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NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10441A
SPONSOR: Pretlow
TITLE OF BILL:
An act to amend the tax law, in relation to the operation of video
lottery terminals at Aqueduct racetrack
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to clarify the provisions of the agreement
between the Nassau Off-Track Betting Corporation and the operator of
video lottery gaming at Aqueduct Racetrack regarding the hosting of
video lottery terminals.
SUMMARY OF SPECIFIC PROVISIONS:
This bill would require the Nassau Off-Track Betting Corporation to
include in its detailed spending plan to be submitted for approval to
the New York State Gaming Commission, a plan for the fair and equitable
distribution of funds it receives from the agreement with the operator
of video lottery gaming at Aqueduct Racetrack to Nassau County.
The bill would also clarify that the machines to be hosted at the Aque-
duct video lottery terminal facility must be in addition to the number
of terminals in operation at such facility on April 1, 2016.
The operator of video lottery gaming at Aqueduct Racetrack would also be
required to, at minimum, maintain amounts to aid to education from video
lottery gaming at Aqueduct Racetrack at the same dollar level realized
in 2015.
Finally, the bill would establish that the maximum annual amount of
capital awards that the operator of video lottery gaming at Aqueduct
Racetrack would be eligible to receive would be limited to $2.5 million
to create parity with other video lottery terminals.
JUSTIFICATION:
The SFY 2016-17 enacted budget authorized the Nassau OTB and Aqueduct
Racetrack to enter into an agreement regarding the hosting of the Nassau
OTB's video lottery terminals at Aqueduct Racetrack. Off-track betting
corporations were established to help provide additional revenue to the
municipalities, but under the structure of the current law, the Nassau
OTB would be able to utilize a significant amount of the funds from the
agreement to address operational debts. This bill would ensure that
participating counties receive an appropriate distribution of the money
negotiated through the agreement to further the intent of the OTBs.
In addition, this bill would ensure that the video lottery terminals to
be hosted at the Aqueduct video lottery terminal facility on behalf the
Nassau OTB will be new machines and not existing, re-designated termi-
nals, maximizing revenue.
LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATION:
To be determined.
EFFECTIVE DATE:
This act would take effect immediately; provided, however that section
two of this act would take effect on the same date and in the same
manner as Section 2 of Part SS of Chapter 60 of the Laws of 2016, takes
effect.
STATE OF NEW YORK
________________________________________________________________________
10441--A
IN ASSEMBLY
May 27, 2016
___________
Introduced by M. of A. PRETLOW -- read once and referred to the Commit-
tee on Racing and Wagering -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee
AN ACT to amend the tax law, in relation to the operation of video
lottery terminals at Aqueduct racetrack
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 4 of subdivision a and subdivision c of section
2 1617-a of the tax law, paragraph 4 of subdivision a as added and subdi-
3 vision c as amended by section 1 of part SS of chapter 60 of the laws of
4 2016, are amended and a new subdivision d-1 is added to read as follows:
5 (4) Aqueduct racetrack, within the lottery terminal facility, pursuant
6 to an agreement between the corporation established pursuant to section
7 five hundred two of the racing, pari-mutuel wagering and breeding law in
8 the Nassau region and the operator of video lottery gaming at Aqueduct
9 racetrack, when such agreement is approved by the gaming commission and
10 as long as such agreement is in place, and when such agreement is accom-
11 panied by a detailed spending plan for the corporation established
12 pursuant to section five hundred two of the racing, pari-mutuel wagering
13 and breeding law in the Nassau region, which includes a plan for the
14 timely payment of liabilities due to the franchised corporation and the
15 fair and equitable distribution of funds by the corporation established
16 pursuant to section five hundred two of the racing, pari-mutuel wagering
17 and breeding law in the Nassau region to the participating counties, and
18 when such video lottery devices are hosted by the operator of video
19 lottery gaming at Aqueduct racetrack on behalf of the corporation estab-
20 lished pursuant to section five hundred two of the racing, pari-mutuel
21 wagering and breeding law in the Nassau region in lieu of the develop-
22 ment of a facility in Nassau county as authorized by paragraph three of
23 this subdivision [a of this section]. Such agreement reached by the
24 parties shall identify the agency principally responsible for funding,
25 approving or undertaking any actions of such agreement. Provided, howev-
26 er, nothing in this paragraph shall infringe upon the rights of the
27 corporation established pursuant to section five hundred two of the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15686-02-6
A. 10441--A 2
1 racing, pari-mutuel wagering and breeding law in the Nassau region to
2 develop a facility pursuant to paragraph three of this subdivision upon
3 the expiration, termination, or withdrawal of such agreement.
4 c. The terminals authorized pursuant to paragraph four of subdivision
5 a of this section shall:
6 (i) be deemed as operated by the corporation established pursuant to
7 section five hundred two of the racing, pari-mutuel wagering and breed-
8 ing law in the Nassau region for the purposes of section sixteen hundred
9 twelve of this chapter and the distributions therefrom made as if the
10 video lottery devices were located in Nassau county;
11 (ii) consist exclusively of electronic table games, unless otherwise
12 approved by the gaming commission and the director of the division of
13 the budget; [and]
14 (iii) be individually designated as hosted[.]; and
15 (iv) be in addition to the number of terminals in operation at the
16 Aqueduct video lottery terminal facility on the first of April, two
17 thousand sixteen.
18 d-1. The operator of video lottery gaming at Aqueduct racetrack shall
19 be required to maintain at minimum, the amounts for aid to education,
20 from video lottery gaming at Aqueduct racetrack at the dollar level
21 realized in two thousand fifteen, to be adjusted by the consumer price
22 index for all urban consumers, as published annually by the United
23 States department of labor, bureau of labor statistics.
24 § 2. Clause (H) of subparagraph (ii) of paragraph 1 of subdivision b
25 of section 1612 of the tax law, as separately amended by section 1 of
26 part GG and section 2 of part SS of chapter 60 of the laws of 2016, is
27 amended to read as follows:
28 (H) notwithstanding clauses (A), (B), (C), (D), (E), (F) and (G) of
29 this subparagraph, the track operator of a vendor track and in the case
30 of Aqueduct, the video lottery terminal facility operator, shall be
31 eligible for a vendor's capital award of up to four percent of the total
32 revenue wagered at the vendor track after payout for prizes pursuant to
33 this chapter, which shall be used exclusively for capital project
34 investments to improve the facilities of the vendor track which promote
35 or encourage increased attendance at the video lottery gaming facility
36 including, but not limited to hotels, other lodging facilities, enter-
37 tainment facilities, retail facilities, dining facilities, events
38 arenas, parking garages and other improvements that enhance facility
39 amenities; provided that such capital investments shall be approved by
40 the division, in consultation with the state racing and wagering board,
41 and that such vendor track demonstrates that such capital expenditures
42 will increase patronage at such vendor track's facilities and increase
43 the amount of revenue generated to support state education programs. The
44 annual amount of such vendor's capital awards that a vendor track and in
45 the case of Aqueduct, the video lottery terminal facility operator,
46 shall be eligible to receive shall be limited to two million five
47 hundred thousand dollars, [except for Aqueduct racetrack, for which
48 there shall be no annual limit,] provided, however, that any such capi-
49 tal award for the Aqueduct video lottery terminal facility operator
50 shall be one percent of the total revenue wagered at the video lottery
51 terminal facility after payout for prizes pursuant to this chapter until
52 the earlier of the designation of one thousand video lottery devices as
53 hosted pursuant to paragraph four of subdivision a of section sixteen
54 hundred seventeen-a of this chapter or April first, two thousand nine-
55 teen and shall then be four percent of the total revenue wagered at the
56 video lottery terminal facility after payout for prizes pursuant to this
A. 10441--A 3
1 chapter, provided, further, that such capital award shall only be
2 provided pursuant to an agreement with the operator to construct an
3 expansion of the facility, hotel, and convention and exhibition space
4 requiring a minimum capital investment of three hundred million dollars.
5 Except for tracks having less than one thousand one hundred video gaming
6 machines, and except for a vendor track located west of State Route 14
7 from Sodus Point to the Pennsylvania border within New York, and except
8 for Aqueduct racetrack each track operator shall be required to co-in-
9 vest an amount of capital expenditure equal to its cumulative vendor's
10 capital award. For all tracks, except for Aqueduct racetrack, the amount
11 of any vendor's capital award that is not used during any one year peri-
12 od may be carried over into subsequent years ending before April first,
13 two thousand seventeen. Any amount attributable to a capital expenditure
14 approved prior to April first, two thousand seventeen and completed
15 before April first, two thousand nineteen; or approved prior to April
16 first, two thousand twenty-one and completed before April first, two
17 thousand twenty-three for a vendor track located west of State Route 14
18 from Sodus Point to the Pennsylvania border within New York, shall be
19 eligible to receive the vendor's capital award. In the event that a
20 vendor track's capital expenditures, approved by the division prior to
21 April first, two thousand seventeen and completed prior to April first,
22 two thousand nineteen, exceed the vendor track's cumulative capital
23 award during the five year period ending April first, two thousand
24 seventeen, the vendor shall continue to receive the capital award after
25 April first, two thousand seventeen until such approved capital expendi-
26 tures are paid to the vendor track subject to any required co-invest-
27 ment. In no event shall any vendor track that receives a vendor fee
28 pursuant to clause (F) or (G) of this subparagraph be eligible for a
29 vendor's capital award under this section. Any operator of a vendor
30 track which has received a vendor's capital award, choosing to divest
31 the capital improvement toward which the award was applied, prior to the
32 full depreciation of the capital improvement in accordance with general-
33 ly accepted accounting principles, shall reimburse the state in amounts
34 equal to the total of any such awards. Any capital award not approved
35 for a capital expenditure at a video lottery gaming facility by April
36 first, two thousand seventeen shall be deposited into the state lottery
37 fund for education aid; and
38 § 3. This act shall take effect immediately; provided, however that
39 section two of this act shall take effect on the same date and in the
40 same manner as section 2 of part SS of chapter 60 of the laws of 2016,
41 takes effect.
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