Senate adds homeowners, Breeders Cup to incentives package

FRANKFORT — The Senate expanded a proposed overhaul of the state’s economic development programs on Friday to include new tax credits for new homeowners and small businesses, but a vote by the House will have to wait until March 26.

Also rolled into the legislation is an incentive to lure the Breeders Cup to Kentucky and to bring a NASCAR Sprint Cup race to the Kentucky Speedway, which was included in separate legislation.

The measure also includes language that would allow the University of Kentucky to use a private company to help upgrade Commonwealth Stadium and build a new baseball stadium.

Earlier this month, plans to replace Rupp Arena, a new campus baseball stadium and an upgrade to Commonwealth Stadium were put on hold so the university could ensure that private companies could legally help pay for stadiums on university property.

Sen. Alice Forgy Kerr, R-Lexington and chairwoman of the Senate economic development committee, said the bill does not include any public money for the building of the sports arenas. There is no specific language in the bill regarding the replacement of Rupp Arena; however, Rupp Arena is not on university-owned property, Kerr said.

The Senate unanimously passed House Bill 229 late Friday, hours after the revised plan was unveiled in the Senate Economic Development, Tourism and Labor Committee, but the House did not vote on the bill before adjourning until later this month.

When lawmakers return for two final work days on March 26 and 27, Kerr said she expected the House to send the legislation to a committee to talk about some of the additional programs the Senate added to the bill.

By waiting until the last two days of the session to pass the bill, the General Assembly risks not being able to override a possible gubernatorial veto.

House Speaker Greg Stumbo, D-Prestonsburg, said late Friday that he doesn’t think Beshear will veto legislation that contains an economic incentives program that his administration created. But Stumbo said he hasn’t seen what the Senate added to the bill.

“We don’t know exactly what’s in them yet. We have to look at those,” Stumbo said.

He said he expected to name House negotiators to work with Senate members to hammer out an agreed upon version of the incentives bill.

Jay Blanton, a spokesman for Beshear, said Friday that Beshear could not say if he would veto the changes.

“We are aware that initiatives have been added, but the governor has not had a chance to review the entire bill,” Blanton said. “He will have to conduct that review first.”

The economic incentives bill backed by Beshear includes a host of tax credits designed to lure and keep jobs in Kentucky. The bill also helps streamline some of the state’s larger economic development programs.

The House passed the bill after making some revisions to Beshear’s original proposal. Included in the incentive plan are tax credits for Hollywood and other production companies to shoot films, documentaries and commercials in Kentucky.

The newly-revised plan includes a home tax credit of up to $5,000 for people who buy homes between May 15, 2009 an May 15, 2010. The overall program will be capped at $25 million and is only authorized for one year, the bill says. Language in the bill does not exempt second homes from the tax credit.

Also tacked on to the bill was an additional proposal to give small businesses a tax credit if they invest a minimum of $5,000 in new technology.

The plan also includes incentives to keep and attract the Breeder’s Cup to Kentucky. Sen. Damon Thayer, R-Georgetown, who backed the plan, said one University of Kentucky study showed that the race generated as much as $30 million in Kentucky. Kentucky already has a Breeders Cup incentive on its books, but that incentive is set to expire in 2009, Thayer said.

Thayer said he has heard no objections from the Beshear administration about the incentive program, which includes a waiver of the excise tax on pari-mutuel wagering for a race track that hosts a Breeders Cup race.

To lure a Sprint Cup race to the Kentucky Speedway, the bill would allow its owners to recover up to 25 percent of a planned $75 million expansion over 20 years through sales tax revenues collected at the track. In exchange, Speedway Motorsports Inc., which owns Kentucky Speedway, must hold a Sprint Cup race at the track.

— Beth Musgrave

Filed Under: Featured • State Budget • State Government • Steve Beshear