New York Codes, Rules and Regulations › Title 9 - EXECUTIVE DEPARTMENT › Subtitle A - Governor's Office › Chapter I - Executive Orders › Part 7 - Executive Orders (David A. Paterson) › Section 7.27 - Executive order no. 27: authorizing new york city off-track betting corporation to file petition under provisions of the laws of the united states for composition or adjustment of municipal indebtedness

Current through Register Vol. 46, No. 28, July 10, 2024
WHEREAS, Article I, Section 9 of the New York State
					 Constitution recognizes, as a permissible exception to an otherwise general
					 prohibition against the authorization or allowance of gambling in this State,
					 "pari-mutuel betting on horse races as may be prescribed by the legislature and
					 from which the state shall derive a reasonable revenue for the support of
					 government;" and
WHEREAS, pursuant to a series of Chapters of the Laws of
					 New York, commencing with Chapter 143 of the Laws of 1970, the Legislature has
					 authorized establishment, conduct and operation of off-track pari-mutuel
					 betting systems on horse racing by designated public benefit corporations in
					 participating municipalities within this State; and
WHEREAS, pursuant to such legislation, including among
					 other Chapter Laws, Chapter 865 of the Laws of 1982, the operation of an
					 off-track pari-mutuel betting system by a public benefit corporation known as
					 the New York City Off-Track Betting Corporation ("NYCOTB") in New York City, is
					 deemed to be a matter of State concern and a public purpose that cannot be
					 adequately attained except by the powers of government, and that such public
					 benefit corporation, as a body politic and corporate exercising the powers
					 conferred upon it by the Legislature, performs a governmental function;
					 and
WHEREAS, since inception nearly forty years ago, NYCOTB
					 cumulatively has generated more than $4.515 billion for the support of the
					 State, local governmental units within New York State and the horse racing
					 industry; and
WHEREAS, in the Report of the independent certified public
					 accountants to NYCOTB for each fiscal year since Fiscal Year 2005, NYCOTB's
					 outside auditing firm has noted that NYCOTB has been required to make
					 distributions in excess of its operating income before statutory distributions,
					 thereby prompting the outside auditor to highlight the existence of uncertainty
					 as to the ability of NYCOTB to continue to maintain operations as a "going
					 concern"; and
WHEREAS, in consequence of the recurring circumstance of
					 NYCOTB being required to make distributions that have exceeded revenue
					 available for distribution after satisfaction of expenses of operation, the
					 Mayor of the City of New York and the Board of Directors of NYCOTB, all of whom
					 were appointees of the Mayor, directed NYCOTB management to prepare a plan for
					 a full shut down of NYCOTB operations as of June 15, 2008; and
WHEREAS, pursuant to the provisions of Chapter 115 of the
					 Laws of 2008, effective as of June 17, 2008, control of NYCOTB was transferred
					 from the City of New York to the State, and the responsibility and power to
					 appoint the members of the NYCOTB Board of Directors shifted to the Governor
					 from the Mayor of New York City; and
WHEREAS, in the ensuing fourteen months following the
					 effective date of Chapter 115, the financial circumstances of NYCOTB have
					 continued to deteriorate, leading to the further depletion of cash available
					 for operations and to the realistic prospect that NYCOTB may completely exhaust
					 cash available to fund continued operations beyond the close of its current
					 2010 fiscal year on March 31, 2010; and
WHEREAS, as recently as August 14, 2009 the Office of the
					 State Comptroller publically reported that:
"The New York City Off-Track Betting Corporation (NYC OTB),
					 is facing financial insolvency if current financial trends continue . . . . The
					 NYC OTB's operating expenses and accumulated losses have increased steadily in
					 the last four years, resulting in an operating deficit of approximately $38
					 million. In total, the organization has an outstanding deficit of more than
					 $228 million. . . . NYC OTB provides millions of dollars in revenues to the
					 horse racing industry, which in turn provides employment for thousands of New
					 Yorkers. The industry is too important to fail. Something has to be done.
					 Inaction will mean insolvency"; and
WHEREAS, the conclusions announced by the Comptroller
					 validate and reinforce the public policy expressed by the Legislature when it
					 transferred NYCOTB to the control of the State and adopted Chapter 115 of the
					 Laws of 2008, which provides:
"The legislature hereby finds that the New York City
					 off-track betting corporation (NYC OTB) is insolvent and facing closure. The
					 legislature further finds that nearly 1.1 billion dollars, almost half of all
					 money wagered on horse racing in New York state, is wagered through NYC OTB.
					 The revenue distributed to the racing industry, which is derived from wagering
					 through NYC OTB, plays an integral role in sustaining the viability of the
					 entire horse racing industry, and NYCOTB employs almost 1,500 people in New
					 York. The legislature therefore determines that the continued operation of NYC
					 OTB Corporation is of paramount importance to the public interest"; and
WHEREAS, the Board of Directors of NYCOTB is considering
					 actions to restore fiscal equilibrium to NYCOTB and enable it to continue to
					 fulfill its tri-partite statutory mission of:
(i) generating reasonable revenue for the
				  support of government,
(ii)
				  preventing and curbing unlawful bookmaking and illegal wagering on horse races,
				  and
(iii) ensuring that off-track
				  betting is conducted in a manner compatible with the well being of the horse
				  racing and breeding industries in this State; and
WHEREAS, it is in the public interest to afford maximum
					 flexibility to the NYCOTB Board of Directors as it charts a course to return
					 NYCOTB to fiscal solvency and enable fulfillment and attainment of the mission
					 assigned to it by the Legislature.
NOW, THEREFORE, I, DAVID A. PATERSON, Governor of the State
					 of New York, by virtue of the authority vested in me by the Constitution and
					 Laws of the State of New York do hereby order as follows:
The New York City Off-Track Betting Corporation, as
					 reconstituted and continued in existence pursuant to Section 27 of Chapter 115
					 of the Laws of 2008, is hereby authorized to and may file any petition with any
					 United States district court or court of bankruptcy under any provision of the
					 laws of the United States, now or hereafter in effect, for the composition or
					 adjustment of municipal indebtedness.
Signed: David A. PatersonDated: September 1, 2009
[FN*] [Revoked by Executive Order No. 12 (Andrew M. Cuomo),
					 infra.]