N.Y. PML Law § 212 — New York Code / Act PML / Article 2 / Section 212
Franchise oversight board
Status: in_force

* § 212. Franchise oversight board.  1. There is hereby created a\nfranchise oversight board which shall consist of five members. Of the\nfive members, three shall be appointed by the governor, one shall be\nappointed by the temporary president of the senate and one shall be\nappointed by the speaker of the assembly. Of the initially appointed\nboard, one member appointed by the governor shall serve for a one year\nterm, one member appointed by the governor shall serve for a two year\nterm, and one member appointed by the governor shall serve for a three\nyear term. The members appointed by the temporary president of the\nsenate and the speaker of the assembly shall serve for a four year term.\nAll successors shall serve for a term of four years. All members shall\ncontinue in office until their successors have been appointed and\nqualified. The governor shall designate the chair from among the sitting\nmembers who shall serve as such at the pleasure of the governor.\n  2. The members shall serve without compensation for their services as\nmembers, but shall be entitled to reimbursement for actual and necessary\nexpenses incurred in the performance of their duties. The state shall\nsave harmless and indemnify members of the board and any officer,\nemployee, agent or other person or persons pursuant to section seventeen\nof the public officers law against any claim, demand, suit or judgment\narising by reason of any act or omission to act by such member, officer,\nemployee, agent or person occurring in the discharge of his or her\nduties and within the scope of his or her service on behalf of the\nfranchise oversight board.\n  3. Such members, except as otherwise provided by law, may engage in\nprivate or public employment, or in a profession or business. The board,\nits members, officers and employees shall be subject to the provisions\nof sections seventy-three and seventy-four of the public officers law.\nNo former trustee or officer of a non-profit racing association known as\nThe New York Racing Association, Inc. or its predecessor, no current\ndirector or officer of a franchised corporation or any individual\nregistered with the New York commission on public integrity shall be\nappointed as members to the board nor shall any member of the board have\nany direct or indirect interest in any racehorse, thoroughbred racing or\npari-mutuel wagering business, video lottery terminal facility or any\ndevelopment at any racing facility.\n  4. Notwithstanding any inconsistent provisions of law, general,\nspecial or local, no officer or employee of the state or of any civil\ndivision thereof shall be deemed to have forfeited or shall forfeit\ntheir office or employment by reason of their acceptance of membership\non the board created by this section.\n  5. The affirmative vote of three members shall be necessary for the\ntransaction of any business or the exercise of any power or function of\nthe franchise oversight board except as otherwise provided here in this\narticle.\n  6. Within thirty days following the appointment of the members of the\nfranchise oversight board, the members of the oversight board shall\nestablish a local advisory board for each racing operation comprising\nthe following members to meet at least twice yearly:\n  a. The local advisory board for the Saratoga racetrack facility shall\ncomprise fifteen members and include five designees from each of the\nfollowing: the board of supervisors, the mayor of the city of Saratoga\nand the franchised corporation.\n  b. (i) The local advisory board for the Aqueduct racetrack facility\nshall comprise of fifteen members, nine of whom shall be designees of\nNew York City Queens Community Board Ten, three designees of the\nfranchised corporation and three designees of the video lottery gaming\noperator. At substantial completion of the Belmont project, as\ndetermined by the gaming commission, this board shall be dissolved.\n  (ii) (A) Notwithstanding subparagraph (i) of this paragraph, within\nthirty days after the substantial completion of the Belmont project, as\ndetermined by the gaming commission, an Aqueduct Redevelopment Community\nAdvisory Board shall be formed to assess all bids made in response to\nthe request for proposals on developing the Aqueduct property and is\nrequired to hold a public hearing and adopt and submit a written\nrecommendation on each bid to the franchise oversight board within sixty\ndays of receiving such bid. The adoption of such recommendation shall be\nby a public vote which results in approval by a majority of the\nappointed members present during the presence of a quorum. The board\nrecommendation shall be in writing via a form provided by the franchise\noversight board and shall include a description of the application, the\ntime and place of the public hearing on the application, the time and\nplace of the meeting at which the recommendation was adopted and the\nvote by which the recommendation was adopted. The community board may\ninclude in its submission the reasons for the vote and any conditions\nattached to its vote.\n  (B) The Aqueduct Redevelopment Community Advisory Board shall consist\nof six members, one to be appointed by the governor, one to be appointed\nby the mayor of the city of New York, one to be appointed by the senator\nrepresenting the senate district where the Aqueduct property is located,\none to be appointed by the assemblymember representing the assembly\ndistrict where the Aqueduct property is located, one to be appointed by\nthe city councilmember representing the district where the Aqueduct\nproperty is located, and one to be appointed by the borough president\nwhere the Aqueduct property is located.\n  c. The local advisory board for the Belmont racetrack facility shall\ncomprise fifteen members, to be appointed as follows:\n  (i) five members from Nassau county to be appointed by the Nassau\ncounty executive. Four of such members must reside in the hamlet of\nElmont;\n  (ii) two members from the town of Hempstead to be appointed by the\nsupervisor of the town of Hempstead. Both members must reside in the\nhamlet of Elmont;\n  (iii) two members to be appointed by the mayor of the village of\nFloral Park, subject to village board approval;\n  (iv) one member to be appointed by the mayor of the village of South\nFloral Park, subject to village board approval;\n  (v) three members to be appointed by the New York Racing Association,\nInc.; and\n  (vi) two members to be appointed by the New York City Queens Community\nBoard 13.\n  The members of the local advisory boards shall serve for a period of\ntwo years. In the event of a vacancy occurring during a term of\nappointment by reason of death, resignation, disqualification or\notherwise such vacancy shall be filled for the unexpired term in the\nsame manner as the original appointment. The members of the local\nadvisory board shall serve without compensation, except that each member\nshall be allowed the necessary and actual expenses incurred in the\nperformance of his or her duties pursuant to this section.\n  7. The Saratoga local advisory boards in cooperation with the state\nhistoric preservation office and the franchise oversight board shall\ncompile a complete, updated historic resources inventory identifying all\nbuildings and landscape features and their current condition at the\nSaratoga Racecourse. The local advisory board may, at its discretion, in\nthe performance of its responsibilities, seek advice from groups or\nindividuals with relevant expertise.\n  All buildings and landscaped features of historic, architectural or\ncultural significance at the Saratoga Racecourse may be advanced by the\nlocal advisory board for consideration for inclusion in the National and\nState Registers of Historic Places and in local historic districts.\n  8. a. The duties and responsibilities of the franchise oversight board\nshall include, but not be limited to, the following:\n  (i) represent the interests of the state in all real estate\ndevelopment proposed for Aqueduct racetrack or real estate development\nat Belmont Park racetrack. Any such real estate development shall only\nbe undertaken pursuant to a competitive process approved by the board,\nafter consultation with the applicable local advisory boards and\nconsideration of local zoning and planning regulation, and in a manner\nthat will not adversely impact any historic structure that is included\nin or eligible for inclusion in the National or the State Register of\nHistoric Places, be consistent with any plan approved for such\ncommunity, and shall be subject to unanimous approval of the franchise\noversight board and all statutory and regulatory requirements; provided,\nhowever, that, subject to approval of the franchise oversight board and\nsubject to all statutory and regulatory requirements, the franchised\ncorporation shall have full powers and rights to develop, redevelop,\nrefurbish, renovate or make such other improvements, capital\nexpenditures or otherwise, to the racetracks and the fixtures and\nimprovements thereon consistent with projects specifically identified in\nthe franchised corporation's approved track facility improvement plan.\n  The franchise oversight board shall be guided by the goals of ensuring\nthe continuation of high quality thoroughbred racing at the thoroughbred\nracing facilities located within the state, raising revenue for or in\naid or support of education in this state from video lottery gaming at\nfacilities of the state racing franchise, and maximizing revenue for\ngovernments from pari-mutuel wagering on racing at facilities of the\nstate racing franchise. In consideration of capital expenditure\napproval, the board shall ensure adequate funds are dedicated for\nmaintenance and repair of existing structures at Saratoga racetrack and\nBelmont Park racetrack and for the improvement of onsite backstretch\npersonnel housing and quality of life.\n  (ii) monitor and enforce compliance with definitive documents that\ncomprise the franchise agreement between the franchised corporation and\nthe state of New York governing the franchised corporation's operation\nof thoroughbred racing and pari-mutuel wagering at the racetracks. The\nfranchise agreement shall contain objective performance standards that\nshall allow contract review in a manner consistent with this chapter.\nThe franchise oversight board shall notify the franchised corporation\nauthorized by this chapter in writing of any material breach of the\nperformance standards or repeated non-material breaches which the\nfranchise oversight board may determine collectively constitute a\nmaterial breach of the performance standards. Prior to taking any action\nagainst such franchised corporation, the franchise oversight board shall\nprovide the franchised corporation with the reasonable opportunity to\ncure any material breach of the performance standards or repeated\nnon-material breaches which the franchise oversight board may determine\ncollectively constitute a material breach of the performance standards.\nUpon a written finding of a material breach of the performance standards\nor repeated non-material breaches which the franchise oversight board\nmay determine collectively constitute a material breach of the\nperformance standards, the franchise oversight board may recommend that\nthe franchise agreement be terminated. The franchise oversight board\nshall refer such recommendation to the commission for a hearing\nconducted pursuant to section two hundred forty-five of this article for\na determination of whether to terminate the franchise agreement with the\nfranchised corporation;\n  (iii) oversee, monitor and review all significant transactions and\noperations of the franchised corporation authorized by this chapter;\nprovided, however, that nothing in this section shall be deemed to\nreduce, diminish or impede the authority of the commission to, pursuant\nto article one of this chapter, determine and enforce compliance by the\nfranchised corporation with terms of racing laws and regulations. Such\noversight shall include, but not be limited to:\n  (A) review and make recommendations concerning the annual operating\nbudgets of such franchised corporation;\n  (B) review and make recommendations concerning operating revenues and\nthe establishment of a financial plan;\n  (C) review and make recommendations concerning accounting, internal\ncontrol systems and security procedures;\n  (D) review such franchised corporation's revenue and expenditure\npolicies which shall include collective bargaining agreements management\nand employee compensation plans, vendor contracts and capital\nimprovement plans;\n  (E) review such franchise corporation's compliance with the laws,\nrules and regulations applicable to its activities;\n  (F) make recommendations for establishing model governance principles\nto improve accountability and transparency; and\n  (G) receive, review, approve or disapprove capital expense plans\nsubmitted annually by the franchised corporation.\n  (iv) evaluate, review and approve the racing franchisee's selection of\na vendor or vendors to contract with the franchised corporation for\nprovision of totalizator services, and manage, subject to the franchised\ncorporation's unilateral right to opt out, directly or indirectly,\nintegration of any offered internet wagering platform. The franchise\noversight board shall consider in its evaluation of any such proposed\nvendor the ability of such vendor to reduce the totalizator expenses and\ngeneral development and production costs of any internet wagering\nplatform of an authorized off-track betting corporation and the state\nracing franchise holder.\n  (v) facilitate discussions and voluntary agreements between the\nfranchised corporation and off-track betting corporations to streamline\noperations, decrease operating costs and maximize opportunities\npertaining to costs and revenues, and encourage an exchange of views and\nexperiences from the franchised corporation and the off-track betting\ncorporations to improve the racing product in New York and to realize\nefficiencies;\n  (vi) review and approve all purchasing policies pursuant to paragraph\n(a) of subdivision six of section two hundred eight of this article;\n  (vii) review and provide any recommendations on all simulcasting\ncontracts (buy and sell) that are also subject to prior approval of the\ncommission;\n  (viii) act on behalf of the People of the State of New York to enter\ninto any real property transactions in furtherance of the purposes and\nintent of this statute, including, without limitation, one or more\nground leases, for one dollar in consideration annually, for each of\nAqueduct racetrack, Belmont Park and Saratoga racecourse to the\nfranchised corporation, for a term that will extend until the racing\nfranchise expires, is revoked, terminated or ends by any other means\nprovided by law. Such leases shall be executed contemporaneously with\nthe conveyance of the racetracks by the franchised corporation's\npredecessor to the state;\n  (ix) enter into on behalf of the state as licensor, a long term\nlicense agreement with the franchised corporation for the use of the\nsimulcast signal and associated intellectual property rights, for\nconsideration of one dollar annually and for a term that will extend\nuntil the racing franchise expires, is revoked, terminated or ends by\nany other means provided by law. Such license agreement shall be\nexecuted contemporaneously with the conveyance of the franchised\ncorporation's assets associated with the franchise agreement.\n  (x) conduct running races or steeplechases at racing facilities and\nconduct pari-mutuel betting on the outcome of the same when necessary to\nassure the continuation of the racing and pari-mutuel betting activities\nat such racing facilities (A) in the event that the racing and/or\npari-mutuel betting franchises of the franchised corporation authorized\nby this chapter then holding such franchises have either been terminated\nin the manner provided by law or have been relinquished by such\ncorporation, or such corporation declines to continue conducting race\nmeetings and pari-mutuel betting on the outcome of the same as required\nby such franchises unless such declination is the result of strikes,\nacts of God, or other unavoidable causes not under the control of such\ncorporation, or the corporate existence of such corporation has been\ndissolved in the manner provided by law prior to the end of the term of\nany such franchise and (B) until such time as a new franchise is\ngranted;\n  (xi) on behalf of the People of the State of New York, and, acting in\nsuch capacity as lessor of the racing facilities and real estate, be\nresponsible for payment of all property taxes related to such racing\nfacilities and real estate;\n  (xii) report annually to the governor and the legislature, beginning\nno later than December thirty-first, two thousand eight, stating its\nfindings and recommendations to implement policy and legislative changes\nnecessary to encourage the continuation of high quality thoroughbred\nracing in New York state and to protect the legitimate interests of the\nstate and the thoroughbred racing industry;\n  (xiii) require the franchised corporation to make all records and\ndocuments pertaining to its financial practices, and other documents and\nrecords necessary to carry out its duties, available to the franchise\noversight board within thirty days of a written request;\n  (xiv) examine or cause to be examined by a third party, the books,\npapers, records and accounts of the franchised corporation;\n  (xv) sue and be sued;\n  (xvi) make and execute contracts and all other instruments necessary\nor convenient for the exercise of its powers and functions under this\narticle;\n  (xvii) request and accept the assistance of any state agency,\nincluding but not limited to, the commission, office of parks,\nrecreation and historic preservation, the department of environmental\nconservation and the department of taxation and finance, in obtaining\ninformation related to the franchised corporation's compliance with the\nterms of the franchise agreement;\n  (xviii) when the franchise oversight board determines the financial\nposition of the franchised corporation has deviated materially from the\nfranchised corporation's financial plan, or other such related documents\nprovided to the franchise oversight board, and such deviation is not\nmitigated by the franchised corporation within one hundred eighty days\nof the franchise oversight board providing notice of such determination\nto the franchised corporation, or when the implementation of such plan\nwould, in the opinion of the franchise oversight board, pose a\nsignificant risk to the liquidity of the franchised corporation, in any\norder or combination:\n  (A) hire, at the expense of the franchised corporation, an independent\nfinancial adviser to evaluate the financial position of the franchised\ncorporation and report on such to the franchise oversight board; and\n  (B) require the franchised corporation to submit for the franchise\noversight board's approval a corrective action plan addressing any\nconcerns identified as risks by the franchise oversight board.\n  (xix) when the franchise oversight board finds the franchised\ncorporation has experienced two consecutive years of material losses due\nto circumstances within the control of the franchised corporation, as\ndetermined by the franchise oversight board, and when the franchised\ncorporation has failed to address concerns identified by the franchise\noversight board pursuant to subparagraph (xviii) of this paragraph, the\nboard may by unanimous vote request the director of the budget to\nimpound and escrow racing support payments accruing to the benefit of\nthe franchised corporation pursuant to paragraphs three and four of\nsubdivision f of section sixteen hundred twelve of the tax law. The\ndirector of the budget shall release such impounded and escrowed racing\nsupport payments upon notice from the franchise oversight board that the\nfranchised corporation has achieved the goals of a new corrective action\nplan approved by the board.\n  The director of the budget shall, upon warrant of the franchise\noversight board, approve the use of withheld racing support payments\nnecessary to satisfy financial instruments used to fund board-approved\ncapital investments, as approved by the franchise oversight board.\n  (xx) do all things necessary, convenient or desirable to carry out its\npurposes and for the exercise of the powers granted in this article.\n  b. Notwithstanding any other provision of this article, the franchised\ncorporation shall be entitled to make capital expenditures, except those\ncapital expenditures for the Saratoga Racecourse that may, on the advice\nof the New York state historic preservation office, adversely impact any\nhistoric structure that is included in or is eligible for inclusion in\nthe national or state register of historic places, to the physical plant\nof the racetracks, grandstand, backstretch, parking and public areas set\nforth in the New York Racing Association's capital expenditure plan\n("capital plan") filed with the racing and wagering board in two\nthousand seven. Any material modification to the capital plan as\ndetermined by the franchise oversight board and each future capital\ninvestment plan for the tracks, grandstand, backstretch, parking and\npublic areas of the racetracks operated by the franchised corporation\ninvolving the expenditure of more than five million dollars in the\naggregate shall require the prior approval of the franchise oversight\nboard. Within five years from the date of commencement of the video\nlottery terminal operations at Aqueduct, and every five years\nthereafter, the franchised corporation shall submit to the oversight\nboard a capital plan for the five-year period commencing on January\nfirst of the following year. Such plans shall contain both the intended\nobject of expenditure and the proposed sources of financing. The\nfranchised corporation shall report to the franchise oversight board\nwithin ninety days following the end of each fiscal year as to the\namount spent pursuant to the capital plan.\n  * NB Repealed 30 days following the assumption of the franchise by a\nsuccessor entity.\n