N.Y. Racing, Pari-Mutuel Wagering and Breeding Law § 319: Capital improvements

§ 319. Capital improvements. 1. For the purposes of this section,

"capital improvement" shall mean any addition to, replacement of or

remodeling of the physical plant, structures and equipment now or

hereafter owned or leased by a racing corporation or association that is

used or is to be used by such corporation or association in connection

with the conduct of horse race meetings, and shall include improvements

to land but not land itself.

2. (a) Notwithstanding the provisions of section three hundred

eighteen of this article, a harness track, may elect upon thirty days

written notice to the commission to withhold, in addition to any other

amounts required by this section, one percent of the total deposits in

pools resulting from regular and multiple bets, provided, however, that

any harness track withholding pursuant to this subdivision shall use at

least fifty percent of such one percent exclusively for capital

improvements as defined in subdivision one of this section subject to

the rules and regulations of the commission. An amount, not to exceed

fifty percent of such one percent, may be used for advertising and

promotion expenses subject to the rules and regulations of the

commission. Provided further, however, that if the harness track was

owned prior to December thirty-first, nineteen hundred eighty-five, by a

nonprofit county agricultural society and leased by a racing association

such one percent shall be paid by the association to the society as

additional rent. Such society shall use such one percent exclusively for

capital improvements as defined in subdivision one of this section

subject to the rules and regulations of the commission. The capital

improvements shall be determined by a committee of the society composed

of the executive director of the society, the chair of the board of

directors of the racing association, or his or her designee, and the

general manager of the racing association. For the purposes of this

paragraph the term "advertising" shall be limited to paid advertising

through radio, television, the print media, direct mail or billboards.

Promotions shall mean activities that are intended to increase the

attendance at, or visibility of, a harness track and shall include

premium giveaways, prizes, free admission, free parking, free programs,

additional monies for purses or other activities of a promotional nature

which stimulate on track attendance. In no event shall this section be

construed to permit the payment of salaries to employees of such a

harness track who are engaged in advertising or promotional activities.

(b) At least once annually, prior to approving any plan for the

expenditure of such capital improvement funds pursuant to this section,

the commission shall, together with the track operator and

representatives of the horsemen's organization representing owners and

trainers using the facility, inspect the entire facility, including the

area commonly referred to as the backstretch, in order to determine

whether the capital improvement plan submitted by the association or

corporation for commission approval includes adequate provision for

expenditures relating to the continued health, safety and well-being of

patrons, backstretch personnel and the horses in their care. After such

inspection, if the commission shall determine that such proposed plan

does not include adequate provision for repairs and improvements

necessary to correct any conditions that it has determined to be unsafe

or otherwise deleterious to the health and safety of patrons, employees

or horses, the commission shall require the track operator to modify its

capital improvement plan to provide for the expenditure of funds for

such repairs and improvements.

3. On or after July first, nineteen hundred ninety for a harness track

other than a harness track authorized to operate in Westchester or

Nassau county or a harness track owned by a non-profit county

agricultural society and leased by a harness racing association such

amounts as may be withheld for the purposes of this section shall be

deposited in a trust fund, kept and maintained by such corporation or

association and administered by a trustee approved by the commission for

the purpose of lending such sums and any interest thereon on an

unsecured basis to such corporation or association exclusively for

capital improvements as defined in subdivision one of this section. All

such amounts borrowed by such corporation or association from such trust

shall be forgiven and deemed satisfied according to a schedule of

depreciation deductions for federal and New York state income tax

purposes for such related capital improvements. It is further provided

that at such time as such corporation or association shall surrender its

pari-mutuel license or fail to apply for a pari-mutuel license for the

succeeding year by December thirty-first of the preceding year that the

commission may declare the trust fund at an end and all sums therein

deposited plus all sums due or owing from such corporation or

association to such trust shall be disposed of in accordance with

provisions of law to be enacted for such purpose; except that the

commission shall direct that such sums therein deposited and all sums

due and owing from such corporation or association be transferred to the

credit of a successor in interest to such corporation or association

upon the licensing of such successor in interest by the commission. Such

trust shall be established and administered pursuant to the rules and

regulations of the commission.