On Thursday, January 7, attorneys for the Texas Horsemen’s Partnership, LLP (THP) filed an “Original Petition for Declaratory Judgment and Application for Temporary and Permanent Injunction” in the District Court of Travis County, Texas against Glen Hegar in his official capacity as Comptroller of Public Accounts for the State of Texas. At question is the constitutionality of a Legislative Budget Board (LBB) appropriations rider, Rider 7, that is currently limiting funding of the Texas Racing Commission (TRC) and poses an imminent and existential threat to the continued existence of the THP and the Texas horse racing industry.
Rider 7 purports to give the LBB unlimited discretion to withhold all funds appropriated for the Texas Racing Commission’s central administration and other support services. Without the ability to spend these funds, the TRC cannot perform any of its basic administrative or regulatory functions and, as a consequence, the Texas horse racing industry cannot operate.
Since Rider 7 became effective, the LBB has made clear that it will not permit the TRC to spend its essential funds until the agency repeals its rules allowing a form of pari-mutuel wagering called Historical Racing. On December 15, 2015, the TRC rejected a proposal to repeal the Historical Racing Rules.
Although the LBB has authorized the TRC to use funds appropriated for other purposes to keep the agency open temporarily, access to those funds will expire on February 29, 2016, and the LBB has indicated that it will not approve any further stopgap measures to keep the TRC operating beyond that date. In addition, defendant Hegar has indicated that he is unable to issue any warrants, electronic fund transfers, or debits to pay for the TRC’s central administration and other support services without the LBB’s approval. Accordingly, absent relief from the District Court of Travis County, the TRC will cease all operations on March 1, 2016, which will result in an immediate shut down of the entire Texas horse racing industry. Such a shutdown could cause irreparable harm to the industry and its participants.
In its legal action, the THP is requesting a judgment from the District Court of Travis County declaring Rider 7 unconstitutional. In addition, the THP is requesting a temporary and permanent injunction that prohibits Mr. Hegar from refusing to pay for the TRC’s central administration and other support services because of the LBB’s failure to approve the expenditure of those appropriated funds pursuant to its purported authority under Rider 7.
“We believe the actions of the Legislative Budget Board are unconstitutional, and we believe we have no choice other than legal action to protect the Texas horse racing industry and the livelihoods of thousands of Texans horsemen and other Texas business owners and employees who depend on the continued existence of our industry.”
The THP’s legal action contends that:
1. Rider 7 constitutes an improper delegation of legal power under Article III, Section 1 of the Texas Constitution.
2. Rider 7 violates the Separation of Powers Clause of the Texas Constitution, Article II, Section 1.
3. Rider 7 violates the Texas Horsemen’s Partnership’s Members’ due process rights under the Texas and United States Constitutions.
A copy of the legal action filed by Gardere Wynne Sewell, LLP on behalf of the THP is available upon request.
The Texas Horsemen’s Partnership (THP) is the officially recognized representative of licensed owners and trainers of racehorses of all racing breeds by the State of Texas. The organization is a partnership between the Texas Horsemen’s Benevolent and Protective Association (THBPA), which represents owners and trainers of Quarter Horses, Paints, and Appaloosas, and the Texas Thoroughbred HBPA, Inc. (TTHBPA), which represents owners and trainers of Thoroughbreds and Arabians. The THP is controlled by a management committee which consists of an equal number of representatives from the THBPA and TTHBPA.