breeders' programs, are not considered the 'breeder' of the horse appears to be an absurd result."

Unless a statute is ambiguous, a court must follow the clear language of a statute. See RepublicBank Dallas, N.A. v. Interkal, Inc., 691 S.W.2d 605, 607 (Tex. 1985). In Simmons v. Arnim, 220 S.W. 66 (1920), the Supreme Court wrote:

Courts must take statutes as they find them. More than that, they should be willing to take them as they find them. They should search out carefully the intendment of a statute, giving full effect to all of its terms. But they must find its intent in its language, and not elsewhere. They are not the law-making body. They are not responsible for omissions in legislation. They are responsible for a true and fair interpretation of the written law.

Id. at 70. However problematic the current statutory definition of "breeder" may be when applied to thoroughbreds, it is not ambiguous. Conception and foaling are clearly distinct events. Consequently, neither this office nor the Racing Commission has authority to define "breeder of a thoroughbred" for purposes of section 6.08 as the owner at the time of foaling rather than the time of conception.

SUMMARY

The Racing Commission has no authority to disregard the statutory definition of "breeder" in regard to thoroughbreds for purposes of section 6.08 of the Texas Racing Act, article 179e, V.T.C.S.

Very truly yours,

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Sarah Woelk
Assistant Attorney General