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In the Matter of the Veto By Governor Chris Christie of the Minutes of the New Jersey Racing

December 7, 2012

IN THE MATTER OF THE VETO BY GOVERNOR CHRIS CHRISTIE OF THE MINUTES OF THE NEW JERSEY RACING COMMISSION FROM THE JUNE 29, 2011 MEETING AND THE ALLOCATION ACTION TAKEN AT THAT MEETING BY THE NEW JERSEY RACING COMMISSION.


On appeal from the New Jersey Racing Commission.

The opinion of the court was delivered by: Messano, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued September 11, 2012

Before Judges Messano, Lihotz and Ostrer.

The opinion of the court was delivered by MESSANO, P.J.A.D.

In this appeal, the Thoroughbred Breeders' Association of New Jersey (TBA) urges us to reverse Governor Chris Christie's veto of the minutes of the June 29, 2011 meeting of the New Jersey Racing Commission (the Commission), and remand to the Commission with instructions to reconsider distribution of $15 million to various stakeholders in New Jersey's horse racing and breeding industry. We set forth the Legislative and procedural history that led to this appeal.

On February 1, 2011, the Legislature enacted comprehensive legislation creating the Atlantic City Tourism District. See L. 2011, c. 18, § 1, now codified as N.J.S.A. 5:12-218 to -233. N.J.S.A. 5:12-223 specifically required: "the Division of Gaming Enforcement . . . [to] determine the amount of cost savings effected by the reduction in fees paid by casino licensees"; the Commission, thereafter, to determine an amount, not to exceed $15 million for the first fiscal year, to be collected by the Casino Redevelopment Authority (CRDA) from these savings; and the CRDA to allocate that amount to the Commission "to support . . . the horse racing industry in this State through the augmentation of purses." Ibid. The statute further provided:

The amount of any funds authorized in this section to be collected and allocated in support of horse racing through the augmentation of purses shall be established by the . . . Commission at a regular meeting . . . held during the fiscal year in which any such payment is authorized, which amount shall be reflected in the meeting minutes delivered . . . to the Governor . . . in the manner provided under [N.J.S.A. 5:5-22.1]. [Ibid.]

N.J.S.A. 5:5-22.1, enacted by the Legislature in 2001, remained unchanged and provides:

A true copy of the minutes of every meeting of the commission shall be forthwith delivered . . . to the Governor. No action taken at such meeting of the commission shall have force and effect until the earlier of 10 days . . . after such copy of the minutes shall have been so delivered, or the approval thereof by the Governor. If, in the 10-day period, the Governor returns such copy of the minutes with veto of any action taken by the commission . . . at such meeting, such action shall be null and void and of no effect.

On May 16, 2011, the Commission solicited "written submissions from all permit holders and horsemen's organizations . . . on the amount of monies the Commission should consider for the augmentation of purses in the current fiscal year."

The Standardbred Breeders and Owners Association of New Jersey (SBOA) stated it would "remain respectfully silent," because, based upon ongoing negotiations to lease the Meadowlands racetrack to a private investor, "we all agreed not to ask for the supplement to purses." However, the SBOA also stated that, "if the Commission d[id] decide to allocate any such monies, the SBOA . . . [should be] treated fairly and an equitable split . . . be made between Freehold and the Meadowlands."

The Thoroughbred Horsemen's Association (THA) sought $10 million for the "New Jersey Bred program[] and an unspecified amount to enhance purses at Monmouth Park." The THA, however, later revised its submission and asked that the Commission not allocate any subsidies in 2011. The THA stated that as a participant in negotiations for the lease of Monmouth Park racetrack, it agreed "to support the Governor's position that no money should be received by the Industry this year." Nonetheless, the THA further wrote that "if . . . the Commission decide[d] to allocate any portion of the Purse Supplement," $7.5 million dollars should be distributed equally to Monmouth Park, the Meadowlands and the Atlantic City Race Course.

Appellant TBA requested $10 million "to augment purses for New Jersey-bred horses." The Atlantic City Race Course requested $800,000 to augment its purses, and Freehold Raceway requested $1,875,000 "to increase purses." On June 13, the New Jersey Sports and Exposition Authority (NJSEA) advised the Commission:

In an effort to create a self-sustaining course for the horse racing industry, the NJSEA has been negotiating with private individuals to shift track operations at both the Meadowlands and Monmouth Park from the State to the private sector . . . .

The agreements have been structured in a manner to eliminate the need for purse subsidies of any kind and all parties to the negotiations have operated with the understanding that no such purse subsidies would be made available . . . .

Based upon the parameters of the agreements that have been reached in principle, and the fact that all material participants have been operating with the knowledge that the State would not provide for purse subsidies in any way, . . . the NJSEA believes that the . . . Commission should not provide for any allocation of these funds.

At its meeting of June 29, the Commission unanimously agreed:

$15 million was needed for the racing industry and . . . propose[d] a distribution method that divide[d] the money equally between the two breeds and distribute[d] the thoroughbred money as follows: $2.5 million to Atlantic City Race Course, $2.5 million to the permit holder at Monmouth Park and $2.5 million to the thoroughbred permit holder at the Meadowlands [and] [t]he standardbred money w[ould] be distributed . . . as follows: $2.5 ...


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