Bill Text: NY A01858 | 2021-2022 | General Assembly | Introduced
Bill Title: Relates to the members of the franchise oversight board and the duties and responsibilities of such board with regard to the New York city off-track betting corporation.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2022-01-05 - referred to racing and wagering [A01858 Detail]
Download: New_York-2021-A01858-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 1858 2021-2022 Regular Sessions IN ASSEMBLY January 11, 2021 ___________ Introduced by M. of A. PRETLOW -- read once and referred to the Commit- tee on Racing and Wagering AN ACT to amend the racing, pari-mutuel wagering and breeding law, in relation to the franchise oversight board The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivisions 3 and 8 of section 212 of the racing, pari-mu- 2 tuel wagering and breeding law, subdivision 3 as amended and subdivision 3 8 as added by chapter 18 of the laws of 2008, subparagraphs (ii), (iii), 4 (vii) and (xvii) as amended, subparagraphs (xviii) and (xix) as added 5 and subparagraph (xx) of paragraph a of subdivision 8 as renumbered by 6 section 2 of part NN of chapter 59 of the laws of 2017, subparagraphs 7 (viii) and (xi) of paragraph a of subdivision 8 as amended by chapter 8 140 of the laws of 2008, and subparagraph (iv) of paragraph a and para- 9 graph b of subdivision 8 as amended by chapter 243 of the laws of 2020, 10 are amended to read as follows: 11 3. Such members, except as otherwise provided by law, may engage in 12 private or public employment, or in a profession or business. The board, 13 its members, officers and employees shall be subject to the provisions 14 of sections seventy-three and seventy-four of the public officers law. 15 No former trustee or officer of a non-profit racing association known as 16 The New York Racing Association, Inc. or its predecessor, no current 17 director or officer of a franchised corporation, no former or current 18 director or officer of the New York city off-track betting corporation 19 or any individual registered with the New York commission on public 20 integrity shall be appointed as members to the board nor shall any 21 member of the board have any direct or indirect interest in any 22 racehorse, thoroughbred racing, off-track betting or pari-mutuel wager- 23 ing business, video lottery terminal facility or any development at any 24 racing facility. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD06503-01-1A. 1858 2 1 8. a. The duties and responsibilities of the franchise oversight board 2 shall include, but not be limited to, the following: 3 (i) represent the interests of the state in all real estate develop- 4 ment proposed for Aqueduct racetrack or real estate development at 5 Belmont Park racetrack. Any such real estate development shall only be 6 undertaken pursuant to a competitive process approved by the board, 7 after consultation with the applicable local advisory boards and consid- 8 eration of local zoning and planning regulation, and in a manner that 9 will not adversely impact any historic structure that is included in or 10 eligible for inclusion in the National or the State Register of Historic 11 Places, be consistent with any plan approved for such community, and 12 shall be subject to unanimous approval of the franchise oversight board 13 and all statutory and regulatory requirements; provided, however, that, 14 subject to approval of the franchise oversight board and subject to all 15 statutory and regulatory requirements, the franchised corporation shall 16 have full powers and rights to develop, redevelop, refurbish, renovate 17 or make such other improvements, capital expenditures or otherwise, to 18 the racetracks and the fixtures and improvements thereon consistent with 19 projects specifically identified in the franchised corporation's 20 approved track facility improvement plan. 21 The franchise oversight board shall be guided by the goals of ensuring 22 the continuation of high quality thoroughbred racing at the thoroughbred 23 racing facilities located within the state, raising revenue for or in 24 aid or support of education in this state from video lottery gaming at 25 facilities of the state racing franchise, and maximizing revenue for 26 governments from pari-mutuel wagering on racing at facilities of the 27 state racing franchise. 28 (ii) monitor and enforce compliance with definitive documents that 29 comprise the franchise agreement between the franchised corporation and 30 the state of New York governing the franchised corporation's operation 31 of thoroughbred racing and pari-mutuel wagering at the racetracks. The 32 franchise agreement shall contain objective performance standards that 33 shall allow contract review in a manner consistent with this chapter. 34 The franchise oversight board shall notify the franchised corporation 35 authorized by this chapter in writing of any material breach of the 36 performance standards or repeated non-material breaches which the fran- 37 chise oversight board may determine collectively constitute a material 38 breach of the performance standards. Prior to taking any action against 39 such franchised corporation, the franchise oversight board shall provide 40 the franchised corporation with the reasonable opportunity to cure any 41 material breach of the performance standards or repeated non-material 42 breaches which the franchise oversight board may determine collectively 43 constitute a material breach of the performance standards. Upon a writ- 44 ten finding of a material breach of the performance standards or 45 repeated non-material breaches which the franchise oversight board may 46 determine collectively constitute a material breach of the performance 47 standards, the franchise oversight board may recommend that the fran- 48 chise agreement be terminated. The franchise oversight board shall refer 49 such recommendation to the commission for a hearing conducted pursuant 50 to section two hundred forty-five of this article for a determination of 51 whether to terminate the franchise agreement with the franchised corpo- 52 ration; 53 (iii) oversee, monitor and review all significant transactions and 54 operations of the franchised corporation and the New York city off-track 55 betting corporation authorized by this chapter; provided, however, that 56 nothing in this section shall be deemed to reduce, diminish or impedeA. 1858 3 1 the authority of the commission to, pursuant to article one of this 2 chapter, determine and enforce compliance by the franchised corporation 3 or the New York city off-track betting corporation with terms of racing 4 laws and regulations. Such oversight shall include, but not be limited 5 to: 6 (A) review and make recommendations concerning the annual operating 7 budgets of such franchised corporation and the New York city off-track 8 betting corporation; 9 (B) review and make recommendations concerning operating revenues and 10 the establishment of a financial plan; 11 (C) review and make recommendations concerning accounting, internal 12 control systems and security procedures; 13 (D) review such franchised corporation's and the New York city off- 14 track betting corporation's revenue and expenditure policies which shall 15 include collective bargaining agreements management and employee compen- 16 sation plans, vendor contracts and capital improvement plans; 17 (E) review such franchise corporation's and the New York city off- 18 track betting corporation's compliance with the laws, rules and regu- 19 lations applicable to its activities; 20 (F) make recommendations for establishing model governance principles 21 to improve accountability and transparency; and 22 (G) receive, review, approve or disapprove capital expense plans 23 submitted annually by the franchised corporation and the New York city 24 off-track betting corporation. 25 (iv) evaluate, review and approve the racing franchisee's and the New 26 York city off-track betting corporation's selection of a vendor or 27 vendors to contract with the franchised corporation and the New York 28 city off-track betting corporation for provision of totalizator 29 services, and manage, subject to the franchised corporation's unilateral 30 right to opt out, directly or indirectly, integration of any offered 31 internet wagering platform. The franchise oversight board shall consider 32 in its evaluation of any such proposed vendor the ability of such vendor 33 to reduce the totalizator expenses and general development and 34 production costs of any internet wagering platform of an authorized 35 off-track betting corporation and the state racing franchise holder. 36 (v) facilitate discussions and voluntary agreements between the fran- 37 chised corporation and off-track betting corporations to streamline 38 operations, decrease operating costs and maximize opportunities pertain- 39 ing to costs and revenues, and encourage an exchange of views and expe- 40 riences from the franchised corporation and the off-track betting corpo- 41 rations to improve the racing product in New York and to realize 42 efficiencies, except the New York city off-track betting corporation 43 shall transfer all wagering accounts, including individual account 44 balances held for telephone and internet wagering to the franchise over- 45 sight board. The New York city off-track betting corporation shall 46 provide a report from its totalizator provider of all wagering accounts 47 including individual customer account balances. The franchise oversight 48 board shall enter into a management services agreement on behalf of the 49 New York city off-track betting corporation with the franchise corpo- 50 ration for the operation of the account deposit wagering for telephone 51 and internet wagering; 52 (vi) review and approve all purchasing policies pursuant to paragraph 53 (a) of subdivision six of section two hundred eight of this article and 54 used by the New York city off-track betting corporation; 55 (vii) the New York city off-track betting corporation and the fran- 56 chised corporation shall jointly negotiate all simulcasting contractsA. 1858 4 1 with out of state entities and the franchise oversight board shall 2 review and provide any recommendations on all simulcasting contracts 3 (buy and sell) that are also subject to prior approval of the commis- 4 sion; 5 (viii) act on behalf of the People of the State of New York to enter 6 into any real property transactions in furtherance of the purposes and 7 intent of this statute, including, without limitation, one or more 8 ground leases, for one dollar in consideration annually, for each of 9 Aqueduct racetrack, Belmont Park and Saratoga racecourse to the fran- 10 chised corporation, for a term that will extend until the racing fran- 11 chise expires, is revoked, terminated or ends by any other means 12 provided by law. Such leases shall be executed contemporaneously with 13 the conveyance of the racetracks by the franchised corporation's prede- 14 cessor to the state; 15 (ix) enter into on behalf of the state as licensor, a long term 16 license agreement with the franchised corporation for the use of the 17 simulcast signal and associated intellectual property rights, for 18 consideration of one dollar annually and for a term that will extend 19 until the racing franchise expires, is revoked, terminated or ends by 20 any other means provided by law. Such license agreement shall be 21 executed contemporaneously with the conveyance of the franchised corpo- 22 ration's assets associated with the franchise agreement[.]; 23 (x) conduct running races or steeplechases at racing facilities and 24 conduct pari-mutuel betting on the outcome of the same when necessary to 25 assure the continuation of the racing and pari-mutuel betting activities 26 at such racing facilities (A) in the event that the racing and/or pari- 27 mutuel betting franchises of the franchised corporation authorized by 28 this chapter then holding such franchises have either been terminated in 29 the manner provided by law or have been relinquished by such corpo- 30 ration, or such corporation declines to continue conducting race meet- 31 ings and pari-mutuel betting on the outcome of the same as required by 32 such franchises unless such declination is the result of strikes, acts 33 of God, or other unavoidable causes not under the control of such corpo- 34 ration, or the corporate existence of such corporation has been 35 dissolved in the manner provided by law prior to the end of the term of 36 any such franchise and (B) until such time as a new franchise is 37 granted, and to conduct all operations and pari-mutuel wagering as 38 authorized pursuant to this chapter for the New York city off-track 39 betting corporation in the event that the system of off-track pari-mutu- 40 el betting in the city of New York operated by the New York city off- 41 track betting corporation has either been terminated or relinquished by 42 such corporation, or such corporation declines to continue to operate 43 unless such declination is the result of strikes, acts of God or other 44 unavoidable causes not under control of such corporation until such time 45 as otherwise provided for in statute; 46 (xi) on behalf of the People of the State of New York, and, acting in 47 such capacity as lessor of the racing facilities and real estate, be 48 responsible for payment of all property taxes related to such racing 49 facilities and real estate; 50 (xii) report annually to the governor and the legislature, beginning 51 no later than December thirty-first, two thousand eight, stating its 52 findings and recommendations to implement policy and legislative changes 53 necessary to encourage the continuation of high quality thoroughbred 54 racing in New York state and to protect the legitimate interests of the 55 state and the thoroughbred racing industry;A. 1858 5 1 (xiii) require the franchised corporation and the New York city off- 2 track betting corporation to make all records and documents pertaining 3 to its financial practices, and other documents and records necessary to 4 carry out its duties, available to the franchise oversight board within 5 thirty days of a written request; 6 (xiv) examine or cause to be examined by a third party, the books, 7 papers, records and accounts of the franchised corporation and the New 8 York city off-track betting corporation; 9 (xv) sue and be sued; 10 (xvi) make and execute contracts and all other instruments necessary 11 or convenient for the exercise of its powers and functions under this 12 article; 13 (xvii) request and accept the assistance of any state agency, includ- 14 ing but not limited to, the commission, office of parks, recreation and 15 historic preservation, the department of environmental conservation, the 16 office of general services and the department of taxation and finance, 17 in obtaining information related to the franchised corporation's compli- 18 ance with the terms of the franchise agreement; and 19 (xviii) when the franchise oversight board determines the financial 20 position of the franchised corporation has deviated materially from the 21 franchised corporation's financial plan, or other such related documents 22 provided to the franchise oversight board, and such deviation is not 23 mitigated by the franchised corporation within one hundred eighty days 24 of the franchise oversight board providing notice of such determination 25 to the franchised corporation, or when the implementation of such plan 26 would, in the opinion of the franchise oversight board, pose a signif- 27 icant risk to the liquidity of the franchised corporation, in any order 28 or combination: 29 (A) hire, at the expense of the franchised corporation, an independent 30 financial adviser to evaluate the financial position of the franchised 31 corporation and report on such to the franchise oversight board; and 32 (B) require the franchised corporation to submit for the franchise 33 oversight board's approval a corrective action plan addressing any 34 concerns identified as risks by the franchise oversight board. 35 (xix) when the franchise oversight board finds the franchised corpo- 36 ration has experienced two consecutive years of material losses due to 37 circumstances within the control of the franchised corporation, as 38 determined by the franchise oversight board, and when the franchised 39 corporation has failed to address concerns identified by the franchise 40 oversight board pursuant to subparagraph (xviii) of this paragraph, the 41 board may by unanimous vote request the director of the budget to 42 impound and escrow racing support payments accruing to the benefit of 43 the franchised corporation pursuant to paragraphs three and four of 44 subdivision f of section sixteen hundred twelve of the tax law. The 45 director of the budget shall release such impounded and escrowed racing 46 support payments upon notice from the franchise oversight board that the 47 franchised corporation has achieved the goals of a new corrective action 48 plan approved by the board. 49 The director of the budget shall, upon warrant of the franchise over- 50 sight board, approve the use of withheld racing support payments neces- 51 sary to satisfy financial instruments used to fund board-approved capi- 52 tal investments, as approved by the franchise oversight board. 53 (xx) do all things necessary, convenient or desirable to carry out its 54 purposes and for the exercise of the powers granted in this article. 55 b. Notwithstanding any other provision of this article, the franchised 56 corporation shall be entitled to make capital expenditures, except thoseA. 1858 6 1 capital expenditures for the Saratoga Racecourse that may, on the advice 2 of the New York state historic preservation office, adversely impact any 3 historic structure that is included in or is eligible for inclusion in 4 the national or state register of historic places, to the physical plant 5 of the racetracks, grandstand, backstretch, parking and public areas set 6 forth in the New York Racing Association's capital expenditure plan 7 ("capital plan") filed with the commission in two thousand seven. Any 8 material modification to the capital plan as determined by the franchise 9 oversight board and each future capital investment plan for the tracks, 10 grandstand, backstretch, parking and public areas of the racetracks 11 operated by the franchised corporation involving the expenditure of more 12 than five million dollars in the aggregate shall require the prior 13 approval of the franchise oversight board. Within five years from the 14 date of commencement of the video lottery terminal operations at Aque- 15 duct, and every five years thereafter, the franchised corporation shall 16 submit to the oversight board a capital plan for the five-year period 17 commencing on January first of the following year. Such plans shall 18 contain both the intended object of expenditure and the proposed sources 19 of financing. The franchised corporation shall report to the franchise 20 oversight board within ninety days following the end of each fiscal year 21 as to the amount spent pursuant to the capital plan. 22 § 2. This act shall take effect immediately; provided, however, the 23 amendments to section 212 of the racing, pari-mutuel wagering and breed- 24 ing law made by section one of this act shall be deemed repealed as 25 provided by chapter 354 of the laws of 2005, as amended.
