KEEP Endorses Initial In-State Breed Incentive Program

The board of directors of the Kentucky Equine Education Project has opted to endorse an in-state Thoroughbred breed development program that could eventually offer awards to horses that race out of state or in other countries.

KEEP chairman Brereton Jones said the board voted unanimously during a July 6 meeting after receiving a recommendation from its legislative subcommittee.

"KEEP supports a Kentucky-based breeders' awards program with a view toward adding national and international components as money becomes available," Jones said.

KEEP intends to take suggestions and have more dialogue with other parties, including the Kentucky Thoroughbred Association and Kentucky Thoroughbred Farm Managers' Club, Jones said. The KTA and farm managers' club support a program that pays awards to Kentucky-breds that win out of state as well.

Many owners and breeders from out of state and other countries do business in Kentucky via horse sales and breeding farms, and many Kentucky-breds end up racing at tracks in other states and countries.

About $12 million is available for the new Kentucky Thoroughbred Breeders' Incentive Fund beginning in 2006. The money will come from the 6% sales tax on stallion fees under legislation passed by the General Assembly this spring. Previously, that money went to the state's general fund.

According to figures being circulated in the industry, a national and international program would award Kentucky-breds about $2,100 for their first win, and no money thereafter. If the awards were paid only to horses that win in state, Kentucky-breds would earn a 25% bonus each time they won, according to estimates.

Jones indicated KEEP took its position in part because of reaction from legislators who would like to see the money and its potential benefits stay in Kentucky to help the local economy.

"It has to be a program that gives enough incentive to attract more horses to stay in the state and to attract more jobs to help the Kentucky economy," Jones said.

The legislative aspects are of particular concern because the horse industry, presumably led by KEEP, is expected to make a strong pitch for alternative gaming during the 2006 session. The KEEP board could vote on a plan of action for gaming before the fall.

Republican Sen. Damon Thayer, who sponsored the breed development legislation in Kentucky, noted there are "plenty of people who race horses in Kentucky who don't live here." He called Kentucky "a global marketplace for Thoroughbreds" and said he believes "that needs to be recognized in the ultimate program approved by the Kentucky Horse Racing Authority."

Thayer noted Kentucky offers tax incentives to Toyota, a Japanese company, to manufacture vehicles in the state, but doesn't only provide the incentives on cars sold and driven in Kentucky. He said the same should apply to the Thoroughbred industry.

Should KEEP, the KTA, and farm managers' club not agree on a single course of action for the breed development program, Jones said each one probably would present its recommendations to the KHRA, which is charged with promulgating the rules for the program. KHRA chairman Bill Street said he'd like to form a subcommittee to study the matter.

"It's possible that we might find a way to unite (before the KHRA takes action)," Jones said.

Thayer said he supports a compromise plan that recognizes the state's international status but also provides incentives for Kentucky-breds that race in the state. "I urge all parties to consider such a plan," he said.