US Laws, Codes, Statutes & Cases

 
    §  208.  Franchise  to nonprofit racing association for running races,
  steeplechases and hunt meetings. 1. a. Any nonprofit racing  association
  organized pursuant to section two hundred two of this chapter, proposing
  to  conduct  a  race  course  or  race  meetings  for  running  races or
  steeplechases or hunt meetings,  may  apply  to  the  state  racing  and
  wagering board for a franchise for a period of not more than twenty-five
  years  nor more than the period specified by law in any particular case,
  whichever is less. If in the judgment of such board the public interest,
  convenience or necessity will be served thereby and a  proper  case  for
  the  issuance of such franchise is shown consistent with the purposes of
  this article and the best interest of racing generally, it  shall  grant
  such  franchise for a period of not more than twenty-five years nor more
  than the period specified by law in any particular  case,  whichever  is
  less,  which  shall  specify  the  minimum number of days in any year on
  which,  and  the   places   where,   such   association   may   operate.
  Notwithstanding  the provisions of section seven of the general business
  law, or any other inconsistent provision of general,  special  or  local
  law,  the  state  racing  and  wagering board shall specify annually the
  dates on which, and the hour of the first  post  time  for  days  during
  which,  such  association  may  operate  at  the places and for the full
  number of days specified in its  franchise.  In  consideration  for  any
  franchise granted pursuant to this section such association shall pay to
  the  New York State Thoroughbred Racing Capital Investment Fund in order
  to reduce such debt obligations which such non-profit racing association
  may have incurred in accordance with article II-A  of  this  chapter  or
  chapter   two  hundred  eighty-one  of  the  laws  of  nineteen  hundred
  ninety-four annually on or before the fifteenth day of the  third  month
  following  the  close  of  every  calendar  year  subsequent to nineteen
  hundred ninety-seven as a franchise fee for each such calendar year,  an
  amount equal to the "entire adjusted net income" of such association, as
  defined  in  paragraph  b  of  subdivision one of this section, less two
  million dollars, which two million dollars or an amount equal to "entire
  adjusted net income" if such "entire adjusted net income" is  less  than
  two  million  dollars  shall  be  used, in addition to any other amounts
  required to be paid by this chapter,  exclusively  for  the  purpose  of
  increasing  purses,  including  stakes,  premiums and prizes, awarded to
  horses in races conducted by such association.  The  repayment  of  such
  debt  obligations  to  the  New  York  State Thoroughbred Racing Capital
  Investment Fund shall be restructured pursuant to agreement between such
  fund and  such  association.  The  basis  for  determining  such  annual
  franchise  fee  shall  be  subject  to  review  from time to time as the
  legislature may require.  Any  such  franchise  granted  before  January
  first,  nineteen  hundred  sixty-eight,  and  heretofore  extended until
  December thirty-first, two thousand shall be and hereby is extended  and
  shall  continue  in  full  force  and  effect  to and including December
  thirty-first, two thousand seven.
    b. "Entire adjusted net income" shall be computed by adding to taxable
  income (but not including taxable income imputed to the  association  by
  the  extension of debt), as heretofore provided, the amount by which the
  operating expenses of such association exceed one hundred six percent of
  such expenses during the prior year. Provided, however, that in any year
  in which the average consumer price index for  urban  wage  earners  and
  clerical  workers  prepared  by the United States department of labor is
  more than six percent higher than the average for such index during  the
  prior  year,  the  percentage  increase  in such index, plus one hundred
  percent, shall be used in lieu of one hundred six percent in calculating
  such amount. For the purposes of this section, operating expenses  shall
  include  all  expenses  of  such  association  for such year except: (i)
  charges for stakes, purses, interest, real estate  taxes,  extraordinary
  nonrecurring charges, principal debt repayments for capital improvements
  including  interest  thereon  and  other necessary expenditures directly
  related  to  the  construction and operation of a video lottery terminal
  facility at Aqueduct racetrack, and depreciation; (ii) promotional costs
  incurred in connection with specific events; (iii) costs incurred in the
  purchase of advertising services; and (iv), for calendar years  nineteen
  hundred   eighty-six   and   nineteen  hundred  eighty-seven,  liability
  insurance costs. In accordance with the provisions of  subdivision  four
  of   this   section,  the  state  comptroller  shall  ensure  that  such
  association reports its expenses on a basis that accurately reflects the
  provisions of this subdivision.
    2. a. On or before November fifteenth of each year,  such  association
  shall  file an estimate of each state franchise fee payable for the next
  succeeding calendar year with the director of the budget, the state  tax
  commission,  the  chairman  of  the  senate  finance  committee, and the
  chairman of the assembly ways and means committee. Such  estimate  shall
  be  accompanied  by  a  report  containing  such  information as the tax
  commission may prescribe. On or before December fifteenth of each  year,
  the  tax  commission  shall issue a schedule for the periodic payment of
  the estimated franchise  fee  during  the  next  succeeding  year.  Such
  payments  shall  be  made at the same time and in the same manner as the
  pari-mutuel tax payments due under the provisions of subdivision two  of
  section   two  hundred  twenty-nine  of  this  chapter  and  in  amounts
  sufficient to ensure that eighty per centum of  such  franchise  fee  is
  collected during the calendar year to which it is applicable.
    b.  Such  franchise  fee shall be paid to the state tax commission and
  shall be accompanied by a report containing  such  information  as  said
  commission may prescribe. If such fee is not paid when due, a penalty of
  five  per  centum  and  interest at the rate of one per centum per month
  from the due date to the date of payment of the fee shall be payable. If
  any such report is not filed when due, or if in the opinion of the state
  tax  commission  any  such  report  is  incorrect,  such  commission  is
  authorized to issue an assessment fixing the correct amount of such fee.
  Such assessments may be issued within three years from the filing of any
  report  and  may  be  issued at any time if no report is filed. Any such
  assessment shall be final and conclusive unless  an  application  for  a
  hearing  is filed by such association within one year of the date of the
  assessment. If the taxable income of any such association as returned to
  the United States treasury department is changed  or  corrected  by  the
  commissioner  of  internal  revenue,  or if an amended federal return is
  filed, such association shall notify the  state  tax  commission  within
  ninety  days thereafter of such change, correction or amended return and
  within one year thereafter, the tax commission may issue  an  assessment
  of  any  additional  tax  due.  The  state  tax  commission  or its duly
  authorized representatives shall at all reasonable times have access  to
  the  books  and records of such association for the purpose of examining
  and checking the same and ascertaining whether or not the proper  amount
  due  the  state  is  being  paid  by  it. All moneys received under this
  section shall be paid by the state tax commission into the general  fund
  of the state treasury.
    3.  Notwithstanding  any  other requirement of this article, for years
  beginning on or after January first, nineteen hundred seventy-seven, the
  capital expenditure plans of any such nonprofit racing association shall
  be  subject  to  the  approval  of  the  non-profit  racing  association
  oversight  board.  To  facilitate  the  exercise  of this authority, the
  non-profit racing association oversight board  may  require  the  annual
  submission  of  the  capital expenditure plans of such association on or
  before November fifteenth of the year preceding the year for  which  the
  plans  are  drawn. Such plans shall contain both the intended objects of
  expenditure and the proposed sources of financing. Approval of the plans
  by  the  non-profit  racing  association  oversight board shall be based
  solely on a finding that any borrowings  contemplated  to  finance  such
  plans can reasonably be expected to be repaid by such association within
  the  term  of  its  franchise  and  the provisions of existing law. Such
  association may, with the approval of the non-profit racing  association
  oversight  board,  file  amended plans subsequent to November fifteenth.
  Copies of the non-profit racing association oversight  board's  approval
  or  rejection  of all original and amended plans shall be filed with the
  chairperson of the senate finance committee and the chairperson  of  the
  assembly ways and means committee, within five days of their issuance.
    4.  Notwithstanding  any  other  provision  of this article, the state
  comptroller shall, from time to time but not less than once in each year
  examine the books  and  accounts  of  such  association,  including  its
  receipts,  disbursements,  contracts, leases, loans, investments and any
  other matters relating  to  its  financial  operations  and  report  the
  results  of  each audit including his certification of the amount of net
  income of the association for the preceding calendar year found  by  him
  to  be  in excess of one million eight hundred fifty thousand dollars to
  the governor and the legislature.
    5. In considering an application for a franchise under  this  section,
  the state racing and wagering board may give consideration to the number
  of  franchises or licenses already granted and to the location of tracks
  covered by such franchises  or  licenses.  By  acceptance  of  any  such
  franchise  and  as  a  condition  thereof the association to which it is
  granted shall agree that it will conduct  running  races,  steeplechases
  and race meetings in accordance with the provisions thereof and that all
  running races, steeplechases or race meetings conducted thereunder shall
  be  subject  to  such reasonable rules and regulations from time to time
  prescribed by the state racing and wagering board.
    6. Any franchise granted pursuant to this section may be  revoked  and
  cancelled  by  the  state racing and wagering board only for the reasons
  and in the manner prescribed under the provisions of section two hundred
  ten of this chapter. The action of the state racing and  wagering  board
  in  revoking  a  franchise  and  any  determination  by  the  state  tax
  commission of the franchise fee shall be reviewable in the supreme court
  in the manner provided by and  subject  to  the  provisions  of  article
  seventy-eight of the civil practice law and rules.
    7.  Except as otherwise provided in paragraph b of subdivision five of
  section two hundred thirteen of this article, all  concession  contracts
  entered  into  by  any nonprofit racing association on and after January
  first, nineteen hundred  seventy-seven,  shall  be  awarded  only  by  a
  process  of  competitive  bidding  approved  by  the  non-profit  racing
  association oversight board.
    8. If a non-profit racing association, which is franchised pursuant to
  this section, and  which  (a)  has  entered  into  an  approved  capital
  improvement  plan as provided in section two hundred fifty-eight of this
  chapter; (b) holds title to the  racing  facilities,  as  such  term  is
  defined  in  subdivision  ten  of  section two hundred fifty-two of this
  chapter, whereat such association is franchised to conduct race meetings
  for running races or steeplechases  or  hunt  meetings  and  pari-mutuel
  betting  on  the  races  run  at such race meetings; and (c) voluntarily
  relinquishes such franchises prior to their expiration,  or  voluntarily
  declines to continue conducting race meetings and pari-mutuel betting on
  the races run at such race meetings as required by its franchises unless
  such  declination  is  the  result  of  strikes,  acts  of God, or other
  unavoidable causes  not  under  the  control  of  such  association,  or
  voluntarily  affects corporate dissolution in the manner provided for by
  article ten  or  eleven  of  the  business  corporation  law  and  other
  applicable provisions of law, or if such franchise or license is revoked
  by  the  racing  and  wagering  board,  then,  notwithstanding any other
  provision of law to the contrary, such association shall transfer to the
  non-profit racing association  oversight  board  at  the  time  of  such
  relinquishment,  declination, revocation or dissolution all right, title
  and interest held by such association in all such  facilities,  and  all
  capital  improvements  made  to  the  real  property and such facilities
  except  that  if  such  relinquishment,   declination,   revocation   or
  dissolution  is  made pursuant to any provision of law enacted after the
  effective date of the chapter of the laws which added  this  subdivision
  then  any  provisions  of  such  subsequent  enactment  of law which are
  inconsistent with the provisions of this subdivision shall supersede the
  provisions of this subdivision.
    9. A non-profit racing association:
    (a) which is franchised pursuant to this section and which holds title
  to the racing facilities, as such term is defined in subdivision ten  of
  section  two hundred fifty-two of this chapter, whereat it is franchised
  to conduct race meetings;
    (b) which acquired title to such facilities pursuant to the provisions
  of section seven-b of chapter four hundred forty of the laws of nineteen
  hundred twenty-six as added by section three of  chapter  eight  hundred
  twelve of the laws of nineteen hundred fifty-five;
    (c)  which  acquired  title  to such facilities and provided for their
  improvement  with  monies  borrowed  pursuant  to  a  long  term  credit
  agreement  contracted  by  such  association  for such purposes with the
  approval of the state racing commission pursuant to  the  provisions  of
  section nine-a of chapter two hundred fifty-four of the laws of nineteen
  hundred  forty  as  added  by  section  three  of  chapter eight hundred
  thirteen of the laws of nineteen hundred fifty-five; and
    (d) which, (i) in accordance with the provisions of section nine-a  of
  chapter  two hundred fifty-four of the laws of nineteen hundred forty as
  added by section three of chapter eight hundred thirteen of the laws  of
  nineteen  hundred  fifty-five  and  (ii)  with the approval of the state
  racing commission, provided for the amortization of  the  debt  incurred
  pursuant to such long term credit agreement with revenues resulting from
  the  conduct  of  race  meetings  and  pari-mutuel  betting  pursuant to
  franchises issued pursuant to section seven-a of  chapter  four  hundred
  forty of the laws of nineteen hundred twenty-six as added by section two
  of  chapter  eight  hundred  twelve  of  the  laws  of  nineteen hundred
  fifty-five and section four-a of chapter two hundred fifty-four  of  the
  laws  of nineteen hundred forty as added by section one of chapter eight
  hundred  thirteen  of  the  laws   of   nineteen   hundred   fifty-five,
  respectively,  as  continued  in this section and in section two hundred
  twenty-nine of  this  chapter  respectively  by  chapter  eight  hundred
  sixty-five  of  the  laws  of  nineteen  hundred  eighty-two,  shall not
  utilize:
    (i) such facilities;
    (ii) any other assets acquired pursuant to the provisions  of  section
  seven-b  of  chapter  four hundred forty of the laws of nineteen hundred
  twenty-six; or
    (iii) the proceeds from  any  sale,  pursuant  to  the  provisions  of
  section two hundred nine-a of this article, of any such facilities or of
  any  such other assets or of any portion of any such facilities or other
  assets for any purposes other than:
    (1) conducting running and steeplechases and hunt meetings in New York
  pursuant to a franchise issued by the state  racing  commission  or  the
  state racing and wagering board for such purposes;
    (2)  conducting  pari-mutuel betting at such race meetings pursuant to
  franchises issued by the state racing commission or the state racing and
  wagering board for such purposes;
    (3) encouraging the  raising,  breeding  and  racing  of  thoroughbred
  horses in New York state;
    (4)  establishing  thoroughbred racing and pari-mutuel betting on such
  racing in New York state on such a footing  that  it  will  command  the
  interest  as  well as the confidence and favorable opinion of the public
  and so that these activities will provide  reasonable  revenue  for  the
  support  of government in accordance with the provisions of section nine
  of article one of the state constitution;
    (5)  increasing  the  attendance  at,  and  pari-mutuel  wagering  on,
  thoroughbred races conducted by such association in New York state;
    (6)  conducting other activities not inconsistent with such non-profit
  racing association's certificate of incorporation or its  franchises  or
  with applicable laws and regulations, provided that the revenues derived
  from  such  activities  are  utilized  for the purpose of furthering the
  accomplishment of any  of  the  purposes  listed  in  subparagraphs  (1)
  through (5) of this paragraph.
    10.  Any non-profit racing association which is franchised pursuant to
  this section shall take such steps as are necessary to  ensure  that  it
  operates in a sound, economical, efficient and effective manner so as to
  produce  a reasonable revenue for the support of government. In carrying
  out these responsibilities, the non-profit racing association  oversight
  board  shall  require  the  appropriate  officers  of the association to
  present to such board for its approval prior to the  beginning  of  each
  fiscal  year an operating budget covering all of the expenses planned to
  be incurred during such year and a plan of operation. The form  of  such
  plan of operation shall be prescribed by such board.
    If  at  any  time,  the  total  expenses  of  such association, except
  principal debt repayments with interest thereon for capital improvements
  and other necessary expenditures directly related  to  the  construction
  and   operation  of  a  video  lottery  terminal  facility  at  Aqueduct
  racetrack, taxes, fees or special assessments levied by the state of New
  York or by any  agency  or  instrumentality  of  the  state  or  by  any
  political  subdivision  of  the  state  or any agency or instrumentality
  thereof, exceed or are anticipated during the  ensuing  year  to  exceed
  ninety  per centum of the revenues available to such association for its
  operations, pursuant to section two hundred twenty-nine of this article,
  then such board  shall  thereafter  disapprove  any  proposed  operating
  budgets  which  provide for operating expenses in excess of a percentage
  of such expenses during the prior year with such percentage to be  equal
  to  the  percentage  which  total  revenue  from  the  conduct  of  such
  facilities, race meetings, races and pari-mutuel betting in the  current
  year  is  projected  to  bear  to  such revenue during the previous year
  provided that such latter percentage may be modified to reflect  unusual
  or   nonrecurring  circumstances  occurring  during  either  such  year.
  Calculations of such percentages, including a clear specification of any
  unusual or nonrecurring circumstances being taken into consideration  in
  the  calculation  of  such  latter  percentage, shall be included in the
  accompanying reports submitted by such association  in  accordance  with
  the  provisions of paragraph a of subdivision two of section two hundred
  thirty-one-a of this article and subdivision one of section two  hundred
  fifty-eight  of  this  chapter.  In  any  year in which actual operating
  expenses are greater than the operating expenses allowed pursuant to the
  provisions of this subdivision, the amount by which such actual expenses
  exceed such allowed  expenses  shall  be  added  to  taxable  income  in
  computing  "entire  adjusted  net  income"  for  use  in calculating the
  franchise  fees  due  to  the state in accordance with the provisions of
  paragraph a of subdivision one of this section.
    11. a. On and after June twenty-sixth, nineteen hundred  eighty-three,
  no  franchise  shall  be  granted  by  the  racing and wagering board in
  accordance with the provisions of subdivision one of this section unless
  such  grant  is  made  in  accordance  with  the  provisions   of   this
  subdivision.  On  or  before  December  first,  two thousand five; on or
  before December first of the year prior to the franchise expiration date
  thereafter; and, immediately upon receiving notification, in  accordance
  with the provisions of section two hundred eight-a of this article, from
  any  non-profit racing association or corporation franchised pursuant to
  this section  to  conduct  race  meetings  at  the  thoroughbred  racing
  facilities  located in Queens county, Saratoga county or jointly located
  in Nassau and Queens counties whereat running  races,  steeplechases  or
  hunt  meetings  and  pari-mutuel betting on the outcome of the same have
  been conducted prior  to  the  effective  date  of  this  section  by  a
  non-profit  racing association known as the New York Racing Association,
  Inc. and which facilities are known as Belmont Park racetrack,  Aqueduct
  racetrack  and  Saratoga  thoroughbred  racetrack,  that  it  intends to
  relinquish  such  franchise  prior  to  the  expiration  date  of   such
  franchise,  or  that  such  association  intends  to  end  its corporate
  existence prior to such expiration date, or upon the revocation of  such
  franchise  or exclusive right to operate and maintain such franchise the
  governor shall take such action as is necessary to create a  special  ad
  hoc   committee  for  the  purpose  of  soliciting  proposals  from  all
  corporations and associations interested in securing the exclusive right
  to operate and maintain such facilities, including, but not limited  to,
  conducting  race meetings, pari-mutuel betting on the races to be run at
  such race meetings at those facilities, and operating  a  video  lottery
  gaming  facility  at  Aqueduct  racetrack during the period beginning on
  January first, two thousand eight or on January first of each  franchise
  period  thereafter,  as  the case may be; or, in the case of a franchise
  which is being relinquished, or revoked due to corporate dissolution  or
  otherwise,  proposals  from all corporations and associations interested
  in carrying out the franchisee's responsibilities during  the  remainder
  of the franchise being relinquished or revoked.
    b.  Such  special  committee  shall  consist  of  nine  members  to be
  appointed by the governor, three members of whom shall be appointed upon
  the recommendation of the temporary president of the senate,  and  three
  of whom shall be appointed upon the recommendation of the speaker of the
  assembly,  and  shall  have full power and authority to hold and conduct
  public hearings.
    c. Within one month of being established, each  such  special  ad  hoc
  committee  shall  give  public  notice  of the fact that it will issue a
  formal request for proposals in accordance with the provisions  of  this
  section.  Such  notice  shall  indicate  that  any parties interested in
  submitting proposals in response to such request for proposals that  are
  not at that time incorporated pursuant to section two hundred one or two
  hundred  two-a  of this chapter, should take such action as is necessary
  to become incorporated under section two  hundred  one  or  two  hundred
  two-a.  No certificate of incorporation under section two hundred one or
  two hundred two-a wherein the right to conduct running  or  steeplechase
  race meetings or hunt meetings is claimed, shall be filed unless; (i) it
  meets  all  of the requirements of the section of law involved; and (ii)
  the approval of the state racing and wagering board is indorsed  thereon
  or  annexed  thereto, stating that, in its opinion, the purposes of this
  chapter and the public interest will be promoted by such  incorporation,
  and  that  such  incorporation  will  be  conducive  to the interests of
  legitimate racing.
    d.  Within  one  year  of  being established, or within such shortened
  period as may be necessary  to  continue  the  conduct  of  thoroughbred
  racing  and pari-mutuel betting at the facilities described in paragraph
  a of this subdivision, each such special ad hoc committee shall issue  a
  formal  request  for  proposals  for  the exclusive right to operate and
  maintain those facilities as described in this  subdivision.  Each  such
  committee  may  prescribe  the form in which proposals shall be made and
  the information to be  furnished  by  each  corporation  or  association
  making such a proposal.
    e.  On  the  basis  of  the proposals submitted and its examination of
  those proposals and of any and all other evidence and information  which
  it  considers relevant, each such ad hoc committee shall determine which
  of  the  associations  or  corporations  submitting  proposals  can   be
  reasonably expected to best provide over the franchise period, or as the
  case  may  be,  during  the  remainder  of the term of a franchise being
  relinquished, for the operation and maintenance of the racing facilities
  involved,  the  conduct  of  race  meetings  at  such  facilities,   the
  pari-mutuel betting on the races to be run at such race meetings and the
  video  lottery  gaming  facility  at  Aqueduct  racetrack in a sound and
  economical  manner  which  is  consistent   with   the   traditions   of
  thoroughbred  racing  in  this  state,  which  will  ensure the long-run
  viability of thoroughbred racing in this state, and which  will  produce
  reasonable revenue for the support of government.
    f.  The  committee  shall  report its findings to the legislature, the
  governor and the racing and wagering board with recommendations for such
  actions as it deems necessary to implement its determinations  regarding
  the  corporation  or  corporations, association or associations to which
  such grants of authority and/or franchises should be  made  or  granted,
  the  legislation  which  should  be  enacted  governing  such  grants of
  authority or franchises, and the responsibilities related thereto  which
  should  be  assigned  to the racing and wagering board and to such other
  state agencies or officers as it deems appropriate.
    g.  In  order  for  the  committee  to  effectively  discharge   these
  enumerated  duties,  the  committee  shall  be authorized to request and
  accept the assistance of any state agency.