* § 212. Franchise oversight board. 1. There is hereby created a
franchise oversight board which shall consist of five members. Of the
five members, three shall be appointed by the governor, one shall be
appointed by the temporary president of the senate and one shall be
appointed by the speaker of the assembly. Of the initially appointed
board, one member appointed by the governor shall serve for a one year
term, one member appointed by the governor shall serve for a two year
term, and one member appointed by the governor shall serve for a three
year term. The members appointed by the temporary president of the
senate and the speaker of the assembly shall serve for a four year term.
All successors shall serve for a term of four years. All members shall
continue in office until their successors have been appointed and
qualified. The governor shall designate the chair from among the sitting
members who shall serve as such at the pleasure of the governor.

2. The members shall serve without compensation for their services as
members, but shall be entitled to reimbursement for actual and necessary
expenses incurred in the performance of their duties. The state shall
save harmless and indemnify members of the board and any officer,
employee, agent or other person or persons pursuant to section seventeen
of the public officers law against any claim, demand, suit or judgment
arising by reason of any act or omission to act by such member, officer,
employee, agent or person occurring in the discharge of his or her
duties and within the scope of his or her service on behalf of the
franchise oversight board.

3. Such members, except as otherwise provided by law, may engage in
private or public employment, or in a profession or business. The board,
its members, officers and employees shall be subject to the provisions
of sections seventy-three and seventy-four of the public officers law.
No former trustee or officer of a non-profit racing association known as
The New York Racing Association, Inc. or its predecessor, no current
director or officer of a franchised corporation or any individual
registered with the New York commission on public integrity shall be
appointed as members to the board nor shall any member of the board have
any direct or indirect interest in any racehorse, thoroughbred racing or
pari-mutuel wagering business, video lottery terminal facility or any
development at any racing facility.

4. Notwithstanding any inconsistent provisions of law, general,
special or local, no officer or employee of the state or of any civil
division thereof shall be deemed to have forfeited or shall forfeit
their office or employment by reason of their acceptance of membership
on the board created by this section.

5. The affirmative vote of three members shall be necessary for the
transaction of any business or the exercise of any power or function of
the franchise oversight board except as otherwise provided here in this
article.

6. Within thirty days following the appointment of the members of the
franchise oversight board, the members of the oversight board shall
establish a local advisory board for each racing operation comprising
the following members to meet at least twice yearly:

a. The local advisory board for the Saratoga racetrack facility shall
comprise fifteen members and include five designees from each of the
following: the board of supervisors, the mayor of the city of Saratoga
and the franchised corporation.

b. (i) The local advisory board for the Aqueduct racetrack facility
shall comprise of fifteen members, nine of whom shall be designees of
New York City Queens Community Board Ten, three designees of the
franchised corporation and three designees of the video lottery gaming
operator. At substantial completion of the Belmont project, as
determined by the gaming commission, this board shall be dissolved.

(ii) (A) Notwithstanding subparagraph (i) of this paragraph, within
thirty days after the substantial completion of the Belmont project, as
determined by the gaming commission, an Aqueduct Redevelopment Community
Advisory Board shall be formed to assess all bids made in response to
the request for proposals on developing the Aqueduct property and is
required to hold a public hearing and adopt and submit a written
recommendation on each bid to the franchise oversight board within sixty
days of receiving such bid. The adoption of such recommendation shall be
by a public vote which results in approval by a majority of the
appointed members present during the presence of a quorum. The board
recommendation shall be in writing via a form provided by the franchise
oversight board and shall include a description of the application, the
time and place of the public hearing on the application, the time and
place of the meeting at which the recommendation was adopted and the
vote by which the recommendation was adopted. The community board may
include in its submission the reasons for the vote and any conditions
attached to its vote.

(B) The Aqueduct Redevelopment Community Advisory Board shall consist
of six members, one to be appointed by the governor, one to be appointed
by the mayor of the city of New York, one to be appointed by the senator
representing the senate district where the Aqueduct property is located,
one to be appointed by the assemblymember representing the assembly
district where the Aqueduct property is located, one to be appointed by
the city councilmember representing the district where the Aqueduct
property is located, and one to be appointed by the borough president
where the Aqueduct property is located.

c. The local advisory board for the Belmont racetrack facility shall
comprise fifteen members, to be appointed as follows:

(i) five members from Nassau county to be appointed by the Nassau
county executive. Four of such members must reside in the hamlet of
Elmont;

(ii) two members from the town of Hempstead to be appointed by the
supervisor of the town of Hempstead. Both members must reside in the
hamlet of Elmont;

(iii) two members to be appointed by the mayor of the village of
Floral Park, subject to village board approval;

(iv) one member to be appointed by the mayor of the village of South
Floral Park, subject to village board approval;

(v) three members to be appointed by the New York Racing Association,
Inc.; and

(vi) two members to be appointed by the New York City Queens Community
Board 13.

The members of the local advisory boards shall serve for a period of
two years. In the event of a vacancy occurring during a term of
appointment by reason of death, resignation, disqualification or
otherwise such vacancy shall be filled for the unexpired term in the
same manner as the original appointment. The members of the local
advisory board shall serve without compensation, except that each member
shall be allowed the necessary and actual expenses incurred in the
performance of his or her duties pursuant to this section.

7. The Saratoga local advisory boards in cooperation with the state
historic preservation office and the franchise oversight board shall
compile a complete, updated historic resources inventory identifying all
buildings and landscape features and their current condition at the
Saratoga Racecourse. The local advisory board may, at its discretion, in
the performance of its responsibilities, seek advice from groups or
individuals with relevant expertise.

All buildings and landscaped features of historic, architectural or
cultural significance at the Saratoga Racecourse may be advanced by the
local advisory board for consideration for inclusion in the National and
State Registers of Historic Places and in local historic districts.

8. a. The duties and responsibilities of the franchise oversight board
shall include, but not be limited to, the following:

(i) represent the interests of the state in all real estate
development proposed for Aqueduct racetrack or real estate development
at Belmont Park racetrack. Any such real estate development shall only
be undertaken pursuant to a competitive process approved by the board,
after consultation with the applicable local advisory boards and
consideration of local zoning and planning regulation, and in a manner
that will not adversely impact any historic structure that is included
in or eligible for inclusion in the National or the State Register of
Historic Places, be consistent with any plan approved for such
community, and shall be subject to unanimous approval of the franchise
oversight board and all statutory and regulatory requirements; provided,
however, that, subject to approval of the franchise oversight board and
subject to all statutory and regulatory requirements, the franchised
corporation shall have full powers and rights to develop, redevelop,
refurbish, renovate or make such other improvements, capital
expenditures or otherwise, to the racetracks and the fixtures and
improvements thereon consistent with projects specifically identified in
the franchised corporation's approved track facility improvement plan.

The franchise oversight board shall be guided by the goals of ensuring
the continuation of high quality thoroughbred racing at the thoroughbred
racing facilities located within the state, raising revenue for or in
aid or support of education in this state from video lottery gaming at
facilities of the state racing franchise, and maximizing revenue for
governments from pari-mutuel wagering on racing at facilities of the
state racing franchise. In consideration of capital expenditure
approval, the board shall ensure adequate funds are dedicated for
maintenance and repair of existing structures at Saratoga racetrack and
Belmont Park racetrack and for the improvement of onsite backstretch
personnel housing and quality of life.

(ii) monitor and enforce compliance with definitive documents that
comprise the franchise agreement between the franchised corporation and
the state of New York governing the franchised corporation's operation
of thoroughbred racing and pari-mutuel wagering at the racetracks. The
franchise agreement shall contain objective performance standards that
shall allow contract review in a manner consistent with this chapter.
The franchise oversight board shall notify the franchised corporation
authorized by this chapter in writing of any material breach of the
performance standards or repeated non-material breaches which the
franchise oversight board may determine collectively constitute a
material breach of the performance standards. Prior to taking any action
against such franchised corporation, the franchise oversight board shall
provide the franchised corporation with the reasonable opportunity to
cure any material breach of the performance standards or repeated
non-material breaches which the franchise oversight board may determine
collectively constitute a material breach of the performance standards.
Upon a written finding of a material breach of the performance standards
or repeated non-material breaches which the franchise oversight board
may determine collectively constitute a material breach of the
performance standards, the franchise oversight board may recommend that
the franchise agreement be terminated. The franchise oversight board
shall refer such recommendation to the commission for a hearing
conducted pursuant to section two hundred forty-five of this article for
a determination of whether to terminate the franchise agreement with the
franchised corporation;

(iii) oversee, monitor and review all significant transactions and
operations of the franchised corporation authorized by this chapter;
provided, however, that nothing in this section shall be deemed to
reduce, diminish or impede the authority of the commission to, pursuant
to article one of this chapter, determine and enforce compliance by the
franchised corporation with terms of racing laws and regulations. Such
oversight shall include, but not be limited to:

(A) review and make recommendations concerning the annual operating
budgets of such franchised corporation;

(B) review and make recommendations concerning operating revenues and
the establishment of a financial plan;

(C) review and make recommendations concerning accounting, internal
control systems and security procedures;

(D) review such franchised corporation's revenue and expenditure
policies which shall include collective bargaining agreements management
and employee compensation plans, vendor contracts and capital
improvement plans;

(E) review such franchise corporation's compliance with the laws,
rules and regulations applicable to its activities;

(F) make recommendations for establishing model governance principles
to improve accountability and transparency; and

(G) receive, review, approve or disapprove capital expense plans
submitted annually by the franchised corporation.

(iv) evaluate, review and approve the racing franchisee's selection of
a vendor or vendors to contract with the franchised corporation for
provision of totalizator services, and manage, subject to the franchised
corporation's unilateral right to opt out, directly or indirectly,
integration of any offered internet wagering platform. The franchise
oversight board shall consider in its evaluation of any such proposed
vendor the ability of such vendor to reduce the totalizator expenses and
general development and production costs of any internet wagering
platform of an authorized off-track betting corporation and the state
racing franchise holder.

(v) facilitate discussions and voluntary agreements between the
franchised corporation and off-track betting corporations to streamline
operations, decrease operating costs and maximize opportunities
pertaining to costs and revenues, and encourage an exchange of views and
experiences from the franchised corporation and the off-track betting
corporations to improve the racing product in New York and to realize
efficiencies;

(vi) review and approve all purchasing policies pursuant to paragraph
(a) of subdivision six of section two hundred eight of this article;

(vii) review and provide any recommendations on all simulcasting
contracts (buy and sell) that are also subject to prior approval of the
commission;

(viii) act on behalf of the People of the State of New York to enter
into any real property transactions in furtherance of the purposes and
intent of this statute, including, without limitation, one or more
ground leases, for one dollar in consideration annually, for each of
Aqueduct racetrack, Belmont Park and Saratoga racecourse to the
franchised corporation, for a term that will extend until the racing
franchise expires, is revoked, terminated or ends by any other means
provided by law. Such leases shall be executed contemporaneously with
the conveyance of the racetracks by the franchised corporation's
predecessor to the state;

(ix) enter into on behalf of the state as licensor, a long term
license agreement with the franchised corporation for the use of the
simulcast signal and associated intellectual property rights, for
consideration of one dollar annually and for a term that will extend
until the racing franchise expires, is revoked, terminated or ends by
any other means provided by law. Such license agreement shall be
executed contemporaneously with the conveyance of the franchised
corporation's assets associated with the franchise agreement.

(x) conduct running races or steeplechases at racing facilities and
conduct pari-mutuel betting on the outcome of the same when necessary to
assure the continuation of the racing and pari-mutuel betting activities
at such racing facilities (A) in the event that the racing and/or
pari-mutuel betting franchises of the franchised corporation authorized
by this chapter then holding such franchises have either been terminated
in the manner provided by law or have been relinquished by such
corporation, or such corporation declines to continue conducting race
meetings and pari-mutuel betting on the outcome of the same as required
by such franchises unless such declination is the result of strikes,
acts of God, or other unavoidable causes not under the control of such
corporation, or the corporate existence of such corporation has been
dissolved in the manner provided by law prior to the end of the term of
any such franchise and (B) until such time as a new franchise is
granted;

(xi) on behalf of the People of the State of New York, and, acting in
such capacity as lessor of the racing facilities and real estate, be
responsible for payment of all property taxes related to such racing
facilities and real estate;

(xii) report annually to the governor and the legislature, beginning
no later than December thirty-first, two thousand eight, stating its
findings and recommendations to implement policy and legislative changes
necessary to encourage the continuation of high quality thoroughbred
racing in New York state and to protect the legitimate interests of the
state and the thoroughbred racing industry;

(xiii) 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 franchise
oversight board within thirty days of a written request;

(xiv) examine or cause to be examined by a third party, the books,
papers, records and accounts of the franchised corporation;

(xv) sue and be sued;

(xvi) make and execute contracts and all other instruments necessary
or convenient for the exercise of its powers and functions under this
article;

(xvii) request and accept the assistance of any state agency,
including but not limited to, the commission, office of parks,
recreation and historic preservation, the department of environmental
conservation and the department of taxation and finance, in obtaining
information related to the franchised corporation's compliance with the
terms of the franchise agreement;

(xviii) when the franchise oversight board determines the financial
position of the franchised corporation has deviated materially from the
franchised corporation's financial plan, or other such related documents
provided to the franchise oversight board, and such deviation is not
mitigated by the franchised corporation within one hundred eighty days
of the franchise oversight board providing notice of such determination
to the franchised corporation, or when the implementation of such plan
would, in the opinion of the franchise oversight board, pose a
significant risk to the liquidity of the franchised corporation, in any
order or combination:

(A) hire, at the expense of the franchised corporation, an independent
financial adviser to evaluate the financial position of the franchised
corporation and report on such to the franchise oversight board; and

(B) require the franchised corporation to submit for the franchise
oversight board's approval a corrective action plan addressing any
concerns identified as risks by the franchise oversight board.

(xix) when the franchise oversight board finds the franchised
corporation has experienced two consecutive years of material losses due
to circumstances within the control of the franchised corporation, as
determined by the franchise oversight board, and when the franchised
corporation has failed to address concerns identified by the franchise
oversight board pursuant to subparagraph (xviii) of this paragraph, the
board may by unanimous vote request the director of the budget to
impound and escrow racing support payments accruing to the benefit of
the franchised corporation pursuant to paragraphs three and four of
subdivision f of section sixteen hundred twelve of the tax law. The
director of the budget shall release such impounded and escrowed racing
support payments upon notice from the franchise oversight board that the
franchised corporation has achieved the goals of a new corrective action
plan approved by the board.

The director of the budget shall, upon warrant of the franchise
oversight board, approve the use of withheld racing support payments
necessary to satisfy financial instruments used to fund board-approved
capital investments, as approved by the franchise oversight board.

(xx) do all things necessary, convenient or desirable to carry out its
purposes and for the exercise of the powers granted in this article.

b. Notwithstanding any other provision of this article, the franchised
corporation shall be entitled to make capital expenditures, except those
capital expenditures for the Saratoga Racecourse that may, on the advice
of the New York state historic preservation office, adversely impact any
historic structure that is included in or is eligible for inclusion in
the national or state register of historic places, to the physical plant
of the racetracks, grandstand, backstretch, parking and public areas set
forth in the New York Racing Association's capital expenditure plan
("capital plan") filed with the racing and wagering board in two
thousand seven. Any material modification to the capital plan as
determined by the franchise oversight board and each future capital
investment plan for the tracks, grandstand, backstretch, parking and
public areas of the racetracks operated by the franchised corporation
involving the expenditure of more than five million dollars in the
aggregate shall require the prior approval of the franchise oversight
board. Within five years from the date of commencement of the video
lottery terminal operations at Aqueduct, and every five years
thereafter, the franchised corporation shall submit to the oversight
board a capital plan for the five-year period commencing on January
first of the following year. Such plans shall contain both the intended
object of expenditure and the proposed sources of financing. The
franchised corporation shall report to the franchise oversight board
within ninety days following the end of each fiscal year as to the
amount spent pursuant to the capital plan.

* NB Repealed 30 days following the assumption of the franchise by a
successor entity.