§ 237. Capital improvements. 1. For the purposes of this section,
"capital improvement" shall mean any addition to, replacement of or
remodeling of the physical plant, structures and equipment now or
hereafter owned or leased by a racing corporation that is used or is to
be used by such corporation in connection with the conduct of horse race
meetings, and shall include improvements to land but not land itself.

2. (a) Any non-franchised corporation authorized under this chapter to
conduct pari-mutuel betting at a race meeting on races run thereat, may
elect upon thirty days written notice to the commission to withhold from
the pari-mutuel pool in addition to any other amounts required by this
section, one percent of the total deposits in pools resulting from
regular and multiple on-track bets; provided, however, that any such
corporation withholding pursuant to this subdivision shall use at least
fifty percent of such one percent exclusively for capital improvements
as defined in subdivision one of this section subject to the rules and
regulations of the commission. An amount, not to exceed fifty percent of
such one percent, may be used for advertising and promotion expenses
subject to the rules and regulations of the commission. For the purposes
of this paragraph the term "advertising" shall be limited to paid
advertising through radio, television, the print media, direct mail or
billboards. Promotions shall mean activities that are intended to
increase the attendance at, or visibility of, any such corporation and
shall include premium giveaways, prizes, free admission, free parking,
free programs, additional monies for purses or other activities of a
promotional nature that stimulate on-track attendance. In no event shall
this section be construed to permit the payment of salaries to employees
of any such corporation who are engaged in advertising or promotional
activities, provided, however, that monies credited to such capital
improvement account on or before July first, nineteen hundred
ninety-six, as certified by the commission, shall not be expended for
any such advertising and promotion as defined herein. Such election
shall terminate upon thirty days written notice to the commission.

(b) At least once annually, prior to approving any plan for the
expenditure of such capital improvement funds pursuant to this section,
the commission shall, together with the track operator and
representatives of the horsemen's organization representing owners and
trainers using the facility and representatives of the jockeys
organization representing licensed jockeys and apprentice jockeys
regularly riding or exercising at such facility, inspect the entire
facility, including the area commonly referred to as the backstretch, in
order to determine whether the capital improvement plan submitted by the
corporation for commission approval includes adequate provision for
expenditures relating to the continued health, safety and well-being of
patrons, jockeys, backstretch personnel and the horses in their care.
After such inspection, if the commission shall determine that such
proposed plan does not include adequate provision for repairs and
improvements necessary to correct any conditions that it has determined
to be unsafe or otherwise deleterious to the health and safety of
patrons, jockeys, employees or horses, the commission shall require the
track operator to modify its capital improvement plan to provide for the
expenditure of funds for such repairs and improvements.

3. On or after July first, nineteen hundred ninety such amounts as may
be withheld for the purposes of this section shall be deposited in a
trust fund, kept and maintained by such corporation and administered by
a trustee approved by the commission for the purpose of lending such
sums and any interest thereon on an unsecured basis to such corporation
exclusively for capital improvements as defined in subdivision one of
this section. All such amounts borrowed by such corporation from such
trust shall be forgiven and deemed satisfied according to a schedule of
depreciation deductions for federal and New York state income tax
purposes for such related capital improvements. It is further provided
that at such time as such corporation shall surrender its pari-mutuel
license or franchise or fail to apply for a pari-mutuel license for the
succeeding year by December thirty-first of the preceding year that the
commission may declare the trust fund at an end and all sums therein
deposited plus all sums due or owing from such corporation to such trust
shall be disposed of in accordance with provisions of law to be enacted
for such purpose. Such trust shall be established and administered
pursuant to the rules and regulations of the commission.