What's happening
This bill changes how franchise fees are calculated for racing corporations by increasing the operating expenses deduction from 45 to 365 days.
Why it matters
Significantly increases the amount racing corporations can deduct as operating expenses from their franchise fee calculation, potentially reducing the fees they owe to the state. This change could free up substantial cash for the corporations, impacting state revenue from these fees.
Shifts the financial balance between the state and racing corporations, possibly affecting public funds available for state programs supported by franchise fee revenue. If fees decrease, the state may need to adjust budgets or look for revenue elsewhere.
May encourage greater financial stability or investment within racing corporations, since retaining more funds could be used for improvements, debt repayment, or other operational needs. This could have downstream effects on the industry’s health, employment, and local economies tied to racing.
Creates a precedent for how franchise fees are calculated in other regulated industries, as this move redefines what constitutes a reasonable deduction for operating costs. Other industries might seek similar changes, potentially influencing broader state fiscal policy.
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Who cares
Headline styles
Change Franchise Fee Formula
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 42
1 Co-sponsor
History
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.257
- Referred to racing, gaming and wagering
- Referred to rules
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
6917
2017-2018 Regular Sessions
IN SENATE
October 13, 2017
Introduced by Sen. BONACIC -- read twice and ordered printed, and when printed to be committed to the Committee on Rules
AN ACT to amend the racing, pari-mutuel wagering and breeding law, in relation to calculating franchise fees
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 1 of section 208 of the racing, pari-mutuel wagering and breeding law, as amended by chapter 140 of the laws of 2008, is amended to read as follows:
1. In consideration of the franchise and in accordance with its franchise agreement, the franchised corporation shall remit to the state, each year, no later than April fifth, a franchise fee payment. The franchise fee shall be calculated and equal to the lesser of paragraph (a) or (b) of this subdivision as follows: (a) adjusted net income, including all sources of audited generally accepted accounting principles net income as of December thirty-first (i) plus the amount of depreciation and amortization for such year as set forth on the statement of cash flows (ii) less the amount received by the franchised corporation for capital expenditures and (iii) less principal payments made for the repayment of debt; or (b) operating cash which is defined as cash available on December thirty-first (i) which excludes all restricted cash accounts, segregated accounts as per audited financial statements and cash on hand needed to fund the on-track pari-mutuel operations through the vault, (ii) less [forty-five] three hundred sixty-five days of operating expenses pursuant to generally accepted accounting principles which shall be an average calculated by dividing the current year's annual budget by the number of days in such year and multiplying that number by [forty-five] three hundred sixty-five.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13581-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the racing, pari-mutuel wagering and breeding law, in relation to calculating franchise fees
Purpose
To increase the amount of reserves the New York Racing Association (NYRA) can retain before paying 100% of their remaining funds to the state as their franchise fee.
Summary of provisions
Section 1: Amends subdivision 1 of section 208 of the Racing, Pari-Mutu- el Wagering and Breeding Law to increase the amount of reserves that NYRA can retain from forty-five days worth of operating cash to three hundred sixty-five days of operating cash before paying their remaining funds to the state as their franchise fee.
Section 2: Effective date.
Justification
NYRA has made tremendous strides in turning around the organization following the 2012 New York State Racing Franchise Accountability and Transparency Act, which overhauled the board and led to significant management changes. These changes have dramatically improved NYRA's financial position and this legislation is needed to ensure they have a proper level of reserves to address any unforeseen future issues.
Legislative history
New bill
Fiscal implications
To be determined.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.