Senate Bill S5018

                                BILL NUMBER:S5018

TITLE OF BILL:
An act
to amend chapter 473 of the laws of 2010 amending the racing,
pari-mutuel wagering and breeding law relating to the New York state
thoroughbred breeding and development fund, in relation to the
effectiveness thereof

PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this legislation is to provide continued revenue to the
New York State Thoroughbred Breeding and Development Fund.

SUMMARY OF SPECIFIC PROVISIONS:
This bill would paragraph a of subdivision I and paragraphs a, e and f
of subdivision 2 of section 254 of the racing, pari-mutuel wagering
and breeding law, to remove the sunset date as enacted by chapter 473
of the laws of 2010.
Chapter 73 of the Laws of 2010 sunsets when the Video Lottery
Terminals (VLTS) come online at Aqueduct race track, which is
anticipated sometime in mid-20 II. Specifically, the following
provisions should be extended for one year following the VLTS coming
online:

o required payments to be made to the fund on a quarterly basis;
o the percentage of revenue that can be allotted to breeder awards
              

would be maintained at 65 percent;
o amount of money used for promoting the breeding and raising of
thoroughbred horses would be increased by one percent to an amount up
to six percent; and
o administrative allotments from the fund would
be increased from 4 percent up to 5 percent.

JUSTIFICATION:
Chapter 473 of the Laws of 2010 provided some flexibility to the
Thoroughbred Breeding and Development Fund. This law is currently
slated to expire upon the commencement of the operation of a video
lottery facility at Aqueduct racetrack, which could be sometime this
year. The Fund has recently voted to implement all of the provisions
of Chapter 473, however, in light of New York City Off-Track Betting
Corporation's much publicized bankruptcy and subsequent closing down
of operations, the Fund stands to lose a significant portion of its
revenue.
It is estimated that 36% of the Fund's annual revenue was provided by
NYCOTB ($3.8 million), and prior to the bankruptcy proceedings,
NYCOTB had stopped making contributions altogether to the Fund. To
help offset this critical loss of revenue, this legislation would
continue the provisions of Chapter 473 for one year following the
VLTS coming online at Aqueduct race track.

The New York State Thoroughbred Breeding and Development Fund,
established in 1973, has helped shape the New York State thoroughbred
industry, making it the benchmark of thoroughbred programs around the
world. For over two decades, the Fund has worked to make thoroughbred
breeding and racing a vital force in New York State's economy,
utilizing its rich racing tradition, vast agricultural resources, and


thriving tourism industry. The Fund is a public benefit corporation
that oversees the registration process for foals and stallions, and
distributes incentives awards to breeders, owners, and stallion
owners. The incentives provided by the Fund are financed from within
the racing industry, using a small percentage of the total monies
wagered through the pari-mutuel system on thoroughbred racing in New
York State.

Thoroughbred Breeders use this funding to invest back into breeding,
thereby keeping that money in the local economy and creating more
jobs, and strengthening the horse racing industry in New York.

The New York Racing and Breeding Program has evolved significantly
since 1973. The goals set out for the Fund have been well
accomplished, especially in the last decade. However, the industry
has seen significant declines in handle year after year. With that,
the Fund's revenue has rapidly fallen each year placing a burden on
the ability to pay awards to participants at advertised rates within
the statutory cap as the Breeding Program has grown. Additionally,
Governmental Accounting Standards Board (GASB 45) regulations have
required the Fund to account for administrative costs years ahead.
Therefore, the Board of Directors of the Thoroughbred Breeding Fund
require the ability to allot Fund revenue based on the current state
of the Thoroughbred industry.
To do so, the statutory limitations on Fund allocations need further
room for growth to accommodate awards earned and revenue at hand to
the Fund. This legislation is a housekeeping modification that has no
financial impact on any other organization or segment of the industry.

NY Thoroughbred Breeders are a key sector of New York's agricultural
economy, which is the number one agri-business for New York.
Thoroughbred Breeders have a significant, positive impact on the
upstate economy by providing jobs, protecting open space, preserving
property values and contributing to the overall state and local
economies. Thoroughbred breeders play a central role in strengthening
New York's horse racing industry by helping maintain the highest
levels of racing, and producing superior quality thoroughbreds. New
York thoroughbred farms range from large commercial facilities to
smaller family owned operations, who are struggling to make ends
meet. New York is home to over 400 thoroughbred breeding farms
utilizing 43,000 acres of working landscape or "green space."
Spending by suppliers and employees generates additional jobs in New
York for a total employment impact of over 35,000 agribusiness jobs.

PRIOR LEGISLATIVE HISTORY:
Similar to Chapter 473 of the Laws of 2010 (A.11130-A/S.7578-A).

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Immediately.