NY-PML Racing, Pari-Mutuel Wagering and Breeding Law NY

Contents

ARTICLE 1 Supervision and Regulation

§ 100 — Legislative intent

Legislative intent. The legislature finds and determines that

the gaming industries constitute a vital sector of New York state's

overall economy. The legislature also finds and determines that

responsive, effective, innovative, state gaming regulation is necessary

to operate in a global, evolving and increasingly competitive market

place. The legislature additionally finds and determines that this

legislation is necessary to modernize and transform the present state

gaming agencies into a new integrated state gaming commission.

The continued growth of the gaming industry will contribute to

economic development and job creation in this state. Therefore, it is

essential to maintain the public confidence and trust in the credibility

and integrity of legalized gaming activities. To ensure such public

confidence and trust, this article provides that the regulation of such

gaming is to be conducted in the most efficient, transparent and

effective manner possible. By consolidating various regulatory functions

into a single oversight body with broad powers, this article ensures

strict state regulation of all corporations, associations and persons

engaged in gaming activity. Further, by consolidating regulatory

functions into a single oversight body, this article will increase

efficiency, reduce costs and eliminate any unnecessary redundancies in

regulation. The improved regulatory structure established by this

article will ensure, so far as practicable, the exclusion of unsuitable

persons or entities from participating in any legalized gaming activity

within this state. The goal of this article is that all gaming activity

conducted in this state will be of the highest integrity, credibility

and quality and that the best interests of the public, both gaming and

non-gaming, will be served. Additionally, during the term of appointment

or employment, every member, officer and employee of the commission

shall be held to the highest ethical standards and avoid any conflict of

interest or appearance thereof. Finally, it is determined by the

legislature that the public interest is best served by those persons or

entities engaged in gaming activity paying the cost of regulating such

activity through reasonable regulatory fees.

§ 101 — Definitions

Definitions. As used in this chapter, the following terms shall

have the following meanings, unless the context requires otherwise:

1. "Public officer" shall mean every elected state and local officer

and every other state and local officer, as defined in section two of

the public officers law, whose duties relate to pari-mutuel racing

activities or the taxation thereof, who is required to devote all or

substantially all of his or her time to the duties of his or her office

for which he or she receives compensation or if employed on a part-time

or other basis receives compensation in excess of twelve thousand

dollars per annum, a member or officer of the state legislature, a

member, director or officer of the state gaming commission, or any

regional off-track betting corporation, or a member of a local

legislative body.

2. "Public employee" shall mean every person employed by the state or

any municipality or other political subdivision thereof or by a local

legislative body, other than a public officer defined in subdivision one

of this section, who is required to devote all or substantially all of

his or her time to the duties of his or her employment for which he or

she receives compensation, or if employed on a part-time basis receives

compensation in excess of twelve thousand dollars per annum, or an

employee of the state legislature or an employee of the state gaming

commission.

3. "Party officer" shall mean the following members or officers of any

political party:

(a) a member of a national committee;

(b) a chairman, vice-chairman, secretary, treasurer or counsel of a

state committee, or member of the executive committee of a state

committee;

treasurer of a county committee.

4. "Local legislative body" shall mean the legislative body of a

county; the council, common council or board of aldermen and the board

of estimate, the board of estimate and apportionment or board of

estimate and contract, if there be one, of a city; the town board of a

town and the village board of a village.

5. "Gaming activity" shall mean the conduct of any form of legalized

gaming, including, but not limited to, Class III gaming under the Indian

Gaming Regulatory Act, 25 U.S.C. § 2701 et seq., pari-mutuel wagering,

both on-track and off-track, bingo and charitable games of chance and

the state lottery for education.

6. "Commission" or "state gaming commission" shall mean the New York

state gaming commission created pursuant to section one hundred two of

this article.

§ 102 — New York state gaming commission

New York state gaming commission. 1. There is hereby created

within the executive department the New York state gaming commission.

The commission shall consist of seven members appointed by the governor

by and with the advice and consent of the senate. Of the seven members,

one shall be appointed upon the recommendation of the temporary

president of the senate and one shall be appointed upon the

recommendation of the speaker of the assembly. All members shall

continue in office until their successors have been appointed and

qualified.

2. Members of the commission shall each possess no less than five

years of responsible administrative experience in public or business

administration and have any one or more of the following qualifications:

(a) significant service as a certified public accountant experienced

in accounting and auditing,

(b) a comprehensive knowledge of corporate finance and securities,

administration or gaming or racing industry management,

(d) significant experience in the fields of criminal investigation,

law enforcement, or law, or

(e) significant experience in the prevention or treatment of problem

gambling.

3. A member shall be designated as chair of the commission by the

governor to serve in such capacity at the pleasure of the governor or

until his or her term as commission member expires, whichever first

occurs. The members shall be appointed for terms of five years;

provided, however, that initial appointments to the commission shall be

for terms as follows:

(a) one member appointed by the governor shall serve for a one year

term, one member appointed by the governor shall serve for a two year

term, one member appointed by the governor shall serve for a three year

term, one member appointed by the governor shall serve for a four year

term, one member appointed by the governor shall serve for a five year

term; and

(b) each of the members appointed by the governor upon the

recommendation of the temporary president of the senate and upon the

recommendation of the speaker of the assembly shall serve for a four

year term.

4. The members shall, when performing the work of the commission, be

compensated at a rate of three hundred dollars per day, together with an

allowance for actual and necessary expenses incurred in the discharge of

their duties.

5. The members of the commission shall not hold any other public

office or public employment for which they shall receive compensation,

other than necessary travel or other expenses incurred in the

performance of the duties of such office or employment. Members may

engage in private employment or in a profession or business, provided,

however, such employment does not interfere or conflict with the

performance or proper discharge of his or her duties.

6. Each member of the commission shall be a resident of the state of

New York. No member of the legislature or person holding any elective or

appointive office in the federal, state or local government shall be

eligible to serve as a member of the commission.

7. The governor may remove any member for inefficiency, neglect of

duty or misconduct in office after giving him or her a copy of the

charges against them, and an opportunity of being heard in person or by

counsel in their own defense, upon not less than ten days' notice. If

such member shall be removed, the governor shall file in the office of

the department of state a complete statement of charges made against

such member, and his or her findings thereon, together with a complete

record of the proceeding.

§ 103 — Organization and divisions

Organization and divisions. 1. The commission shall establish a

plan of organization and may incur expenses within the limits of funds

available to it. An executive director shall be appointed by the

governor, with the advice and consent of the senate, who shall serve at

his or her pleasure. The executive director shall be responsible for the

conduct of the administrative affairs of the commission.

2. The commission shall establish and supervise four divisions to

respectively carry out responsibilities relating to the regulation and

enforcement of the following: lottery, charitable gaming, gaming, and

horse racing and pari-mutuel wagering. Each such division shall be

supervised by a division director, each to serve in such capacity at the

pleasure of the governor.

(a) Division of lottery. The division of lottery shall be responsible

to operate and administer the state lottery for education, as prescribed

by article thirty-four of the tax law, excepting responsibilities for

video lottery gaming. Notwithstanding the foregoing, the division shall

retain the responsibility for all aspects of promotional activities

ARTICLE 2 Thoroughbred Racing and Breeding

§ 201 — Incorporation

Incorporation. (a) General requirements. Any number of persons

may become a corporation for the purpose of conducting racing at one or

more thoroughbred racetracks, conducting pari-mutuel wagering and

furthering the raising and breeding and improving the breed of horses,

with all the general powers of corporations created under the laws of

this state, by making, signing, acknowledging and filing a certificate

which shall contain:

1. The name of the proposed corporation.

2. The objects for which it is to be formed, including a statement as

to whether it is proposed to exercise the particular powers conferred by

section two hundred three of this article, and specifying whether it is

proposed to conduct running or steeplechase race meetings.

3. The amount and description of the capital stock, if applicable.

4. The number of shares of which the capital stock, if applicable,

shall consist, each of which shall not be less than five nor more than

one hundred dollars.

5. The location of its principal business office.

6. Its duration, which shall be for a franchised corporation,

coterminous with the term of the franchise.

7. The number of its directors.

8. The names and post-office addresses of the directors or

incorporators, as applicable, for the first year.

9. The post-office addresses of the subscribers and a statement of the

number of shares of stock which each agrees to take in the corporation,

if applicable.

10. The name of the county in which it proposes to conduct running or

steeplechase race meetings.

(b) Approval. No certificate of incorporation under this section

wherein the right to conduct running or steeplechase race meetings is

claimed, shall hereafter be filed without the approval of the

commission, indorsed thereon or annexed thereto, stating that, in its

opinion, the purposes of this article and the public interest will be

promoted by such incorporation, and that such incorporation will be

conducive to the interests of legitimate racing; nor shall any

certificate amending the said certificate of incorporation in any

particular or any certificate of merger affecting said corporation be

filed without the approval of the commission, indorsed thereon or

annexed thereto stating that, in its opinion, the purposes of this

article and the public interest will be promoted by such amendment or by

such merger and that such amendment or such merger will be conducive to

the interests of legitimate racing.

§ 202 — Restriction upon commencement of business

Restriction upon commencement of business. No business

corporation organized under the provisions of this article shall engage

in the prosecution or management of its business until the whole of its

capital stock shall have been subscribed, nor until it shall have filed

in the offices where certificates of incorporation were filed, a further

certificate stating that the whole of its capital stock has been in good

faith subscribed, executed and acknowledged by its president or

vice-president and treasurer or secretary, and verified by them to the

effect that the statements contained in it are true.

Notwithstanding the foregoing, corporations organized pursuant to

section two hundred one of the not-for-profit corporation law as

charitable corporations as defined in paragraph (a) of section one

hundred two (Definitions) of the not-for-profit corporation law shall

not engage in the prosecution or management of its business until its

certificate of incorporation has been accepted for filing by the

secretary of state and such confirmation of filing has been filed with

the commission and the franchise oversight board.

§ 202-a — Liability of the directors of a franchised corporation

Liability of the directors of a franchised corporation. The

directors of a franchised corporation, and any person or persons acting

on their behalf, while acting within the scope of their authority, shall

be exempt from any personal liability resulting from carrying out any of

the powers expressly given in this chapter, except for acts of

malfeasance or gross negligence.

§ 202-b — No debt of the state

No debt of the state. Nothing in this article shall be

construed to accept a liability to or create a debt of the state within

the meaning of any constitutional or statutory provision.

§ 203 — Right to hold race meetings and races

Right to hold race meetings and races. Any corporation formed

under the provisions of this article, if so claimed in its certificate

of organization, and if it shall comply with all the provisions of this

article, and any other corporation entitled to the benefits and

privileges of this article as hereinafter provided, shall have the power

and the right to hold one or more running race meetings in each year,

and to hold, maintain and conduct running races at such meetings. At

such running race meetings the corporation, or the owners of horses

engaged in such races, or others who are not participants in the race,

may contribute purses, prizes, premiums or stakes to be contested for,

but no person or persons other than the owner or owners of a horse or

horses contesting in a race shall have any pecuniary interest in a

purse, prize, premium or stake contested for in such race, or be

entitled to or receive any portion thereof after such race is finished,

and the whole of such purse, prize, premium or stake shall be allotted

in accordance with the terms and conditions of such race. Races

conducted by a franchised corporation shall be permitted only between

sunrise and sunset. A track first licensed after January first, nineteen

hundred ninety, shall not conduct the simulcasting of thoroughbred races

within district one, in accordance with article ten of this chapter on

days that a franchised corporation is not conducting a race meeting. In

no event shall thoroughbred races conducted by a track first licensed

after January first, nineteen hundred ninety be conducted after eight

o'clock post meridian.

§ 204 — Certificate of payment of stock

Certificate of payment of stock. Except as provided in this

article, no business corporation hereafter organized under this article

or heretofore organized in pursuance of law for any purpose authorized

by this article, shall have any of the powers conferred by section two

hundred three of this article until such corporation shall have filed in

the office or offices where its certificate of incorporation was filed,

a further certificate stating that its capital stock has been fully paid

in cash, and if claiming the right to conduct running race meetings,

that, except as may be authorized by the commission, it actually

maintains a racetrack of not less than five-eighths of one mile in

length or circumference, the location of which shall be specified in

such certificate. Such certificate shall be executed and acknowledged by

such corporation's president or vice-president and such corporation's

treasurer or secretary, and verified by them to the effect that the

statements contained in such certificate are true. In the case of racing

courses to be used for running races or steeplechases, a license from

the commission must also be obtained in the manner hereinafter provided,

and such license be filed with such certificate.

§ 205 — License for running races and steeplechase meetings

License for running races and steeplechase meetings. Any

non-franchised corporation desiring to obtain the benefits of the

provisions of section two hundred three of this article, if proposing to

conduct a race course or race meeting for running races or

steeplechases, may annually apply to the commission for a license to

conduct running races and race meetings or steeplechases and

steeplechase meetings, as the case may be. If, in the judgment of such

commission the public interest, convenience or necessity will be served

thereby and a proper case for the issuance of such license is shown

consistent with the purposes of this article and the best interest of

racing generally, the commission may grant such license, for a term

within the calendar year, which shall specify the dates and period of

time during which, and the place where, the licensee may operate. The

fee for such license shall be one hundred dollars for each racing day,

payable upon issuance of license. In considering an application for a

license under this section, the commission may give consideration to the

number of licenses already granted and to the location of the tracks

previously licensed. Every such license shall contain a condition that

all running races or race meetings conducted thereunder shall be subject

to such reasonable rules and regulations from time to time prescribed by

the commission, designated as the "rules of racing". Before promulgating

such rules of racing or modifying or abrogating any of them, the

commission shall give the jockey club, a corporation organized under the

laws of the state of New York, an opportunity to submit recommendations

relative to such rules for running races and race meetings, and to the

national steeplechase and hunt association, a corporation organized

under the laws of the state of New York, an opportunity to submit

recommendations relative to such rules for steeplechases and

steeplechase meetings, and the commission may adopt, to the extent that

it deems appropriate, any rules so submitted by either of such

corporations or by any other nationally recognized association or

corporation that has for its purpose the improvement of the breed.

§ 206 — Franchise for running races and steeplechase meetings

Franchise for running races and steeplechase meetings. 1. The

franchised corporation referred to in this chapter shall be a

not-for-profit corporation to be known as The New York Racing

Association, Inc. To the extent that the provisions of the

not-for-profit corporation law do not conflict with the provisions of

this article, the not-for-profit corporation law shall apply to the

franchised corporation and the franchised corporation shall be a type C

corporation pursuant to the not-for-profit corporation law. If an

applicable provision of this article relates to a matter embraced in a

provision of the not-for-profit corporation law but is not in conflict

therewith, both provisions shall apply. The franchised corporation shall

perform its functions under a franchise agreement which, notwithstanding

the provisions of section one hundred twelve of the state finance law,

shall not be subject to the approval required by such section, and such

other agreements as may be necessary and appropriate and shall exercise

its powers through a board of directors established under section two

hundred seven of this article. The franchise confers the right and

responsibility to manage and operate all functions at the franchise

racetracks including but not limited to and subject to appropriate

racing laws and regulations the hiring and management of racing

secretaries, stewards, race officials, backstretch employees and other

equine and racing related functions, establishing the purses, the stakes

program and owner's relations, maintenance of the franchise racetracks

and associated facilities, the selection of vendors for food, beverage

and other concessions and such other activities approved by the

franchise oversight board. The franchised corporation, in its

discretion, may permit utilization of the state racing franchise lands

for business purposes unrelated to racing, provided however that upon

written notice from the franchise oversight board with respect to any

such activity, the franchised corporation shall cease such utilization

within thirty days in order to allow the franchise oversight board

approved development or alternative uses approved by the franchise

oversight board. All franchise rights or interests in assets of the

state racing franchise including but not limited to leasehold interests

shall be limited to the term of the franchise. Upon expiration,

termination or ending of the franchise by any other means provided by

law, all franchise rights or interest granted to or held by the

franchised corporation shall cease and revert to the state.

Notwithstanding any provisions of law to the contrary the franchised

corporation shall not conduct, manage or otherwise operate video lottery

gaming activities on the lands of the state racing franchise.

2. The franchised corporation shall, upon acceptance of the franchise,

franchise agreements and all enumerated conditions, be granted a

franchise for a period of not more than twenty-five years, ending no

later than December thirty-first, two thousand thirty-three.

3. Upon acceptance of the franchise, the franchisee's corporate

duration shall be made coterminous with the expiration, revocation or

relinquishment of such franchise. Such length of duration shall be

deemed to be incorporated within and made part of the certificate of

incorporation of the franchised corporation and no amendment to such

certificate to incorporate any such provision shall be necessary to give

effect to any such provision and that any provision contained within

such certificate inconsistent in any manner with the provisions

contained within this section shall be null and void and cease to be of

effect and shall be superseded by the provisions of this section. The

dissolution provisions of articles ten and eleven of the not-for-profit

corporation law shall apply upon the expiration, revocation or

relinquishment of such franchise.

4. The franchised corporation shall not commence operation until

by-laws and a corporate governance code of conduct are adopted by its

board of directors. Such by-laws and code shall ensure the franchised

corporation is operated in an efficient and transparent manner, with the

highest degree of integrity and is fully accountable to the people of

the state of New York.

5. The franchised corporation shall comply with all applicable laws

and regulations and retain an independent business integrity counsel,

who, among other things, will act as an independent source to help

ensure the integrity of the franchised corporation, its officers and

employees, and its operations.

6. The franchised corporation shall honor and be bound by all

collective bargaining agreements to which the previous franchise holder

was a party for their remaining term.

The franchised corporation shall, upon the request of an off-track

betting corporation, purchase simulcasting rights jointly with the

off-track betting corporation so that the off-track betting corporation

pays the same price for the purchased simulcasting rights that the

franchised corporation pays. To the extent permitted by law, the

franchised corporation shall also share simulcasting pricing information

in the market with off-track betting corporations;

7. The franchised corporation shall conduct public meetings in

cooperation with local advisory boards established pursuant to section

two hundred twelve of this article within one hundred eighty days

following the effective date of this section on or near the racetrack

facilities of Aqueduct, Belmont and Saratoga. Thereafter, public

meetings shall be held no less than twice yearly in cooperation with the

local advisory boards established pursuant to section two hundred twelve

of the racing, pari-mutuel wagering and breeding law, in order to

solicit the concerns of the community surrounding the respective racing

operations.

§ 207 — Board of directors of a franchised corporation

* § 207. Board of directors of a franchised corporation. 1. a. The

board of directors, to be called the New York racing association

reorganization board, shall consist of seventeen members, five of whom

shall be elected by the present class A directors of The New York Racing

Association, Inc., eight to be appointed by the governor, two to be

appointed by the temporary president of the senate and two to be

appointed by the speaker of the assembly.

(i) The governor shall nominate a member to serve as chair, subject to

confirmation by majority vote of the board of directors. All non-ex

officio members shall have equal voting rights.

(ii) In the event of a member vacancy occurring by death, resignation

or otherwise, the respective appointing officer or officers shall

appoint a successor who shall hold office for the unexpired portion of

the term. A vacancy from the members appointed from the present board of

The New York Racing Association, Inc., shall be filled by the remaining

such members.

* b. The franchised corporation shall establish a compensation

committee to fix salary guidelines, such guidelines to be consistent

with an operation of other first class thoroughbred racing operations in

the United States; a finance committee, to review annual operating and

capital budgets for each of the three racetracks; a nominating

committee, to nominate any new directors to be designated by the

franchised corporation to replace its existing directors; and an

executive committee. Each of the compensation, finance, nominating and

executive committees shall include at least one of the directors

appointed by the governor, and the executive committee shall include at

least one of the directors appointed by the temporary president of the

senate and at least one of the directors appointed by the speaker of the

assembly.

* NB There are 2 par b's

* b. In addition to these voting members, the board shall have two ex

officio members to advise on critical economic and equine health

concerns of the racing industry, one appointed by the New York

Thoroughbred Breeders Inc., and one appointed by the New York

thoroughbred horsemen's association (or such other entity as is

certified and approved pursuant to section two hundred twenty-eight of

this article).

* NB There are 2 par b's

* c. All directors shall serve at the pleasure of their appointing

authority.

* NB There are 2 par c's

* c. Upon the effective date of this paragraph, the structure of the

board of the franchised corporation shall be deemed to be incorporated

within and made part of the certificate of incorporation of the

franchised corporation, and no amendment to such certificate of

incorporation shall be necessary to give effect to any such provision,

and any provision contained within such certificate inconsistent in any

manner shall be superseded by the provisions of this section. Such board

shall, however, make appropriate conforming changes to all governing

documents of the franchised corporation including but not limited to

corporate by-laws. Following such conforming changes, amendments to the

by-laws of the franchised corporation shall only be made by unanimous

vote of the board.

* NB There are 2 par c's

d. The board, which shall become effective upon appointment of a

majority of public members, shall terminate five years from its date of

creation.

2. Members of the board of directors shall serve without compensation

for their services, but publicly appointed members of the board shall be

entitled to reimbursement from the franchised corporation for actual and

necessary expenses incurred in the performance of their official duties.

3. Members of the board of directors, except as otherwise provided by

law, may engage in private employment, or in a profession or business,

however no member shall have any direct or indirect economic interest in

any video lottery gaming facility, excluding incidental benefits based

on purses or awards won in the ordinary conduct of racing operations, or

any direct or indirect interest in any development undertaken at the

racetracks of the state racing franchise.

4. The affirmative vote of a majority of members of the board of

directors shall be necessary for the transaction of any business or the

exercise of any power or function of the franchised corporation. The

franchised corporation may delegate on an annual basis to one or more of

its members, or its officers, agents or employees, such powers and

duties as it may deem proper.

5. Each voting member of the board of directors of the franchised

corporation shall annually make a written disclosure to the board of any

interest held by the director, such director's spouse or unemancipated

child, in any entity undertaking business in the racing or breeding

industry. Such interest disclosure shall be promptly updated, in

writing, in the event of any material change.

The board shall establish parameters for the reporting and disclosure

of such director interests.

* NB Effective until the appointment of a majority of the state

franchise oversight board members

* § 207. Board of directors of a franchised corporation. 1. a. The

board of directors, to be called the New York racing association board,

shall consist of seventeen members who shall have equal voting rights:

two appointed by the governor, two appointed by the temporary president

of the senate and two appointed by the speaker of the assembly; eight

appointed by the executive committee of the New York racing association

reorganization board of directors constituted pursuant to chapter four

hundred fifty-seven of the laws of two thousand twelve, which shall

continue to exist until such time as the appointments required hereunder

are made. The New York racing association will include knowledge of the

marketplace and communities in which the New York racing association

operates as a factor in board selection; one who shall be the president

and chief executive officer of the franchised corporation, ex officio

and without term limitation; one appointed by the New York Thoroughbred

Breeders, Inc.; and one appointed by the New York thoroughbred

horsemen's association representing at least fifty-one percent of the

horsemen using the facilities of the franchised corporation. The New

York racing association board may include additional ex officio,

non-voting members as appointed pursuant to a majority vote of the

board. All public appointed members of the board shall be a resident of

New York state.

(i) The governor shall nominate a member to serve as chair for an

initial term of three years, who shall serve at the pleasure of the

governor, subject to confirmation by majority vote of the board.

Thereafter, the board shall elect its chair, who shall serve at the

pleasure of the board, from among its members.

(ii) The term of voting membership on the New York racing association

board shall be three years. Individual appointees shall be limited to

serving as a voting member the lesser of three terms or nine years.

Notwithstanding the foregoing, the initial term of one member appointed

by each of the governor, temporary president of the senate, and speaker

of the assembly, the member appointed by the New York thoroughbred

horsemen's association, and the member appointed by the New York

Thoroughbred Breeders, Inc. shall expire March thirty-first, two

thousand eighteen; the initial term of the remaining members appointed

by each of the governor, temporary president of the senate, and speaker

of the assembly and two members appointed by the New York racing

association reorganization board shall expire on March thirty-first, two

thousand nineteen; the initial term of three members appointed by the

New York racing association reorganization board shall expire on March

thirty-first, two thousand twenty-one, and the initial term of three

members appointed by the New York racing association reorganization

board shall expire on March thirty-first, two thousand twenty-three. The

eight initial members appointed by the New York racing association

reorganization board shall hold appointment as a voting member for the

greater of three terms or nine years.

(iii) In the event of a member vacancy occurring by death, resignation

or otherwise, the respective appointing authority shall appoint a

successor who shall hold office for the unexpired portion of the term.

In the case of vacancies among members appointed by the executive

committee of the New York racing association reorganization board of

directors constituted pursuant to chapter four hundred fifty-seven of

the laws of two thousand twelve, appointments thereafter shall be made

by the executive committee of the New York racing association board as

constituted by the chapter of the laws of two thousand seventeen that

amended this section.

(iv) Beginning January first, two thousand twenty-six, one member

appointed by the governor, one member appointed by the temporary

president of the senate, one member appointed by the speaker of the

assembly, and four members appointed by the executive committee of the

New York racing association board of directors shall satisfy at least

one of the following requirements at the time of appointment or

reappointment: (1) over the three years prior, owned or trained horses

with a cumulative average of fifteen starts at New York race tracks per

year, (2) be a breeder of record registered with the thoroughbred

breeding and development fund, (3) be a managing partner in a New York

state-based ownership syndicate licensed with the commission, or (4)

have a cogent interest in the racing and breeding industry in the state.

The provisions of this subparagraph shall not impact any members serving

as of January first, two thousand twenty-six.

(v) Beginning January first, two thousand twenty-six, all non-publicly

appointed members must hold a license pursuant to section two hundred

twenty of this article.

b. The franchised corporation shall establish a compensation committee

to fix salary guidelines, such guidelines to be consistent with an

operation of other first class thoroughbred racing operations in the

United States; a finance and audit committee, to review annual operating

and capital budgets for each of the three racetracks; a nominating and

governance committee, to nominate any new directors to be designated by

the franchised corporation to replace its existing directors and be

responsible for all issues affecting the governance of the franchised

corporation; an equine safety committee to review industry best

practices to improve the safety of horse racing of the three racetracks;

a racing committee to address all issues related to racing operations;

and an executive committee. Each of the compensation, finance,

nominating and executive committees shall include at least one public

member from among the directors appointed by the governor.

c. Upon the effective date of this paragraph, the structure of the New

York racing association board shall be deemed to be incorporated within

and made part of the certificate of incorporation of the franchised

corporation, and no amendment to such certificate of incorporation shall

be necessary to give effect to any such provision, and any provision

contained within such certificate inconsistent in any manner shall be

superseded by the provisions of this section. Such board shall, however,

make appropriate conforming changes to all governing documents of the

franchised corporation including but not limited to corporate by-laws.

Following such conforming changes, amendments to the by-laws of the

franchised corporation shall be made only by unanimous vote of the

board.

2. Members of the New York racing association board shall serve

without compensation for their services, but shall be entitled to

reimbursement from the franchised corporation for actual and necessary

expenses incurred in the performance of their duties for the board.

3. Members of the New York racing association board, except as

otherwise provided by law, may engage in private employment, or in a

profession or business, however no member shall have any direct or

indirect economic interest in any video lottery gaming facility,

excluding incidental benefits based on purses or awards won in the

ordinary conduct of racing operations, or any direct or indirect

interest in any development undertaken at the racetracks of the state

racing franchise including real estate development parcels as defined in

the franchise agreement.

4. The affirmative vote of a majority of members of the New York

racing association board shall be necessary for the transaction of any

business or the exercise of any power or function of the franchised

corporation. The franchised corporation may delegate on an annual basis

to one or more of its members, or its officers, agents or employees,

such powers and duties as it may deem proper.

5. Each voting member of the New York racing association board of the

franchised corporation shall annually make a written disclosure to such

board of any interest held by the director, such director's spouse or

unemancipated child, in any entity undertaking business in the racing or

breeding industry. Such interest disclosure shall be promptly updated,

in writing, in the event of any material change.

The New York racing association board shall establish parameters for

the reporting and disclosure of such director interests.

6. Each voting member of the New York racing association board

appointed by the executive committee of the New York racing association

reorganization board of directors shall seek a racetrack management

license issued by the gaming commission, any fees for which shall be

waived by the commission. No voting member of the board required by the

foregoing to seek a racetrack management license may vote on any board

matter until such license is issued.

7. For purposes of section two hundred twelve of this article, the

establishment of The New York Racing Association, Inc. board of

directors under this section shall not constitute the assumption of the

franchise by a successor entity.

8. The franchise corporation shall not have any direct or indirect

ownership, control, influence, or investment, in any franchise oversight

board approved development or such alternative use as may be approved by

the franchise oversight board conducted on the real estate development

parcels as defined in the franchise agreement.

* NB Effective upon the appointment of a majority of the state

franchise oversight board members

§ 208 — Conditions of franchise award

Conditions of franchise award. 1. In consideration of the

franchise and in accordance with its franchise agreement, the franchised

corporation shall remit to the state, each year, no later than April

fifth, a franchise fee payment. The franchise fee shall be calculated

and equal to the lesser of paragraph (a) or (b) of this subdivision as

follows: (a) adjusted net income, including all sources of audited

generally accepted accounting principles net income as of December

thirty-first (i) plus the amount of depreciation and amortization for

such year as set forth on the statement of cash flows (ii) less the

amount received by the franchised corporation for capital expenditures

and (iii) less principal payments made for the repayment of debt; or (b)

operating cash which is defined as cash available on December

thirty-first (i) which excludes all restricted cash accounts, segregated

accounts as per audited financial statements and cash on hand needed to

fund the on-track pari-mutuel operations through the vault, (ii) less

ninety days of operating expenses pursuant to generally accepted

accounting principles which shall be an average calculated by dividing

the current year's annual budget by the number of days in such year and

multiplying that number by ninety.

2. As a condition of franchise acceptance, the franchised corporation

and its predecessor shall irrevocably relinquish any present or future

rights that it might have, or might claim, with respect to thoroughbred

racing facilities and associated assets located in Queens county,

Saratoga county and jointly located in Nassau and Queens counties

whereat running races, steeplechases or race meetings and pari-mutuel

betting on the outcome of the same have been conducted, including (a)

all the land underlying the racetracks, (b) all improvements thereon and

all physical assets thereon, and (c) all assets associated with the

franchise and the operation of the racetracks, including, without

limitation all rights to intellectual property and simulcasting now

existing or hereafter created, and any and all franchise rights or

interests in such assets including but not limited to leasehold

improvements and interests. The franchised corporation shall take all

appropriate action on the date of substantial consummation, as defined

by the federal bankruptcy code, of the confirmed chapter eleven plan of

reorganization of the non-profit racing association known as The New

York Racing Association, Inc. in the pending bankruptcy case in the

Southern District of New York to ensure that the People of the State of

New York are vested with unencumbered ownership in the real estate for

the three racetracks, including all improvements thereon.

3. As a condition of franchise acceptance, the franchised corporation

shall make application with the commission for live thoroughbred racing

dates at thoroughbred racing facilities located in Queens county,

Saratoga county and jointly located in Nassau and Queens counties in a

manner substantially similar to the racing dates presently undertaken.

4. As a condition of franchise acceptance, the franchised corporation

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 gaming commission.

4-a. As a condition of franchise acceptance, the franchised

corporation shall enter into a franchise agreement that shall require

such franchised corporation to use its best efforts to satisfy

performance standards, measured every four years by the franchise

oversight board. Such performance standards shall relate to racing

dates, New York bred horse races, horse stalls, jockey and equine

safety, state concentrated animal feeding operation, backstretch

conditions, the Saratoga training facility, handle and attendance,

purses, expenses of the franchised corporation, and the communities

surrounding Aqueduct racetrack, Belmont Park racetrack and the Saratoga

race course. As a condition of franchise acceptance, the franchised

corporation shall continue to lease for nominal consideration the

ballfield property near the Aqueduct racetrack that includes lots 62,

118, 119, 127, 133, 135, 136 and 138 of block 11535; lots 73, 110 and

113 of block 11536; lots 5, 9, 10, 12, 14 and 110 of block 11551; and

lot 204 of block 11562 in Queens County, as a ballfield for the

appropriate community organization, and convey the parcel near the

Aqueduct racetrack that includes lot 1 of blocks 11558 and 11560 in

Queens county to the New York city public school construction authority

should such authority desire and commit to purchase such parcel at fair

market value.

5. A franchise may be revoked and cancelled by the commission only for

the reasons and in the manner prescribed under the provisions of

sections two hundred twelve and two hundred forty-four of this article.

The action of the commission in revoking a franchise 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.

6. (a) All contracts entered into by the franchised corporation for

the procurement of goods or services shall be pursuant to a competitive

bidding purchasing policy approved by the franchise oversight board.

(b) In its review of the contracts pursuant to this section in any

contract in excess of one hundred thousand dollars, the franchise

oversight board may review the character and fitness of the entity or

its principals entering into contracts with a franchised corporation and

provided further the oversight board may require such information as it

deems necessary including the power to subpoena such books, records, and

other pertinent information related to the contracts from the contractor

or vendor of any contract.

7. Notwithstanding the provisions of section seven of the general

business law, or any other inconsistent provision of general, special or

local law, the commission shall specify annually the dates on which, and

the hour of the first post time for days during which, such franchised

corporation may operate at the places and for the full number of days

specified in its franchise.

8. The commission shall permit the franchised corporation to conduct

pari-mutuel betting in the manner and subject to the conditions

prescribed by this chapter, at the racetracks described in such racing

franchise for the duration of such racing franchise.

9. (a) The franchised corporation shall maintain a separate account

for all funds held on deposit in trust by the corporation for individual

horsemen's accounts. Purse funds shall be paid by the corporation as

required to meet its purse payment obligations. Funds held in horsemen's

accounts shall only be released or applied as requested and directed by

the individual horseman. Through calendar year two thousand twenty-seven

the New York Jockey Injury Compensation Fund, Inc. may use up to two

million dollars from the account established pursuant to this

subdivision to pay the annual costs required by section two hundred

twenty-one of this article.

(b) Unless otherwise permitted by written agreement with the

horsemen's organization recognized pursuant to section two hundred

twenty-eight of this article the franchised corporation shall fund

purses in an amount (on an annual basis and not a per-race basis) in

excess of that required by this chapter, so as to reduce the purse

cushion at the end of each calendar year by the amount set forth below:

Year Reduction of Purse Maximum Purse Cushion at

Cushion for Calendar Year Year End Not to Exceed

2008 $0 $20.0 million

2009 $1.0 million $19.0 million

2010 $1.0 million $18.0 million

2011 $2.0 million $16.0 million

2012 $2.0 million $14.0 million

2013 $3.0 million $11.0 million

2014 $3.0 million $8.0 million

2015 $2.0 million $6.0 million

Thereafter the maximum purse cushion at year end shall not exceed $6.0

million.

account for funds to be held on deposit in trust by the franchised

corporation for the horsemen's organization recognized pursuant to

section two hundred twenty-eight of this article. Starting in two

thousand eighteen and annually thereafter, funds from the account

established pursuant to this subdivision shall be deposited in the

separate account established under this paragraph in an amount to be

agreed upon by the franchised corporation and the horsemen's

organization recognized pursuant to section two hundred twenty-eight of

this article. Funds held in this account shall be used by such

recognized horsemen's organization solely as collateral to secure

workers' compensation insurance coverage, including through the New York

Jockey Injury Compensation Fund, Inc. Such coverage shall include high

deductible programs and forms of self-insurance.

(d) In the event the horsemen's organization recognized pursuant to

section two hundred twenty-eight of this article determines that the

funds are no longer needed as collateral to secure workers' compensation

insurance coverage, then, upon agreement by the franchised corporation

and such appropriately recognized horsemen's organization, funds in the

separate account established under paragraph (c) of this subdivision

shall be returned to the account established pursuant to paragraph (a)

of this subdivision.

(e) The account shall be subject to annual audit by a certified public

accountant approved and paid by the appropriately recognized horsemen's

organization.

* 10. It is incumbent upon the franchised corporation to ensure the

health and safety of its equine participants. To accomplish that goal,

the franchised corporation shall, by September first, two thousand

twenty-five, make a one-time contribution of two million dollars to the

Harry M. Zweig memorial fund, established under section seven hundred

one of this chapter, for the sole purpose of off-setting the cost of

purchasing screening and imaging equipment for the research project as

specified in subdivision seven of section seven hundred four of this

chapter. The Harry M. Zweig memorial fund shall hold such money in an

escrow account until such time as it is necessary to purchase the

equipment required to conduct the research. The money in the escrow

account shall not be used for any purposes other than purchasing

equipment to be used for such research.

* NB Repealed September 1, 2028

§ 209 — Examination of the books and accounts by the state comptroller

Examination of the books and accounts by the state comptroller.

Notwithstanding any other provision of this article, the state

comptroller may from time to time examine the books and accounts of such

franchised corporation, including its receipts, disbursements,

contracts, leases, loans, investments and any other matters relating to

its financial operations, including the franchised corporation's

calculation of the franchise fee payment pursuant to the provisions of

subdivision one of section two hundred eight of this article and report

the results of each audit to the governor, the legislature, the attorney

general, the franchise oversight board and the commission.

§ 210 — Franchise termination

Franchise termination. Upon receiving notification, in

accordance with the provisions of section two hundred ten-a of this

article, from any franchised corporation that it intends to relinquish

such franchise prior to the expiration date of such franchise, or that

such franchised corporation 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 franchise

oversight board shall take such action as is necessary to assure the

continuation of the racing and pari-mutuel activities at the racing

facilities operated pursuant to the franchise agreement.

§ 210-a — Relinquishment of franchise

Relinquishment of franchise. 1. No franchised corporation

shall relinquish a franchise granted to it pursuant to section two

hundred six of this article at any time within the term of any such

franchise without giving separate written notification of its intention

to effect relinquishment by certified mail return receipt requested to

the franchise oversight board and the commission not less than one

hundred eighty days prior to the date such franchised corporation

proposes to be the effective date of relinquishment.

2. Such a franchised corporation shall not present a certificate of

dissolution of its corporate existence under article ten of the

not-for-profit corporation law to the department of state with the

consent required by law attached thereto for a period of at least one

hundred eighty days following the date that the association elected to

dissolve its corporate status in the manner authorized by the provisions

of such article.

3. Such a franchised corporation also shall not present a petition for

judicial dissolution of its corporate existence to a court pursuant to

the provisions of article eleven of the not-for-profit corporation law

for a period of at least one hundred eighty days following the date that

action was completed under section eleven hundred two of the

not-for-profit corporation law authorizing the presentation of such

petition and the franchised corporation agrees to name the franchise

oversight board in the petition for the purpose of enabling the

franchise oversight board to receive a copy of any order to show cause

made by a court under the provisions of section eleven hundred four of

the not-for-profit corporation law.

4. If the franchised corporation voluntarily relinquishes its

franchise prior to 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 franchised corporation, or voluntarily affects

corporate dissolution in the manner provided for by article ten or

eleven of the not-for-profit corporation law and other applicable

provisions of law, or if such franchise is revoked by the board, then,

notwithstanding any other provision of law to the contrary, the

franchised corporation shall transfer to the franchise oversight board

at the time of such relinquishment, declination, revocation or

dissolution all right, title and interest held by such franchised

corporation in all such facilities and associated assets, and all

capital improvements made to the real property and such facilities.

§ 211 — Fair association, when entitled to privileges

Fair association, when entitled to privileges. Any state,

county or other fair association shall be entitled to the privileges

conferred by section two hundred four of this article upon filing in the

offices wherein its certificate of incorporation is filed, a certificate

that sets forth its intention to avail itself of such privileges; and

any such state, county or other fair association shall not be required

to obtain any license or file any other certificate. State, county and

other fair associations entitled to conduct trotting races may also

conduct running races in connection therewith, and the provisions of

this article requiring a racetrack to be of specified dimensions shall

not apply to such association; but no running races shall be conducted

for more than five days on any track or grounds, unless the license of

the commission therefor is first obtained.

§ 212 — Franchise oversight board

* § 212. Franchise oversight board. 1. There is hereby created a

franchise oversight board which shall consist of five members. Of the

five members, three shall be appointed by the governor, one shall be

appointed by the temporary president of the senate and one shall be

appointed by the speaker of the assembly. Of the initially appointed

board, one member appointed by the governor shall serve for a one year

term, one member appointed by the governor shall serve for a two year

term, and one member appointed by the governor shall serve for a three

year term. The members appointed by the temporary president of the

senate and the speaker of the assembly shall serve for a four year term.

All successors shall serve for a term of four years. All members shall

continue in office until their successors have been appointed and

qualified. The governor shall designate the chair from among the sitting

members who shall serve as such at the pleasure of the governor.

2. The members shall serve without compensation for their services as

members, but shall be entitled to reimbursement for actual and necessary

expenses incurred in the performance of their duties. The state shall

save harmless and indemnify members of the board and any officer,

employee, agent or other person or persons pursuant to section seventeen

of the public officers law against any claim, demand, suit or judgment

arising by reason of any act or omission to act by such member, officer,

employee, agent or person occurring in the discharge of his or her

duties and within the scope of his or her service on behalf of the

franchise oversight board.

3. Such members, except as otherwise provided by law, may engage in

private or public employment, or in a profession or business. The board,

its members, officers and employees shall be subject to the provisions

of sections seventy-three and seventy-four of the public officers law.

No former trustee or officer of a non-profit racing association known as

The New York Racing Association, Inc. or its predecessor, no current

director or officer of a franchised corporation or any individual

registered with the New York commission on public integrity shall be

appointed as members to the board nor shall any member of the board have

any direct or indirect interest in any racehorse, thoroughbred racing or

pari-mutuel wagering business, video lottery terminal facility or any

development at any racing facility.

4. Notwithstanding any inconsistent provisions of law, general,

special or local, no officer or employee of the state or of any civil

division thereof shall be deemed to have forfeited or shall forfeit

their office or employment by reason of their acceptance of membership

on the board created by this section.

5. The affirmative vote of three members shall be necessary for the

transaction of any business or the exercise of any power or function of

the franchise oversight board except as otherwise provided here in this

article.

6. Within thirty days following the appointment of the members of the

franchise oversight board, the members of the oversight board shall

establish a local advisory board for each racing operation comprising

the following members to meet at least twice yearly:

a. The local advisory board for the Saratoga racetrack facility shall

comprise fifteen members and include five designees from each of the

following: the board of supervisors, the mayor of the city of Saratoga

and the franchised corporation.

b. (i) The local advisory board for the Aqueduct racetrack facility

shall comprise of fifteen members, nine of whom shall be designees of

New York City Queens Community Board Ten, three designees of the

franchised corporation and three designees of the video lottery gaming

operator. At substantial completion of the Belmont project, as

determined by the gaming commission, this board shall be dissolved.

(ii) (A) Notwithstanding subparagraph (i) of this paragraph, within

thirty days after the substantial completion of the Belmont project, as

determined by the gaming commission, an Aqueduct Redevelopment Community

Advisory Board shall be formed to assess all bids made in response to

the request for proposals on developing the Aqueduct property and is

required to hold a public hearing and adopt and submit a written

recommendation on each bid to the franchise oversight board within sixty

days of receiving such bid. The adoption of such recommendation shall be

by a public vote which results in approval by a majority of the

appointed members present during the presence of a quorum. The board

recommendation shall be in writing via a form provided by the franchise

oversight board and shall include a description of the application, the

time and place of the public hearing on the application, the time and

place of the meeting at which the recommendation was adopted and the

vote by which the recommendation was adopted. The community board may

include in its submission the reasons for the vote and any conditions

attached to its vote.

(B) The Aqueduct Redevelopment Community Advisory Board shall consist

of six members, one to be appointed by the governor, one to be appointed

by the mayor of the city of New York, one to be appointed by the senator

representing the senate district where the Aqueduct property is located,

one to be appointed by the assemblymember representing the assembly

district where the Aqueduct property is located, one to be appointed by

the city councilmember representing the district where the Aqueduct

property is located, and one to be appointed by the borough president

where the Aqueduct property is located.

c. The local advisory board for the Belmont racetrack facility shall

comprise fifteen members, to be appointed as follows:

(i) five members from Nassau county to be appointed by the Nassau

county executive. Four of such members must reside in the hamlet of

Elmont;

(ii) two members from the town of Hempstead to be appointed by the

supervisor of the town of Hempstead. Both members must reside in the

hamlet of Elmont;

(iii) two members to be appointed by the mayor of the village of

Floral Park, subject to village board approval;

(iv) one member to be appointed by the mayor of the village of South

Floral Park, subject to village board approval;

(v) three members to be appointed by the New York Racing Association,

Inc.; and

(vi) two members to be appointed by the New York City Queens Community

Board 13.

The members of the local advisory boards shall serve for a period of

two years. In the event of a vacancy occurring during a term of

appointment by reason of death, resignation, disqualification or

otherwise such vacancy shall be filled for the unexpired term in the

same manner as the original appointment. The members of the local

advisory board shall serve without compensation, except that each member

shall be allowed the necessary and actual expenses incurred in the

performance of his or her duties pursuant to this section.

7. The Saratoga local advisory boards in cooperation with the state

historic preservation office and the franchise oversight board shall

compile a complete, updated historic resources inventory identifying all

buildings and landscape features and their current condition at the

Saratoga Racecourse. The local advisory board may, at its discretion, in

the performance of its responsibilities, seek advice from groups or

individuals with relevant expertise.

All buildings and landscaped features of historic, architectural or

cultural significance at the Saratoga Racecourse may be advanced by the

local advisory board for consideration for inclusion in the National and

State Registers of Historic Places and in local historic districts.

8. a. The duties and responsibilities of the franchise oversight board

shall include, but not be limited to, the following:

(i) represent the interests of the state in all real estate

development proposed for Aqueduct racetrack or real estate development

at Belmont Park racetrack. Any such real estate development shall only

be undertaken pursuant to a competitive process approved by the board,

after consultation with the applicable local advisory boards and

consideration of local zoning and planning regulation, and in a manner

that will not adversely impact any historic structure that is included

in or eligible for inclusion in the National or the State Register of

Historic Places, be consistent with any plan approved for such

community, and shall be subject to unanimous approval of the franchise

oversight board and all statutory and regulatory requirements; provided,

however, that, subject to approval of the franchise oversight board and

subject to all statutory and regulatory requirements, the franchised

corporation shall have full powers and rights to develop, redevelop,

refurbish, renovate or make such other improvements, capital

expenditures or otherwise, to the racetracks and the fixtures and

improvements thereon consistent with projects specifically identified in

the franchised corporation's approved track facility improvement plan.

The franchise oversight board shall be guided by the goals of ensuring

the continuation of high quality thoroughbred racing at the thoroughbred

racing facilities located within the state, raising revenue for or in

aid or support of education in this state from video lottery gaming at

facilities of the state racing franchise, and maximizing revenue for

governments from pari-mutuel wagering on racing at facilities of the

state racing franchise. In consideration of capital expenditure

approval, the board shall ensure adequate funds are dedicated for

maintenance and repair of existing structures at Saratoga racetrack and

Belmont Park racetrack and for the improvement of onsite backstretch

personnel housing and quality of life.

(ii) monitor and enforce compliance with definitive documents that

comprise the franchise agreement between the franchised corporation and

the state of New York governing the franchised corporation's operation

of thoroughbred racing and pari-mutuel wagering at the racetracks. The

franchise agreement shall contain objective performance standards that

shall allow contract review in a manner consistent with this chapter.

The franchise oversight board shall notify the franchised corporation

authorized by this chapter in writing of any material breach of the

performance standards or repeated non-material breaches which the

franchise oversight board may determine collectively constitute a

material breach of the performance standards. Prior to taking any action

against such franchised corporation, the franchise oversight board shall

provide the franchised corporation with the reasonable opportunity to

cure any material breach of the performance standards or repeated

non-material breaches which the franchise oversight board may determine

collectively constitute a material breach of the performance standards.

Upon a written finding of a material breach of the performance standards

or repeated non-material breaches which the franchise oversight board

may determine collectively constitute a material breach of the

performance standards, the franchise oversight board may recommend that

the franchise agreement be terminated. The franchise oversight board

shall refer such recommendation to the commission for a hearing

conducted pursuant to section two hundred forty-five of this article for

a determination of whether to terminate the franchise agreement with the

franchised corporation;

(iii) oversee, monitor and review all significant transactions and

operations of the franchised corporation authorized by this chapter;

provided, however, that nothing in this section shall be deemed to

reduce, diminish or impede the authority of the commission to, pursuant

to article one of this chapter, determine and enforce compliance by the

franchised corporation with terms of racing laws and regulations. Such

oversight shall include, but not be limited to:

(A) review and make recommendations concerning the annual operating

budgets of such franchised corporation;

(B) review and make recommendations concerning operating revenues and

the establishment of a financial plan;

control systems and security procedures;

(D) review such franchised corporation's revenue and expenditure

policies which shall include collective bargaining agreements management

and employee compensation plans, vendor contracts and capital

improvement plans;

(E) review such franchise corporation's compliance with the laws,

rules and regulations applicable to its activities;

(F) make recommendations for establishing model governance principles

to improve accountability and transparency; and

(G) receive, review, approve or disapprove capital expense plans

submitted annually by the franchised corporation.

(iv) evaluate, review and approve the racing franchisee's selection of

a vendor or vendors to contract with the franchised corporation for

provision of totalizator services, and manage, subject to the franchised

corporation's unilateral right to opt out, directly or indirectly,

integration of any offered internet wagering platform. The franchise

oversight board shall consider in its evaluation of any such proposed

vendor the ability of such vendor to reduce the totalizator expenses and

general development and production costs of any internet wagering

platform of an authorized off-track betting corporation and the state

racing franchise holder.

(v) facilitate discussions and voluntary agreements between the

franchised corporation and off-track betting corporations to streamline

operations, decrease operating costs and maximize opportunities

pertaining to costs and revenues, and encourage an exchange of views and

experiences from the franchised corporation and the off-track betting

corporations to improve the racing product in New York and to realize

efficiencies;

(vi) review and approve all purchasing policies pursuant to paragraph

(a) of subdivision six of section two hundred eight of this article;

(vii) review and provide any recommendations on all simulcasting

contracts (buy and sell) that are also subject to prior approval of the

commission;

(viii) act on behalf of the People of the State of New York to enter

into any real property transactions in furtherance of the purposes and

intent of this statute, including, without limitation, one or more

ground leases, for one dollar in consideration annually, for each of

Aqueduct racetrack, Belmont Park and Saratoga racecourse to the

franchised corporation, for a term that will extend until the racing

franchise expires, is revoked, terminated or ends by any other means

provided by law. Such leases shall be executed contemporaneously with

the conveyance of the racetracks by the franchised corporation's

predecessor to the state;

(ix) enter into on behalf of the state as licensor, a long term

license agreement with the franchised corporation for the use of the

simulcast signal and associated intellectual property rights, for

consideration of one dollar annually and for a term that will extend

until the racing franchise expires, is revoked, terminated or ends by

any other means provided by law. Such license agreement shall be

executed contemporaneously with the conveyance of the franchised

corporation's assets associated with the franchise agreement.

(x) conduct running races or steeplechases at racing facilities and

conduct pari-mutuel betting on the outcome of the same when necessary to

assure the continuation of the racing and pari-mutuel betting activities

at such racing facilities (A) in the event that the racing and/or

pari-mutuel betting franchises of the franchised corporation authorized

by this chapter then holding such franchises have either been terminated

in the manner provided by law or have been relinquished by such

corporation, or such corporation declines to continue conducting race

meetings and pari-mutuel betting on the outcome of the same as required

by such franchises unless such declination is the result of strikes,

acts of God, or other unavoidable causes not under the control of such

corporation, or the corporate existence of such corporation has been

dissolved in the manner provided by law prior to the end of the term of

any such franchise and (B) until such time as a new franchise is

granted;

(xi) on behalf of the People of the State of New York, and, acting in

such capacity as lessor of the racing facilities and real estate, be

responsible for payment of all property taxes related to such racing

facilities and real estate;

(xii) report annually to the governor and the legislature, beginning

no later than December thirty-first, two thousand eight, stating its

findings and recommendations to implement policy and legislative changes

necessary to encourage the continuation of high quality thoroughbred

racing in New York state and to protect the legitimate interests of the

state and the thoroughbred racing industry;

(xiii) require the franchised corporation to make all records and

documents pertaining to its financial practices, and other documents and

records necessary to carry out its duties, available to the franchise

oversight board within thirty days of a written request;

(xiv) examine or cause to be examined by a third party, the books,

papers, records and accounts of the franchised corporation;

(xv) sue and be sued;

(xvi) make and execute contracts and all other instruments necessary

or convenient for the exercise of its powers and functions under this

article;

(xvii) request and accept the assistance of any state agency,

including but not limited to, the commission, office of parks,

recreation and historic preservation, the department of environmental

conservation and the department of taxation and finance, in obtaining

information related to the franchised corporation's compliance with the

terms of the franchise agreement;

(xviii) when the franchise oversight board determines the financial

position of the franchised corporation has deviated materially from the

franchised corporation's financial plan, or other such related documents

provided to the franchise oversight board, and such deviation is not

mitigated by the franchised corporation within one hundred eighty days

of the franchise oversight board providing notice of such determination

to the franchised corporation, or when the implementation of such plan

would, in the opinion of the franchise oversight board, pose a

significant risk to the liquidity of the franchised corporation, in any

order or combination:

(A) hire, at the expense of the franchised corporation, an independent

financial adviser to evaluate the financial position of the franchised

corporation and report on such to the franchise oversight board; and

(B) require the franchised corporation to submit for the franchise

oversight board's approval a corrective action plan addressing any

concerns identified as risks by the franchise oversight board.

(xix) when the franchise oversight board finds the franchised

corporation has experienced two consecutive years of material losses due

to circumstances within the control of the franchised corporation, as

determined by the franchise oversight board, and when the franchised

corporation has failed to address concerns identified by the franchise

oversight board pursuant to subparagraph (xviii) of this paragraph, the

board may by unanimous vote request the director of the budget to

impound and escrow racing support payments accruing to the benefit of

the franchised corporation pursuant to paragraphs three and four of

subdivision f of section sixteen hundred twelve of the tax law. The

director of the budget shall release such impounded and escrowed racing

support payments upon notice from the franchise oversight board that the

franchised corporation has achieved the goals of a new corrective action

plan approved by the board.

The director of the budget shall, upon warrant of the franchise

oversight board, approve the use of withheld racing support payments

necessary to satisfy financial instruments used to fund board-approved

capital investments, as approved by the franchise oversight board.

(xx) do all things necessary, convenient or desirable to carry out its

purposes and for the exercise of the powers granted in this article.

b. Notwithstanding any other provision of this article, the franchised

corporation shall be entitled to make capital expenditures, except those

capital expenditures for the Saratoga Racecourse that may, on the advice

of the New York state historic preservation office, adversely impact any

historic structure that is included in or is eligible for inclusion in

the national or state register of historic places, to the physical plant

of the racetracks, grandstand, backstretch, parking and public areas set

forth in the New York Racing Association's capital expenditure plan

("capital plan") filed with the racing and wagering board in two

thousand seven. Any material modification to the capital plan as

determined by the franchise oversight board and each future capital

investment plan for the tracks, grandstand, backstretch, parking and

public areas of the racetracks operated by the franchised corporation

involving the expenditure of more than five million dollars in the

aggregate shall require the prior approval of the franchise oversight

board. Within five years from the date of commencement of the video

lottery terminal operations at Aqueduct, and every five years

thereafter, the franchised corporation shall submit to the oversight

board a capital plan for the five-year period commencing on January

first of the following year. Such plans shall contain both the intended

object of expenditure and the proposed sources of financing. The

franchised corporation shall report to the franchise oversight board

within ninety days following the end of each fiscal year as to the

amount spent pursuant to the capital plan.

* NB Repealed 30 days following the assumption of the franchise by a

successor entity.

§ 213 — Project labor agreements

Project labor agreements. 1. For the purposes of this section,

"project labor agreement" shall mean a pre-hire collective bargaining

agreement between a contractor and the labor organization, including an

organization composed of more than one labor union, determined by the

franchise oversight board as representing the largest number of

employees likely to work on the project, establishing the labor

organization as the collective bargaining representative for all persons

who will perform work on the project, and which provides that only

contractors and subcontractors who sign a pre-negotiated agreement with

the labor organization can perform project work.

2. Notwithstanding the provisions of any general, special, or local

law to the contrary, in regard to the video gaming terminal facility or

related development at a thoroughbred racing facility:

(a) The franchise oversight board may require a contractor awarded a

contract, subcontract, lease, grant, bond, covenant or other agreement

for a project to enter into a project labor agreement during and for the

work involved with such project when such requirement is part of the

franchise oversight board's request for proposals for the project and

when the franchise oversight board determines that the record supporting

the decision to enter into such an agreement establishes that the

interests underlying the competitive bidding laws are best met by

requiring a project labor agreement including: obtaining the best work

at the lowest possible price; preventing favoritism, fraud and

corruption; the impact of delay; the possibility of cost savings; and

any local history of labor unrest.

(b) Any contract to which the franchise oversight board is a party,

and any contract entered into by a third party acting in place of, on

behalf of and for the benefit of the franchise oversight board pursuant

to any lease, permit or other agreement between such third party and the

franchise oversight board, for the construction, reconstruction,

demolition, excavation, rehabilitation, repair, renovation, alteration,

or improvement, of a project undertaken pursuant to this chapter, shall

be subject to all of the provisions of article eight of the labor law,

including the enforcement of prevailing wage requirements by the fiscal

officer as defined in paragraph e of subdivision five of section two

hundred twenty of the labor law to the same extent as a contract of the

state, and shall be deemed public work for purposes of such article.

project shall contain a provision that the contractor shall furnish a

labor and material bond guaranteeing prompt payment of moneys that are

due to all persons furnishing labor and materials pursuant to the

requirements of any contracts for a project undertaken pursuant to this

section and a performance bond for the faithful performance of the

project, which shall conform to the provisions of section one hundred

three-f of the general municipal law, and that a copy of such

performance and payment bonds shall be kept by the franchise oversight

board and shall be open to public inspection.

(d) For the purposes of article fifteen-A of the executive law, any

person entering into a contract for a project authorized pursuant to

this section shall be deemed a state agency as that term is defined in

such article and such contracts shall be deemed state contracts within

the meaning of that term as set forth in such article.

(e) Whenever the franchise oversight board enters into a contract,

subcontract, lease, grant, bond, covenant or other agreement for

construction, reconstruction, demolition, excavation, rehabilitation,

repair, renovation, alteration, or improvement with respect to each

project undertaken pursuant to this chapter, the franchise oversight

board shall consider the financial and organizational capacity of

contractors and subcontractors in relation to the magnitude of work they

may perform, the record of performance of contractors and subcontractors

on previous work, the record of contractors and subcontractors in

complying with existing labor standards and maintaining harmonious labor

relations, and the commitment of contractors to work with minority and

women owned business enterprises pursuant to article fifteen-A of the

executive law through joint ventures or subcontractor relationships.

(f) The franchise oversight board shall further require, on any

contract for construction in excess of three million dollars with

respect to any contract for construction, reconstruction, demolition,

excavation, rehabilitation, repair, renovation, alteration, or

improvement that each contractor and subcontractor shall participate in

apprentice training programs in the trades of work it employs that have

been approved by the department of labor for not less than three years.

The franchise oversight board shall further require that each contractor

and subcontractor shall have graduated at least one apprentice in the

last three years and shall have at least one apprentice currently

enrolled in such training program. Additionally it must be demonstrated

that the program has made significant efforts to attract and retain

minority apprentices, as determined by affirmative action goals

established for such programs by the department of labor.

(g) Whenever the franchise oversight board enters into a contract

under which employees are employed to perform building service work, as

that term is defined in section two hundred thirty of the labor law,

such work shall be subject to article nine of the labor law to the same

extent as building services work performed pursuant to a contract with a

public agency.

(h) All developers of and entities having an operational interest in

any hotel or video lottery terminal facility at a thoroughbred racing

facility in which the state has a proprietary interest or is otherwise

acting as a market participant must have entered into an agreement with

the labor organization(s) that is/are actively engaged in representing

and attempting to represent hotel service, food and beverage,

housekeeping, and gaming employees in New York city and the surrounding

areas and, where applicable, the Saratoga area that is valid and

enforceable under 29 U.S.C. section 185(a) and that prohibits any

strikes, picketing or other economic interference with the hotel or

video lottery terminal facility and ensures that any operations at the

hotel or video lottery terminal facilities involving the use of hotel or

video lottery terminal employees that are conducted by contractors,

subcontractors, licensees, assignees, tenants or subtenants, shall be

done under contracts enforceable under 29 U.S.C. section 185(a)

containing the same provisions as specified above.

§ 214 — Acquisition of racing facilities

Acquisition of racing facilities. Any franchised corporation

desiring to acquire racing facilities, including real estate, or the

capital stock of one or more racing associations shall apply to the

franchise oversight board for approval of such acquisition. If in the

judgment of such board the public interest, convenience or necessity and

the best interest of racing generally will be served thereby, such board

shall enter an order granting approval of such acquisition and of the

terms thereof.

§ 216 — Disposition of racing facilities or certain assets

Disposition of racing facilities or certain assets. 1. Any

franchised corporation desiring to grant, give, devise, or sell any

assets including tangible and intangible assets, racing facilities and

real estate shall apply to the commission and to the franchise oversight

board for approval of such disposition, provided, however, that the

approval of such commission and such board shall not be necessary for

the sale of property, other than real property, that is appropriately,

customarily and usually sold by the association in the normal course of

its business. If in the judgment of the commission and the franchise

oversight board, acting individually, the public interest, convenience

or necessity and the best interest of racing will be served thereby, the

commission and franchise oversight board shall each enter an order

granting approval of such disposition and of the terms thereof.

2. Such franchised corporation during the term of such a franchise

shall not pledge, mortgage or otherwise encumber any of the racetrack

facilities or properties acquired after the effective date of this

subdivision without the prior written approval of the franchise

oversight board.

The franchised corporation may incur indebtedness, including without

limitation, the issuance of non-convertible debt securities in

connection therewith, and grant liens on and security interests in

assets and interests, including without limitation, the revenue streams

referred to herein, except that any debt incurred or funds raised shall

be used to promote racing at the franchise racetracks. The franchised

corporation shall not create any lien or security interest in any asset

that runs with the franchise, such as the simulcasting contract, the

repayment of which would extend beyond the term of the franchise. All

incurrence of debt or grant of liens or security interests other than

those arising within the ordinary course of business such as

materialmen's and mechanics' liens first require the approval of the

franchise oversight board.

3. The state through the urban development corporation may borrow to

fund racetrack capital improvements at Aqueduct racetrack, Belmont Park

racetrack and Saratoga race course and borrow on behalf of the

franchised corporation pursuant to franchise oversight board approval

secured against the franchised corporation's right to receive payments

for racetrack capital improvements pursuant to subdivision f of section

sixteen hundred twelve of the tax law, provided, however, the indenture

shall restrict the use of net proceeds to capital expenditures at the

racetrack and provided further that any such borrowing shall be secured

only by such future stream of racetrack capital improvement payments

payable to the franchised corporation. The urban development corporation

shall initially borrow funds necessary for approved capital expenditures

in years one through five and then at appropriate times as determined by

the franchise oversight board for years six through ten, years eleven

through fifteen, years sixteen through twenty and years twenty-one

through twenty-five. The amount of borrowing for approved capital

expenditures shall not exceed the amount that would have been paid out

for facility improvements in the event the full payment pursuant to

subdivision f of section sixteen hundred twelve of the tax law for that

purpose was made.

§ 217 — Revocation of licenses

Revocation of licenses. If any corporation to which a license

shall be granted shall fail or refuse to comply with the provisions of

this chapter, or with the terms and conditions of its license, or if for

any other reason the continuance of such license shall not be deemed

conducive to the interests of legitimate racing, the commission, upon

its own initiative or upon complaint of the jockey club, in the case of

race courses to be used for running races, or upon the complaint of the

national steeplechase and hunt association in the case of race courses

to be used for steeplechases, shall have the power to cancel and revoke

such license. Written notice of such complaint shall be given to such

corporation by the commission within five days after receiving such

complaint, or after determining to take action, which notice shall

specify a time and place of hearing thereon. If the commission cancels

and revokes such license, then all powers exercised under section two

hundred three of this article by the corporation to which such license

was granted shall cease and determine.

§ 218 — Stewards at race meetings

Stewards at race meetings. There shall be three stewards to

supervise each running race meeting conducted pursuant to sections two

hundred five and two hundred six of this article. One of such stewards

shall be the official steward of the commission, one shall be appointed

by the jockey club or by the national steeplechase and hunt association

as may be appropriate, and one shall be appointed by the corporation

conducting such race meeting. Such stewards shall exercise such powers

and perform such duties at each race meeting as may be prescribed by the

rules of the commission. During the absence or inability to act of an

official steward of the commission, or in the event of the failure or

inability to appoint either of the other two stewards, the powers and

duties of such steward shall be exercised and performed by a person

designated by the commission for that purpose.

§ 219 — Advertising or promotional material

Advertising or promotional material. Notwithstanding any other

provision of law, rule or regulation nothing herein shall be deemed to

authorize the stewards or the commission to promulgate any rule or

regulation that would prohibit a jockey from wearing any advertising or

promotional material on his or her clothing. The wearing of such

advertising or promotional material shall be permitted only when the

owner of a horse for whom such jockey is riding provides the jockey with

prior written authorization. Notwithstanding the foregoing, when a

corporation, company or any other entity sponsors a race or race day at

any franchised corporation or any racing association or corporation,

such racing association may prohibit a jockey from wearing advertising

material that represents a competitor of such sponsoring corporation,

company or other entity.

§ 220 — Licenses for participants and employees at race meetings

Licenses for participants and employees at race meetings. * 1.

For the purpose of maintaining a proper control over race meetings

conducted pursuant to sections two hundred five and two hundred six of

this article, the commission shall license owners, which term shall be

deemed to include part-owners and lessees, trainers, assistant trainers

and jockeys, jockey agents, stable employees, non-publicly appointed

members of the board of a franchised corporation, and such other persons

as the commission may by rule prescribe at running races and at

steeplechases, provided, however, that no such license shall be required

for seasonal employees hired solely to work for no longer than six weeks

during the summer meet at Saratoga racetrack, and any such other times

as race dates historically assigned to Belmont Park are conducted at the

Saratoga racetrack in two thousand twenty-four, two thousand twenty-five

and two thousand twenty-six as approved in writing by the commission. In

the event that a proposed licensee is other than a natural person, the

commission shall require by regulation disclosure of the names and

addresses of all owners of an interest in such entity. The commission

may retain, employ or appoint such officers, employees and agents, as it

may deem necessary to receive, examine and make recommendations, for the

consideration of the commission, in respect of applications for such

licenses; prescribe their duties in connection therewith, and fix their

compensation therefor within the limitations prescribed by law. Each

applicant for a license shall pay to the commission an annual license

fee as follows: owner's license, if a renewal, fifty dollars, and if an

original application, one hundred dollars; trainer's license, thirty

dollars; assistant trainer's license, thirty dollars; jockey's license,

fifty dollars; jockey agent's license, twenty dollars; and stable

employee's license, five dollars. Each applicant may apply for a

two-year or three-year license by payment to the commission of the

appropriate multiple of the annual fee. The commission may by rule fix

the license fees to be paid by other persons required to be licensed by

the rules of the commission, not to exceed thirty dollars per category.

The application for the license shall be in writing in such form as the

commission may prescribe, and contain such information as the commission

may require. The commission shall henceforth cause all applicants for

licenses to be photographed and fingerprinted and may issue

identification cards to licensees. Such fingerprints shall be submitted

to the division of criminal justice services for a state criminal

history record check, as defined in subdivision one of section three

thousand thirty-five of the education law, and may be submitted to the

federal bureau of investigation for a national criminal history record

check. A fee equal to the actual cost of issuance shall be charged for

the initial issuance of such identification cards. Each such license

unless revoked for cause shall be for the period of no more than one,

two or three years, determined by rule of the commission, expiring on

the applicant's birth date. Licenses of non-publicly appointed members

of the board of a franchised corporation shall be issued without fee and

remain in effect for the duration of their board service. Licenses

current on the effective date of this provision shall not be reduced in

duration by this provision. An applicant who applies for a license that,

if issued, would take effect less than six months prior to the

applicant's birth date may, by payment of a fifty percent higher fee,

receive a license which shall not expire until the applicant's second

succeeding birth date. All receipts of the commission derived from the

operation of this section shall be paid by it into the state treasury on

or before the tenth day of each month. All officials connected with the

actual conduct of racing shall be subject to approval by the commission.

* NB Effective until December 31, 2026

* 1. For the purpose of maintaining a proper control over race

meetings conducted pursuant to sections two hundred five and two hundred

six of this article, the commission shall license owners, which term

shall be deemed to include part-owners and lessees, trainers, assistant

trainers and jockeys, jockey agents, stable employees, non-publicly

appointed members of the board of a franchised corporation, and such

other persons as the commission may by rule prescribe at running races

and at steeplechases, provided, however, that no such license shall be

required for seasonal employees hired solely to work for no longer than

six weeks during the summer meet at Saratoga racetrack. In the event

that a proposed licensee is other than a natural person, the commission

shall require by regulation disclosure of the names and addresses of all

owners of an interest in such entity. The commission may retain, employ

or appoint such officers, employees and agents, as it may deem necessary

to receive, examine and make recommendations, for the consideration of

the commission, in respect of applications for such licenses; prescribe

their duties in connection therewith, and fix their compensation

therefor within the limitations prescribed by law. Each applicant for a

license shall pay to the commission an annual license fee as follows:

owner's license, if a renewal, fifty dollars, and if an original

application, one hundred dollars; trainer's license, thirty dollars;

assistant trainer's license, thirty dollars; jockey's license, fifty

dollars; jockey agent's license, twenty dollars; and stable employee's

license, five dollars. Each applicant may apply for a two-year or

three-year license by payment to the commission of the appropriate

multiple of the annual fee. The commission may by rule fix the license

fees to be paid by other persons required to be licensed by the rules of

the commission, not to exceed thirty dollars per category. The

application for the license shall be in writing in such form as the