S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1162
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 13, 2023
                                ___________
 
 Introduced  by  M.  of  A. L. ROSENTHAL -- read once and referred to the
   Committee on Ways and Means
 
 AN ACT to amend the tax law, in relation  to  the  investment  of  funds
   wagered  on  video  lottery  gaming for certain horse races; to repeal
   certain provisions of the tax law  relating  thereto;  and  to  repeal
   paragraph b of subdivision 1 of section 1355 of the racing, pari-mutu-
   el wagering and breeding law relating thereto
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision f of section 1612 of the tax law, as amended by
 chapter 174 of the laws of 2013, paragraph 1 as amended by section 2  of
 part  OO of chapter 59 of the laws of 2014 and paragraph 3 as amended by
 section 2 of part V of chapter 59 of the laws of  2020,  is  amended  to
 read as follows:
   f.  As  consideration  for  the  operation of the video lottery gaming
 facility at Aqueduct racetrack, the division shall cause the  investment
 in THE EDUCATION SYSTEM OF THE STATE OF NEW YORK AND the racing industry
 of  the following percentages of the vendor fee to be deposited or paid,
 as follows:
   1. Six and one-half percent of  the  total  wagered  after  payout  of
 prizes  for the first year of operation of video lottery gaming at Aque-
 duct racetrack, seven percent of  the  total  wagered  after  payout  of
 prizes  for the second year of operation, and seven and one-half percent
 of the total wagered after payout of prizes for the third year of opera-
 tion and thereafter, for the purpose of [enhancing  purses  at  Aqueduct
 racetrack,  Belmont Park racetrack and Saratoga race course. One percent
 of the gross purse enhancement amount, as required by this  subdivision,
 shall be paid to the gaming commission to be used exclusively to promote
 and  ensure  equine  health  and safety in New York. Any portion of such
 funding to the gaming commission unused during a fiscal  year  shall  be
 returned  on  a pro rata basis in accordance with the amounts originally

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04176-01-3
              

 A. 1162                             2

 contributed and shall be used for the purpose  of  enhancing  purses  at
 such  tracks]  FUNDING  THE  EDUCATION  SYSTEM OF THE STATE OF NEW YORK,
 SHALL BE DEPOSITED IN THE STATE  LOTTERY  FUND  FOR  ADDITIONAL  LOTTERY
 GRANTS  TO ELIGIBLE SCHOOL DISTRICTS, INCLUDING SCHOOLS SERVING STUDENTS
 WITH DISABILITIES AND SCHOOLS WITH PRESCHOOL SPECIAL EDUCATION PROGRAMS.
 [One and one-half percent of the  gross  purse  enhancement  amount,  as
 required  by  this  subdivision, shall be paid to an account established
 pursuant to section two hundred twenty-one-a of the racing,  pari-mutuel
 wagering  and  breeding  law  to  be  used exclusively to provide health
 insurance for jockeys.]
   2. [One] EIGHT AND ONE-HALF percent of the total wagered after  payout
 of  prizes  [for  the first year of operation of video lottery gaming at
 Aqueduct racetrack, one and one-quarter percent  of  the  total  wagered
 after  payout  of  prizes  for the second year of operation, and one and
 one-half percent of the total wagered after payout  of  prizes  for  the
 third year of operation and thereafter, for an appropriate breeding fund
 for  the  manner of racing conducted at Aqueduct racetrack, Belmont Park
 racetrack and Saratoga race course] SHALL  BE  DEPOSITED  IN  THE  STATE
 LOTTERY FUND FOR ADDITIONAL LOTTERY GRANTS TO ELIGIBLE SCHOOL DISTRICTS,
 INCLUDING  SCHOOLS  SERVING  STUDENTS WITH DISABILITIES AND SCHOOLS WITH
 PRESCHOOL SPECIAL EDUCATION PROGRAMS.
   3. [Four percent of the total revenue wagered after payout  of  prizes
 to  be  deposited  into  an account of the franchised corporation estab-
 lished pursuant to section two hundred six of  the  racing,  pari-mutuel
 wagering  and  breeding law to be used for capital expenditures in main-
 taining and upgrading Aqueduct racetrack,  Belmont  Park  racetrack  and
 Saratoga  race  course.  Capital  expenditures  may  include funding the
 construction of and initially equipping a state-based equine drug  test-
 ing  and research laboratory to be used pursuant to subdivision seven of
 section nine hundred two of the racing, pari-mutuel wagering and  breed-
 ing law.
   4.  Three percent of the total revenue wagered after payout for prizes
 to be deposited into an account of  the  franchised  corporation  estab-
 lished  pursuant  to  section two hundred six of the racing, pari-mutuel
 wagering and breeding law to be used  for  general  thoroughbred  racing
 operations  at  Aqueduct  racetrack, Belmont Park racetrack and Saratoga
 race course.
   5.] Paragraphs one[,] AND two[, three and four]  of  this  subdivision
 shall   be   known  collectively  as  the  "[racing]  EDUCATION  support
 payments".
   § 2. Paragraph 1-b of subdivision b of section 1612 of the tax law, as
 added by section 2 of part EE of chapter 59 of  the  laws  of  2019,  is
 amended to read as follows:
   1-b.  Notwithstanding  any provision of law to the contrary, free play
 allowance credits authorized by the division pursuant to  subdivision  i
 of  section  sixteen  hundred  seventeen-a  of this article shall not be
 included in the calculation of the total amount wagered on video lottery
 games, the total amount wagered after payout of prizes, the vendor  fees
 payable  to the operators of video lottery gaming facilities, fees paya-
 ble to the division's video lottery gaming equipment  contractors,  [or]
 racing support payments, OR EDUCATION SUPPORT PAYMENTS.
   §  3.  Subdivision  f-1  of section 1612 of the tax law, as amended by
 chapter 175 of the laws of 2013, is amended to read as follows:
   f-1. As consideration for operation of video lottery  gaming  facility
 located in the county of Nassau or Suffolk and operated by a corporation
 established pursuant to section five hundred two of the racing, pari-mu-
 A. 1162                             3
 
 tuel wagering and breeding law, the division shall cause the [investment
 in the racing industry of the] following [percentages] PERCENTAGE of the
 vendor fee to be deposited or paid as follows:
   [1.  Two  and  three  tenths]  FIVE percent of the total wagered after
 payout of prizes [for the purpose of enhancing purses at Aqueduct  race-
 track, Belmont Park racetrack and Saratoga race course, provided, howev-
 er,  that  any amount that is in excess of the amount necessary to main-
 tain purse support from video  lottery  gaming  at  Aqueduct  racetrack,
 Belmont  Park racetrack and Saratoga race course at the same level real-
 ized in two thousand thirteen, to be  adjusted  by  the  consumer  price
 index  for  all  urban  consumers,  as  published annually by the United
 States department of labor, bureau of labor statistics, shall instead be
 returned to the commission] SHALL BE DEPOSITED IN THE STATE LOTTERY FUND
 FOR ADDITIONAL LOTTERY GRANTS TO ELIGIBLE  SCHOOL  DISTRICTS,  INCLUDING
 SCHOOLS  SERVING  STUDENTS  WITH DISABILITIES AND SCHOOLS WITH PRESCHOOL
 SPECIAL EDUCATION PROGRAMS.
   [2. five tenths percent of the total wagered after  payout  of  prizes
 for  the  appropriate breeding fund for the manner of racing at Aqueduct
 racetrack, Belmont Park racetrack and Saratoga  race  course,  provided,
 however,  that  any  amount that is in excess of the amount necessary to
 maintain payments from video lottery gaming at Aqueduct racetrack at the
 same level realized in two thousand thirteen,  to  be  adjusted  by  the
 consumer  price  index for all urban consumers, as published annually by
 the United States department of labor, bureau of labor statistics, shall
 instead be returned to the commission.
   3. one and three tenths percent of the  total  revenue  wagered  after
 payout  of  prizes  to  be  deposited  into an account of the franchised
 corporation established pursuant to  section  two  hundred  six  of  the
 racing,  pari-mutuel  wagering  and  breeding law to be used for capital
 expenditures in maintaining and upgrading  Aqueduct  racetrack,  Belmont
 Park  racetrack  and  Saratoga  race course, provided, however, that any
 amount that is in excess of the amount necessary  to  maintain  payments
 for capital expenditures from video lottery gaming at Aqueduct racetrack
 at  the  same level realized in two thousand thirteen, to be adjusted by
 the consumer price index for all urban consumers, as published  annually
 by  the  United  States department of labor, bureau of labor statistics,
 shall instead be returned to the commission.
   4. Nine tenths percent of the total revenue wagered after  payout  for
 prizes  to  be  deposited  into an account of the franchised corporation
 established pursuant to section two hundred six of the racing,  pari-mu-
 tuel  wagering  and  breeding  law  to  be used for general thoroughbred
 racing operations at Aqueduct  racetrack,  Belmont  Park  racetrack  and
 Saratoga  race  course,  provided,  however,  that any amount that is in
 excess  of  the  amount  necessary  to  maintain  payments  for  general
 thoroughbred  racing  operations  from  video lottery gaming at Aqueduct
 racetrack at the same level realized in two  thousand  thirteen,  to  be
 adjusted  by  the  consumer  price  index  for  all  urban consumers, as
 published annually by the United States department of labor,  bureau  of
 labor statistics, shall instead be returned to the commission.]
   §  4. The opening paragraph of paragraph 2 of subdivision b of section
 1612 of the tax law, as amended by section 2 of part S of chapter 39  of
 the laws of 2019, is amended to read as follows:
   As consideration for the operation of a video lottery gaming facility,
 the  division,  shall  cause  the investment [in the racing industry] IN
 THOSE COUNTIES THAT HOST VIDEO LOTTERY GAMING FACILITIES, of  a  portion
 of the vendor fee received pursuant to paragraph one of this subdivision
 A. 1162                             4
 
 in  the  manner  set  forth in this subdivision.   With the exception of
 Aqueduct racetrack, a video lottery gaming facility authorized  pursuant
 to  paragraph  five  of  subdivision a of section sixteen hundred seven-
 teen-a  of this article or a facility in the county of Nassau or Suffolk
 operated by a corporation established pursuant to section  five  hundred
 two  of  the  racing,  pari-mutuel  wagering and breeding law, each such
 track shall dedicate a portion of its vendor fees, received pursuant  to
 clause (A), (B), (B-1), (B-2), (C), or (D) of subparagraph (ii) of para-
 graph  one  of this subdivision, for the purpose of [enhancing purses at
 such track] FUNDING ECONOMIC DEVELOPMENT, JOB  CREATION,  AND  WORKFORCE
 PROTECTIONS  IN  THE COUNTIES THAT HOST VIDEO LOTTERY GAMING FACILITIES,
 in an amount equal to eight and  three-quarters  percent  of  the  total
 revenue  wagered  at  the  vendor  track  after pay out for prizes. [One
 percent of the gross purse  enhancement  amount,  as  required  by  this
 subdivision,  shall  be  paid to the gaming commission to be used exclu-
 sively to promote and ensure equine health and safety in New  York.  Any
 portion  of such funding to the gaming commission unused during a fiscal
 year shall be returned to the video lottery gaming operators  on  a  pro
 rata basis in accordance with the amounts originally contributed by each
 operator  and  shall be used for the purpose of enhancing purses at such
 track] SUCH FUNDS SHALL BE CREDITED TO THE HOST  COUNTY  IN  WHICH  EACH
 VENDOR  TRACK RESIDES. SUCH FUNDS SHALL BE UTILIZED BY SUCH COUNTIES FOR
 THE PURPOSES  OF  ECONOMIC  DEVELOPMENT,  JOB  CREATION,  AND  WORKFORCE
 PROTECTIONS. IF A VENDOR TRACK CEASES RACING OPERATIONS, SUCH VENDOR FEE
 SHALL CONTINUE TO BE PAID.
   [One  and  one-half percent of the gross purse enhancement amount at a
 thoroughbred track, as required by this subdivision, shall be paid to an
 account established pursuant to section two hundred twenty-one-a of  the
 racing,  pari-mutuel wagering and breeding law to be used exclusively to
 provide health insurance for jockeys.] In addition, with  the  exception
 of Aqueduct racetrack, a video lottery gaming facility authorized pursu-
 ant to paragraph five of subdivision a of section sixteen hundred seven-
 teen-a  of this article or a facility in the county of Nassau or Suffolk
 operated by a corporation established pursuant to section  five  hundred
 two  of  the racing, pari-mutuel wagering and breeding law, one and one-
 quarter percent of total revenue wagered at the vendor track  after  pay
 out for prizes, received pursuant to clause (A), (B), (B-1), (B-2), (C),
 or  (D) of subparagraph (ii) of paragraph one of this subdivision, shall
 be distributed [to the appropriate  breeding  fund  for  the  manner  of
 racing  conducted  by  such track] FOR FUNDING ECONOMIC DEVELOPMENT, JOB
 CREATION, AND WORKFORCE PROTECTIONS IN  THE  COUNTIES  THAT  HOST  VIDEO
 LOTTERY GAMING FACILITIES.
   §  5.  Paragraph  3 of subdivision b of section 1612 of the tax law is
 REPEALED.
   § 6. Subdivision h of section 1612 of  the  tax  law,  as  amended  by
 section  3  of  part  S of chapter 39 of the laws of 2019, is amended to
 read as follows:
   h. As consideration for the operation of a video lottery gaming facil-
 ity located in Orange county, the division shall cause the investment in
 the [racing industry] EDUCATION SYSTEM OF THE STATE OF NEW YORK  at  the
 following amount from the vendor fee to be paid as follows:
   [As  amount  to  the  horsemen  for  purses at a licensed racetrack in
 Sullivan county in an] AN  amount  equal  to  eight  and  three-quarters
 percent of the total revenue wagered at the video lottery gaming facili-
 ty,  after  pay out for prizes TO BE DEPOSITED IN THE STATE LOTTERY FUND
 FOR ADDITIONAL LOTTERY GRANTS TO ELIGIBLE  SCHOOL  DISTRICTS,  INCLUDING
 A. 1162                             5
 
 SCHOOLS  SERVING  STUDENTS  WITH DISABILITIES AND SCHOOLS WITH PRESCHOOL
 SPECIAL EDUCATION PROGRAMS. [The facility located in Orange  county,  as
 defined  in  paragraph  five of subdivision a of section sixteen hundred
 seventeen-a  of  this  article  shall  pay to the horsemen at a licensed
 racetrack at Yonkers racetrack an amount to  maintain  purses  for  such
 horsemen at the same dollar levels realized in two thousand eighteen, to
 be  adjusted  by  the  consumer  price index for all urban consumers, as
 published annually by the United States department of  labor  bureau  of
 labor  statistics.]  In  addition,  one and one-quarter percent of total
 revenue wagered at the video lottery gaming facility after pay  out  for
 prizes,  received  pursuant  to clause (B) of subparagraph (ii) of para-
 graph one of subdivision b of this section, shall be distributed to  the
 [appropriate  breeding]  STATE  LOTTERY  fund  for [the manner of racing
 conducted by such track] ADDITIONAL LOTTERY GRANTS  TO  ELIGIBLE  SCHOOL
 DISTRICTS,  INCLUDING  SCHOOLS  SERVING  STUDENTS  WITH DISABILITIES AND
 SCHOOLS WITH PRESCHOOL SPECIAL EDUCATION PROGRAMS.  In  no  circumstance
 shall  net  proceeds  of  the lottery, including the proceeds from video
 lottery gaming, be used for the payment of non-lottery expenses  of  the
 gaming commission, administrative or otherwise.
   § 7. Paragraph 5 of subdivision a of section 1617-a of the tax law, as
 added  by    section  4  of part S of chapter 39 of the laws of 2019, is
 amended to read as follows:
   (5) At a facility located in Orange county to be operated by the enti-
 ty otherwise licensed to operate  video  lottery  gaming  at  Monticello
 racetrack,  provided that: (i) such licensed entity is no longer operat-
 ing video lottery gaming at  Monticello  racetrack  [and  provided  that
 Monticello racetrack is conducting racing operations]; (ii) such facili-
 ty  in  Orange  county  is  not sited within a thirty mile radius of the
 video lottery gaming  facility  at  Yonkers  racetrack;  and  (iii)  the
 licensed  entity,  its subsidiaries and affiliates, including the entity
 licensed to operate a commercial gaming facility in Sullivan county, and
 the entity licensed to operate video lottery gaming at Yonkers racetrack
 enter into a mitigation agreement, to be approved by the gaming  commis-
 sion,  which  shall  include, but not be limited to, terms that require:
 (A) the operator of the facility in Orange  county  to  make  an  annual
 payment  to  the  entity  licensed  to  operate  video lottery gaming or
 commercial gaming at Yonkers racetrack to account for the  effects  that
 siting  such  facility  in  Orange county would likely have on the gross
 gaming revenue of the entity licensed to operate at  Yonkers  racetrack;
 (B)  employment  levels  at  the  affected facilities; and (C) that upon
 expiration or termination of the agreement,  the  authority  to  operate
 video  lottery  gaming in Orange county shall cease. Notwithstanding any
 other provision of this subdivision, at no time shall an entity  operat-
 ing  video  lottery gaming in Orange county be permitted to apply for or
 receive a license to operate a commercial gaming facility in that  coun-
 ty.
   §  8.  Paragraph  (b)  of subdivision 1 of section 1355 of the racing,
 pari-mutuel wagering and breeding law is REPEALED.
   § 9. Severability.  If any provision or term of this act is,  for  any
 reason,  declared  unconstitutional  or  invalid  or  ineffective by any
 competent jurisdiction, such decision shall not affect the  validity  of
 the  effectiveness  of  the  remaining  portions of this act or any part
 thereof.
   § 10. This act shall take effect immediately.