11/21/2005 1:00AM

Breeder incentive plan approved in Kentucky

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LEXINGTON, Ky. - The Kentucky Horse Racing Authority unanimously approved a detailed plan to award an estimated $12 million in subsidies to Kentucky Thoroughbred breeders beginning in 2006 at a meeting on Monday in Lexington.

The plan, which was hammered out by a subcommittee of the authority after consulting with breeders' groups in the state, bases the size of awards on whether the horse wins a race inside or outside of the state. Other components reward breeders of Grade 1 stakes winners and breeders of horses who amass the most earnings in claiming races at the state's tracks.

Representatives of breeders' groups said the plan approved on Monday was a compromise that sought to concentrate the subsidies among small and mid-sized breeders in Kentucky by awarding the lion's share of the funds to winners of Kentucky races. Some large farms had objected, contending that the awards program should treat a winner of a Kentucky race and a winner of a race outside the state equally.

Dell Hancock, a member of the authority and part of the family that owns Claiborne Farm, said before voting to approve the plan that she would like to see the national component of the plan expanded if the fund receives any additional money in the future.

Under the plan, a breeder of a Kentucky-bred horse that wins a maiden special weight, allowance, or stakes race in Kentucky will receive an award equal to 25 percent of the winner's share of the purse, capped at $10,000. A breeder of a Kentucky-bred horse that wins a maiden special weight or allowance race outside of the state will receive an award equal to 10 percent of the winner's share, also capped at $10,000. The out-of-state awards will also be limited to horses that are 2, 3, or 4 years old.

In addition, the breeder of the winner of a Kentucky Oaks or a Kentucky Derby will receive a $100,000 award. Any other Grade 1 win in Kentucky will entitle the breeder to an award of $25,000. Any breeder of a Kentucky-bred horse that wins a Grade 1 stakes outside of the state will receive a $2,500 award.

The fund also plans to award money to the breeders of the three horses who earn the most money in claiming races run during the year at four different tracks: Churchill Downs, Ellis Park, Keeneland, and Turfway.

Doug Hendrickson, a member of the authority who chaired the subcommittee that developed the plan, said that the purpose of the plan was to create incentives for breeders to keep mares in Kentucky. The fund has also set aside money to study the economic impact of the subsidies on an annual basis.

The plan was made possible by legislation passed earlier this year that diverted the sales tax paid on stud fees to the subsidy program. State officials have estimated that stud fee taxes will generate approximately $15 million in annual revenue to the program. Eighty percent of the revenue, or $12 million, will go to Thoroughbred breeders, while 13 percent will go to Standardbred breeders. The remaining 7 percent will be distributed among 13 other "non-racing" breeds in the state.