Authorizes the Suffolk regional off-track betting corporation to file for bankruptcy; provides that all funds in the capital acquisition fund shall be available to the Suffolk regional OTB for any corporate purpose.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9062
SPONSOR: Sweeney (MS) TITLE OF BILL: An act to amend the racing, pari-mutuel wagering and
breeding law, in relation to authorizing the Suffolk regional off-track
betting corporation to file for bankruptcy; and providing that all funds
in the capital acquisition fund shall be available to the Suffolk
regional OTB for any corporate purpose
PURPOSE OR GENERAL IDEA OF BILL: This bill would provide Suffolk OTB
with the specific power to file for bankruptcy under the United States
Bankruptcy Code. The ability to file for bankruptcy protection would
allow Suffolk OTB to address its debts and long-term obligations in an
orderly manner, while continuing to operate and generate revenue to pay
creditors and Suffolk County. The bill also allows Suffolk OTB to access
funds in its capital acquisition fund for general corporate purposes of
the Suffolk OTB.
JUSTIFICATION: Suffolk OTB was created in the early 1970s to raise
revenue for Suffolk County as a participating municipality, curb illegal
bookmaking, and support the State's horse racing industry. It is
required by statute to make payments to the State, Suffolk County, other
municipalities and the horse racing industry. In recent years it has
faced fiscal challenges.
This bill would amend the Racing and Wagering Law to specifically
empower Suffolk OTB to file for bankruptcy. This specific authorization
to allow Suffolk OTB to file for bankruptcy will protect taxpayers as
well as the horse racing industry in New York. Without bankruptcy
protection, in the face of fiscal difficulty, Suffolk 0TB could be
forced to shut its doors and terminate hundreds of employees. This has
devastating consequences for employees, suppliers, landlords, neighbor-
hoods and creditors, and creates complicated and expensive issues for
taxpayers. In addition, it causes New York horse racing enthusiasts and
racing revenue to shift from New York State-based operations to out-of-
state horse racing ventures.
In March, 2011, Suffolk OTB filed for bankruptcy protection. It filed a
Plan of Debt Adjustment with the bankruptcy court, providing for the 100
percent payment of its creditors over time according to specific sched-
ules. The bankruptcy allowed Suffolk OTB to continue to operate and
generate revenue to pay creditors, while addressing its debts and long-
term obligations in an orderly manner. However, an objection to the
bankruptcy petition filed by an out-of-state competitor, challenging the
OTB's legal authority to declare bankruptcy, was ultimately sustained.
Amending the Racing and Wagering Law to specifically authorize Suffolk
OTB to file for bankruptcy protection will provide Suffolk OTB with the
tools to methodically address debts and long term obligations such as
leases and health care coverage while continuing to operate, serve the
public, generate revenue for the State and Suffolk County and pay credi-
tors; and then exit bankruptcy as soon as practicable. Suffolk OTB is
not on the expense side of State or local budgets.
Section 509-a of the Racing and Wagering Law expressly authorizes
regional OTBs to create capital acquisition funds, funded by pari-mutuel
wagering pools, for the purpose of financing the future acquisition,
construction or equipping of facilities. This bill would provide that
all funds accumulated in Suffolk OTB's capital acquisition fund created
pursuant to section 509-a of the Racing and Wagering Law or deposited
into such fund thereafter will be available to Suffolk OTB for any
corporate purpose. It will allow Suffolk OTB to access and use for
corporate purposes funds that are simply not needed for the future
acquisition, construction and equipping of facilities.
PRIOR LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
S. 6293 A. 9062
SENATE - ASSEMBLY
January 20, 2012
___________
IN SENATE -- Introduced by Sen. FLANAGAN -- read twice and ordered
printed, and when printed to be committed to the Committee on Racing,
Gaming and Wagering
IN ASSEMBLY -- Introduced by M. of A. SWEENEY, THIELE, ENGLEBRIGHT,
RAMOS, RAIA -- read once and referred to the Committee on Racing and
Wagering
AN ACT to amend the racing, pari-mutuel wagering and breeding law, in
relation to authorizing the Suffolk regional off-track betting corpo-
ration to file for bankruptcy; and providing that all funds in the
capital acquisition fund shall be available to the Suffolk regional
OTB for any corporate purpose
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The racing, pari-mutuel wagering and breeding law is
2 amended by adding a new section 503-a to read as follows:
3 § 503-a. Additional powers of the Suffolk regional off-track betting
4 corporation. In addition to the powers enumerated in section five
5 hundred three of this article, the Suffolk regional off-track betting
6 corporation is hereby authorized and may file any petition with any
7 United States district court or court of bankruptcy under any provision
8 of laws of the United States for the composition or adjustment of munic-
9 ipal indebtedness.
10 § 2. Notwithstanding any other provision of law or regulation to the
11 contrary, all funds in the capital acquisition fund, established pursu-
12 ant to section 509-a of the racing, pari-mutuel wagering and breeding
13 law shall be available to the Suffolk regional off-track betting corpo-
14 ration for any corporate purpose.
15 § 3. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13856-06-2
