Environmental and Public Protection Cabinet
Breeders' incentive program detailed

FRANKFORT, Ky. (Nov. 8, 2005) - Thoroughbred horse breeders in Kentucky would share awards based on the residency of the mare as the main economic factor under a proposal for horse breeders' incentives recommended by a subcommittee of the Kentucky Horse Racing Authority (KHRA).

Three breeders' incentive programs, expected to generate $15 million annually, were part of tax modernization legislation sponsored in the 2005 General Assembly by Sen. Damon Thayer.

Doug Hendrickson, chairman of the subcommittee, said the thoroughbred program proposal contains a Kentucky component, a national component and a bonus component that could be used for some races.

"Our subcommittee worked very diligently in crafting this recommendation, relying upon data from various sources, but especially The Jockey Club, in order to create a proposal that would have the greatest economic impact on the state," said Hendrickson. "While the recommendation was not unanimous, a majority of the subcommittee believes it accommodates the greatest number of interests, will do the most to create jobs and stimulate the horse breeding industry in Kentucky. We appreciate Senator Thayer's support of our proposal and look forward to presenting this recommendation to the full Racing Authority."

In order to qualify for the proposed rewards program, a mare must reside in Kentucky from the time of breeding until her foal is born. The qualification is meant to ensure breeders who receive checks from this program have contributed a significant economic impact and created jobs in Kentucky, Hendrickson said.

Details of the subcommittee's recommended proposal are:

• Kentucky First Component - An incentive would be granted to the breeders of the winners of all maiden, allowance and stakes races in Kentucky.  The bonus would be equal to 25 percent of the winning purse, excluding supplemental funds, and the maximum bonus to the breeder would be $10,000 per race.  There would be no age limitation for the horses.
• National Component - An incentive would be granted to breeders of the winners of maiden and allowance races held in other states for 2-, 3- and 4-year old thoroughbreds. The bonus would be equal to 10 percent of the winning purse, excluding supplemental funds, with a maximum bonus of $10,000 per race.
• Remainder Component - The subcommittee is also discussing returning some portion of any surplus money to the fund in order to provide a "cushion" for paying the above components.  Additional considerations are for an incentive to be awarded for certain stakes races in Kentucky and/or the United States.

The KHRA will also consider recommendations for breeders' incentives for standardbreds and all other breeds at its Nov. 21 meeting.

No new taxes were passed for the incentive funds, which will use the sales tax on breeding fees on horses as the funding source. Horse-related businesses in the state generate more than $102 million in tax revenues to the Commonwealth, according to a 2002 economic impact study of Kentucky's equine industry by the University of Kentucky.

California, New York, Florida and Pennsylvania are among other states that offer breeder incentive awards.