45th legislature - STATE OF NEW MEXICO - first session, 2001

RELATING TO REVENUE; PROVIDING FOR REVENUE DISTRIBUTIONS TO THE LOTTERY TUITION FUND TO ENSURE THE FUND'S ABILITY TO CONTINUE TO PROVIDE TUITION SCHOLARSHIPS TO ELIGIBLE STUDENTS; INCREASING NUMBER OF GAMING MACHINES TO INCREASE REVENUE FROM THE GAMING TAX; DISTRIBUTING PART OF THE GAMING TAX TO THE LOTTERY TUITION FUND; CLARIFYING LOTTERY SCHOLARSHIP PROVISIONS; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978; MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 6-24-3 NMSA 1978 (being Laws 1995, Chapter 155, Section 3) is amended to read:

"6-24-3. PURPOSES.--The purposes of the New Mexico Lottery Act are to:

A. establish and provide for the conduct of a fair and honest lottery for the entertainment of the public; and

B. provide the maximum amount of revenues, without imposing additional taxes or using other state revenues, for the [purposes] purpose of

[(1) funding critical capital outlay needs of the public schools; and

(2)] providing tuition assistance to resident undergraduates at New Mexico post-secondary educational institutions."

Section 2. Section 6-24-23 NMSA 1978 (being Laws 1995, Chapter 155, Section 23, as amended) is amended to read:

"6-24-23. LOTTERY TUITION FUND CREATED--PURPOSE.--[A.] The "lottery tuition fund" is created in the state treasury. The fund shall be administered by the commission on higher education. Earnings from investment of the fund shall accrue to the credit of the fund. [Any] The balance in the fund at the end of [any] a fiscal year shall [remain in the fund for appropriation by the legislature as provided in this section.

B. After appropriation, if any, by the legislature for scholarships pursuant to Subsection C of Section 21-1-2 NMSA 1978, the remaining money in the lottery tuition fund] not revert to the general fund and is appropriated to the commission on higher education for distribution to New Mexico's public post-secondary educational institutions to provide tuition assistance for New Mexico resident undergraduates as provided by law."

Section 3. Section 6-24-24 NMSA 1978 (being Laws 1995, Chapter 155, Section 24, as amended) is amended to read:

"6-24-24. DISPOSITION OF REVENUE.--

A. As nearly as practical, an amount equal to at least fifty percent of the gross annual revenues from the sale of lottery tickets shall be returned to the public in the form of lottery prizes.

B. The authority shall transmit all net revenues to the state treasurer [who shall deposit fifty percent of the revenues in the public school capital outlay fund for expenditure pursuant to the provisions of the Public School Capital Outlay Act and fifty percent] for deposit in the lottery tuition fund. Estimated net revenues shall be transmitted monthly to the state treasurer for deposit in the [funds] fund; provided that the total amount of annual net revenues for the fiscal year shall be transmitted no later than August 1 each year.

C. In determining net revenues, operating expenses of the lottery include all costs incurred in the operation and administration of the lottery and all costs resulting from any contracts entered into for the purchase or lease of goods or services required by the lottery, including the costs of supplies, materials, tickets, independent audit services, independent studies, data transmission, advertising, promotion, incentives, public relations, communications, commissions paid to lottery retailers, printing, distribution of tickets, purchases of annuities or investments to be used to pay future installments of winning lottery tickets, debt service and payment of any revenue bonds issued, contingency reserves, transfers to the reserve fund and any other necessary costs incurred in carrying out the provisions of the New Mexico Lottery Act.

D. An amount up to two percent of the gross annual revenues shall be set aside as a reserve fund to cover bonuses and incentive plans for lottery retailers, special promotions for retailers, purchasing special promotional giveaways, sponsoring special promotional events, compulsive gambling rehabilitation and such other purposes as the board deems necessary to maintain the integrity and meet the revenue goals of the lottery. The board shall report annually to the governor and each regular session of the legislature on the use of the money in the reserve fund. Any balance in excess of fifty thousand dollars ($50,000) at the end of any fiscal year shall be transferred to the lottery tuition fund."

Section 4. Section 6-24-27 NMSA 1978 (being Laws 1995, Chapter 155, Section 27) is amended to read:

"6-24-27. REVENUE AND BUDGET REPORTS--RECORDS--INDEPENDENT AUDITS.--

A. The board shall:

(l) submit quarterly and annual reports to the governor, legislative finance committee and lottery oversight committee disclosing the total lottery revenue, prizes, commissions, ticket costs, operating expenses and net revenues of the authority during the reporting period and, in the annual report, describe the organizational structure of the authority and summarize the functions performed by each organizational division within the authority;

(2) maintain weekly or more frequent records of lottery transactions, including the distribution of lottery tickets to retailers, revenue received, claims for prizes, prizes paid, prizes forfeited and other financial transactions of the authority; and

(3) use the state government fiscal year.

B. The board shall provide, for informational purposes, to the department of finance and administration and the legislative finance committee, by December 1 of each year, a copy of the annual proposed operating budget for the authority for the succeeding fiscal year. This budget proposal shall also be accompanied by an estimate of the net revenues to be deposited in the [public school capital outlay fund and the] lottery tuition fund for the current and succeeding fiscal years.

C. The board shall contract with an independent certified public accountant or firm for an annual financial audit of the authority. The certified public accountant or firm shall have no financial interest in any lottery contractor. The certified public accountant or firm shall present an audit report no later than March 1 for the prior fiscal year. The certified public accountant or firm shall evaluate the internal auditing controls in effect during the audit period. The cost of this financial audit shall be an operating expense of the authority. The legislative finance committee may, at any time, order an audit of any phase of the operations of the authority, at the expense of the authority, and shall receive a copy of the annual independent financial audit. A copy of any audit performed by the certified public accountant or ordered by the legislative finance committee shall be transmitted to the governor, the speaker of the house of representatives, the president pro tempore of the senate, the legislative finance committee and the lottery oversight committee."

Section 5. A new Section of the Tax Administration Act is enacted to read:

"[NEW MATERIAL] DISTRIBUTION OF GAMING TAX REVENUE TO THE LOTTERY TUITION SCHOLARSHIP RESERVE FUND.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the lottery tuition fund in an amount equal to one-third of the net receipts attributable to the gaming tax."

Section 6. Section 21-1-2 NMSA 1978 (being Laws 1970, Chapter 9, Section 1, as amended) is amended to read:

"21-1-2. [MATRICULATION AND] TUITION AND FEES--SCHOLARSHIPS.--

A. Except as otherwise provided in this section and in Section 21-1-4.3 NMSA 1978, the boards of regents of the university of New Mexico, New Mexico state university, New Mexico highlands university, western New Mexico university, eastern New Mexico university, New Mexico military institute, New Mexico institute of mining and technology and New Mexico junior college shall establish and charge matriculation fees and tuition fees as follows:

(1) each student shall be charged a matriculation fee of not less than five dollars ($5.00) upon enrolling in each institution;

(2) each student who is a resident of New Mexico shall be charged a tuition fee of not less than twenty dollars ($20.00) a year;

(3) each student who is not a resident of New Mexico shall be charged a tuition fee of not less than fifty dollars ($50.00) a year;

(4) each student shall be charged a tuition fee of not less than ten dollars ($10.00) for each summer session; and

(5) each student may be charged a tuition fee for extension courses.

B. Except as otherwise provided in this section and in Section 21-1-4.3 NMSA 1978, the board of regents of northern New Mexico state school shall establish and charge each student a matriculation fee and a tuition fee.

C. The board of regents of each institution may establish and grant gratis scholarships to students who are residents of New Mexico in an amount not to exceed [the matriculation fee or] tuition and fees [or both]. These scholarships are in addition to the lottery tuition scholarships authorized in Section 21-1-4.3 NMSA 1978 and shall be granted to the full extent of available funds before lottery tuition scholarships are granted. The number of scholarships established and granted pursuant to this subsection shall not exceed three percent of the preceding fall semester enrollment in each institution and shall not be established and granted for summer sessions. The president of each institution shall select and recommend to the board of regents of his institution, as recipients of scholarships, students who possess good moral character and satisfactory initiative, scholastic standing and personality. At least thirty-three and one-third percent of the gratis scholarships established and granted by each board of regents each year shall be granted on the basis of financial need.

D. The board of regents of each institution set out in this subsection may establish and grant, in addition to those scholarships provided for in Subsection C of this section, athletic scholarships for tuition and fees. In no event shall the board of regents of any institution be allowed to award scholarships for tuition and fees for more than the number of athletic scholarships set out in this subsection and in no event shall more than seventy-five percent of the scholarships granted be for out-of-state residents:

(1) the board of regents of the university of New Mexico may grant up to two hundred ninety-three athletic scholarships;

(2) the board of regents of New Mexico state university may grant up to two hundred seventy athletic scholarships;

(3) the boards of regents of New Mexico highlands university, eastern New Mexico university and western New Mexico university may each grant up to one hundred forty athletic scholarships; and

(4) the board of regents of New Mexico junior college may grant up to fifty-two athletic scholarships.

E. In the event that the number of athletic scholarships exceeds the number of athletic scholarships permitted that institution by regulations and bylaws of the national collegiate athletic association or the national association of intercollegiate athletics of which that institution is a member, the appropriate board of regents shall reduce the number of authorized tuition scholarships to comply with association rules and regulations.

F. Matriculation fees [and], tuition fees and other fees shall be fixed and made payable as directed by the board of regents of each institution, collected by the officers of each institution and accounted for as are other funds of the institutions. Matriculation fees shall be charged only once for each institution in which a student enrolls."

Section 7. Section 21-1-4.3 NMSA 1978 (being Laws 1996, Chapter 71, Section 3, as amended) is amended to read:

"21-1-4.3. TUITION SCHOLARSHIPS AUTHORIZED--CERTAIN EDUCATIONAL INSTITUTIONS.--

A. To the extent that funds are [made] available [by the legislature] from the lottery tuition fund, the boards of regents of New Mexico state university, New Mexico institute of mining and technology, eastern New Mexico university, western New Mexico university, the university of New Mexico, New Mexico highlands university and northern New Mexico state school shall award tuition scholarships for qualified resident students attending their respective institutions and branches of those institutions.

B. Except as authorized in Subsection C of this section, the tuition scholarships authorized in this section shall [apply] be awarded only to full-time resident students who, immediately upon completion of a high school curriculum at a public or accredited private New Mexico high school or upon receiving a graduate equivalent diploma, are accepted for entrance to and attend one of the state educational institutions set forth in this section or one of the branches of those institutions. Each tuition scholarship shall be awarded for up to four consecutive years beginning the second semester of the recipient's first year of enrollment, provided that the recipient has maintained residency in New Mexico and maintained a grade point average of 2.5 or higher on a 4.0 scale during his first semester of full-time enrollment.

C. The tuition scholarships authorized in this section shall also apply to full-time resident students who, immediately upon completion of a high school curriculum at a public or accredited private New Mexico high school or upon receiving a graduate equivalent diploma, attend a two-year public post-secondary educational institution in New Mexico and who, upon the completion of that curriculum or at the end of two years, whichever is sooner, transfer to one of the post-secondary state educational institutions set forth in this section. Those students shall be eligible for a tuition scholarship for two consecutive years, provided that those students maintain residency in New Mexico, maintain a grade point average of 2.5 or higher on a 4.0 scale and attend the institution full time during the regular academic year.

D. The tuition scholarships authorized in this section shall also apply to full-time resident students who:

(1) within one hundred twenty days of completion of a high school curriculum at a public or accredited private New Mexico high school, or of receiving a graduate equivalent diploma, begin service in the United States armed forces; and

(2) within one hundred twenty days of completion of honorable service or medical discharge from the service are accepted for entrance to and attend one of the state educational institutions set forth in this section.

E. The commission on higher education shall prepare guidelines setting forth explicit student continuing eligibility criteria and guidelines for administration of the tuition scholarship program. Guidelines shall be distributed to the board of regents of each institution to enable a uniform availability of the resident student tuition scholarships."

Section 8. Section 21-1-4.4 NMSA 1978 (being Laws 1996, Chapter 71, Section 4) is amended to read:

"21-1-4.4. COMMISSION ON HIGHER EDUCATION--DETERMINATION OF LOTTERY TUITION SCHOLARSHIPS--USE OF LOTTERY TUITION FUND.--Prior to June 1 of each year, the commission on higher education shall determine the amount of money available for lottery tuition scholarships at state public post-secondary educational institutions. Based on the amount [appropriated by the legislature] available from the lottery tuition fund and on the projected enrollment at all public post-secondary educational institutions, the commission on higher education shall establish the percentage of tuition that shall be awarded for qualified resident students attending New Mexico public post-secondary educational institutions. The percentage of tuition awarded shall be the same for each institution, regardless of the actual cost of tuition at each institution."

Section 9. Section 21-13-10 NMSA 1978 (being Laws 1963, Chapter 17, Section 9, as amended) is amended to read:

"21-13-10. BOARD DUTIES.--

A. It is the duty of the community college board to determine financial and educational policies of the community college. The community college board shall provide for the management of the community college and execution of these policies by selecting a competent president for the community college, and, upon the president's recommendation, the board shall employ other administrative personnel, instructional staff or other personnel as may be needed for the operation, maintenance and administration of the community college.

B. The community college board shall have the power to fix tuition and fee rates for resident and nonresident students of the district, to accept gifts, to accept federal aid, to purchase, hold, sell and rent property and equipment and to promote the general welfare of the institution for the best interest of educational service to the people of the community college district.

C. To the extent that funds are [made] available [by the legislature] from the lottery tuition fund, the community college board shall award lottery tuition scholarships for qualified resident students attending their respective institutions. All other scholarship funds available to the board shall be used before granting any lottery tuition scholarships.

D. The lottery tuition scholarships authorized in this section shall apply only to full-time resident students who, immediately upon completion of a high school curriculum at a public or accredited private New Mexico high school or upon receiving a graduate equivalent diploma, are accepted for entrance to and attend a community college. Each tuition scholarship shall be awarded for up to two consecutive years beginning the second semester of the recipient's first year of enrollment, provided that the recipient has maintained residency in New Mexico and maintained a grade-point average of 2.5 or higher on a 4.0 scale during his first semester of full-time enrollment.

E. The commission on higher education shall prepare guidelines setting forth explicit student continuing eligibility criteria and guidelines for administration of the tuition scholarship program. Guidelines shall be distributed to community college boards to enable a uniform availability of the scholarship."

Section 10. Section 21-13-19 NMSA 1978 (being Laws 1968, Chapter 70, Section 2, as amended) is amended to read:

"21-13-19. ENROLLMENT DEFINED--PAYMENTS--SCHOLARSHIPS.--

A. For those students in community colleges taking college-level courses, full-time-equivalent students shall be defined and computed by the commission on higher education in the same manner in which it defines and computes full-time-equivalent students for all other college-level programs within its jurisdiction.

B. No student shall be included in any calculations made under the provisions of this section if the student is enrolled in a course the cost of which is totally reimbursed from federal, state or private sources. The public school district shall transfer to the community college the tuition and fees for any student who, during the term, is counted in the membership of the public school district and will receive high school credit for coursework at the community college.

C. The commission on higher education shall not recommend an appropriation greater than three hundred twenty-five dollars ($325) for each full-time-equivalent student for any community college that levies a tax at a rate less than two dollars ($2.00), unless a lower amount is required by operation of the rate limitation provisions of Section 7-37-7.1 NMSA 1978 upon a rate of at least two dollars ($2.00) on each one thousand dollars ($1,000) of net taxable value, as that term is defined in the Property Tax Code, or any community college that reduces a previously authorized tax levy, except as required by the operation of the rate limitation provisions of Section 7-37-7.1 NMSA 1978.

D. The commission on higher education shall require from the community college such reports as the commission deems necessary for the purpose of determining the number of full-time-equivalent students at the community college eligible to receive support under this section.

E. A community college board shall establish tuition and fee rates for its respective institutions for full-time, part-time, resident and nonresident students, as defined by the commission on higher education.

F. A community college board may establish and grant gratis scholarships to students who are residents of New Mexico in an amount not to exceed [the matriculation fee or] tuition and fees [or both. Except as provided for lottery scholarships]. These scholarships are in addition to the lottery tuition scholarships authorized in Section 21-13-10 NMSA 1978 and shall be granted to the full extent of available funds before lottery tuition scholarships are granted. The number of gratis scholarships established and granted shall not exceed three percent of the preceding fall semester enrollment in each institution and shall not be established and granted for summer sessions. The president of each institution shall select and recommend to the community college board of his institution, as recipients of scholarships, students who possess good moral character and satisfactory initiative, scholastic standing and personality. At least thirty-three and one-third percent of the gratis scholarships established and granted by each community college board each year shall be granted on the basis of financial need."

Section 11. Section 21-14-5 NMSA 1978 (being Laws 1957, Chapter 143, Section 4, as amended) is amended to read:

"21-14-5. FINANCING OF BRANCH COMMUNITY COLLEGES--TUITION AND FEE [WAIVERS] SCHOLARSHIPS.--

A. Financing of branch community colleges shall be by tuition and fees, which shall be set by the board of regents of the parent institution, by gifts and grants and by other funds as may be made available pursuant to the provisions of the College District Tax Act or Chapter 21, Article 14 NMSA 1978.

B. The board of regents of the respective parent institution of the branch community college may establish and grant gratis scholarships to students of the branch community college who are residents of New Mexico in an amount not to exceed [the matriculation fee or] tuition and fees [or both. Except as provided in Section 21-1-4.3 NMSA 1978]. These scholarships are in addition to the lottery tuition scholarships authorized in Section 21-1-4.3 NMSA 1978 and shall be granted to the full extent of available funds before lottery tuition scholarships are granted. The number of gratis scholarships established and granted shall not exceed three percent of the preceding fall semester enrollment in the branch community college and shall not be established and granted for summer sessions. The president of each institution shall select and recommend to the board of regents of his institution, as recipients of scholarships, students who possess good moral character and satisfactory initiative, scholastic standing and personality. At least thirty-three and one-third percent of the gratis scholarships established and granted by the board of regents for a branch community college each year shall be granted on the basis of financial need."

Section 12. Section 21-16-10 NMSA 1978 (being Laws 1968, Chapter 59, Section 3, as amended) is amended to read:

"21-16-10. APPROPRIATION--DISTRIBUTION--SCHOLARSHIPS.--

A. The commission on higher education shall recommend an appropriation for each technical and vocational institute based upon its financial requirements in relation to its authorized program and its available funds from non-general fund sources; provided, the recommended appropriation shall be an amount not less than three hundred twenty-five dollars ($325) for each full-time-equivalent student.

B. The commission on higher education shall by rule provide for the method for calculating the number of full-time-equivalent students in technical and vocational institutes. No student shall be included in any calculation of the number of full-time-equivalent students if the student is enrolled in a course, the cost of which is totally reimbursed from federal, state or private sources. The public school district shall transfer to the technical and vocational institute the tuition and fees for any student who, during the term, is counted in the membership of the public school district and will receive high school credit for coursework at the technical and vocational institute.

C. The commission on higher education shall not recommend an appropriation greater than three hundred

twenty-five dollars ($325) for each full-time-equivalent student for any technical and vocational institute that levies a tax at a rate less than two dollars ($2.00), unless a lower amount is required by operation of the rate limitation provisions of Section 7-37-7.1 NMSA 1978 upon a rate approved by the electors of at least two dollars ($2.00) on each one thousand dollars ($1,000) of net taxable value, as that term is defined in the Property Tax Code, or any technical and vocational institute that reduces a previously authorized tax levy, except as required by the operation of the rate limitation provisions of Section 7-37-7.1 NMSA 1978.

D. The board may establish and grant gratis scholarships to students who are residents of New Mexico in an amount not to exceed [the matriculation fee or] tuition and fees [or both. Except as provided in Section 21-16-10.1 NMSA 1978]. These scholarships are in addition to the lottery tuition scholarships authorized in Section 21-16-10.1 NMSA 1978 and shall be granted to the full extent of available funds before lottery tuition scholarship are granted. The number of scholarships established and granted shall not exceed three percent of the preceding fall semester enrollment in the technical and vocational institute and shall not be established and granted for summer sessions. The president of the technical and vocational institute shall select and recommend to the board as recipients of scholarships students who possess good moral character and satisfactory initiative, scholastic standing and personality. At least thirty-three and one-third percent of the gratis scholarships established and granted by the board each year shall be granted on the basis of financial need."

Section 13. Section 21-16-10.1 NMSA 1978 (being Laws 1996, Chapter 71, Section 6, as amended) is amended to read:

"21-16-10.1. LOTTERY TUITION SCHOLARSHIPS AUTHORIZED.--

A. To the extent that funds are [made] available [by the legislature] from the lottery tuition fund, the board of a technical and vocational institute shall award lottery tuition scholarships for qualified resident students attending a technical and vocational institute. All other scholarship funds available to the board shall be used before granting any lottery tuition scholarships.

B. The lottery tuition scholarships authorized in this section shall apply only to full-time resident students who, immediately upon completion of a high school curriculum at a public or accredited private New Mexico high school or upon receiving a graduate equivalent diploma, are accepted for entrance to and attend a technical and vocational institute. Each lottery tuition scholarship shall be awarded for up to two consecutive years beginning the second semester of the recipient's first year of enrollment, provided that the recipient has maintained residency in New Mexico and maintained a grade-point average of 2.5 or higher on a 4.0 scale during his first semester of full-time enrollment with renewal of an additional two years upon transfer.

C. The commission on higher education shall prepare guidelines setting forth explicit student continuing eligibility criteria and guidelines for administration of the tuition scholarship program. Guidelines shall be distributed to the boards of technical and vocational institutes to enable a uniform availability of the scholarships."

Section 14. Section 60-2E-27 NMSA 1978 (being Laws 1997, Chapter 190, Section 29, as amended) is amended to read:

"60-2E-27. GAMING OPERATOR LICENSEES--SPECIAL CONDITIONS FOR RACETRACKS--NUMBER OF GAMING MACHINES--DAYS AND HOURS OF OPERATIONS.--

A. A racetrack licensed by the state racing commission pursuant to the Horse Racing Act to conduct live horse races or simulcast races may be issued a gaming operator's license to operate gaming machines on its premises where live racing is conducted.

B. A racetrack's gaming operator's license shall automatically become void if:

(1) the racetrack no longer holds an active license to conduct pari-mutuel wagering; or

(2) the racetrack fails to maintain a minimum of three live race days a week with at least nine live races on each race day during its licensed race meet in the 1997 calendar year and in the 1998 and subsequent calendar years, four live race days a week with at least nine live races on each race day during its licensed race meet.

C. [A gaming operator licensee that is a racetrack may have up to three hundred licensed gaming machines, but] The number of gaming machines to be located on the [licensee's] premises of a racetrack that is a gaming operator licensee shall be specified in the [gaming operator's] license. The number of licensed gaming machines authorized for a racetrack that is a gaming operator licensee is based upon the number of live race days held in a calendar year by the licensee as follows:

(1) up to three hundred if seventeen through thirty live race days are held;

(2) up to four hundred fifty if thirty-one through forty-five live race days are held;

(3) up to six hundred if forty-six through sixty live race days are held;

(4) up to seven hundred fifty if sixty-one through seventy-five live race days are held;

(5) up to nine hundred if seventy-six through ninety live race days are held; and

(6) up to one thousand two hundred if ninety-one through three hundred sixty-five live race days are held.

D. Gaming machines on a racetrack gaming operator licensee's premises may be played only on days when the racetrack is either conducting live horse races or simulcasting horse race meets. A gaming operator licensee that is a racetrack shall be permitted to conduct such games on only the aforementioned days for a daily period not to exceed twelve hours at the discretion of such licensee.

E. Alcoholic beverages shall not be sold, served, delivered or consumed in the area restricted pursuant to Subsection F of Section 60-2E-26 NMSA 1978."

Section 15. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.