811 KAR 2:120. Kentucky Horse Breeders’ Incentive Fund.

 

      RELATES TO: KRS 230.225(7)(b), (7)(e),

230.330, 230.804, EO 2008-668, 15 U.S.C. 1821-1831

      STATUTORY AUTHORITY: KRS 230.804(2)(b),

EO 2008-668

      NECESSITY, FUNCTION AND CONFORMITY: KRS.

230.804 establishes the Kentucky Horse Breeders’ Incentive Fund. KRS

230.804(2)(b) authorizes the Kentucky Horse Racing Authority to promulgate

administrative regulations establishing the conditions and criteria for the

distribution of moneys from the fund. EO 2008-668, effective July 3, 2008,

established the Kentucky Horse Racing Commission and transferred all authority,

function, and responsibilities of the Kentucky Horse Racing Authority to

Commission. This administrative regulation establishes eligibility standards,

administrative practices to enforce the standards, and the procedures for

paying incentive awards from the fund.

 

      Section 1. Definitions. (1) "Applicant"

means a Kentucky affiliate representing a breed of horses which is eligible to

register with the commission to participate in the Kentucky Horse Breeders’

Incentive Fund.

      (2) "Award distribution plan"

means a plan submitted by a Kentucky affiliate to the commission outlining the

procedures by which the Kentucky affiliate will award funds from the Kentucky

Horse Breeders’ Incentive Fund to incentive winners who are members of the Kentucky

affiliate.

      (3) "Breed" means a subspecies of

horse with particular physical characteristics common to the subspecies which

are used in establishing the identity of a horse by a registry recognized by

the Commission.

      (4) "Breeder" means:

      (a) A person or persons engaged in the

breeding of horses eligible for the KHBIF, as defined by the national

association of the Kentucky affiliate recognized by the commission as a participant

in the KHBIF program; or

      (b) If the national association does not

define "breeder", the owner of the dam of a horse when the horse was

foaled.

      (5) "Closed breed registry"

means the restrictions of the official national breed registry recognized by

the KHBIF.

      (6) "Contest" means a

competitive event with an outcome which qualifies the owner of a horse as an

incentive winner under a Kentucky affiliate’s award distribution plan.

      (7) "Incentive winner" means a

person whose horse’s performance in a contest entitles that person to an award

from the Kentucky Horse Breeders’ Incentive Fund.

      (8) "Kentucky affiliate" means

the Kentucky organization that is recognized by a national breed organization representing

that particular breed of horse in Kentucky.

      (9) "Kentucky Horse Breeders’

Incentive Fund" means the trust and revolving fund established by KRS

230.804.

      (10) "KHBIF" means the Kentucky

Horse Breeders’ Incentive Fund.

 

      Section 2. Registration of Kentucky Affiliate.

(1) Only a Kentucky affiliate may register to participate in the KHBIF.

      (2) To become eligible to receive funds

from the KHBIF, a Kentucky affiliate shall register with the commission by:

      (a) Filing an "Application for

Registration of Kentucky Affiliate with the Kentucky Horse Breeders’ Incentive

Fund", KHRA Form HB-1, (12/08); and

      (b) Filing with the application an award

distribution plan to be reviewed and approved by the commission.

      (3) A thoroughbred breed shall not be

eligible for registration with the KHBIF.

      (4) A standardbred breed shall not be

eligible for registration with the KHBIF, unless the standardbred breed consists

exclusively of show horses.

      (5) The color of a breed of horses shall

not be the sole criterion used to define that breed for purposes of

registration with the KHBIF.

      (6) The authority may establish, under

the general jurisdiction of the Kentucky Horse Racing Commission, the Kentucky

Horse Breeders’ Incentive Fund Advisory Committee. If established, the advisory

committee shall consist of three (3) members appointed by the chairman of the commission

by July 1 of each year. One (1) member shall be recommended to the chairman for

appointment by the Kentucky Equine Education Project (KEEP). If KEEP has not

recommended a member for appointment by July 1 of a given year, the Chairman of

the Kentucky Horse Racing Commission shall make the appointment without the

recommendation. Each member of the advisory committee shall serve from July 1

through June 30 of the following year. Each member of the advisory committee shall

be a resident of Kentucky. Each member of the advisory committee shall serve

without compensation, but shall be entitled to reimbursement for all expenses

incurred in the discharge of official business. The advisory committee shall

select a chairman from its membership annually.

      (7)(a) The Kentucky Horse Breeders’

Incentive Fund Advisory Committee shall advise and assist the Kentucky Horse

Racing Commission in the registration process described in this section. The

advisory committee shall make a recommendation of approval or denial to the commission

for each applicant based upon the application and compliance with the

requirements established in subsection (13) of this section.

      (b) The Kentucky Horse Racing Commission

shall employ qualified personnel necessary to assist the commission and the

advisory committee in carrying out the provisions of this administrative regulation.

These personnel shall serve at the pleasure of the commission, and compensation

for these personnel shall be fixed by the commission.

      (8) After the advisory committee

recommends to the commission the approval or denial of an application, the commission

shall consider the recommendation and whether or not the requirements of this

administrative regulation have been met, and shall:

      (a) Approve the application;

      (b) Deny the application; or

      (c) Defer consideration of the

application for a reasonable time for the purpose of conducting further

investigation of the application.

      (9) Registration shall be effective for

three (3) years. The first three (3) year registration period shall consist of

the period beginning January 1, 2006, and ending December 31, 2008.

      (10) For the first registration period a

Kentucky affiliate shall register with the commission on or prior to March 31,

2007.

      (11) For each three (3) year period

beginning January 1, 2009, a Kentucky affiliate shall register with the commission

on or prior to November 1 of the calendar year immediately preceding January 1

of the first year of the three (3) year registration period.

      (12) A Kentucky affiliate shall have

until December 31 following the November 1 deadline set forth in subsection (11)

of this section to revise and update any information previously provided to the

commission on or before the November 1deadline.

      (13) The application and the accompanying

award distribution plan provided to the commission shall set forth the

following information:

      (a) The name of the breed of horse

covered by the plan;

      (b) The name of the Kentucky affiliate;

      (c) A letter from the national breed

organization representing the breed certifying that the Kentucky affiliate is

the recognized representative in Kentucky of that breed, and certifying the

number of horses twenty-five (25) years of age and younger in the breed residing

in Kentucky;

      (d) A letter from the nation breed

organization representing the breed certifying that the breed has a closed

breed registry; and

      (e) The award distribution plan pursuant

to which awards will be distributed to KHBIF incentive winners who are breeders

or owners of horses bred and foaled in Kentucky. The award distribution plan

shall specify:

      1. The scoring method or point system to

be utilized in contests to determine the incentive winner of each contest as

certified by the national breed organization;

      2. The identity of the scoring person or

body that will judge each contest as certified by the national breed

organization;

      3. The rules of the contests in which the

horses of the breed will participate as certified by the national breed organization;

and

      4. The percentage distribution formula by

which the Kentucky affiliate shall grant awards to incentive winners.

      (14)(a) The commission shall be

recognized and designated as the sole official registrar of the Kentucky Horse

Breeders’ Incentive Fund for the purposes of registering the application and

award distribution plan for each breed in accordance with the terms of this

administrative regulation.

      (b) The records of each national breed

organization shall be used as the official records of the commission for determining

the following information:

      1. The identity of the Kentucky affiliate

representing the breed in Kentucky; and

      2. The number of horses of the breed

twenty-five (25) years of age and younger registered with the national breed

organization and currently residing in Kentucky.

      (15) If the information on an application

form required under this section is found to be inaccurate, or becomes

inaccurate, or changes, the organization identified as the Kentucky affiliate shall

promptly notify the commission of the correct information within thirty (30)

days of discovering the inaccuracy or the circumstances causing the information

to change.

 

      Section 3. Timing and Distribution of

Awards. (1) The events eligible for awards from the Kentucky Horse Breeders’

Incentive Fund, as set forth in each award distribution plan, shall be those occurring

on or after January 1, 2006.

      (2) Awards to incentive winners shall be

calculated and distributed each year.

      (3) The commission, with the cooperation

of each Kentucky affiliate shall, after the end of each calendar year, calculate

the funds due to each Kentucky affiliate for that year.

      (4) The amount allocated to a Kentucky

affiliate participating in the KHBIF shall be calculated by:

      (a) Dividing the number of horses of the

breed twenty-five (25) years of age and younger and currently residing in

Kentucky as certified by the national breed organization pursuant to Section

2(13)(c) of this administrative regulation, by the total number of horses from

all Kentucky affiliates certified pursuant to Section 2(13)(c) of this

administrative regulation The number of horses in each case shall be the number

of horses recorded on each Kentucky affiliate’s application form on the

December 31 deadline preceding the three (3) year registration period; and

      (b) Multiplying the fraction obtained in

paragraph (a) by the total amount of money allocated to all Kentucky affiliates

during the year.

      (5) An award to an incentive winner from

the KHBIF shall be determined based on the award distribution plan submitted by

the Kentucky affiliate representing the breed to the commission pursuant to

Section 2(2)(b) of this administrative regulation.

      (6) The Kentucky affiliate shall, by

March 1 of each year, determine the names of the incentive winners who are

entitled to awards for contests held during the previous year and provide the

names of the incentive winners to the commission.

      (7) The commission shall, by June 1 of

each year, notify each incentive winner of the amount of the award to which the

incentive winner is entitled by notice sent to the last known address provided

to the commission by the Kentucky affiliate.

      (8) After receiving notification of an

award, each incentive winner shall return an enclosed claim form for the award

that certifies that the incentive winner is entitled to the award and that

certifies the incentive winner’s taxpayer ID number or Social Security number. The

claim form shall be delivered to the commission no later than December 31 of

the same year in which the commission notified the incentive winner of the

award pursuant to subsection (7) of this section.

      (9) The claim form shall be the form

"Claim Form of Incentive Winner for Award from the Kentucky Horse

Breeders’ Incentive Fund", KHRA Form HB-2, (12/06).

      (10) Any award owing to an incentive

winner who cannot be located by December 31 of the year in which the commission

attempted to notify the incentive winner of the award pursuant to subsection

(7) of this section, shall lapse to the KHBIF.

      (11) Failure to return the claim form

required by subsection (8) of this section by December 31 of the year in which

the incentive winner was notified of the award pursuant to subsection (7) of

this section shall result in forfeiture of the award, and the award money shall

lapse to the KHBIF.

      (12) An award from the KHBIF shall not be

granted to any incentive winner who is not in good standing with the national

breed organization or Kentucky affiliate.

 

      Section 4. Semi-annual Reports. (1) A

semi-annual status report describing a Kentucky affiliate’s progress and

participation in the award distribution plan shall be filed with the advisory

committee by each Kentucky affiliate on or before July 31 and January 31. If

that date is on a Saturday, Sunday, or legal holiday, the report shall be due

on the first business day thereafter.

      (2) The semi-annual report shall also

include:

      (a) A list of all stallions presently

breeding horses eligible to participate in the fund, and the farm locations on

which the stallions stand;

      (b) A schedule of all state and national

contests for that year in which horses eligible to participate in the KHBIF are

scheduled to participate.

 

      Section 5. Disputes. (1) Any dispute

between the commission and a Kentucky affiliate or national breed organization

arising under this administrative regulation shall be raised by the aggrieved

party filing a petition seeking relief with the executive director of the commission,

within thirty (30) days of the action or the inaction leading to the dispute.

      (2) If the executive director and the

aggrieved party do not agree on a resolution of the dispute, the executive

director shall assign the case to a hearing officer who shall conduct a hearing

pursuant to KRS Chapter 13B.

 

      Section 6. Disciplinary Procedures. (1)

The commission may deny or revoke the registration of a Kentucky affiliate or

national breed organization if the Kentucky affiliate or national breed organization:

      (a) Knowingly provides the commission

with incorrect, false, or misleading information concerning any aspect of the

registration of the breed represented by the Kentucky affiliate with the commission;

      (b) Knowingly fails to furnish within

thirty (30) days information the commission has requested relating to the

registration; or

      (c) Knowingly violates any provision of

KRS Chapter 230 or Title 810 or 811 KAR in any other manner.

      (2) If the commission denies or revokes

the registration of a Kentucky affiliate or national breed organization, the

Kentucky affiliate or national organization may request, and the commission

shall schedule, a hearing to be conducted pursuant to KRS Chapter 13B.

      (3) At the conclusion of the hearing, the

commission shall, in its final order, determine whether the Kentucky affiliate

or national breed organization has knowingly provided the commission with incorrect,

false, or misleading information, or has knowingly failed to provide the commission

with requested information, or has knowingly violated any provision of KRS

Chapter 230 or Title 810 or 811 KAR in any other manner, and may take one (1)

or more of the following actions:

      (a) Deny or revoke the registration;

      (b) Uphold the denial or revocation of

the registration;

      (c) Rescind the denial or revocation of

the registration;

      (d) Bar the Kentucky affiliate or

national breed organization which violated subsection (1) of this section from

registering for a period of from one (1) to ten (10) years, based on the seriousness

of the violation, beginning with the date on which the final order becomes effective;

      (e) Without funds due to be allocated to

the Kentucky affiliate; or

      (f) Withdraw funds previously allocated

to the Kentucky affiliate.

      (4) If a Kentucky affiliate’s designee or

representative fails to appear at the hearing, the commission may take one (1)

or more of the following actions:

      (a) Deny or revoke the registration; or

      (b) Bar the Kentucky affiliate which

failed to respond to the summons from registering foals to the fund for a

period of from one (1) to ten (10) years, based on the seriousness of the

violation, beginning with the date on which the final order becomes effective;

      (c) Withdraw funds previously allocated

to the state affiliate;

      (d) Withhold funds due to be allocated to

the Kentucky affiliate; or

      (e) Reschedule the hearing.

      (5) For a second or subsequent violation

of subsection (1) of this section, the commission may bar the Kentucky

affiliate or national breed organization from eligibility to receive an incentive

from the KHBIF for period of from one (1) to twenty (20) years.

      (6) The commission shall notify the

Kentucky affiliate in writing of the action taken by the commission.

      (7) If the evidence available to the commission

indicates that an individual who is a member of, or acting on behalf of, a

Kentucky affiliate or national breed organization has, without the knowledge or

consent of the Kentucky affiliate or national breed organization, knowingly

provided the commission with incorrect, false, or misleading information,

knowingly failed to provide the Authority with requested information, or

knowingly violated the federal Horse Protection Act, 15 U.S.C. Sections 1821

through 1831, or any other federal or state law pertaining to the breeding,

racing, or showing of horses, or reflecting on the honesty and trustworthiness

of the individual to participate in the KHBIF, the commission may take one (1)

or more of the following actions:

      (a) Condition the continuing registration

of the Kentucky affiliate in the KHBIF upon the exclusion of that individual

from any further participation in work related to the KHBIF;

      (b) Withdraw funds previously allocated

to the individual;

      (c) Withhold funds due to be allocated to

the individual; or

      (d) Bar the individual from further

participation in the KHBIF for a period of time proportionate to the

seriousness of the violation.

      (8) An individual against whom

disciplinary action has been taken under subsection (7) of this section may

appeal the matter to the commission pursuant to KRS Chapter 13B.

 

      Section 7. Incorporation by Reference.

(1) The following material is incorporated by reference:

      (a) "Application for Registration of

State Affiliate with the Kentucky Horse Breeders’ Incentive Fund", KHRA

Form HB-1, (12/08); and

      (b) "Claim Form of Incentive Winner

for Award from the Kentucky Horse Breeders’ Incentive Fund", KHRA Form

HB-2, (12/08).

      (2) This material may be inspected,

copied, or obtained, subject to applicable copyright law, at the Kentucky Horse

Racing Commission, 4063 Iron Works Pike, Building B, Lexington, Kentucky 40511,

Monday through

Friday, 8 a.m. to 4:30 p.m.

      (3) This material may also be obtained

from the KHRC Web site at www.khrc.ky.gov. (33 Ky.R. 2242; Am. 3201; eff.

5-4-2007; 35 Ky.R. 1914; 2743; eff. 7-6-2009.)