ANNAPOLIS, AUG. 20 -- Baltimore Del. Larry Young, who is cochairman of a legislative committee considering a controversial proposal to allow intertrack betting for the first time in Maryland, has returned a $1,000 campaign contribution from one of the affected racetracks' owners.

Young, in the midst of a tight race for next month's Democratic primary in the Baltimore City Council president's race, returned the check to Thomas Manfuso, who is a part owner of Pimlico and Laurel race courses along with the better-known Frank J. DeFrancis, according to sources. Young's campaign manager, Michael Richardson, read from a letter he wrote that accompanied the returned check but would not identify the donor.

Young had been criticized by legislative leaders when he was chairman of the House Environmental Matters Committee for soliciting campaign contributions from industries and groups that came before the committee.

Young lost that chairmanship before the last legislative session and is now cochairman of the Administrative, Executive and Legislative Review Committee, which oversees regulations promulgated by state agencies. On Tuesday, the committee will vote on a proposal advanced by DeFrancis that would allow patrons at Laurel to watch and wager on simulcast races at Pimlico.

Manfuso was out of town and unavailable for comment yesterday. DeFrancis, who strongly supports former state Sen. Harry J. McQuirk in the council president's race, said he could not speak for Manfuso but added that it was not unusual for them to support different candidates. "Politically, we all do our own thing," said DeFrancis, referring to his racetrack partners. He said he had not contributed to Young's campaign and had not been asked to.

Richardson wrote in the letter to Manfuso that the campaign considered the contribution offer "genuine and honorable" but could not accept the money because of the appearance of a conflict.

"There was a question in our minds whether it was right or wrong to accept that," Richardson said.

The intertrack betting proposals have been controversial since they were first submitted last spring. Secretary of Licensing and Regulation William A. Fogle Jr. refused the proposal by DeFrancis and the Maryland Racing Commission that would have allowed patrons at Laurel to watch the Preakness on closed-circuit television and bet on the race.

Fogle said there was not enough time to work out the details of the proposal before the Preakness and there was disagreement in his office about whether a 1984 law that allowed telephone betting was broad enough to allow the kind of simulcasting advocated by DeFrancis.

But Fogle changed his mind when the racetrack owner and the racing commission brought up the idea again in July. He forwarded the proposals to Young's committee.

Since then, Attorney General J. Joseph Curran has issued an opinion saying the 1984 law appears to give the Racing Commission latitude to approve DeFrancis's proposal, although he said it was a "close call."

Sen. James C. Simpson (D-Charles), the Senate chairman of the review committee, has said he didn't believe the legislature intended for the 1984 law to cover simulcasting, while other legislators, including bill sponsor Sen. Thomas Bromwell (D-Baltimore County), said the law does cover simulcasting. Young has not yet stated his opinion.