Chapter 571 of the 2020 Acts of Assembly requires the Virginia Department of Agriculture and Consumer Services (VDACS) to investigate and enter into negotiations for the involvement of the Commonwealth in the whole or partial operation or management of the Virginia Horse Center (VHC) Foundation. VDACS is required to include in such investigation and negotiations the addition of state-appointed members of the VHC Foundation Board of Directors (Board). Chapter 571 authorizes VDACS to take any steps necessary to accomplish the investigation, including negotiations with the Board. However, VDACS is prohibited from expending state funds for the purchase, transfer, or lease of real property unless such funds are specifically appropriated for that purpose or approved by the General Assembly.

Paragraph F.4 of Item 110 of the 2020 Appropriation Act (Act) requires that the Virginia Racing Commission (Commission) investigate and report on the total amount of money allocated annually pursuant to certain provisions in the Act to the Virginia Equine Alliance to support development of the equine industry in Virginia and any funding that directly or indirectly supports the operations of the VHC or the VHC Foundation. As part of this report, the Commission is required, in cooperation with VDACS, to make a recommendation as to the benefits of involvement of the Commonwealth in the whole or partial operation or management of the VHC Foundation, including the addition of state-appointed members to the VHC Foundation Board. As with the authorization for VDACS pursuant to Chapter 571, the Commission may take any steps necessary to accomplish the investigation, including negotiations with the Board, but shall not expend state funds for the purchase, transfer, or lease of real property unless specifically appropriated for that purpose or approved by the General Assembly.

Given the commonalities in these two required investigations of the VHC Foundation, VDACS and the Commission have worked together to issue a consolidated report that meets the requirements of both the legislative and budgetary mandates. In conversations conducted in order to research this report, the VHC Foundation indicated that it has a plan in place to improve the Virginia Horse Center's financial position and that the involvement of a commonwealth agency in the whole or partial operation or management of the VHC Foundation or state-appointed members of the VHC Foundation Board would not be welcomed at this time. The VHC Foundation has made clear that it wishes to remain a private organization. Based on the information provided by the VHC Foundation, VDACS and the Commission have concluded that the Commonwealth should not engage in the direct management or operation of the VHC Foundation or seek to add state-appointed members to its Board of Directors. The following report includes information to support these recommendations.