Kentucky state senator Damon Thayer.

Kentucky state senator Damon Thayer.

Associated Press

Breed Development Program Part of Tax Modernization in Kentucky?

A Kentucky legislator with close ties to the horse industry hopes tax breaks and a breed development program are included in a tax modernization proposal Gov. Ernie Fletcher plans to push during the 2005 session of the General Assembly.

Republican Sen. Damon Thayer, an executive with the National Thoroughbred Racing Association and Breeders' Cup, said he met with Fletcher and members of his administration to discuss his proposal to shift about $14 million generated for the state general fund each year through a tax on stud fees to breed development. A tax that produces $9 million from money spent on feed, fencing, and farm equipment would be eliminated.

Thayer first discussed his proposal Nov. 10 during a meeting of the Interim Joint Committee on Agriculture's Subcommittee on Horse Farming, of which he is co-chair. On Dec. 16, he said instead of trying to push a stand-alone bill through the legislature, he'd prefer it be part of the tax modernization legislation.

If that measure were to pass, a separate bill would be written to establish the breed development fund and the agency--most likely the Kentucky Horse Racing Authority, he said--to administer it. A temporary task force would be created to develop recommendations for the program.

Unlike other states, Kentucky doesn't offer breed development incentives. It does have the Kentucky Thoroughbred Development Fund, which adds about $9 million a year to purses for Kentucky-breds only.

The General Assembly convenes Jan. 4 for 30 days, with a few breaks before its March 22 conclusion. Thayer said budgetary matters and tax relief are priorities for the short session.

"We've talked about the whole array of sales taxes and pari-mutuel excise taxes that go into the general fund," Thayer said of his talks with the Fletcher administration. "It's just a matter of what's doable and what makes the most sense."

In 2004, the racing industry again failed in its bid to win legislative approval for a constitutional amendment on racetrack gaming. Gaming--at least through the constitutional amendment route--can't be addressed until 2006 unless Fletcher calls a special session. He has said, however, he is against expanded gaming.

If the issue of gaming comes up in 2006, Thayer will play a key role. On Dec. 8, Senate president David Williams said Thayer is in line to serve as chair of the Senate State and Local Government Committee.

The committee oversees things such as state and regional planning, administrative regulations, and elections. It also has jurisdiction over constitutional amendments.

As committee chairman, Thayer would decide which measures to bring up for discussion. He has said the only way he would support racetrack gaming is through a constitutional amendment--a vote of the citizens of Kentucky.