The New York Racing Association and Magna Entertainment Corp. again are discussing merger possibilities, two months after the NYRA board flatly rejected a bid by Frank Stronach's company to become financial partners."We're continuing to talk," NYRA chairman Barry Schwartz said.The surprising admission comes after Schwartz led the effort to beat back any talk of mergers back in March. But the quick rebuff by NYRA at the time angered some influential state officials who believe the holders of the prized New York Thoroughbred racing franchise were in no position, given legal and financial problems, to dismiss MEC's bid.To press its cause, MEC hired well-placed Republican and Democratic lobbyists, including former United States Sen. Alfonse D'Amato; Kenneth Bruno, son of longtime NYRA backer Senate Majority Leader Joseph Bruno; and Patricia Lynch, friend of Assembly Speaker Sheldon Silver. MEC is paying the firms $650,000 this year in lobbying and consulting fees.MEC's lobbying efforts were believed to rest with two options: press ahead with the joint operations idea and/or move to block NYRA's bid to get its franchise to operate Aqueduct, Belmont Park, and Saratoga extended for several more years beyond its 2007 expiration.In the past couple of weeks, MEC has continued to float its merger plan, sources said. It has proposed taking over NYRA's debt, which could hover at about $100 million or more in payments to the Thoroughbred Capital Investment Fund and purse money to horsemen. In return, it would assume all non-racing functions at NYRA tracks, from running restaurants to controlling NYRA's future video lottery terminal casino at Aqueduct that Schwartz wants Las Vegas-based MGM Mirage to operate.The idea would position MEC to some day take over NYRA's franchise. Under one plan, Schwartz would be named president of MEC's New York racing operations.MEC president James McAlpine did not return repeated calls for comment.Schwartz declined to comment on any specifics dealing with MEC's offer or plans or to say what NYRA is pressing for at the negotiating table."There are a number of areas where we feel we might be able to be helpful to each other," Schwartz said. "We are continuing to have a dialogue with them."Schwartz characterized the conversations as "pleasant."When asked why NYRA is engaged in talks with MEC after its board only two months ago soundly rejected any merger notion, Schwartz said: "When people are interested in doing things with us, we've got to explore it to see if it's in NYRA's interest."MEC has long been interested in getting into the lucrative New York racing market in a direct ownership way. But the options are limited--either NYRA or Finger Lakes Race Track, which is owned by Delaware North.