§ 319. 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 or association that is
used or is to be used by such corporation or association in connection
with the conduct of horse race meetings, and shall include improvements
to land but not land itself.

2. (a) Notwithstanding the provisions of section three hundred
eighteen of this article, a harness track, may elect upon thirty days
written notice to the commission to withhold, in addition to any other
amounts required by this section, one percent of the total deposits in
pools resulting from regular and multiple bets, provided, however, that
any harness track 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. Provided further, however, that if the harness track was
owned prior to December thirty-first, nineteen hundred eighty-five, by a
nonprofit county agricultural society and leased by a racing association
such one percent shall be paid by the association to the society as
additional rent. Such society shall use such one percent exclusively for
capital improvements as defined in subdivision one of this section
subject to the rules and regulations of the commission. The capital
improvements shall be determined by a committee of the society composed
of the executive director of the society, the chair of the board of
directors of the racing association, or his or her designee, and the
general manager of the racing association. 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, a harness track and shall include
premium giveaways, prizes, free admission, free parking, free programs,
additional monies for purses or other activities of a promotional nature
which stimulate on track attendance. In no event shall this section be
construed to permit the payment of salaries to employees of such a
harness track who are engaged in advertising or promotional activities.

(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, 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 association or
corporation for commission approval includes adequate provision for
expenditures relating to the continued health, safety and well-being of
patrons, 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, 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 for a harness track
other than a harness track authorized to operate in Westchester or
Nassau county or a harness track owned by a non-profit county
agricultural society and leased by a harness racing association 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 or
association 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 or association exclusively for
capital improvements as defined in subdivision one of this section. All
such amounts borrowed by such corporation or association 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 or association shall surrender its
pari-mutuel license 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 or
association to such trust shall be disposed of in accordance with
provisions of law to be enacted for such purpose; except that the
commission shall direct that such sums therein deposited and all sums
due and owing from such corporation or association be transferred to the
credit of a successor in interest to such corporation or association
upon the licensing of such successor in interest by the commission. Such
trust shall be established and administered pursuant to the rules and
regulations of the commission.