At its meeting on November 22, 1993, the Joint Legislative Committee on Administrative Rules (Committee) voted, pursuant to RSA 541-A:3-e, to enter a preliminary objection to Final Proposal 93-099 containing proposed rules of the Pari-Mutuel Commission (Commission). The Commission responded by letter dated December 16, 1993.

At its meeting on January 21, 1994, the Committee voted, pursuant to RSA 541-A:3-e, V(c), to enter a final objection to Final Proposal 93-099. The final objection has been filed with the Director of the Office of Legislative Services for publication in the New Hampshire Rulemaking Register. The effect of a final objection is stated in RSA 541-A:3-e, VI:

Due to the number of bases for objection, some of the rules to which a final objection has been filed have not been identified in this text. Such unidentified rules, and the bases for final objection, are specified in the annotations to the rules made by the Committee's staff. Copies of the rules can be obtained from the Office of Legislative Services, Division of Administrative Rules, Room 114 in the State House, 107 North Main Street, Concord, New Hampshire 03301-4951, at a charge of $0.20 per page.

The following summarizes the bases upon which the final objection has been entered:

1. Uniform System of Drafting and Numbering

Pari 300 contains rules that are, pursuant to Committee Rules 403.01(d) and 403.02(c), contrary to the public interest by not being clear and understandable and capable of uniform enforcement, respectively, and, pursuant to Committee Rule 402.02(a), contrary to legislative intent by violating RSA 541-A:3-a, VIII, as discussed below.

Pursuant to RSA 541-A:3-a, VIII, the agency must conform to the uniform system of numbering and drafting developed by the Director of Legislative Services and contained in Ls-A 400 of the Rulemaking Manual. The Committee had made a preliminary objection that the rules were contrary to legislative intent by the violation of RSA 541-A:3-a, VIII and contrary to the public interest by not being clear and understandable and capable of uniform enforcement.

The Commission amended some of the rules in response to the preliminary objection to correct violations of the uniform system. However, numerous violations of the uniform system of numbering and drafting remain, including failure to use "shall" in all instances where appropriate, failure to include the requirements of agency forms, and failure to include the criteria upon which discretionary decisions will be made. Therefore the Committee made a final objection to the rules which, as noted in the annotations, do not conform to the uniform system of numbering and drafting.

2. Authority and Legislative Intent

Pari 300 contains rules, noted in the annotations, that are, pursuant to Committee Rule 401.01(c), beyond the authority of the Commission and, pursuant to Committee Rule 402.02(a), contrary to legislative intent by violating the statutes cited in the annotations, as discussed below.

The Committee had made a preliminary objection that there are some rules, as noted in the annotations, which appeared to the Committee to be beyond the agency's authority or contrary to legislative intent by violating the statutes cited. For example, the Committee could find no statutory authority for stewards to take action under Pari 304, essentially as agents of the Commission, relative to fines, suspensions and other penalties which are levied. RSA 541-A:12, III(a) forbids the imposition of fines and penalties by rules without specific statutory authority. The rulemaking authority cited by the Commission with the final proposal, RSA 284:12, III and VI, does not mention such authority for stewards. Although RSA 284:20 states that "stewards shall exercise such powers and perform such duties at each race meet as may be prescribed by the rules and regulations of the commission", other statutes appear to limit suspensions, fines, hearings, and licensing to the Commission itself. Pursuant to RSA 284:13, the "Commission", defined in RSA 284:6-a as a group of 6 members, has the authority to conduct hearings. Pursuant to RSA 284:16, the Commission has the power to license and may "revoke any license for good cause upon reasonable notice and hearing", and pursuant to RSA 284:19 fines may be levied and licenses "may be revoked by the commission at any time for cause." Under RSA 541-A:15, II and III, an agency may revoke, suspend, or amend a license. However, an "agency" is defined in RSA 541-A:1, II as the entity with rulemaking authority, in this case the Commission itself.

Additional examples regarding lack of authority include Pari 313.28, which allows the Commission to charge for the cost of wages of Commission staff if a race is cancelled on short notice, and Pari 320.06, which allows a fee for background checks. The Commission has authority for license fees and fines under RSA 294:16, but these special charges are separate from those and are not mentioned in the statute. RSA 541-A:12, III(a) and (c) require specific authority, respectively, for fines and fees.

A final example of a Committee determination that there was a lack of authority for an agency action relates to administrative searches without warrants. Under RSA 541-A:12, III(d), specific statutory authority is required for nonconsensual inspections. Since there is no statute that specifically grants the Commission such authority, any search performed by the Commission would require the consent of the licensee. While Pari 314.03 states that acceptance of a license is "deemed" consent to search a licensee's property and seize contraband, the Committee determined that if the licensee says "no" at the time of the search, any search conducted thereafter would be nonconsensual, and therefore conducted without authority.

The Committee determined that the amendments made to the rules by the Commission did not remove these bases for objection. Therefore the Committee made a final objection, on the same bases as for the preliminary objection, to the rules as noted in the annotations.

3. Oral Rulemaking and Delegation of Rulemaking

Pari 300 contains rules noted in the annotations that are, pursuant to Committee Rule 402.02(a) and 402.02(b)(2), contrary to legislative intent by violating RSA 541-A:12, III(e) and by allowing requirements to be set orally instead of through the rulemaking process mandated by RSA 541-A:3 as discussed below.

The Committee had made a preliminary objection that there are some rules, as noted in the annotations, that violate RSA 541-A:12, III(e) by delegating the rulemaking authority of the agency, and that lead to requirements, limitations or prohibitions being set outside the process mandated by RSA 541-A:3. There are numerous instances in these rules where stewards and various licensees are given authority to act in a discretionary manner. The Committee determined that in almost all instances in these rules where such discretion was granted, no criteria, or insufficient criteria, were included on which the steward or licensee was to base his/her decision. Whenever discretionary decisions are made based on criteria which have not been stated in the rules, then, in the Committee's view, requirements are being set outside the process mandated by RSA 541-A:3. In addition, when a rulemaker has given authority to another to act in a discretionary manner, which has resulted in requirements being set outside the process mandated by RSA 541-A:3, the rulemaker has violated RSA 541-A:12, III,(e) by delegating its rulemaking authority.

For example, under Pari 304.20 the stewards have the authority to "interpret all rules and to decide all questions not specifically addressed by the rules." The Committee determined that any interpretation or question decided that would have general applicability would, in effect, be a rule made outside RSA 541-A as a result of a delegation of authority.

Under Pari 305.02, "the racing secretary shall establish the conditions and eligibility for entering the races." In this example, the racing secretary has been delegated complete authority to set requirements which, although published by the secretary, are never adopted as rules.

In the Committee's view, the amendments made to the rules by the Commission did not remove these bases for objection. Therefore the Committee made a final objection, on the same bases as for the preliminary objection, to the rules as noted in the annotations.

4. Clarity

Pari 300 contains rules noted in the annotations that are, pursuant to Committee Rules 403.01(d) and 403.02(c), contrary to the public interest by not being clear and understandable and capable of uniform enforcement, and, pursuant to Committee Rules 402.02(a) and 402.02(b)(2), contrary to legislative intent by violating RSA 541-A:2, I(b), and by allowing requirements to be set orally instead of through the rulemaking process mandated by RSA 541-A:3, as discussed below.

In the Committee's view, there are rules, as noted in the annotations, which set requirements which are vague or general, use terms that have not been defined or were simply unclear as written. For example, Pari 314.04 sets licensure criteria in general terms only, such as "sufficient integrity" and "sufficient ability." Pari 330.01 allows the Commission to exclude any person ejected from any pari-mutuel facility upon a finding that the attendance of the person "would be adverse to the public interest." Pari 313.04 requires that racing associations attempt to provide training and racing surfaces that "have received scientific approval as safe and humane", but it does not state what "scientific approval" is, how it is granted or who grants it.

The Committee had made a preliminary objection that these rules were therefore contrary to the public interest by not being clear and understandable and capable of uniform enforcement, and contrary to legislative intent by allowing requirements to be set orally instead of through the rulemaking process mandated by RSA 541-A:3, and by violating RSA 541-A:2, I,(b), requiring rules for all formal and informal procedures available.

In the Committee's view, the amendments made to the rules by the Commission did not remove these bases for objection. Therefore the Committee made a final objection, on the same bases as for the preliminary objection, to the rules as noted in the annotations.

4. Forms and Hearings

Pari 300 contains rules that are, pursuant to Committee Rules 403.01(d) and 403.02(c), contrary to the public interest by not being clear and understandable and capable of uniform enforcement, and, pursuant to Committee Rule 402.02(a) and 402.02(b)(2), contrary to legislative intent by violating RSA 541-A:2, I(b) and by allowing requirements to be set other than through the rulemaking process mandated by RSA 541-A:3, as discussed below.

There are some places in the rules where forms are mentioned but where the requirements in the forms have not been specified in the rules themselves as required by RSA 541-A:2, I(b), mandating a description of all forms. The rules also mention a hearing process, but the rules do not contain complete rules on hearings, thereby violating RSA 541-A:2, I(b), requiring that all formal and informal procedures available be specified by rule. The Committee made a preliminary objection that these rules were contrary to the public interest by not being clear and understandable and capable of uniform enforcement and contrary to legislative intent by violating RSA 541-A:2, I(b) and by allowing requirements to be set other than through the rulemaking process mandated by RSA 541-A:3.

The Commission did not amend these rules in response to the Committee's objection. Therefore the Committee made a final objection, on the same bases as for the preliminary one, to the rules as noted in the annotations.