On certification to the Superior Court, Chancery Division.
For modification and affirmance -- Justices Pashman, Clifford, Schreiber, Handler, Pollock and O'Hern. For reversal -- None. The opinion of the Court was delivered by Pollock, J.
This appeal raises the question whether the statutory designation of the New Jersey Horsemen's Benevolent and Protective Association (NJHBPA) to receive up to 2.5% of the purse money from thoroughbred horseracing in New Jersey violates state constitutional prohibitions against special laws. The Chancery Division concluded that the special law provisions of the New Jersey Constitution had not been violated. We granted direct certification, 88 N.J. 500 (1981), and now modify and affirm.
Plaintiffs are owners of thoroughbred racehorses that run at New Jersey tracks. Defendant, the Horsemen's Benevolent and Protective Association (HBPA), is a national nonprofit organization which serves both as a charity aiding the racehorse industry and as a representative of owners, trainers, and other personnel in dealings with racetracks. HBPA was incorporated in Rhode Island, has its principal place of business in Maryland and is divided into 26 regional divisions, one of which is NJHBPA.
Each of the regional divisions, including NJHBPA, is bound by HBPA's national constitution and bylaws and may not unilaterally change its procedures or benefits to meet local needs. The national board, which has the power to suspend or expel any member, determines the assessments to be paid by each of the regional divisions to finance HBPA.
Any licensed owner or trainer is eligible for membership in HBPA and, unless expressly declining membership in writing, automatically becomes a member by starting a thoroughbred horse in a qualifying race. Members of the national HBPA also automatically become members of each regional division in
which they start a horse. To remain a member in good standing, an owner must contribute to HBPA not less than 1% of any purse money. Moreover, a member of any regional division must be in good standing with all other regions to receive HBPA membership benefits. An owner racing horses in several states must contribute 1% or more of purses won in each state to the regional division for that state or forfeit all benefits from all regions. No New Jersey benefits would be available to any owner who raced in another state and refused to contribute to that regional division. To illustrate, an owner who races in New Jersey and New York may not contribute either to the New Jersey region or to the New York region, but must contribute to both.
In most regions, HBPA members sign prepared cards authorizing the tracks to deduct the required 1% contribution directly from each member's purse money and forward that amount directly to the regional division. Until 1975, the NJHBPA used the signature card system to collect its contribution. If any owners did not wish to become HBPA members, they simply declined to sign cards and no deductions were taken from their purses. In 1975, however, the Legislature amended the statute governing racing and provided expressly that up to "2.5% of the sum available for distribution as purse money from all parimutuel pools" be paid directly to the NJHBPA.
Prior to 1971, the statute did not expressly establish the portion of the total amount wagered at racetracks in the State that should be distributed as purse money to the owners. Predecessor statutes simply provided for a percentage allocation to the New Jersey Racing Commission. See L. 1940, c. 17, § 46 and subsequent amendments. Starting in 1971, however, the Legislature has allocated varying percentages of the betting pool to the horse owners. In 1971, the Legislature directed the tracks to pay out 3.74% of the amount wagered (after certain unrelated statutory distributions) as purse money. L. 1971, c. 159, § 1. The percentage was amended in 1974 to 8.75%, L. 1974, c. 181, § 3; to 4.24% in 1975, L. 1975, c. 327, § 2; and to a
range of 5.92% to 10.11% (depending on the volume and nature of the wagering permitted) in 1979. L. 1979, c. 94, § 2. In 1980, a new provision applicable only to the Meadowlands track imposed a range of 4.24% to 7.24% without changing the percentages at other tracks. L. 1980, c. 25, § 4.
The provision establishing the purse money percentage originally required the tracks to distribute the entire amount "as purse money," L. 1971, c. 159, § 1, but the 1974 amendment directed its distribution "as purse money and for programs designed to aid the horsemen and their representatives." L. 1974, c. 181, § 3. Those aid programs were not to exceed 3.2% of the purse money percentage. Id. In 1975, the Legislature designated NJHBPA as a recipient of the funds; the statute was amended to direct the amount to be distributed "as purse money and for programs designed to aid the horsemen and the New Jersey Horsemen's Benevolent and Protective Association." L. 1975, c. 327, § 2. The 1975 amendment also lowered the ceiling for aid programs to 2.9% of the purse money. The ceiling was reduced further to 2.5% in 1979, L. 1979, c. 94, § 2, where it remains to date, N.J.S.A. 5:5-66(b)(1)(d) and (b)(2)(d), except at the Meadowlands track where a 2.9% ceiling applies. L. 1980, c. 25, § 4, codified at N.J.S.A. 5:10-7.
Nothing in the legislative history indicates the reason for the designation of NJHBPA; since 1974, however, the entire allocation has been paid to NJHBPA. No other "programs designed to aid the horsemen" receive money under the statutory provisions, and no statute or ...