A Kentucky lawmaker is preparing racing-related legislation with a primary goal of funding the Kentucky Horse Racing Commission, equine drug testing, and supplements for purses and stakes at the state’s racetracks.

The draft bill authored by Republican Sen. Damon Thayer basically shifts tax dollars back to the horse racing industry. Depending on pari-mutuel handle, the measure could raise $4 million to $6 million a year, Thayer said.

The concept is similar to one in which a 6% tax on stallion fees was used to create breeders’ incentive funds in Kentucky.

A December report from the Governor’s Task Force on the Future of Racing recommended a hike in the pari-mutuel tax and purse deductions to help fund the KHRC and drug testing. Thayer said he opposes that plan.

“It’s not fair for the fans and (horse) owners to pay the freight,” he said. “We can use tax dollars generated by the horse industry to regulate the horse industry. People will say we can’t afford (to take money from the general fund), but my counter argument is we can’t afford not to do it for Kentucky to remain viable as the horse capital of the world.”

Under the plan, tracks would continue paying pari-mutuel taxes on live handle (Churchill Downs and Keeneland 3.5%, and the other six tracks in the state 1.5%). There also is a 3% excise tax on simulcast handle in Kentucky.

In return, the tracks wouldn’t have to pay for drug testing, which will get more expensive as the program expands into things such as anabolic steroids and out-of-competition testing. Thayer said the funds are needed to enforce the new rules.

The KHRC would benefit most from the shift in tax dollars. The task force has recommended the organization hire staff to improve regulation. The Thayer bill calls for all the KHRC, not racing associations, to pay for all employees, such as st