Relates to extending certain provisions of law relating to the New York state thoroughbred breeding and development fund

Summary of specific provisions

This bill would paragraph a of subdivision I and paragraphs a, e and f of subdivision 2 of section 254 of the racing, pari-mutuel wagering and breeding law, to remove the sunset date as enacted by chapter 473 of the laws of 2010. Chapter 73 of the Laws of 2010 sunsets when the Video Lottery Terminals (VLTS) come online at Aqueduct race track, which is anticipated sometime in mid-20 II. Specifically, the following provisions should be extended for one year following the VLTS coming online:

o required payments to be made to the fund on a quarterly basis; o the percentage of revenue that can be allotted to breeder awards would be maintained at 65 percent; o amount of money used for promoting the breeding and raising of thoroughbred horses would be increased by one percent to an amount up to six percent; and o administrative allotments from the fund would be increased from 4 percent up to 5 percent.

Justification

Chapter 473 of the Laws of 2010 provided some flexibility to the Thoroughbred Breeding and Development Fund. This law is currently slated to expire upon the commencement of the operation of a video lottery facility at Aqueduct racetrack, which could be sometime this year. The Fund has recently voted to implement all of the provisions of Chapter 473, however, in light of New York City Off-Track Betting Corporation's much publicized bankruptcy and subsequent closing down of operations, the Fund stands to lose a significant portion of its revenue. It is estimated that 36% of the Fund's annual revenue was provided by NYCOTB ($3.8 million), and prior to the bankruptcy proceedings, NYCOTB had stopped making contributions altogether to the Fund. To help offset this critical loss of revenue, this legislation would continue the provisions of Chapter 473 for one year following the VLTS coming online at Aqueduct race track.

The New York State Thoroughbred Breeding and Development Fund, established in 1973, has helped shape the New York State thoroughbred industry, making it the benchmark of thoroughbred programs around the world. For over two decades, the Fund has worked to make thoroughbred breeding and racing a vital force in New York State's economy, utilizing its rich racing tradition, vast agricultural resources, and

thriving tourism industry. The Fund is a public benefit corporation that oversees the registration process for foals and stallions, and distributes incentives awards to breeders, owners, and stallion owners. The incentives provided by the Fund are financed from within the racing industry, using a small percentage of the total monies wagered through the pari-mutuel system on thoroughbred racing in New York State.

Thoroughbred Breeders use this funding to invest back into breeding, thereby keeping that money in the local economy and creating more jobs, and strengthening the horse racing industry in New York.

The New York Racing and Breeding Program has evolved significantly since 1973. The goals set out for the Fund have been well accomplished, especially in the last decade. However, the industry has seen significant declines in handle year after year. With that, the Fund's revenue has rapidly fallen each year placing a burden on the ability to pay awards to participants at advertised rates within the statutory cap as the Breeding Program has grown. Additionally, Governmental Accounting Standards Board (GASB 45) regulations have required the Fund to account for administrative costs years ahead. Therefore, the Board of Directors of the Thoroughbred Breeding Fund require the ability to allot Fund revenue based on the current state of the Thoroughbred industry. To do so, the statutory limitations on Fund allocations need further room for growth to accommodate awards earned and revenue at hand to the Fund. This legislation is a housekeeping modification that has no financial impact on any other organization or segment of the industry.

NY Thoroughbred Breeders are a key sector of New York's agricultural economy, which is the number one agri-business for New York. Thoroughbred Breeders have a significant, positive impact on the upstate economy by providing jobs, protecting open space, preserving property values and contributing to the overall state and local economies. Thoroughbred breeders play a central role in strengthening New York's horse racing industry by helping maintain the highest levels of racing, and producing superior quality thoroughbreds. New York thoroughbred farms range from large commercial facilities to smaller family owned operations, who are struggling to make ends meet. New York is home to over 400 thoroughbred breeding farms utilizing 43,000 acres of working landscape or "green space." Spending by suppliers and employees generates additional jobs in New York for a total employment impact of over 35,000 agribusiness jobs.

Prior legislative history

Similar to Chapter 473 of the Laws of 2010 (A.11130-A/S.7578-A).

Fiscal implications

None.

Effective date

Immediately.