NY Rac, Pari-Mut Wag & Breeding L § 212 (2021)
2021 New York Laws PML - Racing, Pari-Mutuel Wagering and Breeding Law Article 2 - Thoroughbred Racing and Breeding 212 - Franchise Oversight Board.

* §  212.  Franchise  oversight  board.  1.  There is hereby created a franchise oversight board which shall consist of five members  appointed by  the  governor.  Of the five 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. 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, one member appointed by  the  governor  shall serve  for a three year term, while 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. 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. The local advisory board for the Aqueduct racetrack facility  shall comprise  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.   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.  (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;  (C) review and make recommendations  concerning  accounting,  internal 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.