810 Ky. Admin. Regs. 7:020

Current through Register Vol. 51, No. 5, November 1, 2024

Section 810 KAR 7:020 - Kentucky thoroughbred breeders' incentive fund

RELATES TO: KRS 230.215, 230.330, 230.800

NECESSITY, FUNCTION, AND CONFORMITY: KRS 230.215(1) declares that it is the intent of the Commonwealth to foster and to encourage the horse breeding industry within the Commonwealth and to encourage the improvement of the breeds of horses. KRS 230.215(2) vests in the corporation forceful control of horse racing in the Commonwealth with plenary power to promulgate administrative regulations prescribing conditions under which all legitimate horse racing and wagering thereon is conducted in the Commonwealth so as to encourage the improvement of the breeds of horses in the Commonwealth. KRS 230.800 establishes the Kentucky Thoroughbred Breeders' Incentive Fund (KBIF). KRS 230.800(2)(b) requires the corporation to promulgate administrative regulations establishing the conditions and criteria for the distribution of moneys from the fund. This administrative regulation establishes eligibility standards, administrative practices to enforce the standards, and the administration of payments from the fund.

Section 1. Definitions.

(1) "Allowance race" means an overnight race for which eligibility and weight to be carried is determined according to specified conditions which include age, gender, earnings, and number of wins, excluding starter allowance races.

(2) "Claiming earnings" means the gross cash portion, as this portion is determined by The Jockey Club, of the prize awarded to a qualified Kentucky claiming horse that is paid from the association or the license holder permitted to conduct racing in the jurisdiction.

(3) "Claiming race" means a race in which every horse running in the race may be transferred in conformity with 810 KAR 4:050.

(4) "Grade I stakes race" means a nonrestricted race held in the United States that has been assigned Grade I stakes status for the year contested by the American Graded Stakes Committee of the Thoroughbred Owners and Breeders Association.

(5) "Grade II stakes race" means a nonrestricted race held in the United States that has been assigned Grade II stakes status for the year contested by the American Graded Stakes Committee of the Thoroughbred Owners and Breeders Association.

(6) "Grade III stakes race" means a nonrestricted race held in the United States that has been assigned Grade III stakes status for the year contested by the American Graded Stakes Committee of the Thoroughbred Owners and Breeders Association.

(7) "Group I race" means:

(a) A nonrestricted race held in England, France, or Ireland that has been assigned Group I race status for the year contested by the European Pattern Committee; or

(b) A nonrestricted race held in Canada that has been assigned Canadian Grade I stakes status for the year contested by the Canadian Graded Stakes Committee.

(8) "Group II race" means:

(a) A nonrestricted race held in England, France, or Ireland that has been assigned Group II race status for the year contested by the European Pattern Committee; or

(b) A nonrestricted race held in Canada that has been assigned Canadian Grade II stakes status for the year contested by the Canadian Graded Stakes Committee.

(9) "Group III race" means:

(a) A nonrestricted race held in England, France, or Ireland that has been assigned Group III race status for the year contested by the European Pattern Committee; or

(b) A nonrestricted race held in Canada that has been assigned Canadian Grade III stakes status for the year contested by the Canadian Graded Stakes Committee.

(10) "Intended breeder of record" means the owner or lessee of a thoroughbred mare who:

(a) Desires to:

1. Use the mare for breeding purposes; and

2. Qualify the foal for the Kentucky Thoroughbred Breeders' Incentive Fund; and

(b) Is listed as the intended breeder of record on the forms necessary to register under the KBIF.

(11) "KBIF" means the Kentucky Thoroughbred Breeders' Incentive Fund.

(12) "KBIF registered horse" means a horse registered with the Kentucky Thoroughbred Breeders' Incentive Fund.

(13) "Kentucky sire" means a sire registered as a Kentucky Thoroughbred Development Fund sire.

(14) "Maiden special weight race" means a race in which:

(a) None of the runners have been declared a winner previously; and

(b) None of the runners are eligible to be claimed.

(15) "Overnight race" means a race for which entries close at a time set by the racing secretary.

(16) "Public auction" means a thoroughbred auction conducted by a recognized member of the Society of International Thoroughbred Auctioneers, or other similar public auction approved by the KBIF advisory committee.

(17) "Qualified breeder" means the breeder of record listed in The Jockey Club records.

(18) "Qualified Kentucky claiming horse" means a foal who:

(a)

1. Is born out of a qualified mare; and

2. Is from a Kentucky sire; and

(b) Receives earnings from a claiming race in Kentucky.

(19) "Qualified mare" means a thoroughbred dam who resides in Kentucky from the time of the first cover in Kentucky by a Kentucky sire until foaling, unless one (1) of the exceptions in Section 5(4) of this administrative regulation is met.

(20) "Qualified winner" means a thoroughbred horse born out of a qualified mare and from a Kentucky sire that is declared the official winner by the stewards and is not eligible to be claimed in that race.

(21) "Qualified winner's earnings" means the gross cash portion of the prize, as this portion is determined by The Jockey Club, awarded to the qualified winner of a race that is paid for from the association or the license holder permitted to conduct racing in the jurisdiction.

(22) "Starter allowance" means a race written to allow claiming horses who have improved from their earlier form to run in a nonclaiming event.

Section 2. Timing of Awards; Eligibility.

(1) Disbursements from the KBIF shall be made after December 31, but not later than March 31, for awards earned for the preceding calendar year.

(2) For a horse foaled prior to 2007, the breeder shall be eligible to receive funds from the Kentucky Thoroughbred Breeders' Incentive Fund, if the horse is eligible to be registered to receive funds under the Kentucky Thoroughbred Development Fund.

(3) For a horse foaled during or after 2007, the requirements set forth in this administrative regulation shall be met.

(4) The races eligible for awards from the KBIF as provided in Sections 3 and 6 of this administration regulation shall be those run on and after January 1, 2006.

Section 3. Awards.

(1) An incentive of $50,000 shall be awarded to the qualified breeder of the qualified winner of:

(a) The Kentucky Derby; and

(b) The Kentucky Oaks.

(2)

(a) An incentive shall be awarded to the twenty (20) horses with the most claiming wins in Kentucky each year.

(b) An incentive of $200,000 shall be distributed to the twenty (20) qualified Kentucky claiming horses with the most claiming wins in Kentucky, as follows:

1. $20,000 to the horse with the most wins;

2. $17,500 to the horse with the second most wins;

3. $15,000 to the horse with the third most wins;

4. $12,500 to the horse with the fourth most wins;

5. $12,000 to the horse with the fifth most wins;

6. $11,500 to the horse with the sixth most wins;

7. $11,000 to the horse with the seventh most wins;

8. $10,500 to the horse with the eighth most wins;

9. $10,000 to the horse with the ninth most wins;

10. $9,500 to the horse with the tenth most wins;

11. $9,000 to the horse with the eleventh most wins;

12. $8,500 to the horse with the twelfth most wins;

13. $8,000 to the horse with the thirteenth most wins;

14. $7,500 to the horse with the fourteenth most wins;

15. $7,000 to the horse with the fifteenth most wins;

16. $6,500 to the horse with the sixteenth most wins; and

17. $6,000 to each horse with the seventeenth, eighteenth, nineteenth, and twentieth most wins.

(c) Claiming earnings earned at a Kentucky race track from the same calendar year shall be used to settle any ties.

(d) If two (2) or more horses have the same number of wins and the same total earnings, all incentive totals to which those horses would have been entitled shall be divided equally between or among them.

(3)

(a) For those KBIF registered horses foaled in 2007 or after, an incentive shall be awarded to the qualified breeder of the qualified winner of each maiden special weight and allowance race held in the United States, but outside Kentucky, or at Woodbine Racetrack in Ontario, Canada.

(b) The incentive shall be that amount which is equal to ten (10) percent of the qualified winner's earnings except it shall not exceed $3,000.

(4)

(a) An incentive shall be awarded to the qualified breeder of the qualified winner of each maiden special weight and allowance race held in Kentucky.

(b) The incentive shall be that amount that is equal to ten (10) percent of the qualified winner's earnings except it shall not exceed $3,000.

(5)

(a) For those KBIF registered horses foaled in 2007 or after, an incentive shall be awarded to the qualified breeder of the qualified winner of each non-graded stakes race held in the United States, but outside Kentucky, or at Woodbine Racetrack in Ontario, Canada.

(b) The incentive shall be that amount that is equal to ten (10) percent of the qualified winner's earnings except it shall not exceed $4,000.

(6)

(a) An incentive shall be awarded to the qualified breeder of the qualified winner of each non-graded stakes race held in Kentucky.

(b) The incentive shall be that amount that is equal to ten (10) percent of the qualified winner's earnings except it shall not exceed $4,000.

(7)

(a) An incentive shall be awarded to the qualified breeder of the qualified winner of each:

1. Grade I stakes race held in the United States;

2. Group 1 race held in Canada, England, France, and Ireland; and

3. Group I race held on Dubai World Cup day, Japan Cup day, and Hong Kong International day.

(b) The incentive shall be $7,500.

(8)

(a) An incentive shall be awarded to the qualified breeder of the qualified winner of each:

1. Grade II and Grade III stakes race held in the United States; and

2. Group 2 and Group 3 race held in Canada, England, France, and Ireland.

(b) The incentive shall be $5,000.

(9) An incentive shall not be awarded to the winner of any Breeders' Cup World Championship race.

Section 4. Registration of Foals.

(1)

(a) For a horse foaled on or before December 31, 2006 and eligible to be registered under Section 2(2) of this administrative regulation, the intended breeder of record shall file a "Kentucky Thoroughbred Breeders' Incentive Fund Application for Award Form", KHRGC 7-020-7, with the corporation.

(b) The Kentucky Thoroughbred Breeders' Incentive Fund Application for Award form shall be filed no later than December 31 of the year following the year in which the horse has raced in a race that would qualify the horse for an incentive from the KBIF.

(c) A filing fee of thirty (30) dollars shall be deducted from the award amount.

(d) The filing fee shall be assessed one (1) time per horse.

(2) For a horse foaled on or after January 1, 2007, the intended breeder of record shall register the unborn foal with the corporation on or prior to August 15 of the cover year by filing the "Kentucky Thoroughbred Breeders' Incentive Fund Application for Mare Registration Form", KHRGC 7-020-1, and paying a filing fee of sixty (60) dollars, except as provided in subsection (5) of this section.

(3)

(a) The corporation shall be recognized and designated as the sole official registrar of the KBIF for the purposes of registering Kentucky thoroughbred foals in accordance with this administrative regulation.

(b) The records of The Jockey Club shall be used as the official records of the corporation for purposes of this administrative regulation to determine the following information:

1. The identity of the qualified breeder;

2. The claiming wins and earnings for each race;

3. The qualified winners' earnings for each race;

4. The name of the qualified winner for each race;

5. The name of each horse determined to be a qualified Kentucky claiming horse;

6. The registration number or special identification number of the KBIF registered horse;

7. The name of the KBIF registered horse; and

8. Other information for purposes of administering the KBIF.

(4) If the information on a form required under this section is found to be incorrect or becomes incorrect or changes, the person considered to be the intended breeder of record shall file an amended form with the corporation to correct the information.

(5)

(a) The Corporation may accept a late filing if the intended breeder of record can prove that the foal otherwise met the eligibility requirements to be a KBIF registered horse. The late filing shall be made on the "Kentucky Thoroughbred Breeders' Incentive Fund Application for Late Mare Registration Form", KHRGC 7-020-6.

(b) The amount of the late filing fee shall be:

1. $150 for a filing made after August 15 of the cover year and on or prior to December 31 of the cover year;

2. $750 for a filing made between January 1 and December 31 of the weanling year; and

3. $1,500 for a filing made between January 1 and December 31 of the yearling year.

(6)

(a) The corporation may accept a special filing if a pregnant mare is purchased at public auction outside Kentucky and:

1. The mare resided in Kentucky from the time of the first cover in Kentucky by a Kentucky sire to the time of foaling;

2. The mare returned to Kentucky within fourteen (14) days of the conclusion of the auction; and

3. The foal meets all of the other eligibility requirements to be a KBIF registered horse.

(b) The special filing shall be made on the "Kentucky Thoroughbred Breeders' Incentive Fund Application for Special Filing of Mare Registration Form", KHRGC 7-020-8.

(c) The amount of the special filing fee shall be:

1. $300 for a filing made between January 1 and December 31 of the cover year;

2. $1,500 for a filing made between January 1 and December 31 of the weanling year; and

3. $3,000 for a filing made between January 1 and December 31 of the yearling year.

(7) If ownership of a mare is transferred, a "Kentucky Thoroughbred Breeders' Incentive Fund Mare Transfer Form", KHRGC 7-020-2, shall be filed with the corporation.

(8) If any registration or nomination deadline imposed by this administrative regulation falls on a weekend or holiday, the deadline shall be moved to the next business day following the original deadline.

Section 5. Qualification of Foal and Qualified Mare.

(1) The corporation may inspect where the mare proposed to be a qualified mare is boarded or request and obtain records relating to the location of the mare proposed to be a qualified mare to determine that the residency requirement is met.

(2) The person claiming to be the qualified breeder shall bear the burden of proof to show that a mare is a qualified mare.

(3) A failure to comply with a term, condition, or requirement of this administrative regulation shall not result in the loss of the registration of the foal, if the person claiming the foal should be registered proves to the satisfaction of the corporation:

(a) The failure to comply was insignificant with respect to the registration requirements as a whole; and

(b) A good faith and reasonable attempt was made to comply with all applicable terms, conditions, and requirements of this administrative regulation.

(4) For the thoroughbred dam to be a qualified mare, the thoroughbred dam shall have resided in Kentucky from the time of the first cover in Kentucky by a Kentucky sire until foaling, unless one (1) of the following exceptions is met:

(a) Medical procedure.

1. A medical procedure is required to be performed to protect the health of the mare or the unborn foal that involves an extraordinary medical situation and the breeder desires to have an expert located outside of Kentucky conduct the procedure;

2. The owner or the lessee of the mare files a "Kentucky Thoroughbred Breeders' Incentive Fund Application to Move Mare Outside of Kentucky Form", KHRGC 7-020-4, no later than fourteen (14) days after the mare leaves Kentucky and provides information relating to the procedure;

3. The executive director of the corporation approves the departure of the mare from Kentucky based on the criteria in this paragraph;

4. The mare remains under the care of a veterinarian during the entire period of time she is not residing in Kentucky other than the time during which she is traveling to and from Kentucky; and

5. The mare is in Kentucky for foaling as established by documentation provided to the corporation;

(b) Training.

1. The mare has not yet delivered her first foal and is in active training outside Kentucky;

2. The owner or the lessee of the mare files a "Kentucky Thoroughbred Breeders' Incentive Fund Application to Move Mare Outside of Kentucky Form", KHRGC 7-020-4, at least fourteen (14) days before the mare leaves Kentucky and provides information relating to the training outside of Kentucky;

3. The executive director of the corporation approves the departure of the mare from Kentucky based on the criteria in this paragraph; and

4. The mare is in Kentucky for foaling as established by documentation provided to the corporation; or

(c) Public auction.

1. The owner of the mare desires to enter her for sale at a public auction held outside of Kentucky;

2. The owner of the mare files with the corporation a "Kentucky Thoroughbred Breeders' Incentive Fund Application to Move Mare Outside of Kentucky Form", KHRGC 7-020-4, at least fourteen (14) days before the mare leaves Kentucky and provides information relating to the auction;

3. The executive director of the corporation approves the departure of the mare from Kentucky based on the criteria in this paragraph;

4. The mare returns to Kentucky within fourteen (14) days after the conclusion of the auction; and

5. The mare is in Kentucky for foaling as established by documentation provided to the corporation.

(5) The executive director shall notify the corporation if an exception is made to the residency requirement pursuant to subsection (4) of this section.

(6) A qualified breeder of a qualified mare shall be responsible for:

(a) The registration and records of the KBIF registered horse; and

(b) Complying with the requirements of the Kentucky Thoroughbred Breeders' Incentive Fund.

(7) The owner or lessee of the mare may withdraw the mare's foal from the KBIF by filing a "Kentucky Thoroughbred Breeders' Incentive Fund Notice of Withdrawal of Foal Form", KHRGC 7-020-5.

Section 6. Shortfall and Bonus Calculation.

(1) If, at the close of any calendar year, inadequate funding is available in the KBIF to fund the awards provided for in Section 3 of this administrative regulation, the funding shall be decreased proportionally among all awards, excluding the Kentucky claiming award, the Kentucky Oaks award, and the Kentucky Derby award, until funding is adequate to fund all awards.

(2)

(a) If, at the close of a calendar year, the amount available for awards is in excess of the amount necessary to fund the awards provided in Section 3 of this administrative regulation, after payment of operating expenses, a reserve fund shall be established in the KBIF in an amount that is no more than five (5) percent of the amount of funding available from tax receipts for that calendar year.

(b) Moneys in the reserve account may be used as needed to provide funding of awards in a subsequent calendar year if the amount available at the close of the last calendar year is insufficient to fund the awards provided in Section 3 of this administrative regulation.

(c) Additional money shall not be added to the reserve fund if it contains at least $5,000,000 when the excess funding is available.

(3) If, at the close of a calendar year, the amount available for awards is in excess of the amount necessary to fund the awards provided in Section 3 of this administrative regulation and an amount has been designated for the reserve fund provided for in subsection (4)(a) of this section, then the awards shall be increased proportionally among all awards except the Kentucky claiming award, the Kentucky Oaks award, and the Kentucky Derby award.

Section 7. Application Requirements.

(1) The amount due for awards shall be calculated after the end of each calendar year. The recipient of an award shall be notified of the amount of the award to which the recipient may be entitled according to the last known address on file with the KBIF.

(2)

(a) After receipt of notification of an award, each potential recipient shall return an application for the award on the "Kentucky Thoroughbred Breeders' Incentive Fund Application for Award Form", KHRGC 7-020-7, certifying that the applicant is entitled to the award and certifies the applicant's United States taxpayer ID number or Social Security number.

(b) A breeder may appoint an authorized agent to complete the application by filing with the corporation a "Kentucky Thoroughbred Breeders' Incentive Fund Authorized Agent Form", KHRGC 7-020-3.

(3)

(a) Awards due recipients who cannot be located by December 31 of the year after the year in which the qualified winner or qualified Kentucky claiming horse became eligible to receive an incentive under Section 3 of this administrative regulation shall lapse to the KBIF for distribution or building the reserve in the following year.

(b) Failure to submit the application by December 31 of the year after the year in which the qualified winner or qualified Kentucky claiming horse became eligible to receive an incentive under Section 3 of this administrative regulation shall result in forfeiture of the award and the award money shall lapse to the KBIF for distribution or building the reserve in the following year.

Section 8. Advisory Committee.

(1) The corporation may establish an advisory committee to assist in administering the KBIF.

(2) If established, the advisory committee shall consist of five (5) members appointed by the chairman of the corporation by July 1 of each year. Each member of the advisory committee shall:

(a) Serve from July 1 through June 30 of the following year; and

(b) Be a resident of Kentucky.

(3) The advisory committee shall select a chairman from its membership annually.

Section 9. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Kentucky Thoroughbred Breeders' Incentive Fund Application for Mare Registration Form", KHRGC 7-020-1, 11/2018;

(b) "Kentucky Thoroughbred Breeders' Incentive Fund Mare Transfer Form", KHRGC 7-020-2, 11/2018;

(c) "Kentucky Thoroughbred Breeders' Incentive Fund Authorized Agent Form", KHRGC 7-020-3, 11/2018;

(d) "Kentucky Thoroughbred Breeders' Incentive Fund Application to Move Mare Outside of Kentucky Form", KHRGC 7-020-4, 11/2018;

(e) "Kentucky Thoroughbred Breeders' Incentive Fund Notice of Withdrawal of Foal Form", KHRGC 7-020-5, 11/2018;

(f) "Kentucky Thoroughbred Breeders' Incentive Fund Application for Late Mare Registration Form", KHRGC 7-020-6, 11/2018;

(g) "Kentucky Thoroughbred Breeders' Incentive Fund Application for Award Form", KHRGC 7-020-7, 11/2018; and

(h) "Kentucky Thoroughbred Breeders' Incentive Fund Application for Special Filing of Mare Registration Form", KHRGC 7-020-8, 11/2018.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, from the Kentucky Horse Racing and Gaming Corporation, 4047 Iron Works Parkway, Lexington, Kentucky 40511, Monday through Friday, 8 a.m. to 4:30 p.m. This material is also available on the KHRGC Web site at http://khrc.ky.gov.

810 KAR 7:020

45 Ky.R. 1978; 3154; eff. 5-31-2019; TAm eff. 7/1/2024.

STATUTORY AUTHORITY: KRS 230.215(2), 230.800(2)(b)