2023 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.  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;
(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.