Bill Text: NJ A2582 | 2018-2019 | Regular Session | Introduced


Bill Title: Requires New Jersey Sports and Exposition Authority to defer lease payment due by racetrack lessees for three years under certain circumstances.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2018-02-01 - Introduced, Referred to Assembly Tourism, Gaming and the Arts Committee [A2582 Detail]

Download: New_Jersey-2018-A2582-Introduced.html

ASSEMBLY, No. 2582

STATE OF NEW JERSEY

218th LEGISLATURE

 

INTRODUCED FEBRUARY 1, 2018

 


 

Sponsored by:

Assemblyman  RONALD S. DANCER

District 12 (Burlington, Middlesex, Monmouth and Ocean)

 

 

 

 

SYNOPSIS

     Requires New Jersey Sports and Exposition Authority to defer lease payment due by racetrack lessees for three years under certain circumstances.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning the lease of Monmouth Park and Meadowlands racetracks to private entity lessees and amending P.L.1971, c.137.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    Section 7 of P.L.1971, c.137 (C.5:10-7) is amended to read as follows:

     7.    a.  The authority or a lessee of the authority is hereby authorized, licensed and empowered to apply to the Racing Commission for a permit or permits to hold and conduct, at any of the projects set forth in paragraphs (1) and (5) of subsection a. of section 6 of P.L.1971, c.137 (C.5:10-6), horse race meetings for stake, purse or reward, and to provide a place or places on the race meeting grounds or enclosure for wagering by patrons on the results of such horse races by the parimutuel system, and to receive charges and collect all revenues, receipts and other sums from the operation thereof and, in the case of the authority, the ownership thereof.

     b.    Except as otherwise provided in this section, such horse race meetings and parimutuel wagering shall be conducted by the authority or a lessee of the authority in the manner and subject to compliance with the standards set forth in P.L.1940, c.17 (C.5:5-22 et seq.) and the rules, regulations and conditions prescribed by the Racing Commission thereunder for the conduct of horse race meetings and for parimutuel betting at such meetings.

     c.     Application for said permit or permits shall be on such forms and shall include such accompanying data as the Racing Commission shall prescribe for other applicants. The Racing Commission shall proceed to review and act on any such application within 30 days after its filing and the Racing Commission is authorized in its sole discretion to determine whether a permit shall be granted to the authority or a lessee of the authority. If, after such review, the Racing Commission acts favorably on such application, a permit shall be granted to the authority or a lessee of the authority without any further approval and shall remain in force and effect so long as any bonds or notes of the authority remain outstanding, the provisions of any other law to the contrary notwithstanding. In granting a permit to the authority or a lessee of the authority to conduct a horse race meeting, the Racing Commission shall not be subject to any limitation as to the number of tracks authorized for the conduct of horse race meetings pursuant to any provision of P.L.1940, c.17 (C.5:5-22 et seq.). Said permit shall set forth the dates to be allotted to the authority for its initial horse race meetings. Thereafter application for dates for horse race meetings by the authority or a lessee of the authority and the allotment thereof by the Racing Commission, including the renewal of the same dates theretofore allotted, shall be governed by the applicable provisions of P.L.1940, c.17 (C.5:5-22 et seq.). Notwithstanding the provisions of any other law to the contrary, the Racing Commission shall allot annually to the authority or a lessee of the authority for the Meadowlands Complex, in the case of harness racing, not less than the number of racing days allotted pursuant to subsection b. of section 30 of P.L.2001, c.199 (C.5:5-156), and in the case of running racing, not less than 56 racing days, if and to the extent that application is made therefor.

     d.    No hearing, referendum or other election or proceeding, and no payment, surety or cash bond or other deposit, shall be required for the authority or a lessee of the authority to hold or conduct the horse race meetings with parimutuel wagering herein authorized.

     e.     The authority or a lessee of the authority shall determine the amount of the admission fee for the races and all matters relating to the collection thereof.

     f.     Distribution of sums deposited in parimutuel pools to winners thereof shall be in accordance with the provisions of section 44 of P.L.1940, c.17 (C.5:5-64) pertaining thereto. The authority or a lessee of the authority shall make disposition of the deposits remaining undistributed as follows:

     (1)   In the case of harness races:

     (a)   Hold and set aside in an account designated as a special trust account 1% of such total contributions in all pools, to be used and distributed as hereinafter provided and as provided in section 5 of P.L.1967, c.40, for the following purposes and no other:

     (i)    42 1/2% thereof to increase purses and grant awards for starting horses, as provided or as may be provided by rules of the New Jersey Racing Commission, with payment to be made in the same manner as payment of other purses and awards, unless otherwise provided by a contractual agreement authorized under section 11 of P.L.2013, c.266 (C.5:5-188);

     (ii)   49% thereof for the establishment of a Sire Stakes Program for standardbred horses, with payment to be made to the Department of Agriculture for administration as hereinbefore provided;

     (iii) 5 1/2% thereof to the Sire Stakes Program for purse supplements designed to improve and promote the standardbred breeding industry in New Jersey by increasing purses for owners of horses that are sired by a New Jersey registered stallion and are eligible to participate in the Sire Stakes Program. The Sire Stakes Program board of trustees shall consult with the Standardbred Breeders' and Owners' Association of New Jersey before disbursing money for purse supplements;

     (iv) 3% thereof for other New Jersey horse breeding and promotion conducted by the New Jersey Department of Agriculture.

     Payment of the sums held and set aside pursuant to subparagraphs (iii) and (iv) shall be made to the commission every seventh day of any and every race meeting in the amount then due, as determined in the manner provided above, and shall be accompanied by a report under oath showing the total of all such contributions, together with such other information as the commission may require.

     (b)   Distribute as purse money and for programs designed to aid the horsemen and the Standardbred Breeders' and Owners' Association of New Jersey 5.1175%, or in the case of races on a charity racing day 5%, of such total contributions. Expenditures for programs designed to aid the horsemen and the Standardbred Breeders' and Owners' Association of New Jersey shall not exceed 5% of the sum available for distribution as purse money. The formula for distribution of the purse money as either overnight purses or special stakes shall be determined by an agreement between the Standardbred Breeders' and Owners' Association of New Jersey and the authority or a lessee of the authority. Notwithstanding the foregoing, for pools where the patron is required to select two or more horses, the authority or a lessee of the authority shall distribute as purse money 5.6175%, or in the case of races on a charity racing day 5.5%, of the total contributions and for pools where the patron is required to select three or more horses, the authority or a lessee of the authority shall distribute as purse money 7.1175%, or in the case of races on a charity racing day 7%, of the total contributions. Notwithstanding the foregoing, for pools where a patron is required to select three or more horses, the authority or a lessee of the authority shall retain out of the 7.1175% or 7% to be distributed as purse money a sum deemed necessary by the racing commission, for use by the commission to finance a prerace blood testing program, and such other testing programs which the commission shall deem proper and necessary and which shall be subject to the regulation and control of said commission.  Notwithstanding the foregoing, the sum available for distribution as purse money under this subsection may be distributed as provided by a contractual agreement authorized under section 11 of P.L.2013, c.266 (C.5:5-188).

     (c)   In the case of races on a racing day other than a charity racing day, distribute to the Standardbred Breeders' and Owners' Association of New Jersey for the administration of a health benefits program for horsemen .1175% of such total contributions.

     (d)   In the case of races on a racing day other than a charity racing day, distribute to the Sire Stakes Program for standardbred horses .02% of such total contributions.

     (e)   In the case of races on a racing day other than a charity racing day, distribute to the Backstretch Benevolency Programs Fund created pursuant to P.L.1993, c.15 (C.5:5-44.8) .01% of such total contributions.

     (2)   In the case of running races:

     (a)   Hold and set aside in an account designated as a special trust account .05% of such total contributions, to be used and distributed for State horse breeding and development programs, research, fairs, horse shows, youth activities, promotion and administration, as provided in section 5 of P.L.1967, c.40 (C.5:5-88).

     (b)   Distribute as purse money and for programs designed to aid the horsemen and the New Jersey Thoroughbred Horsemen's Association 4.475%, or in the case of races on a charity racing day 4.24%, of such total contributions. Expenditures for programs designed to aid the horsemen and the New Jersey Thoroughbred Horsemen's Association shall not exceed 2.9% of the sum available for distribution as purse money. The formula for distribution of the purse money as either overnight purses or special stakes shall be determined by an agreement between the New Jersey Thoroughbred Horsemen's Association and the authority or a lessee of the authority. Notwithstanding the foregoing, for pools where the patron is required to select three or more horses, the authority or a lessee of the authority shall distribute as purse money 7.475%, or in the case of races on a charity racing day 7.24%, of the total contributions.  Notwithstanding the foregoing, the sum available for distribution as purse money under this subsection may be distributed as provided by a contractual agreement authorized under section 12 of P.L.2013, c.266 (C.5:5-189).

     (c)   Deduct and set aside in a special trust account established pursuant to section 46b.(1)(e) and 46b.(2)(e) of P.L.1940, c.17 (C.5:5-66) for the establishment and support by the commission of the thoroughbred breeding industry in New Jersey .1% of such total contributions, except that for pools where the patron is required to select three or more horses, the amount shall be .6%. The money in the special trust account shall be used to: (i) improve purses for closed races; (ii) provide awards to owners and breeders of registered New Jersey bred horses who earn portions of purses in open and closed races at New Jersey race tracks or in closed races at an out-of-State track as part of a multi-state event to promote thoroughbred breeding, and to owners of stallions posted on the official stallion roster of the Thoroughbred Breeders' Association of New Jersey, which sire such New Jersey bred money earners; and (iii) provide awards to the New Jersey Thoroughbred Breeders' Association for programs beneficial to thoroughbred breeding in this State. The New Jersey thoroughbred award program shall be administered and disbursed by the Thoroughbred Breeders' Association of New Jersey subject to the approval of the commission. The special trust account to be established pursuant to this paragraph shall be separate and apart from the special trust account established and maintained pursuant to subparagraph (a) of this paragraph.

     (d)   In the case of races on a racing day other than a charity racing day, distribute to the Thoroughbred Breeders' Association of

New Jersey .02% of such total contributions.

     (e)   In the case of races on a racing day other than a charity racing day, distribute to the Backstretch Benevolency Programs Fund created pursuant to P.L.1993, c.15 (C.5:5-44.8) .01% of such total contributions.

     Payment of the sums held and set aside pursuant to subparagraphs (a) and (c) of this subsection shall be made to the commission every seventh day of any and every race meeting in the amount then due, as determined in the manner provided above, and shall be accompanied by a report under oath showing the total of all such contributions, together with such other information as the commission may require.

     In addition to the amounts above, in the case of races on a racing day designated or allotted as a charity racing day pursuant to P.L.1977, c.200 (C.5:5-44.2 et seq.), P.L.1993, c.15 (C.5:5-44.8), or section 1 of P.L.1997, c.80 (C.5:5-44.9), an amount equal to 1/2 of 1% of all parimutuel pools shall be paid to the commission at the time and in the manner prescribed by the commission.

     All amounts remaining in parimutuel pools, including the breaks, after such distribution and payments shall constitute revenues of the authority or a lessee of the authority.  Except as otherwise expressly provided in this section 7, the authority or a lessee of the authority shall not be required to make any payments to the Racing Commission or others in connection with contributions to parimutuel pools.

     g.    All sums held by the authority or a lessee of the authority for payment of outstanding parimutuel tickets not claimed by the person or persons entitled thereto within the time provided by law shall be paid upon the expiration of such time, without further obligation to such ticketholder, as follows:

     (1)   In the case of running and harness races, beginning July 1, 1997 50% of those sums shall be paid to the Racing Commission for deposit in the general fund of the State and disposition in accordance with section 4 of P.L.1997, c.29 (C.5:5-68.1);

     (2)   In the case of running races, 50% of those sums shall be paid to the commission and set aside in the special trust account established pursuant to section 46b.(1)(e) and section 46b.(2)(e) of P.L.1940, c.17 (C.5:5-66); and

     (3)   In the case of harness races, 25% of those sums shall be retained by the permitholder to supplement purses for sire stakes races on which there is parimutuel wagering, and 25% shall be retained by the permitholder to supplement overnight purses unless otherwise provided by a contractual agreement authorized under section 11 of P.L.2013, c.266 (C.5:5-188).

     h.    No admission or amusement tax, excise tax, license or horse racing fee of any kind shall be assessed or collected from the authority or a lessee of the authority by the State of New Jersey, or by any county or municipality, or by any other body having power

to assess or collect license fees or taxes.

     i.     Any horse race meeting and the parimutuel system of wagering upon the results of horse races held at such race meeting shall not under any circumstances, if conducted as provided in the act and in conformity thereto, be held or construed to be unlawful, other statutes of the State to the contrary notwithstanding.

     j.     Each employee of the authority or a lessee of the authority engaged in the conducting of horse race meetings shall obtain the appropriate license from the Racing Commission, subject to the same terms and conditions as is required of similar employees of other permitholders. The Racing Commission may suspend any member of the authority upon approval of the Governor and the license of any employee of the authority or a lessee of the authority in connection with the conducting of horse race meetings, pending a hearing by the Racing Commission, for any violation of the New Jersey laws regulating horse racing or any rule or regulation of the commission. Such hearing shall be held and conducted in the manner provided in said laws.

     k.    Notwithstanding any other provision of law, rule, or regulation to the contrary, if the authority shall enter into an agreement with a private entity to lease a racetrack facility it owns to that entity, it may further agree with that entity to jointly operate the facility during a transitionary period.  The transitionary period shall only last:

     (1)   until the private entity lessee has been fully licensed by the New Jersey Racing Commission and has received all necessary permits to conduct future horse race meetings at the racetrack in the manner and subject to compliance with the standards set forth in P.L.1940, c.17 (C.5:5-22 et seq.), and the rules, regulations, and conditions prescribed by the New Jersey Racing Commission thereunder; or

     (2)   for one year from the date that the lease agreement is signed, whichever is shorter.

     The New Jersey Racing Commission may extend the transitionary period for a reasonable time frame beyond one year from the date that the lease agreement is signed, however under no circumstances can the transitionary period extend beyond two years from the date that the lease agreement is signed.  At the expiration of the transitionary period and any extension granted by the New Jersey Racing Commission, the private entity lessee shall be required to have obtained all the necessary permits and licenses in the manner and subject to compliance with the standards set forth in P.L.1940, c.17 (C.5:5-22 et seq.), and the rules, regulations, and conditions prescribed by the New Jersey Racing Commission thereunder.  During this transitionary period, the private entity lessee shall be permitted to conduct horse race meetings and wagering through its own employees or through the authority's employees, provided that the authority or the private entity lessee holds a permit issued pursuant to section 30 of P.L.1940, c.17 (C.5:5-50). During this transitionary period, the authority may also assign any portion of the proceeds it receives from the operation of the leased racetrack to the private entity lessee.  During the transitionary period, the private entity lessee and the authority must remain, at all times, in compliance with P.L.1940, c.17 (C.5:5-22 et seq.), except that the private entity need not obtain a permit pursuant to section 30 of P.L.1940, c.17 (C.5:5-50) if the authority has been granted one by the New Jersey Racing Commission.

     Notwithstanding the provisions of any law, rule, contract, or regulation to the contrary, the authority shall defer any lease payment due pursuant to the agreement above the amount of $1 by the private entity lessee for a period of three years immediately following the effective date of this act, P.L.   , c.   ; provided that the full lease payment due under the agreement shall be payable by the private entity lessee if the lessee receives proceeds from sports wagering or casino wagering during the deferral period.  

(cf: P.L.2013, c.266, s.8)

 

     2.    This act shall take effect immediately.

 

 

STATEMENT

 

     Under current law, the New Jersey Sports and Exposition Authority is authorized to lease Monmouth Park and the Meadowlands racetracks to private entities.  Under the lease agreement, full lease payments are due following a transition period.  This bill defers the amount of lease payments due above $1 for a period of three years from the bill's effective date.  However, the private entity lessees would be required to pay the full amount due under the lease agreement if they receive proceeds from either sports wagering or casino wagering during the deferral period.

     It is the sponsor's intent to protect the economic benefits the racetracks provide under the current challenging economic conditions.  With the significant private sector investments made and operational expenses incurred without State subsidy, it is critical during the next three years for the racetracks to have some flexibility in the short term that can result in long term economic benefits for the State.  For example, an $80 million new grandstand was constructed at the Meadowlands Racetrack.  Both racetracks provide positive and significant economic impacts in the form of jobs, tourism, and entertainment, including the record setting
appearance of Triple Crown winner American Pharaoh.  The racetracks also play an important role in supporting the farmland economy and preserving open space. 

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