Legislation

§ 318. Disposition of on-track pari-mutuel pools; harness races. 1.
Except as otherwise provided by law, every association or corporation
authorized under this article to conduct pari-mutuel betting at a
harness horse race meeting on races run thereat shall distribute all
sums deposited in any pari-mutuel pool to the holders of winning tickets
therein, provided such tickets be presented for payment prior to April
first of the year following the year of their purchase, less an amount
that shall be established and retained by such racing association or
corporation of between fourteen and twenty percent of the total deposits
in pools resulting from regular bets, less sixteen to twenty-two percent
of the total deposits in pools resulting from multiple bets, less twenty
to thirty percent of the total deposits in pools resulting from exotic
bets, and less twenty to thirty-six percent of the total betting
deposits in pools resulting from super exotic bets. The retention rate
to be established is subject to the prior approval of the commission.
Such rate may not be changed more than once per calendar quarter to be
effective on the first day of the calendar quarter.

"Exotic bets" and "multiple bets" shall have the meanings set forth in
section five hundred nineteen of this chapter. "Super exotic bets" shall
have the meaning set forth in subdivision four of section three hundred
one of this article.

a. Of the sum so retained from on-track pari-mutuel betting pools,
such association or corporation authorized to operate in Westchester or
Nassau county: (i) shall pay to the commissioner of taxation and finance
as a reasonable tax for the privilege of conducting pari-mutuel betting
at races run at race meetings held by such corporation or association, a
tax, which is hereby levied, in the applicable percentage set forth in
subdivision one of section one hundred thirty-six of this chapter as
limited by subdivision two of section one hundred thirty-six of this
chapter. Any such association or corporation shall, for any twelve-month
period beginning on April first in nineteen hundred ninety and any year
thereafter, expend an amount equal to at least one-half of one percent
of its on-track bets during the immediately preceding calendar year for
enhancements consisting of capital improvements as defined by section
three hundred nineteen of this article, repairs to its physical plant,
structures, and equipment used in its racing or wagering operations, and
five special events at each track in each calendar year, not otherwise
conducted in the ordinary course of business, the purpose of which shall
be to encourage, attract and promote track attendance and encourage new
and continued patronage, which events shall be subject to the approval
of the commission for purposes of this subdivision. In the determination
of the amounts expended for such enhancements, the commission shall
consider the average of the two immediately preceding twelve-month
calendar periods.

(ii) except as otherwise provided in this paragraph an amount equal to
six and eight-tenths percent of the total pool resulting from on-track
regular bets, an amount equal to seven and ninety-five one hundredths
percent of the total pool resulting from on-track multiple bets, an
amount equal to ten and one-half percent of the total pool resulting
from on-track exotic bets, an amount equal to fifteen and one-half
percent of the total daily pool resulting from on-track super exotic
bets shall be used exclusively for purses, of which an amount of not
less than ninety percent shall be used exclusively for purses for
overnight races conducted by such association or corporation. Such
amounts may be reduced upon an application approved by the commission
and an agreement between the licensed harness racing corporation or
association and the representative horsemen's organization as a
condition to reduce the amounts of retained percentages as provided for
in this section. However, of the total amount available for purses, an
amount as determined by contractual obligations between an organization
representing at least fifty-one percent of the owners and trainers using
the facilities of such association or corporation for racing, training
or stabling purposes and the association or corporation, shall be used
for the administrative purposes of said organization and for such
welfare and medical plans for regularly employed backstretch employees
principally employed at the facilities of such corporation or
association as provided by said organization, provided, however, that
eligibility for benefits in such plans shall not be conditioned upon
membership in such organization by any employee or employer thereof, and
any denial of eligibility for benefits in such plans which, upon
investigation and review by the commission, is determined to have
resulted from a person, firm, association, corporation or organization
knowingly aiding in or permitting eligibility for benefits being
conditioned upon membership in such organization shall subject such
organization to the penalties imposed under sections three hundred ten
and three hundred twenty-one of this article but the ratio between the
amounts actually expended for such welfare and medical plans and the
cost actually incurred in administering such welfare and medical plans
for fiscal years of such corporation or association, on or after July
twenty-fourth, nineteen hundred eighty-one, shall not be less than the
ratio between such amounts actually expended and such costs actually
incurred for the fiscal year immediately prior to such date. Such
organization shall annually on or before July first certify to the
commission that it represents at least fifty-one percent of such owners
and trainers and provide copies of such certification to such
association or corporation. Any other organization claiming to represent
at least fifty-one percent of such owners and trainers may file a
challenge with the commission within fifteen days of such original
certification. The commission shall examine such claim and may undertake
studies and conduct hearings to determine the validity of such claim.
Within sixty days of receiving such challenge and based upon the
findings of such studies and hearings, the commission shall render a
decision on the validity of such claim and advise such organizations and
association or corporation of its determination. Upon receipt of such
original certification by such organization, the association or
corporation shall make such payments to said organization and, in the
event of a challenge brought to any other organization, such payments
shall continue to be made until such time as the commission renders its
decision on such challenge; and

(iii) the balance of the retained percentage of such pools may be held
by such association or corporation for its own use and purposes except
as provided in paragraph c of this subdivision and in subdivision four
of section three hundred one of this article, provided, however, that
the commission shall report annually, on or before July first, to the
director of the budget, the chair of the senate finance committee and
the chair of the assembly ways and means committee the extent to which
such corporations and associations used such retained percentages for
operations, maintenance, capital improvements, advertising and
promotion, administration and general overhead and evaluate the
effectiveness and make recommendations with respect to the application
of the rates of taxation as provided for in subparagraph (i) of this
paragraph in accomplishing the objectives stated therein. Such report
shall also specify the amounts of such retained percentages used for
investments not directly related to racing activities and such amounts
used to declare dividends or other profit distributions, additions to
capital stock, its sale and transfer and additions to retained earnings.
Such reports shall also include an analysis of any such agreements or
proposals to conduct or otherwise expand wagers authorized under article
ten of this chapter and present its conclusions with respect to the
conduct of such wagering, the nature of such proposals and agreements,
and recommendations to ensure the future maintenance of the intent of
this article and article ten of this chapter.

b. (i) Of the sums retained by any other licensed harness racing
association or corporation other than those described in paragraph a of
this subdivision, such association or corporation shall pay to the
commissioner of taxation and finance as a reasonable tax for the
privilege of conducting pari-mutuel betting at races run at race
meetings held by such corporation or association, a tax, which is hereby
levied, in the applicable percentage set forth in subdivision one of
section one hundred thirty-six of this chapter, as limited by
subdivision two of section one hundred thirty-six of this chapter. Any
such racing association or corporation shall for any twelve-month period
beginning on April first in nineteen hundred ninety and any year
thereafter, expend an amount equal to at least one-half of one percent
of its on-track bets during the immediately preceding calendar year for
enhancements consisting of capital improvements as defined by section
three hundred nineteen of this article, repairs to its physical plant,
structures, and equipment used in its racing or wagering operations, not
otherwise conducted in the ordinary course of business, the purpose of
which shall be to encourage, attract and promote track attendance and
encourage new and continued patronage, which events shall be subject to
the approval of the commission for purposes of this subdivision. In this
regard, expenditures by a county agricultural society pursuant to
section three hundred nineteen of this article shall be credited to the
applicable harness racing association or corporation for this purpose.
In the determination of the amounts expended for such enhancements, the
commission may consider the immediately preceding twelve-month calendar
period or the average of the two immediately preceding twelve-month
calendar periods. The commission shall report annually, before July
first, to the director of the budget, the chair of the senate finance
committee and the chair of the assembly ways and means committee the
extent to which such corporations and associations used such retained
percentages for operations, maintenance, capital improvements,
advertising and promotion, administration and general overhead and
evaluate the effectiveness and make recommendations with respect to the
application of the rates of taxation as provided for in this
subparagraph in accomplishing the objectives stated therein. Such report
shall also specify the amounts of such retained percentages used for
investments not directly related to racing activities and such amounts
used to declare dividends or other profit distributions, additions to
capital stock, its sale and transfer and additions to retained earnings.
Such reports shall also include an analysis of any such agreements or
proposals to conduct or otherwise expand wagers authorized under article
ten of this chapter and present its conclusions with respect to the
conduct of such wagering, the nature of such proposals and agreements,
and recommendations to ensure the future maintenance of the intent of
this article.

(ii) Of the sums retained by such association or corporation, an
amount equal to one and three-quarters percent of the total pool
resulting from on-track regular, multiple and exotic bets shall be used
exclusively for the purpose of increasing purses awarded in overnight
races conducted by such association or corporation. Such amounts shall
be in addition to purse moneys otherwise provided pursuant to existing
contractual obligations. In this regard an amount equal to twelve
percent of the total bets in super exotic pools shall be used for purses
in lieu of any such contractual obligations that might otherwise apply
to purses to be awarded on super exotic bets. Any portion of such amount
not so used during any year shall be so used during the following year.
In addition to the amounts required in this paragraph, fifty percent of
all additional sums retained, as a result of tax reductions provided in
this section after September first, nineteen hundred ninety-four to
qualified licensed harness racing associations, shall be used
exclusively for purposes of increasing purses awarded in overnight races
conducted by such association or corporation, provided that such
association or corporation has entered into a written agreement with its
representative horsemen's organization on and after September first,
nineteen hundred ninety-four. Notwithstanding anything contained herein
to the contrary, in a harness special betting district the amount to be
used for purses or the methodology for calculating the amount to be used
for purses may be specified in a written contract between a harness
racing association or corporation and its representative horsemen's
association. The balance of the retained percentage of such pool may be
held by such corporation or association for its own use and purposes.

(iii) The commission shall as a condition of racing require an
association authorized to operate in areas other than Westchester or
Nassau county to withhold one percent of all purses and to pay such sum
to the horsemen's organization representing the owners and trainers
using the facilities of such association that had a contract with the
association governing the conditions of racing on January first,
nineteen hundred ninety-two, as determined by the commission.

Any other horsemen's organization may apply to the commission to be
approved as the qualified organization to receive payment of the one
percent of all purses by submitting to the commission proof of both,
that (i) such organization represents more than fifty-one percent of all
the owners and trainers using the same facilities and (ii) the
horsemen's organization previously approved as qualified by the
commission does not represent fifty-one percent of all the owners and
trainers using the same facilities. If the commission is satisfied that
the documentation submitted with the application of any other horsemen's
organization is conclusive with respect to subparagraphs (i) and (ii) of
this paragraph, the commission may approve the applicant as the
qualified recipient organization.

In the best interests of racing, upon receipt of such an application,
the commission may direct the payments to the previously qualified
horsemen's organization to continue uninterrupted, or it may direct the
payments to be withheld and placed in interest-bearing accounts for a
period not to exceed ninety days, during which time the commission shall
review and approve or disapprove the application. Funds held in such
manner shall be paid to the organization approved by the commission. In
no event shall the commission accept more than one such application in
any calendar year from the same horsemen's organization.

The funds authorized to be paid by the commission are to be used
exclusively for the benefit of those horsemen racing in New York state
through the administrative purposes of such qualified organization,
benevolent activities on behalf of backstretch employees, and for the
promotion of equine research.

c. Of the sums retained by any harness racing association or
corporation, an amount equal to one percent of the total pools resulting
from on-track regular, multiple and exotic bets and an amount equal to
three percent of the total pools resulting from on-track super exotic
bets shall be paid to the agriculture and New York state horse breeding
development fund.

d. Every harness racing association or corporation shall pay to the
commission as a regulatory fee, which fee is hereby levied, six-tenths
of one percent of the total daily on-track pari-mutuel pools of such
association or corporation.

2. The state tax levied adjusted for any credits in this section shall
be paid to the commissioner of taxation and finance, on the last
business day of each month and shall cover taxes due for the period from
the sixteenth day of the preceding month through the fifteenth day of
the current month provided, however, that such payments required to be
made on March thirty-first shall include all taxes due and accruing
through the last full week of racing in March of the current year or as
otherwise determined by the commissioner, and shall be accompanied by a
report under oath showing the total of all such contributions together
with such other information as the commissioner may require. A penalty
of five percent and interest at the rate of one percent per month from
the date the report is required to be filed to the date of payment of
the tax shall be payable in case any tax imposed by this section is not
paid when due. If the commissioner determines that any moneys received
under this section were paid in error, the commissioner may cause the
same to be refunded without interest out of any moneys collected
thereunder, provided an application therefor is filed with it within one
year from the time the erroneous payment was made. Such taxes, interest
and penalties when collected, after the deduction of refunds of taxes
erroneously paid, shall be paid by the commissioner into the general
fund of the state treasury.

3. Except as otherwise provided by law no county, city, town, village
or other political subdivision of the state may impose, levy or collect
a tax on admission fees or tax on admission, on bets made by patrons in
the form of purchases of pari-mutuel tickets or upon such tickets, on
pari-mutuel pools, on breaks, on dividends or payments made to winning
bettors, or on that part of the pari-mutuel pools or breaks to be
retained by harness horse racing associations or corporations under this
section.

4. Notwithstanding any other provisions of this chapter, there shall
be no pari-mutuel tax imposed upon the compensation received by any
harness racing association or corporation in consideration for (a)
permission to have wagering conducted outside this state on races run by
such association or corporation, and (b) the simulcasting outside this
state of races run by such association or corporation, except for such
permission or such simulcasting as may be granted to an off-track
betting operator in the state of Connecticut by a harness racing
association or corporation located in Nassau or Westchester county. Any
such association or corporation so simulcasting to an off-track betting
operator in the state of Connecticut shall pay to the New York
commissioner of taxation and finance a reasonable tax for such
permission and privilege for such simulcasting, which is hereby levied,
at the following rates: one and one-tenth percent of total daily regular
and multiple bets; three and one-tenth percent of total daily exotic
bets; and three and one-half percent of total daily super exotic bets.

5. Maintenance of pari-mutuel racing activity. For any calendar year
commencing on or after January first, nineteen hundred eighty-nine, a
harness racing association or corporation shall not conduct fewer
pari-mutuel programs and pari-mutuel races at its facilities than ninety
percent of the programs and races so conducted during nineteen hundred
eighty-five or during nineteen hundred eighty-six, whichever is less,
unless such association or corporation demonstrates to the satisfaction
of the commission good cause due to factors beyond the control of such
association or corporation or because the commission finds that it would
be uneconomical or impractical for such association or corporation to be
assigned or conduct the prescribed number.

6. Notwithstanding any provision of law to the contrary, in the
absence of a contract between the licensed harness racing corporation or
association and the representative horsemen's organization, the
previously negotiated contract related to welfare, medical, or
retirement plans, including any associated costs, provided by the
horsemen's organization to participants in racing at the licensed
harness racing facility shall be automatically extended for a one-time
period of twelve months commencing from the date that the previously
negotiated contract expired. The amounts shall be paid monthly from the
horsemen's gross purse enhancement amount from video lottery gaming.