ALBANY -A board appointed by former Gov. George Pataki is preparing to take over New York's thoroughbred racing on Jan. 1 if closed-door negotiations between Gov. Eliot Spitzer and legislative leaders drag on past a Dec. 31 deadline.

The Non-Profit Racing Association Oversight Board authorized its chairwoman Monday to start negotiating to continue racing at Aqueduct in January, followed potentially by the Belmont and Saratoga race tracks. If NYRA can't or won't continue to run racing after its franchise expires at the end of the year, then board Chairwoman Carole Stone is authorized to negotiate with others, including NYRA's competitors. They are Capital Play, Empire Racing, and Excelsior Racing.

The interim agreement would stay in place until Spitzer and the Legislature agree on a new operator of the tracks for as long as the next 30 years. Spitzer and NYRA already have a formal proposal to do that as part of a deal that includes NYRA relinquishing a claim it owns the race tracks.

Senate Majority Leader Joseph Bruno welcomed the board's action, but called for immediate public negotiations to resolve the issue and avoid uncertainty in an industry that employs 40,000 people statewide.

“What's more time sensitive than this?” Bruno said. “I'm here and I've been here. It puzzles me why the governor is fiddling. I think he's reading too much about Nero.”

Bruno would support having NYRA run the tracks, but he wants to award some lucrative pieces - including selling the simulcast images of races and running video slot machines -to other groups. Spitzer and Bruno also disagree on how to reconstitute NYRA's board, which has been in place despite years of state and federal investigations into mismanagement and a pending bankruptcy court case.

State officials, including Spitzer, contend that the state owns the track and NYRA ceases to exist as a legal entity on Jan. 1. But forcing the issue could mean a court would decide NYRA owns the property - worth more than $1 billion - on which it's run racing and paid taxes since 1955. NYRA says it will seek to enforce its ownership claim if its franchise isn't continued.

NYRA isn't taking up an offer for what amounts to an extension, saying it is confident Spitzer and the Legislature will agree to awarding the franchise now. NYRA President Charles Hayward told the industry magazine, Blood-Horse, on Saturday that NYRA had several conditions for any temporary arrangement. Chief among them was to make sure any interim management deal wouldn't threaten NYRA's land claim.

“NYRA's attorneys are reviewing the resolution adopted today by the Non-Profit Racing Oversight Board to determine an appropriate course of action,” NYRA said in a prepared statement Monday.

Stone, the oversight board chairwoman, is the former budget director in Pataki's Republican administration.

Spitzer, a Democrat, said negotiations with legislative leaders continue and could lead to awarding a franchise by Dec. 31. But he said there are other ways to make sure New York racing would continue even without an agreement by the deadline.

AP-ES-12-17-07 1715EST