By Bob Conner 

CAPITOL — State legislators on Wednesday approved a new 25-year franchise for the New York Racing Association, passing a 103-page, single-spaced bill that most of them saw for the first time a few hours earlier.

The bill, which Gov. Eliot Spitzer said he will sign and which is supported by NYRA, appears to settle or at least greatly alleviate a political and economic problem that has bedeviled the state for years and become increasingly acute. Spitzer, Senate Majority Leader Joseph Bruno, R-Brunswick, and a spokesman for Assembly Speaker Sheldon Silver, D-Manhattan, all praised the legislation, which they said should put racing on the right track.

The bill’s passage also prompted the Nonprofit Racing Oversight Board to meet and approve another temporary extension of NYRA’s franchise, to tide it over until provisions of the bill become effective. That means Aqueduct Race Track in Queens will not shut down today, and NYRA will not be laying off workers as it had threatened.

Bennett Liebman, coordinator of the Racing and Wagering Law Program at Albany Law School, said the bill represents a complete victory for NYRA, but also addresses some of the concerns he had raised at a Senate hearing about the agreement proposed last September between Spitzer and NYRA.

That memorandum of understanding provided too little funding for horsemen and breeders, Liebman said, but those interests are happy with the final legislation.

“It’s a lot better for the horsemen,” Bruno said after a news conference.

NYRA will get a $105 million advance from the state to get it out of bankruptcy, which it is supposed to repay from revenue derived from video lottery terminals (VLTs) that were previously authorized for Aqueduct, but have not yet been installed there. Another $259 million that NYRA owes to the state will be mostly forgiven, according to Bruno and Paul Francis, Spitzer’s director of state operations.

The NYRA board will be reconstituted to include more representatives appointed by state government, and a new Franchise Oversight Board will be created, appointed by state government leaders, to evaluate NYRA’s operations every four years.

Bruno needed Democratic votes to pass the bill in the Senate, where he has a three-vote majority, because five Republicans voted no.

Four of them were from Long Island, and their main objection was that the bill does not include authorization for VLTs at the Belmont Park racetrack in Nassau County. Bruno had supported VLTs there, as did Long Island politicians from both parties and Spitzer, but they were kept out of the bill by Assembly Democrats.

Most Senate Democrats supported the measure. Bruno denied he made a deal with Democratic leader Sen. Malcolm Smith of Queens, who could not be reached for comment.

All Capital Region legislators from both parties supported the bill, which passed the Senate by 39 votes to 17, and by the Assembly 92-40.

NYRA gives up its ownership claim of its three tracks, including Saratoga Race Course in Saratoga Springs, under terms of the legislation. The bill also sets the stage for creation of a local advisory board in Saratoga.

Saratoga Springs residents have expressed keen interest in preserving the historic track, and in preventing an interruption of racing at Aqueduct. Today at 11 a.m., Bruno will brief “local Saratoga community leaders and horse racing fans,” according to a statement he issued, at an event at the National Museum of Racing and Hall of Fame, 191 Union Ave.

Assembly Minority Leader James Tedisco, R-Schenectady, who like Bruno represents Saratoga Springs, said the new Franchise Oversight Board will be empowered to recommend that the Racing and Wagering Board terminate the franchise if NYRA fails to comply with performance standards, and NYRA will continue to pay local property taxes.

The Racing and Wagering Board is expected to meet today and approve a new temporary franchise extension.

The bill, A-9998, can be looked up on the Assembly Web site.

NYRA has lost money for many years, in part because of the state’s creation of the Off-Track Betting network. Attendance at the downstate tracks has slumped drastically, and rival bidders said they could do a better job than NYRA at drawing patrons there.

The state will grant a new bidder the gaming franchise at Aqueduct. The legislation relies on the Aqueduct VLT revenue to solve NYRA’s financial problems. Bruno and others have said the potential revenue from VLTs at Belmont also is needed, in part for economic development in the poor area around that track.

NYRA and former Gov. George Pataki were feuding in the last year of his term, and at that time few observers would have bet on NYRA being awarded a new franchise. However, it was able to turn its economic weakness, which had put it in federal Bankruptcy Court in Manhattan, into a sort of strength. Its legal status, when combined with its ownership claim, gave it the potential to tie up the state and a rival bidder in litigation if they tried to take over the tracks — or at least that’s how Spitzer, Bruno and Silver saw it. Bruno noted that a bankruptcy trustee would be looking out for the interests of creditors, and not necessarily for the interests of racing or New Yorkers.

The bill also bolsters the finances of some harness tracks. “Vernon Downs will be able to reopen and a shutdown of Tioga Downs will be averted,” according to a statement from Spitzer’s press office.