Expands the reports a franchised thoroughbred racing corporation must make available to the franchise oversight board

BILL NUMBER:S7076

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.

Existing Law:

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.

Budget Implications:

There are no fiscal implications to the State from this bill.

Local Impact:

There is no impact on local governments from this bill.

Effective Date:

This bill would take effect immediately.