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AN ACT relating to the partial distribution of pari -mutuel racing tax receipts to 1
local governments. 2
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 3
Section 1. KRS 138.510 is amended to read as follows: 4
(1) (a) Before August 1, 2022, except as provided in paragraph (e) of this subsection 5
and subsection (3) of this section, an excise tax is imposed on all tracks 6
conducting pari-mutuel wagering on live racing under the jurisdiction of the 7
corporation as follows: 8
1. For each track with a daily average live handle of one million two 9
hundred thousand dollars ($1,200,000) or above, the tax shall be in the 10
amount of three and one -half percent (3.5%) of all money wagered on 11
live races at the track during the fiscal year; and 12
2. For each track with a daily average live handle under one million two 13
hundred thousand dollars ($1,200,000), the tax shall be one and one -half 14
percent (1.5%) of all money wagered on live races at the track during 15
the fiscal year. 16
(b) Beginning August 1, 20 22, the excise tax imposed on all tracks conducting 17
pari-mutuel wagering on live racing under jurisdiction of the corporation shall 18
be one and one -half percent (1.5%) of all money wagered on live races at the 19
track during the fiscal year. 20
(c) Beginning on April 1, 2014, an excise tax is imposed on all tracks conducting 21
pari-mutuel wagering on historical horse races under the jurisdiction of the 22
corporation at a rate of one and one-half percent (1.5%) of all money wagered 23
on historical horse races at the track during the fiscal year. 24
(d) Money shall be deducted from the tax paid under paragraphs (a), (b), and (c) 25
of this subsection and deposited as follows: 26
1. a. Before August 1, 2022, an amount equal to three -quarters of one 27
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percent (0.75%) of all money wage red on live races and historical 1
horse races at the track for Thoroughbred racing shall be deposited 2
in the Thoroughbred development fund established in KRS 3
230.400; and 4
b. Beginning August 1, 2022, an amount equal to three -quarters of 5
one percent (0.75%) of all money wagered on live races and 6
historical horse races at the track for Thoroughbred racing shall be 7
deposited in the Thoroughbred development fund established in 8
KRS 230.400 until forty -five million dollars ($45,000,000) has 9
been deposited during a fiscal year, at which point the amount 10
deposited in the fund shall decrease to four -tenths of one percent 11
(0.4%) of all money wagered on live and historical horse races at 12
the track for Thoroughbred racing for the remainder of the fiscal 13
year; 14
2. a. Before August 1, 2022, an amount equal to one percent (1%) of all 15
money wagered on live races and historical horse races at the track 16
for harness racing shall be deposited in the Kentucky standardbred 17
development fund established in KRS 230.770. Beginning Augus t 18
1, 2022, an amount equal to one percent (1%) of all money 19
wagered on live races at the track for harness racing shall be 20
deposited in the Kentucky standardbred development fund until a 21
total of twenty million dollars ($20,000,000) has been deposited 22
during a fiscal year from this subparagraph, at which point the 23
amount deposited shall decrease to four -tenths of one percent 24
(0.4%) of all money wagered for the remainder of the fiscal year; 25
and 26
b. Beginning August 1, 2022, an amount equal to one percent (1%) 27
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of all money wagered on historical horse races at the track for 1
harness racing shall be distributed in the exact amounts based 2
upon contracts between the parties that have been filed with the 3
corporation, but at least one -half (1/2) of the funds shall be 4
deposited into the Kentucky standardbred development fund 5
established in KRS 230.770 until a total of twenty million dollars 6
($20,000,000) has been deposited into the Kentucky standardbred 7
development fund during a fiscal year from this subparagraph, at 8
which point the amount deposited in this subdivision shall 9
decrease to four -tenths of one percent (0.4%) of all money 10
wagered for the remainder of the fiscal year. The corporation shall 11
provide the department all information necessary from the 12
contracts in o rder for the funds in this subparagraph to be 13
distributed; 14
3. a. An amount equal to one percent (1%) of all money wagered on 15
live races and historical horse races at the track for paint horse, 16
Appaloosa, and Arabian horse racing shall be deposited in the 17
Kentucky paint horse, Appaloosa, and Arabian development fund 18
established by KRS 230.445; and 19
b. An amount equal to one percent (1%) of all money wagered on 20
live races and historical horse races at the track for quarter horse 21
racing shall be deposited in th e Kentucky quarter horse 22
development fund established by KRS 230.405; 23
4. An amount equal to two -tenths of one percent (0.2%) of all money 24
wagered on live races and historical horse races at the track shall be paid 25
out in equal amounts as follows: 26
a. To the equine industry program trust and revolving fund 27
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established by KRS 230.550 to support the Equine Industry 1
Program at the University of Louisville, except that the amount 2
deposited from money wagered on historical horse races in any 3
fiscal year shall not exceed eight hundred fifty thousand dollars 4
($850,000); 5
b. To the University of Kentucky for equine industry programs at the 6
university, except that the amount paid from money wagered on 7
historical horse races in any fiscal year shall not exceed four 8
hundred thousand dollars ($400,000); 9
c. To the Bluegrass Community and Technical College for the 10
provision of equine industry programs by the system, except that 11
the amount paid from money wagered on historical horse races in 12
any fiscal year shall not exceed tw o hundred fifty thousand dollars 13
($250,000); 14
d. Amounts remaining from money wagered on historical horse races 15
in a fiscal year after payments are made in accordance with 16
subdivisions a., b., and c. of this subparagraph shall be distributed 17
in equal amounts to: 18
i. The Kentucky Horse Racing and Gaming Corporation for the 19
benefit of Thoroughbred, standardbred, and American 20
quarter horse aftercare facilities in Kentucky, in an amount 21
not to exceed two hundred fifty thousand dollars ($250,000). 22
The Kentucky Hor se Racing and Gaming Corporation shall 23
serve as the administrative agent for these funds, and shall 24
distribute them annually to organizations engaged in the 25
accreditation and monitoring of aftercare facilities. Any 26
funds distributed under this subpart by t he Kentucky Horse 27
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Racing and Gaming Corporation shall be awarded to 1
aftercare facilities based in Kentucky only after the facilities 2
have achieved and maintained levels of service and operation 3
that resulted in national accreditation; and 4
ii. The Kentucky equine management internship program for 5
equine management training, in an amount not to exceed two 6
hundred fifty thousand dollars ($250,000); and 7
e. Any amounts remaining from money wagered on historical horse 8
races in a fiscal year after payments are mad e in accordance with 9
subdivisions a., b., c., and d. of this subparagraph shall be paid to 10
the general fund; 11
5. a. An amount equal to one -tenth of one percent (0.1%) of all money 12
wagered on live races and historical horse races at the track shall 13
be deposi ted in a trust and revolving fund to be used for the 14
construction, expansion, or renovation of facilities or the purchase 15
of equipment for equine programs at state universities and the 16
Bluegrass Community and Technical College, except that the 17
amount deposited from money wagered on historical horse races in 18
any fiscal year shall not exceed three hundred twenty thousand 19
dollars ($320,000). 20
b. These funds shall not be used for salaries or for operating funds 21
for teaching, research, or administration. Funds al located under 22
this subparagraph shall not replace other funds for capital purposes 23
or operation of equine programs at state universities and the 24
Bluegrass Community and Technical College. 25
c. The Kentucky Council on Postsecondary Education shall serve as 26
the administrative agent for these funds, and shall establish an 27
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advisory committee of interested parties, including all universities 1
and the Bluegrass Community and Technical College with 2
established equine programs, to evaluate proposals and make 3
recommendations for the awarding of funds. 4
d. The Kentucky Council on Postsecondary Education may 5
promulgate administrative regulations to establish procedures for 6
administering the program and criteria for evaluating and awarding 7
grants;[ and] 8
6. An amount equal t o one -tenth of one percent (0.1%) of all money 9
wagered on live races and historical horse races shall be distributed to 10
the corporation to support equine drug testing as provided in KRS 11
230.265(3), except that the amount deposited from money wagered on 12
historical horse races in any fiscal year shall not exceed three hundred 13
twenty thousand dollars ($320,000); and 14
7. An amount equal to one -tenth of one percent (0.1%) of all money 15
wagered on live races and historical horse races shall be distributed to 16
the pa ri-mutuel racing local government support fund created in 17
Section 2 of this Act. 18
(e) The excise tax imposed by paragraphs (a) and (b) of this subsection shall not 19
apply to pari-mutuel wagering on live harness racing at a county fair. 20
(2) (a) Except as provided in paragraph (c) of this subsection, an excise tax is 21
imposed on: 22
1. All tracks conducting telephone account wagering; 23
2. All tracks participating as receiving tracks in intertrack wagering under 24
the jurisdiction of the corporation; and 25
3. All tracks participating as receiving tracks displaying simulcasts and 26
conducting interstate wagering thereon. 27
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(b) 1. Before August 1, 2022, the tax shall be three percent (3%) of all money 1
wagered on races as provided in paragraph (a) of this subsectio n during 2
the fiscal year. 3
2. Beginning August 1, 2022, the tax shall be one and one -half percent 4
(1.5%) of all money wagered on races as provided in paragraph (a) of 5
this subsection during the fiscal year. 6
(c) A noncontiguous track facility approved by the corporation on or after 7
January 1, 1999, shall be exempt from the tax imposed under this subsection, 8
if the facility is established and operated by a licensed track which has a total 9
annual handle on live racing of two hundred fifty thousand dollars ($250 ,000) 10
or less. The amount of money exempted under this paragraph shall be retained 11
by the noncontiguous track facility, KRS 230.3771 and 230.378 12
notwithstanding. 13
(d) Money shall be deducted from the tax paid under paragraphs (a) and (b) of 14
this subsection as follows: 15
1. An amount equal to one percent (1%) of the amount wagered shall be 16
deposited as follows: 17
a. In the Thoroughbred development fund established in KRS 18
230.400 if the host track is conducting a Thoroughbred race 19
meeting or the interstate wagering is conducted on a Thoroughbred 20
race meeting; 21
b. In the Kentucky standardbred development fund established in 22
KRS 230.770, if the host track is conducting a harness race 23
meeting or the interstate wagering is conducted on a harness race 24
meeting; 25
c. In the Kentucky paint horse, Appaloosa, and Arabian development 26
fund established by KRS 230.445, if the host track is conducting a 27
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paint horse, Appaloosa, or Arabian horse race meeting or the 1
interstate wagering is conducted on a paint horse, Appaloosa, or 2
Arabian horse race meeting; or 3
d. In the Kentucky quarter horse development fund established by 4
KRS 230.405, if the host track is conducting a quarter horse race 5
meeting or the interstate wagering is conducted on a quarter horse 6
race meeting; 7
2. An amount equal to twenty-five thousandths of one percent (0.025%) of 8
the amount wagered shall be allocated to the equine industry program 9
trust and revolving fund established by KRS 230.550 to be used to 10
support the Equine Industry Program at the University of Louisville; 11
3. An amount equal to one-twentieth of one percent (0.05%) of the amount 12
wagered shall be deposited in a trust and revolving fund to be used for 13
the construction, expansion, or renovation of facilities or the purchase of 14
equipment for equine programs at state universities, as detailed in 15
subsection (1)(d)5. of this section; and 16
4. An amount equal to one-twentieth of one percent (0.05%) of the amount 17
wagered shall be distributed to the corporation to support equine drug 18
testing as provided in KRS 230.265(3). 19
(3) If a host track in this state is the location for the conduct of a two (2) day 20
international horse racing event that distributes in excess of a total of twenty million 21
dollars ($20,000,000) in purses and awards: 22
(a) The excise tax imposed by subsect ion (1)(a) and (b) of this section shall not 23
apply to money wagered at the track on live races conducted at the track 24
during the two (2) day international horse racing event; and 25
(b) Amounts wagered at the track on live races conducted at the track during the 26
two (2) day international horse racing event shall not be included in 27
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calculating the daily average live handle for purposes of subsection (1) of this 1
section. 2
(4) If a host track in this state is the location for the conduct of an international harnes s 3
racing event spanning multiple days that distributes at least five million dollars 4
($5,000,000) in purses and awards, the Tourism, Arts and Heritage Cabinet shall be 5
granted a race title sponsorship and promotional package at the international 6
harness ra cing event with all usual and customary benefits assigned to promote 7
Kentucky tourism. The Tourism, Arts and Heritage Cabinet shall not be charged 8
any fees for the promotional package. 9
(5) The taxes imposed by this section shall be paid, collected, and adm inistered as 10
provided in KRS 138.530. 11
SECTION 2. A NEW SECTION OF KRS CHAPTER 230 IS CREATED TO 12
READ AS FOLLOWS: 13
(1) The pari-mutuel racing local government support fund in the State Treasury is 14
hereby created and shall be: 15
(a) A trust and agency account administered by the Department for Local 16
Government in accordance with this section; and 17
(b) Disbursed by the State Treasurer upon the warrant of the commissioner of 18
the Department for Local Government. 19
(2) This fund shall consist of moneys received in accordance with the distribution 20
formula established in Section 1 of this Act. 21
(3) Notwithstanding KRS 45.229, moneys remaining in the account at the close of 22
the fiscal year shall not lapse but shall carry forward into the succeeding fiscal 23
year. 24
(4) Moneys in the fund shall be used to support local governments where live and 25
historical horse rac ing facilities are located and as specified in subsections (5) 26
and (6) of this section. 27
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(5) The Department for Local Government shall promulgate administrative 1
regulations in accordance with KRS Chapter 13A that direct how local 2
governments may use moneys from this fund to address the social costs of 3
problem gambling, including but not limited to: 4
(a) Law enforcement retention; 5
(b) Homelessness; 6
(c) Affordable housing; and 7
(d) The policing, regulation, and administration of the facilities where live and 8
historical horse racing facilities are located. 9
(6) (a) The moneys in the fund shall be disbursed, at least quarterly, to counties 10
containing tracks or facilities that are paying the excise tax that ultimately 11
is deposited into the fund. 12
(b) The Department for Local Government shall: 13
1. Determine the amount of excise tax generated and paid by each track 14
or facility; 15
2. Determine the portion of the moneys in the fund related to that excise 16
tax; and 17
3. Distribute the tax to the appropriate county. 18
(7) The Dep artment for Local Government shall promulgate administrative 19
regulations in accordance with KRS Chapter 13A related to: 20
(a) The requirements for qualification for distribution of the moneys from this 21
fund to local governments, which shall include: 22
1. Application and reporting requirements for local governments; 23
2. A list of eligible expenses by the local governments; and 24
3. Accountability criteria for local governments to receive moneys; and 25
(b) Distributions to the local governments, which shall include g uidelines for 26
the allocation of moneys for local governments which include both cities 27
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and counties. 1
(8) The Department of Revenue shall provide aggregate information to the 2
Department for Local Government pertaining to the location of the facilities, by 3
county and by city, in which pari -mutuel racing tax receipts are generated each 4
period, and other information as needed by the Department for Local 5
Government to perform the calculation in subsection (6) of this section. 6
(9) As used in this section, "loca l government" means a city, county, urban -county 7
government, charter county government, consolidated local government, and 8
unified local government. 9
Section 3. KRS 131.190 is amended to read as follows: 10
(1) No present or former commissioner or employee of the department, present or 11
former member of a county board of assessment appeals, present or former property 12
valuation administrator or employee, present or former secretary or employee of the 13
Finance and Administration Cabinet, former secretary or employee of the Revenue 14
Cabinet, or any other person, shall intentionally and without authorization inspect 15
or divulge any information acquired by him or her of the affairs of any person, or 16
information regarding the tax schedules, returns, or reports required to be filed with 17
the department or other proper officer, or any information produced by a hearing or 18
investigation, insofar as the information may have to do with the affairs of the 19
person's business. 20
(2) The prohibition established by subsection (1) of this section shall not extend to: 21
(a) Information required in prosecutions for making false reports or returns of 22
property for taxation, or any other infraction of the tax laws; 23
(b) Any matter properly entered upon any assessment record, or in any way made 24
a matter of public record; 25
(c) Furnishing any taxpayer or his or her properly authorized agent with 26
information respecting his or her own return; 27
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(d) Testimony provided by the commissioner or any employee of the department 1
in any court, or the introduction as evidence of returns or reports filed with the 2
department, in an action for violation of state or federal tax laws or in any 3
action challenging state or federal tax laws; 4
(e) Providing an owner of unmined coal, oil or gas reserves, and other mineral or 5
energy resources assessed under KRS 1 32.820, or owners of surface land 6
under which the unmined minerals lie, factual information about the owner's 7
property derived from third-party returns filed for that owner's property, under 8
the provisions of KRS 132.820, that is used to determine the owne r's 9
assessment. This information shall be provided to the owner on a confidential 10
basis, and the owner shall be subject to the penalties provided in KRS 11
131.990(2). The third -party filer shall be given prior notice of any disclosure 12
of information to the owner that was provided by the third-party filer; 13
(f) Providing to a third -party purchaser pursuant to an order entered in a 14
foreclosure action filed in a court of competent jurisdiction, factual 15
information related to the owner or lessee of coal, oil, gas reserves, or any 16
other mineral resources assessed under KRS 132.820. The department may 17
promulgate an administrative regulation establishing a fee schedule for the 18
provision of the information described in this paragraph. Any fee imposed 19
shall not exceed t he greater of the actual cost of providing the information or 20
ten dollars ($10); 21
(g) Providing information to a licensing agency, the Transportation Cabinet, or 22
the Kentucky Supreme Court under KRS 131.1817; 23
(h) Statistics of gasoline and special fuels gal lonage reported to the department 24
under KRS 138.210 to 138.448; 25
(i) Providing any utility gross receipts license tax return information that is 26
necessary to administer the provisions of KRS 160.613 to 160.617 to 27
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applicable school districts on a confidential basis; 1
(j) Providing documents, data, or other information to a third party pursuant to an 2
order issued by a court of competent jurisdiction; 3
(k) Publishing administrative writings on its official website in accordance with 4
KRS 131.020(1)(b);[ or] 5
(l) Providing the information required in Section 2 of this Act to the 6
Department for Local Government on a confidential basis for the 7
calculation of the fund distribution in that section; or 8
(m) Providing information to the Legislative Research Commission under: 9
1. KRS 139.519 for purposes of the sales and use tax refund on building 10
materials used for disaster recovery; 11
2. KRS 141.436 for purposes of the energy efficiency products credits; 12
3. KRS 141.437 for purposes of the ENERGY STAR home and the 13
ENERGY STAR manufactured home credits; 14
4. KRS 141.383 for purposes of the film industry incentives; 15
5. KRS 154.26-095 for purposes of the Kentucky industrial revitalization 16
credit and the job assessment fees; 17
6. KRS 141.068 for purposes of the Kentucky investment fund; 18
7. KRS 141.396 for purposes of the angel investor credit; 19
8. KRS 141.389 for purposes of the distilled spirits credit; 20
9. KRS 141.408 for purposes of the inventory credit; 21
10. KRS 141.390 for purposes of the recycling and composting credits; 22
11. KRS 141.3841 for purposes of the selling farmer credit; 23
12. KRS 141.4231 for purposes of the renewable chemical production 24
credit; 25
13. KRS 141.524 for purposes of the Education Opportunity Account 26
Program credit; 27
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14. KRS 141.398 for purposes of the development area credit; 1
15. KRS 139.516 for purposes of the sales and use tax exemptions for the 2
commercial mining of cryptocurrency; 3
16. KRS 141.419 for purposes of the decontamination credit; 4
17. KRS 141.391 for purposes of the qualified broadband investment credit; 5
18. KRS 139.499 for purposes of the sales and use tax exemptions for a 6
qualified data center project; and 7
19. KRS 139.5325 for purposes of the sales and use tax incentive for a 8
qualifying attraction. 9
(3) The commissioner shall make available any information for official use only and on 10
a confidential basis to the proper officer, agency, board or commission of this state, 11
any Kentucky county, any Kentucky city, any other state, or the fed eral 12
government, under reciprocal agreements whereby the department shall receive 13
similar or useful information in return. 14
(4) Access to and inspection of information received from the Internal Revenue Service 15
is for department use only, and is restricted to tax administration purposes. 16
Information received from the Internal Revenue Service shall not be made available 17
to any other agency of state government, or any county, city, or other state, and 18
shall not be inspected intentionally and without authorizat ion by any present 19
secretary or employee of the Finance and Administration Cabinet, commissioner or 20
employee of the department, or any other person. 21
(5) Statistics of crude oil as reported to the department under the crude oil excise tax 22
requirements of KR S Chapter 137 and statistics of natural gas production as 23
reported to the department under the natural resources severance tax requirements 24
of KRS Chapter 143A may be made public by the department by release to the 25
Energy and Environment Cabinet, Department for Natural Resources. 26
(6) Notwithstanding any provision of law to the contrary, beginning with mine -map 27
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submissions for the 1989 tax year, the department may make public or divulge only 1
those portions of mine maps submitted by taxpayers to the departmen t pursuant to 2
KRS Chapter 132 for ad valorem tax purposes that depict the boundaries of mined -3
out parcel areas. These electronic maps shall not be relied upon to determine actual 4
boundaries of mined-out parcel areas. Property boundaries contained in mine m aps 5
required under KRS Chapters 350 and 352 shall not be construed to constitute land 6
surveying or boundary surveys as defined by KRS 322.010 and any administrative 7
regulations promulgated thereto. 8