S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6562

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                              April 9, 2013
                               ___________

Introduced  by M. of A. ENGLEBRIGHT, WEISENBERG, SCHIMEL, RAIA, MONTESA-
  NO, RAMOS, LUPINACCI, SWEENEY -- Multi-Sponsored by -- M. of A.  McDO-
  NOUGH  -- read once and referred to the Committee on Racing and Wager-
  ing

AN ACT to amend the racing, pari-mutuel wagering and  breeding  law  and
  the  tax law, in relation to allowing the Nassau and Suffolk off-track
  betting corporations to host video lottery terminals

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Section 503 of the racing, pari-mutuel wagering and breed-
ing law is amended by adding a new subdivision 10-a to read as follows:
  10-A. IN THE NASSAU AND SUFFOLK  REGIONS,  TO  OPERATE  VIDEO  LOTTERY
GAMING AT A CORPORATION'S FACILITY WHICH IS LICENSED PURSUANT TO SECTION
ONE THOUSAND EIGHT OR ONE THOUSAND NINE OF THIS CHAPTER;
  S 2. Subparagraph (ii) of paragraph 1 of subdivision b of section 1612
of  the  tax law, as amended by section 6 of part K of chapter 57 of the
laws of 2010, clause (H) as amended by chapter 454 of the laws of  2012,
clause (I) as added by  section 1 of part O of chapter 61 of the laws of
2011, is amended to read as follows:
  (ii) less a vendor's fee the amount of which is to be paid for serving
as  a  lottery  agent  to the track operator of a vendor track; AND LESS
VENDOR'S FEES TO BE PAID FOR SERVING AS A LOTTERY AGENT  TO  THE  NASSAU
AND SUFFOLK REGIONAL OFF-TRACK BETTING CORPORATIONS OPERATORS AT AUTHOR-
IZED  PARTICIPATING  OFF-TRACK  BETTING  FACILITIES LICENSED PURSUANT TO
EITHER SECTION ONE THOUSAND EIGHT OR ONE THOUSAND NINE  OF  THE  RACING,
PARI-MUTUEL  WAGERING  AND  BREEDING LAW, WHICH FEES SHALL BE AGGREGATED
AND PAID IN EQUAL AMOUNTS TO THE COUNTIES OF NASSAU AND SUFFOLK:
  (A) having fewer than one thousand one hundred video gaming  machines,
at  a  rate  of  thirty-five percent for the first fifty million dollars
annually, twenty-eight percent for  the  next  hundred  million  dollars
annually,  and  twenty-five  percent  thereafter  of  the  total revenue

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10035-01-3
              

A. 6562                             2

wagered at the vendor track after payout for  prizes  pursuant  to  this
chapter;
  (B)  having one thousand one hundred or more video gaming machines, at
a rate of thirty-one percent of the total revenue wagered at the  vendor
track  after payout for prizes pursuant to this chapter, except for such
facility located in the county of Westchester, in which  case  the  rate
shall be thirty percent until March thirty-first, two thousand twelve.
  Notwithstanding  the  foregoing, not later than April first, two thou-
sand twelve, the vendor fee AT SUCH TRACK OR  VENDOR  OFF-TRACK  BETTING
FACILITY shall become thirty-one percent and remain at that level there-
after;  and  except for Aqueduct racetrack, in which case the vendor fee
shall be thirty-eight percent of the total revenue wagered at the vendor
track after payout for prizes pursuant to this chapter;
  (C) notwithstanding clauses (A) and (B) of this subparagraph, when the
vendor track OR VENDOR OFF-TRACK BETTING FACILITY is located in an  area
with  a population of less than one million within the forty mile radius
around such track, at a rate of thirty-nine percent for the first  fifty
million  dollars  annually,  twenty-eight  percent  for the next hundred
million dollars annually, and  twenty-five  percent  thereafter  of  the
total  revenue  wagered  at the vendor track OR VENDOR OFF-TRACK BETTING
FACILITY after payout for prizes pursuant to this chapter;
  (D) notwithstanding clauses (A), (B) and  (C)  of  this  subparagraph,
when  the  vendor  track OR VENDOR OFF-TRACK BETTING FACILITY is located
within fifteen miles of a Native American class III gaming facility at a
rate of forty-one percent of the total revenue  wagered  at  the  vendor
track after payout for prizes pursuant to this chapter;
  (E)  notwithstanding  clauses  (A),  (B), (C) and (D) of this subpara-
graph, when a Native American class III gaming facility is  established,
after  the  effective date of this subparagraph, within fifteen miles of
the vendor track OR VENDOR OFF-TRACK BETTING  FACILITY,  at  a  rate  of
forty-one  percent  of the total revenue wagered after payout for prizes
pursuant to this chapter;
  (E-1) for purposes of this subdivision, the term  "class  III  gaming"
shall have the meaning defined in 25 U.S.C. S 2703(8).
  (F) notwithstanding clauses (A), (B), (C), (D) and (E) of this subpar-
agraph,  when  a  vendor track, is located in Sullivan county and within
sixty miles from any gaming facility in a contiguous state  such  vendor
fee  shall, for a period of five years commencing April first, two thou-
sand eight, be at a rate of  forty-one  percent  of  the  total  revenue
wagered  at  the  vendor  track after payout for prizes pursuant to this
chapter, after which time such rate shall be as for all tracks in clause
(C) of this subparagraph.
  (G) notwithstanding clauses (A), (B), (C), (D), (E) and  (F)  of  this
subparagraph,  when no more than one vendor track located in the town of
Thompson in Sullivan county at the site of the former Concord Resort  at
which a qualified capital investment has been made and no fewer than one
thousand  full-time,  permanent  employees  have  been  newly  hired, is
located in Sullivan county and is within sixty  miles  from  any  gaming
facility  in  a  contiguous  state, then for a period of forty years the
vendor's fee shall equal the total revenue wagered at the  vendor  track
after  payout  of  prizes  pursuant  to  this subdivision reduced by the
greater of (i) twenty-five percent of total  revenue  after  payout  for
prizes  for  "video  lottery games" or (ii) for the first eight years of
operation thirty-eight million dollars, and beginning in the ninth  year
of  operation  such  amount shall increase annually by the lesser of the
increase in the consumer price index or two percent, plus seven  percent

A. 6562                             3

of  total  revenue after payout of prizes. In addition, in the event the
vendor fee is calculated pursuant to subclause (i) of this  clause,  the
vendor's  fee shall be further reduced by 11.11 percent of the amount by
which  total revenue after payout for prizes exceeds two hundred fifteen
million dollars, but in  no  event  shall  such  reduction  exceed  five
million dollars.
  Provided,  however,  that in the case of no more than one vendor track
located in the town of Thompson in Sullivan county at the  site  of  the
former Concord Resort with a qualified capital investment, and one thou-
sand  full-time, permanent employees if at any time after three years of
opening operations of the licensed video  gaming  facility  or  licensed
vendor track, the vendor track experiences an employment shortfall, then
the  recapture amount shall apply, for only such period as the shortfall
exists.
  For the purposes of this section "qualified capital investment"  shall
mean  an  investment  of  a  minimum  of  six hundred million dollars as
reflected by audited financial statements of which not less  than  three
hundred  million  dollars  shall be comprised of equity and/or mezzanine
financing as an initial investment in a county where twelve  percent  of
the  population  is  below  the federal poverty level as measured by the
most recent Bureau of Census Statistics prior to the  qualified  capital
investment  commencing  that results in the construction, development or
improvement  of  at  least  one  eighteen  hole  golf  course,  and  the
construction and issuance of certificates of occupancy for hotels, lodg-
ing,  spas, dining, retail and entertainment venues, parking garages and
other capital improvements at or adjacent to the licensed  video  gaming
facility  or  licensed vendor track which promote or encourage increased
attendance at such facilities.
  For the purposes of  this  section,  "full-time,  permanent  employee"
shall  mean  an  employee  who  has worked at the video gaming facility,
vendor track or related and adjacent facilities for a minimum  of  thir-
ty-five  hours per week for not less than four consecutive weeks and who
is entitled to receive the usual and customary fringe benefits  extended
to  other  employees  with  comparable rank and duties; or two part-time
employees who have worked at the video gaming facility, vendor track  or
related  and  adjacent  facilities for a combined minimum of thirty-five
hours per week for not less than four  consecutive  weeks  and  who  are
entitled  to receive the usual and customary fringe benefits extended to
other employees with comparable rank and duties.
  For the purpose of this section "employment goal" shall mean one thou-
sand five hundred full-time permanent employees  after  three  years  of
opening  operations  of  the  licensed video gaming facility or licensed
vendor track.
  For the purpose of this section "employment shortfall"  shall  mean  a
level  of  employment that falls below the employment goal, as certified
annually by vendor's certified  accountants  and  the  chairman  of  the
empire state development corporation.
  For  the  purposes  of  this section "recapture amount" shall mean the
difference between the amount of the vendor's fee paid to a vendor track
with a qualified capital investment, and the vendor fee otherwise  paya-
ble  to a vendor track pursuant to clause (F) of this subparagraph, that
is reimbursable by the vendor track to the division for payment into the
state treasury, to the credit of  the  state  lottery  fund  created  by
section  ninety-two-c  of  the  state  finance law, due to an employment
shortfall pursuant to the following schedule only for the period of  the
employment shortfall:

A. 6562                             4

  (i)  one  hundred  percent  of  the recapture amount if the employment
shortfall is greater  than  sixty-six  and  two-thirds  percent  of  the
employment goal;
  (ii)  seventy-five  percent  of the recapture amount if the employment
shortfall is greater than thirty-three  and  one-third  percent  of  the
employment goal;
  (iii)  forty-nine  and one-half percent of the recapture amount if the
employment shortfall is greater than thirty percent  of  the  employment
goal;
  (iv)  twenty-two  percent  of  the  recapture amount if the employment
shortfall is greater than twenty percent of the employment goal;
  (v) eleven percent of the recapture amount if the employment shortfall
is greater than ten percent of the employment goal.
  (H) notwithstanding clauses (A), (B), (C), (D), (E), (F)  and  (G)  of
this  subparagraph,  the  track  operator of a vendor track OR OFF-TRACK
BETTING OPERATOR OF A VENDOR  OFF-TRACK  BETTING  CORPORATION  shall  be
eligible for a vendor's capital award of up to four percent of the total
revenue wagered at the vendor track OR VENDOR OFF-TRACK BETTING FACILITY
after  payout  for  prizes pursuant to this chapter, which shall be used
exclusively for capital project investments to improve the facilities of
the vendor track which promote or encourage increased attendance at  the
video  lottery  gaming  facility  including,  but not limited to hotels,
other lodging facilities, entertainment facilities,  retail  facilities,
dining facilities, events arenas, parking garages and other improvements
that  enhance facility amenities; provided that such capital investments
shall be approved by  the  division,  in  consultation  with  the  state
[racing  and  wagering  board]  GAMING  COMMISSION, and that such vendor
track OR VENDOR OFF-TRACK BETTING FACILITY demonstrates that such  capi-
tal  expenditures  will  increase  patronage  at  such vendor track's OR
VENDOR'S OFF-TRACK BETTING facilities and increase the amount of revenue
generated to support state education programs. The annual amount of such
vendor's capital awards that a vendor track shall be eligible to receive
shall be limited to two million five hundred  thousand  dollars,  except
for  Aqueduct  racetrack,  for  which there shall be no vendor's capital
awards. Except for tracks OR OFF-TRACK BETTING  FACILITIES  having  less
than one thousand one hundred video gaming machines, each track operator
OR OFF-TRACK BETTING FACILITY OPERATOR shall be required to co-invest an
amount  of  capital expenditure equal to its cumulative vendor's capital
award. For all tracks OR OFF-TRACK BETTING FACILITIES, except for  Aque-
duct  racetrack,  the  amount  of any vendor's capital award that is not
used during any one year period may  be  carried  over  into  subsequent
years  ending  before  April  first,  two  thousand fourteen. Any amount
attributable to a capital expenditure approved prior to April first, two
thousand fourteen and completed before April first, two thousand sixteen
shall be eligible to receive the vendor's capital award.  In  the  event
that  a  vendor  track's  capital expenditures, approved by the division
prior to April first, two thousand fourteen and completed prior to April
first, two thousand sixteen, exceed the vendor track's cumulative  capi-
tal  award  during the five year period ending April first, two thousand
fourteen, the vendor shall continue to receive the capital  award  after
April  first, two thousand fourteen until such approved capital expendi-
tures are paid to the vendor track subject to  any  required  co-invest-
ment.  In  no  event  shall any vendor track OR VENDOR OFF-TRACK BETTING
FACILITY that receives a vendor fee pursuant to clause  (F)  or  (G)  of
this  subparagraph  be  eligible for a vendor's capital award under this
section. Any operator of a vendor  track  OR  VENDOR  OFF-TRACK  BETTING

A. 6562                             5

FACILITY which has received a vendor's capital award, choosing to divest
the capital improvement toward which the award was applied, prior to the
full depreciation of the capital improvement in accordance with general-
ly  accepted accounting principles, shall reimburse the state in amounts
equal to the total of any such awards. Any capital  award  not  approved
for  a  capital  expenditure at a video lottery gaming facility by April
first, two thousand fourteen shall be deposited into the  state  lottery
fund for education aid; and
  (I)  Notwithstanding  any  provision of law to the contrary, free play
allowance credits authorized by the division pursuant to  subdivision  f
of  section  sixteen  hundred  seventeen-a  of this article shall not be
included in the calculation of the total amount wagered on video lottery
games, the total amount wagered after payout of prizes, the vendor  fees
payable  to  the operators of video lottery facilities, vendor's capital
awards, fees payable to the division's video  lottery  gaming  equipment
contractors, or racing support payments.
  S  3.  Subparagraph  (iii) of paragraph 1 and the opening paragraph of
paragraph 2 of subdivision b of section 1612 of the tax law, as  amended
by  section 1 of part O-1 of chapter 57 of the laws of 2009, are amended
to read as follows:
  (iii) less an additional vendor's marketing allowance at a rate of ten
percent for the first one hundred million  dollars  annually  and  eight
percent  thereafter  of the total revenue wagered at the vendor track OR
VENDOR OFF-TRACK BETTING FACILITY after payout for prizes to be used  by
the  vendor track OR VENDOR OFF-TRACK BETTING FACILITY for the marketing
and promotion and associated costs of its  video  lottery  gaming  oper-
ations  and  pari-mutuel  horse  racing  operations, as long as any such
costs associated with pari-mutuel horse racing operations simultaneously
encourage increased attendance at such  vendor's  video  lottery  gaming
facilities, consistent with the customary manner of marketing comparable
operations in the industry and subject to the overall supervision of the
division;  provided,  however,  that  the  additional vendor's marketing
allowance shall not exceed eight percent in any year for any operator of
a racetrack located in the county of Westchester  or  Queens;  provided,
however,  a  vendor  track  OR  VENDOR  OFF-TRACK  BETTING FACILITY that
receives a vendor fee pursuant to clause (G)  of  subparagraph  (ii)  of
this  paragraph  shall  not  receive  the  additional vendor's marketing
allowance. In establishing the vendor fee, the division shall ensure the
maximum lottery support for education while also ensuring the  effective
implementation  of  section  sixteen hundred seventeen-a of this article
through the provision of reasonable reimbursements and  compensation  to
vendor  tracks  OR VENDOR OFF-TRACK BETTING FACILITIES for participation
in such program. Within twenty days after any award of  lottery  prizes,
the  division  shall  pay  into the state treasury, to the credit of the
state lottery fund, the balance of all moneys received from the sale  of
all  tickets for the lottery in which such prizes were awarded remaining
after provision for the payment of prizes as herein provided. Any reven-
ues derived from the sale of advertising on  lottery  tickets  shall  be
deposited in the state lottery fund.
  As consideration for the operation of a video lottery gaming facility,
the  division,  shall  cause  the investment in the racing industry of a
portion of the vendor fee received pursuant to  paragraph  one  of  this
subdivision  in  the  manner  set  forth in this subdivision.   With the
exception of ANY VENDOR OFF-TRACK BETTING FACILITY  AND  Aqueduct  race-
track,  each  such  track  shall  dedicate a portion of its vendor fees,
received pursuant to clause (A), (B), (C), (D),  (E),  (F),  or  (G)  of

A. 6562                             6

subparagraph  (ii)  of paragraph one of this subdivision, solely for the
purpose of enhancing purses at such track, in an amount equal  to  eight
and  three-quarters  percent  of the total revenue wagered at the vendor
track after pay out for prizes. In addition, with the exception of Aque-
duct  racetrack, one and one-quarter percent of total revenue wagered at
the vendor track after pay out for prizes, received pursuant  to  clause
(A),  (B),  (C), (D), (E), (F), or (G) of subparagraph (ii) of paragraph
one of this subdivision, shall be distributed to the appropriate  breed-
ing fund for the manner of racing conducted by such track.
  S  4.  Subdivision  a  of section 1617-a of the tax law, as amended by
section 2 of part O-1 of chapter 57 of the laws of 2009, is  amended  to
read as follows:
  a. The division of the lottery is hereby authorized to license, pursu-
ant  to  rules  and regulations to be promulgated by the division of the
lottery, the operation of video lottery gaming at (1)  Aqueduct,  Monti-
cello,  Yonkers,  Finger  Lakes,  and Vernon Downs racetracks, or at any
other racetrack licensed pursuant to article three of the racing,  pari-
mutuel  wagering  and breeding law that are located in a county or coun-
ties in which video lottery gaming has been authorized pursuant to local
law, excluding the licensed racetrack commonly referred  to  in  article
three  of  the racing, pari-mutuel wagering and breeding law as the "New
York state exposition" held in Onondaga county and the racetracks of the
non-profit racing association known as Belmont Park  racetrack  and  the
Saratoga  thoroughbred  racetrack;  AND  (2)  AT  ONE REGIONAL OFF-TRACK
BETTING CORPORATION FACILITY LICENSED PURSUANT TO SECTION  ONE  THOUSAND
EIGHT  OR  ONE  THOUSAND  NINE  OF  THE RACING, PARI-MUTUEL WAGERING AND
BREEDING LAW WITHIN THE NASSAU REGION AND  THE  SUFFOLK  REGION.    Such
rules  and  regulations shall provide, as a condition of licensure, that
racetracks OR REGIONAL OFF-TRACK BETTING  CORPORATIONS,  AS  CREATED  BY
SECTION  FIVE HUNDRED TWO OF THE RACING, PARI-MUTUEL WAGERING AND BREED-
ING LAW, to be licensed are certified to be in compliance with all state
and local fire and safety codes, that the division is afforded  adequate
space,  infrastructure, and amenities consistent with industry standards
for such video gaming operations as found at racetracks in other states,
that racetrack  OR  REGIONAL  OFF-TRACK  BETTING  CORPORATION  employees
involved  in  the  operation  of  video  lottery gaming pursuant to this
section are licensed by the racing and wagering board,  and  such  other
terms  and  conditions  of  licensure  as  the  division  may establish.
Notwithstanding any inconsistent provision of law, video lottery  gaming
at  a  racetrack  OR  REGIONAL OFF-TRACK BETTING CORPORATION pursuant to
this section shall be deemed an approved activity for such racetrack  OR
REGIONAL  OFF-TRACK BETTING CORPORATION under the relevant city, county,
town, or village land use or zoning ordinances, rules,  or  regulations.
No entity licensed by the division operating video lottery gaming pursu-
ant to this section may house such gaming activity in a structure deemed
or approved by the division as "temporary" for a duration of longer than
eighteen-months.  Nothing  in  this  section shall prohibit the division
from licensing an entity to operate video lottery gaming at an  existing
racetrack  as  authorized in this subdivision whether or not a different
entity is licensed to conduct horse racing and pari-mutuel  wagering  at
such  racetrack pursuant to article two or three of the racing, pari-mu-
tuel wagering and breeding law.
  The division, in consultation with the  [racing  and  wagering  board]
STATE  GAMING  COMMISSION, shall establish standards for approval of the
temporary and permanent physical layout and construction of any facility
or building devoted to a video lottery gaming  operation.  In  reviewing

A. 6562                             7

such  application  for  the construction or reconstruction of facilities
related or devoted to the operation or housing of video  lottery  gaming
operations,  the  division, in consultation with the racing and wagering
board, shall ensure that such facility:
  (1)  possesses superior consumer amenities and conveniences to encour-
age and attract the patronage of tourists and other visitors from across
the region, state, and nation.
  (2) has adequate motor vehicle parking facilities  to  satisfy  patron
requirements.
  (3)  has a physical layout and location that facilitates access to and
from the horse racing track portion of such facility to encourage patro-
nage of live horse racing events that are conducted at such track.
  S 5. This act shall take effect the first of January  next  succeeding
the date on which it shall have become a law.