Jennifer Wolsing, General Counsel

This administrative regulation establishes standards for eligibility and the administration of payments from the Kentucky Thoroughbred Development Fund ("KTDF").

This regulation is necessary to exercise the statutory authority set forth in KRS 230.400(7). Specifically, this regulation is necessary to establish the eligibility requirements for those desiring to receive distributions from the KTDF.

This regulation conforms to the statutory authority granted to the Kentucky Horse Racing Commission by KRS 230.400(7).

This administrative regulation will assist in the effective administration of the mandates in KRS 230.400.

The main proposed changes to this regulation are as follows: Removes obsolete definitions and adds new definitions, including for "licensed association" and "KTDF Advisory Committee." Removes obsolete or duplicative language. This ensures that the regulation is consistent with its enabling statute, KRS 230.400. Amends the regulation such that surplus money from live racing and from historical horse races can be treated the same way by the licensed associations. Added language notes money shall be allocated to the credit of each licensed association in the amount the licensed association contributed to the KTDF. Adds language that a licensed association may pay reasonable advertising charges from its available KTDF balance provided the advertising charges are consistent with the intent of the KTDF and approval of any advertising payment shall be subject to the recommendation of the KTDF Advisory Committee and the approval of the commission.

This amendment is necessary to ensure statutory compliance, remove unnecessary or obsolete language, add language to explain KTDF money allocation, and add clarifying language regarding the use of KTDF money to pay advertising charges.

KRS 230.400 requires the Kentucky Horse Racing Commission promulgate administrative regulations as may be necessary to carry out the provisions and purposes of the KTDF. This amendment and regulation fulfill that statutory mandate.

The amendment will assist the effective administration of the KTDF as statutorily required.

This regulation affects Kentucky’s licensed racing associations that offer thoroughbred racing and purse supplements, owners of Kentucky-bred thoroughbreds, farm owners and employees, Kentucky veterinarians and equine health care facilities, horse transportation companies, farriers, farmers and suppliers of hay, feed and grain, equine supply companies providing medical sales, daily maintenance care and tack, Kentucky thoroughbred sale companies, equine tourism generating state/local room tax for lodging, gasoline tax on travel and transportation of horses, farm equipment retail stores, and state and local payroll tax generated by the above businesses. (4) Provide an analysis of how the entities identified in the previous question will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:

The entities identified in question (3) will not acquire additional responsibilities.

In complying with this administrative regulation or amendment, how much will it cost each of the entities: None of the entities identified in (3) will incur any costs in complying with the amendment.

As a result of compliance, the entities identified in (3) will receive direct and indirect benefits of a stronger racing and breeding industry in Kentucky.

There is no initial administrative cost to implement this administrative regulation.

There is no continuing cost to implement this administrative regulation.

There is no increased cost. The KTDF is funded by the taxes established in KRS 138.510.

No increase in fees or funding will be necessary to implement this administrative regulation.

This administrative regulation does not establish any new fees or increase any current fees to participate.

Tiering was not applied because this administrative regulation will apply to all similarly situated entities in an equal manner.

The Kentucky Horse Racing Commission will be impacted by this administrative regulation.

The statutory authority for this administrative regulation is found in KRS 230.400(7).

If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation.

Although specific dollar estimates cannot be determined, the greatest impact of this regulation to the state and local government will be the increase in payroll taxes imposed upon all participants as noted in the Regulatory Impact Analysis & Tiering Statement.

Although specific dollar estimates cannot be determined, continued growth and participation in the program over subsequent years will increase payroll taxes imposed upon all participants as noted in the Regulatory Impact Analysis & Tiering Statement.

Because the infrastructure for administering the program is already in place, it is anticipated that there will be no additional net cost to administer this program for the first year.

Because the infrastructure for administering the program is already in place, it is anticipated that there will be no additional net cost to administer this program in subsequent years.

Neutral

Neutral

None

This regulation is not anticipated to generate cost savings in the first year.

This regulation is not anticipated to generate cost savings in subsequent years.

This regulation is not anticipated to generate new costs in the first year.

This regulation is not anticipated to generate additional costs in subsequent years.

$0.00

$0.00

N/A

"Major economic impact" means an overall negative or adverse economic impact from an administrative regulation of five hundred thousand dollars ($500,000) or more on state or local government or regulated entities, in aggregate, as determined by the promulgating administrative bodies. [KRS 13A.010(13)]. The KHRC does not anticipate a major economic impact, as set forth in the answers to the questions above.