Expands the reports a franchised thoroughbred racing corporation must make available to the franchise oversight board.
Ayes (58): Addabbo, Avella, Ball, Bonacic, Boyle, Breslin, Carlucci, DeFrancisco, Dilan, Farley, Felder, Flanagan, Gallivan, Gianaris, Gipson, Golden, Griffo, Grisanti, Hannon, Hoylman, Kennedy, Klein, Krueger, Lanza, Larkin, Latimer, LaValle, Libous, Little, Marcellino, Marchione, Martins, Maziarz, Montgomery, Nozzolio, O'Brien, O'Mara, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Sampson, Sanders, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousins, Tkaczyk, Valesky, Young, Zeldin
Excused (3): Diaz, Espaillat, Hassell-Thomps
TITLE OF BILL: An act to amend the racing, pari-mutuel wagering and breeding law, in relation to oversight of a franchised racing corporation and to make technical amendments thereto
Purpose of the Bill:
This bill would strengthen the ability of the Franchise Oversight Board (FOB) to review the records of the franchised corporation that operates the State-owned horse racing tracks.
Summary of Provisions:
Section 1 of the bill would amend Racing, Pari-Mutual Wagering and Breeding Law (Racing Law) § 212(8)(a)(xiii) to authorize the FOB to require the franchised corporation, which is now The New York Racing Association, Inc. (NYRA), to make available within 30 days of a request of the FOB any reports of the independent business integrity counsel. The bill further provides that with respect to such mandatory disclosure to the FOB, the attorney-client privilege would not apply, but that such privilege would continue to apply with respect to other parties.
Section 1 of the bill would also amend subparagraphs (iii), (iv), (vii), and (xvii) of Racing Law § 212(8)(a) to refer to the Gaming Commission rather than the former Racing and Wagering Board and to correct a typographical error and make other minor technical amendments.
Racing Law § 206(5) requires the franchised corporation to "retain an independent business integrity counsel, who, among other things, will act as an independent source to help ensure the integrity of the franchised corporation, its officers and employees, and its operations." Racing Law § 212(8)(a)(xiii) currently provides that the FOB may "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 FOB within 30 days of a request. Currently, however, NYRA has been reluctant to provide reports of the independent business integrity counsel to the FOB over concern that doing so would waive NYRA's attorney-client privilege with respect to such reports.
Prior Legislative History:
This is a new proposal.
Statement in Support:
In order for the FOB to carry out its oversight responsibilities, this bill would make explicit the FOB's entitlement to receive reports of NYRA's independent business integrity counsel. The existence of the attorney-client privilege between NYRA and its business integrity counsel makes it problematic for NYRA to make reports of its business integrity counsel available to the FOB. By providing that the
privilege does not apply to such reports in regard to the FOB, NYRA's interest in protecting the privilege with respect to outside parties would be preserved, while allowing the FOB to fulfill its oversight function. The other provisions in the bill make technical amendments to Racing Law § 212(8)(a) for the purpose of clarification.
There are no fiscal implications to the State from this bill.
There is no impact on local governments from this bill.
This bill would take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 7076 IN SENATE April 23, 2014 ___________Introduced by Sen. BONACIC -- (at request of the New York State Gaming Commission) -- read twice and ordered printed, and when printed to be committed to the Committee on Racing, Gaming and Wagering AN ACT to amend the racing, pari-mutuel wagering and breeding law, in relation to oversight of a franchised racing corporation and to make technical amendments thereto THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subparagraphs (iii), (iv), (vii), (xiii) and (xvii) of paragraph a of subdivision 8 of section 212 of the racing, pari-mutuel wagering and breeding law, as added by chapter 18 of the laws of 2008, are amended to read as follows: (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 state
[racing and wager- ing board]GAMING COMMISSION to, pursuant to article one of this chap- ter, 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 [polices]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; andEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13909-02-4 S. 7076 2
(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]TOTALISATOR 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 their ability to reduce the [totalizator]TOTALISATOR 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. (vii) review and provide any recommendations on all simulcasting contracts (buy and sell) that are also subject to prior approval of the [racing and wagering board]STATE GAMING COMMISSION; (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, INCLUDING WITHOUT LIMITATION ANY REPORTS OF INDEPENDENT BUSINESS INTEGRITY COUNSEL RETAINED PURSUANT TO SUBDIVISION FIVE OF SECTION TWO HUNDRED SIX OF THIS ARTICLE. SUCH REPORTS ARE NOT PROTECTED BY THE ATTORNEY-CLIENT PRIVILEGE SET FORTH IN SECTION FORTY-FIVE HUNDRED THREE OF THE CIVIL PRACTICE LAW AND RULES OR OTHERWISE IN RELATION TO THIS MANDATORY DISCLOSURE TO THE FRANCHISE OVERSIGHT BOARD, BUT SUCH REPORTS RETAIN SUCH PRIVILEGE IN REGARD TO OTHER PARTIES UNLESS THE FRANCHISE OVERSIGHT BOARD NEEDS TO DISCLOSE SUCH REPORTS TO PROMOTE OR ENSURE COMPLIANCE BY THE FRANCHISED CORPO- RATION WITH THE LAWS AND RULES OF THE STATE OF NEW YORK. SUCH RECORDS AND DOCUMENTS SHALL BE available to the franchise oversight board within thirty days of a written request; (xvii) request and accept the assistance of any state agency, includ- ing but not limited to, the [racing and wagering board]STATE GAMING COMMISSION, the [division of the lottery]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; and S 2. This act shall take effect immediately; provided, however the amendments to section 212 of the racing, pari-mutuel wagering and breed- ing law made by section one of this act shall not affect the expiration and repeal of such section pursuant to chapter 354 of the laws of 2005 and shall expire and be deemed repealed therewith.