Jennifer Wolsing

This administrative regulation prescribes the conditions under which standardbred racing shall be conducted in Kentucky. Specifically, KRS 230.770(6) authorizes the commission to promulgate regulations establishing the eligibility requirements for horses participating in races for which a portion of the purse is provided by the Kentucky Standardbred Development Fund and Kentucky Standardbred Breeders' Incentive Fund ("KSDF/KSBIF"). This particular regulation establishes the eligibility requirements to receive funds from KSDF/KSBIF.

This regulation is necessary to exercise the statutory authority of the KHRC set forth in KRS 230.215(2) to "promulgate administrative regulations prescribing conditions under which all legitimate standardbred horse racing and wagering thereon is conducted in the Commonwealth of Kentucky" and the statutory authority set forth in KRS 230.240(1). Specifically, this regulation is necessary to establish the eligibility requirements for those desiring to receive distributions from the KSDF/KSBIF.

This regulation conforms to the statutory authority granted to the Kentucky Horse Racing Commission by KRS 230.215(2), 230.260(8), 230.770(1), (6), (7), and KRS 230.802(2)(b).

This administrative regulation will assist in the effective administration of the statutes by outlining the qualifications a horse owner and breeder need to follow to be eligible to receive KSDF/KSBIF monies.

The four main proposed changes to this regulation are as follows: 1) Create an opportunity to participate in cases where the Mare Certificate of Eligibility Nomination was missed; 2) Adjust the fees for a horse to late nominate within its two-year-old year if the mare was not nominated during the calendar year of the breeding season; 3) Allow for a three-year-old to participate even if no sustaining payments were made as a two-year-old, but keep the initial March 15 sustaining payment mandatory to encourage two-year-old participation; and 4) Change the declaration/starting fees to 0.5% of the total purses distributed or to be distributed for each race in which the horse is declared.

This amendment is necessary to create opportunities for horse owners to participate in the Sire Stakes, even if the mare was not nominated or the foal was nominated late.

KRS 230.770 (2) requires the commission "to use the development fund to promote races, and to provide purses for races, for Kentucky-bred Standardbred horses." KRS 230.802 (2)(a) requires the commission to "use moneys deposited in the Kentucky Standardbred breeders incentive fund to provide rewards for breeders or owners of Kentucky-bred standardbred horses." This amendment fulfills that statutory mandate by implementing the changes outlined above to enhance the fund.

The amendment will assist in the effective administration of the statutes by providing incentives for stallion owners to stand their horses in Kentucky and breeders to keep their mares in Kentucky.

This administrative regulation will affect standardbred breeders; owners; boarding farm owners and employees; Kentucky veterinarians and equine healthcare facilities; horse transportation companies; farriers; farmers and suppliers of hay, feed and grain; equine supply companies; daily maintenance care and tack; Kentucky Standardbred sale companies; retail stores and maintenance services; and state and local payroll tax.

Breeders will have an additional opportunity to earn breeder awards, owners will have an additional incentive to buy Kentucky-bred horses, and stallion owners will be provided incentives to relocate their stud horses to Kentucky. All other entities identified in (3) will not acquire any additional responsibilities, but will reap the benefits of a stronger breeding industry in Kentucky.

None of the entities identified in question (3) will incur any costs in complying with the amendment if they nominate the mare or foal timely. Rather, this amendment specifically offers more opportunities to receive distributions from the fund by allowing late nominations.

Compliance will allow owners to participate in the Kentucky Sire Stakes program and will reap the benefits of a stronger breeding industry in Kentucky.

There is no initial cost to implement this administrative regulation.

There is no continuing cost of implementing this administrative regulation.

The nomination fees are used for the implementation and enforcement of this regulation.

Yes, there are fee changes in the proposed changes to this regulation. First, timely mare nomination used to be free. Mares who are timely registered by December 31 in the foal’s year of conception will now pay $20 per nomination. However, this fee is being made up b/c the yearling fee for 95% of our nominations, coming from the mare residing in Kentucky during the breeding season was $80, whereas now it is $60. Second, it used to be impossible to late register a mare. Now, mares who are late registered between January 1 of their foaling year and May 15 of the foal’s yearling year will pay $750 per nomination. Mares who are late registered between May 16 of the foal’s yearling year and December 31 of the foal’s yearling year will pay $1,500 per nomination. Yearling registration used to be $40 if the foal was registered through the stallion and $80 if the foal was registered through the mare. Now, those fees are averaged, so that foals who are timely nominated by May 15 of their yearling year will pay $60 per nomination during that yearling year, regardless of whether they are registered through the stallion or the mare. Foals who are timely nominated in their yearling year used to pay three $300 sustaining payments to maintain eligibility during their two-year-old year. This will not change; timely nominated foals will still pay three $300 sustaining payments during their two-year-old year. However, foals who were late nominated during their two-year-old year used to pay a single penalty of either $500 or $600, depending on whether they were nominated through their stallion or mare, respectively. Now, foals that are not timely nominated as a yearling will pay one $500 penalty, regardless of whether they were nominated through their stallion or mare. Foals who are timely nominated by May 15 of their yearling year or are untimely nominated during their two-year-old year used to pay three $300 sustaining payments to maintain eligibility during their three-year-old year. This will not change; foals nominated during their yearling or two-year-old years will still pay three $300 sustaining payments to maintain eligibility during their three-year-old year. There used to be no option to nominate a foal in its three-year-old year. Now, foals who are nominated for the first time in their three-year-old year will pay a $1,200 additional penalty and will pay three $600 sustaining payments, in order to be nominated during their three-year-old year.

Yes, there are fee changes in the proposed changes to this regulation. First, timely mare nomination used to be free. Mares who are timely registered by December 31 in the foal’s year of conception will now pay $20 per nomination. However, this fee is being made up b/c the yearling fee for 95% of our nominations, coming from the mare residing in Kentucky during the breeding season was $80, whereas now it is $60. Second, it used to be impossible to late register a mare. Now, mares who are late registered between January 1 of their foaling year and May 15 of the foal’s yearling year will pay $750 per nomination. Mares who are late registered between May 16 of the foal’s yearling year and December 31 of the foal’s yearling year will pay $1,500 per nomination. Yearling registration used to be $40 if the foal was registered through the stallion and $80 if the foal was registered through the mare. Now, those fees are averaged, so that foals who are timely nominated by May 15 of their yearling year will pay $60 per nomination during that yearling year, regardless of whether they are registered through the stallion or the mare. Foals who are timely nominated in their yearling year used to pay three $300 sustaining payments to maintain eligibility during their two-year-old year. This will not change; timely nominated foals will still pay three $300 sustaining payments during their two-year-old year. However, foals who were late nominated during their two-year-old year used to pay a single penalty of either $500 or $600, depending on whether they were nominated through their stallion or mare, respectively. Now, foals that are not timely nominated as a yearling will pay one $500 penalty, regardless of whether they were nominated through their stallion or mare. * Foals who are timely nominated by May 15 of their yearling year or are untimely nominated during their two-year-old year used to pay three $300 sustaining payments to maintain eligibility during their three-year-old year. This will not change; foals nominated during their yearling or two-year-old years will still pay three $300 sustaining payments to maintain eligibility during their three-year-old year. There used to be no option to nominate a foal in its three-year-old year. Now, foals who are nominated for the first time in their three-year-old year will pay a $1,200 additional penalty and will pay three $600 sustaining payments, in order to be nominated during their three-year-old year.

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 230.215(2), 230.260(8), 230.770(1), (6), (7), 230.802(2)(b).

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 by all participants noted in the Regulatory Impact Analysis & Tiering Statement.

Continued growth and participation in the program will increase payroll taxes by all participants 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. Although the regulation will likely save many of our licensees $20.00 on yearling nominations, that cost is recouped by an additional $20.00 fee for mare or stallion registrations during the breeding season.

This regulation is not anticipated to generate cost savings in subsequent years. Although the regulation will likely save many of our licensees $20.00 on yearling nominations, that cost is recouped by an additional $20.00 fee for mare or stallion registrations during the breeding season.

This regulation is not anticipated to generate additional costs in the first year. While some entities may pay late fees, that will be a voluntary fee paid by those who nominate late. The KHRC normally receives 5 to 10 late nominations per year, and does not anticipate a large number of additional late nominations.

This regulation is not anticipated to generate additional costs in subsequent years. While some entities may pay late fees, that will be a voluntary fee paid by those who nominate late. The KHRC normally receives 5 to 10 late nominations per year, and does not anticipate a large number of additional late nominations.

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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 answer to the question above.