SB0330

SENATE BILL 330

56th legislature - STATE OF NEW MEXICO - first session, 2023

INTRODUCED BY

Antonio Maestas

AN ACT

RELATING TO EXECUTIVE REORGANIZATION; MOVING THE REGULATION OF HORSE RACING TO THE REGULATION AND LICENSING DEPARTMENT; ABOLISHING THE STATE RACING COMMISSION; PROVIDING FOR THE TRANSFER OF FUNCTIONS, APPROPRIATIONS, MONEY, PERSONNEL, PROPERTY, CONTRACTUAL OBLIGATIONS, STATUTORY REFERENCES AND RULES.

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

SECTION 1. Section 7-1-8.8 NMSA 1978 (being Laws 2019, Chapter 87, Section 2, as amended) is amended to read:

"7-1-8.8. INFORMATION THAT MAY BE REVEALED TO OTHER STATE AND LEGISLATIVE AGENCIES.--An employee of the department may reveal confidential return information to the following agencies; provided that a person who receives the information on behalf of the agency shall be subject to the penalties in Section 7-1-76 NMSA 1978 if the person fails to maintain the confidentiality required:

A. a committee of the legislature for a valid legislative purpose, return information concerning any tax or fee imposed pursuant to the Cigarette Tax Act;

B. the attorney general, return information acquired pursuant to the Cigarette Tax Act for purposes of Section 6-4-13 NMSA 1978 and the master settlement agreement defined in Section 6-4-12 NMSA 1978;

C. the commissioner of public lands, return information for use in auditing that pertains to rentals, royalties, fees and other payments due the state under land sale, land lease or other land use contracts;

D. the secretary of human services or the secretary's delegate under a written agreement with the department:

(1) the last known address with date of all names certified to the department as being absent parents of children receiving public financial assistance, but only for the purpose of enforcing the support liability of the absent parents by the child support enforcement division or any successor organizational unit;

(2) return information needed for reports required to be made to the federal government concerning the use of federal funds for low-income working families;

(3) return information of low-income taxpayers for the limited purpose of outreach to those taxpayers; provided that the human services department shall pay the department for expenses incurred by the department to derive the information requested by the human services department if the information requested is not readily available in reports for which the department's information systems are programmed;

(4) return information required to administer the Health Care Quality Surcharge Act; and

(5) return information in accordance with the provisions of the Easy Enrollment Act;

E. the department of information technology, by electronic media, a database updated quarterly that contains the names, addresses, county of address and taxpayer identification numbers of New Mexico personal income tax filers, but only for the purpose of producing the random jury list for the selection of petit or grand jurors for the state courts pursuant to Section 38-5-3 NMSA 1978;

F. the state courts, the random jury lists produced by the department of information technology under Subsection E of this section;

G. the director of the New Mexico department of agriculture or the director's authorized representative, upon request of the director or representative, the names and addresses of all gasoline or special fuel distributors, wholesalers and retailers;

H. the public regulation commission, return information with respect to the Corporate Income and Franchise Tax Act required to enable the commission to carry out its duties;

I. the [state racing commission] regulation and licensing department, return information with respect to the state, municipal and county gross receipts taxes paid by racetracks;

J. the gaming control board, tax returns of license applicants and their affiliates as provided in Subsection E of Section 60-2E-14 NMSA 1978;

K. the director of the workers' compensation administration or to the director's representatives authorized for this purpose, return information to facilitate the identification of taxpayers that are delinquent or noncompliant in payment of fees required by Section 52-1-9.1 or 52-5-19 NMSA 1978;

L. the secretary of workforce solutions or the secretary's delegate, return information for use in enforcement of unemployment insurance collections pursuant to the terms of a written reciprocal agreement entered into by the department with the secretary of workforce solutions for exchange of information;

M. the New Mexico finance authority, information with respect to the amount of municipal and county gross receipts taxes collected by municipalities and counties pursuant to any local option municipal or county gross receipts taxes imposed, and information with respect to the amount of governmental gross receipts taxes paid by every agency, institution, instrumentality or political subdivision of the state pursuant to Section 7-9-4.3 NMSA 1978;

N. the superintendent of insurance, return information with respect to the premium tax and the health insurance premium surtax;

O. the secretary of finance and administration or the secretary's designee, return information concerning a credit pursuant to the Film Production Tax Credit Act;

P. the secretary of economic development or the secretary's designee, return information concerning a credit pursuant to the Film Production Tax Credit Act;

Q. the secretary of public safety or the secretary's designee, return information concerning the Weight Distance Tax Act;

R. the secretary of transportation or the secretary's designee, return information concerning the Weight Distance Tax Act;

S. the secretary of energy, minerals and natural resources or the secretary's designee, return information concerning tax credits or deductions for which eligibility is certified or otherwise determined by the secretary or the secretary's designee; and

T. the secretary of environment or the secretary's designee, return information concerning tax credits for which eligibility is certified or otherwise determined by the secretary or the secretary's designee."

SECTION 2. Section 7-9-40 NMSA 1978 (being Laws 1970, Chapter 60, Section 2, as amended) is amended to read:

"7-9-40. EXEMPTION--GROSS RECEIPTS TAX--PURSES AND JOCKEY REMUNERATION AT NEW MEXICO RACETRACKS--RECEIPTS FROM GROSS AMOUNTS WAGERED.--

A. Exempted from the gross receipts tax are the receipts of horsemen, jockeys and trainers from race purses at New Mexico horse racetracks subject to the jurisdiction of the [state racing commission] regulation and licensing department.

B. Exempted from the gross receipts tax are the receipts of a racetrack from the commissions and other amounts authorized by Section [60-1-10] 60-1A-19 NMSA 1978 to be retained by a racetrack conducting horse races under the authority of a license from the [state racing commission] regulation and licensing department."

SECTION 3. Section 60-1A-2 NMSA 1978 (being Laws 2007, Chapter 39, Section 2) is amended to read:

"60-1A-2. DEFINITIONS.--As used in the Horse Racing Act:

A. "board" means the gaming control board;

B. "breakage" means the odd cents by which the amount payable on each dollar wagered exceeds a multiple of ten;

C. "department" or "commission" means the [state racing commission] regulation and licensing department;

D. "exotic wagering" means all wagering other than on win, place or show, through pari-mutuel wagering;

E. "export" means to send a live audiovisual broadcast of a horse race in the process of being run at a horse racetrack from the originating horse racetrack to another location;

F. "guest state" means a jurisdiction, other than the jurisdiction in which a horse race is run, in which a horse racetrack, off-track wagering facility or other facility that is a member of and subject to an interstate common pool is located;

G. "guest track" means a horse racetrack, off-track wagering facility or other licensed facility in a location other than the state in which a horse race is run that is a member of and subject to an interstate common pool;

H. "handle" means the total of all pari-mutuel wagering sales, excluding refunds and cancellations;

I. "horse race" means a competition among racehorses on a predetermined course in which the horse completing the course in the least amount of time generally wins;

J. "host state" means the jurisdiction within which a sending track is located, also known as a "sending state";

K. "host track" means the horse racetrack from which a horse race subject to an interstate common pool is transmitted to members of that interstate common pool, also known as a "sending track";

L. "import" means to receive a live audiovisual broadcast of a horse race;

M. "interstate common pool" means a pari-mutuel pool that combines comparable pari-mutuel pools from one or more locations that accept wagers on a horse race run at a sending track for purposes of establishing payoff prices at the pool members' locations, including pools in which pool members from more than one state simultaneously combine pari-mutuel pools to form an interstate common pool;

N. "jockey club" means an organization that administers thoroughbred registration records and registers thoroughbreds;

O. "licensed premises" means land, together with all buildings, other improvements and personal property located on the land, that is under the direct control of a racetrack licensee, including the restricted areas, grandstand and public parking areas;

P. "licensee" means a person licensed by the [commission] department and includes a holder of an occupational, secondary or racetrack license;

Q. "occupational license" means a license issued by the [commission] department to a vendor or to a person having access to a restricted area on the licensed premises, including a horse owner, trainer, jockey, agent, apprentice, groom, exercise person, veterinarian, valet, farrier, starter, clocker, racing secretary, pari-mutuel clerk and other personnel designated by the [commission] department whose work, in whole or in part, is conducted around racehorses or pari-mutuel betting windows;

R. "pari-mutuel wagering" means a system of wagering in which bets on a live or simulcast horse race are pooled and held by the racetrack licensee for distribution of the total amount, less the deductions authorized by law, to holders of winning tickets; "pari-mutuel wagering" does not include bookmaking or pool selling;

S. "pari-mutuel wagering pool" means the money wagered on a specific horse race through pari-mutuel wagering;

T. "practical breeder" means a person who has practical experience in breeding horses, although the person may not be actively involved in breeding horses;

U. "primary residence" means the domicile where a person resides for most of the year, and, if the person is temporarily out of state, the address where a person will return when the person returns to New Mexico or the address that a person uses for purposes of a driver's license, passport or voting;

V. "quarter horse" means a racehorse that is registered with the American quarter horse association or any successor association;

W. "race meet" means a period of time within dates specified by the [commission] department in which a racetrack licensee is authorized to conduct live racing on the racing grounds;

X. "racehorse" means a quarter horse or thoroughbred that is bred and trained to compete in horse races;

Y. "racetrack license" means a license to conduct horse races issued by the [commission] department;

Z. "racetrack licensee" means a person who has been issued a racetrack license;

AA. "racing grounds" means the area of the restricted area of licensed premises used for the purpose of conducting horse races and all activities ancillary to the conduct of horse races, including the track, stable area, jockey's quarters and horse training areas;

BB. "retainage" means money that is retained from wagers on win, place and show and on exotic wagers by a racetrack licensee pursuant to the Horse Racing Act;

CC. "restricted areas" means the stable area, the area behind the pari-mutuel betting windows and anywhere on the racing grounds;

DD. "secondary licensee" means all officers, directors, shareholders, lenders or holders of evidence of indebtedness of a corporation or legal entity owning a horse racetrack, and all persons holding a direct or indirect interest of any nature whatsoever in the horse racetrack, including interests or positions that deal with the funds of the racetrack or that are administrative, policymaking or supervisory;

EE. "simulcast" means a transmission of a live audiovisual broadcast of a horse race being run at a horse racetrack other than the horse racetrack or other licensed facility at which the broadcast is being received for viewing pursuant to a simulcasting contract;

FF. "stakes race" means a horse race in which nominations or entry or starting fees contribute to the purse; an overnight race is not a stakes race;

GG. "steward" means an employee of the [commission] department who supervises horse races and oversees a race meet while in progress, including holding hearings regarding licensees and enforcing the rules of the [commission] department and the horse racetrack;

HH. "takeout" means amounts authorized by statute to be deducted from the pari-mutuel wagers;

II. "thoroughbred" means a racehorse that is registered with the jockey club;

JJ. "track" means the surfaced oval area on which horse races are conducted; and

KK. "vendor" means a person who provides goods or services to or in the racing grounds or restricted area of the licensed premises of a horse racetrack."

SECTION 4. Section 60-1A-4 NMSA 1978 (being Laws 2007, Chapter 39, Section 4) is amended to read:

"60-1A-4. [COMMISSION] DEPARTMENT--POWERS--DUTIES.--

A. The [commission] department may:

(1) grant, deny, suspend or revoke occupational licenses, secondary licenses and racetrack licenses, establish the terms for each classification of a racetrack license and set fees for submitting an application for a license;

(2) exclude or compel the exclusion of a person from all horse racetracks [who] whom the [commission] department deems detrimental to the best interests of horse racing or who willfully violates the Horse Racing Act, a rule or order of the [commission] department or [a] federal or state law [of the United States or New Mexico];

(3) compel the production of documents, books and tangible items, including documents showing the receipts and disbursements of a racetrack licensee;

(4) investigate the operations of a licensee and place a designated representative of the department on the licensed premises of a racetrack licensee for the purpose of observing compliance with the Horse Racing Act and rules or orders of the [commission] department;

(5) employ staff as required to administer the Horse Racing Act and employ staff with basic law enforcement training to be stationed at racetracks to maintain peace and order, enforce the law, conduct investigations and enforce the Horse Racing Act or rules or orders of the [commission] department; provided that staff employed with law enforcement training may not carry firearms or other deadly weapons while on duty for the [commission] department;

(6) summon witnesses;

(7) administer oaths for the effective discharge of the [commission's] department's authority; and

(8) appoint a hearing officer to conduct hearings required by the Horse Racing Act or a rule adopted pursuant to that act.

B. The [commission] department shall:

(1) make rules to hold, conduct and operate all race meets and horse races held in the state and to identify and assign racing dates;

(2) require the following information for each applicant on an application for a license:

(a) the full name, address and contact information of the applicant, and if the applicant is a corporation, the name of the state of incorporation and the names, addresses and contact information of officers, members of the board of directors and managers of the corporation;

(b) the exact location at which the applicant desires to conduct a horse race or race meet; (c) whether the horse racetrack is owned or leased, and, if leased, the name and residence of the fee owner of the land or, if the owner is a corporation, the names of the directors and stockholders;

(d) a statement of the assets and liabilities of [the person or corporation] persons making the application;

(e) the kind of racing to be conducted; (f) the beginning and ending dates desired for the race meet and the days during that time period when horse races are to be scheduled; and

(g) other information determined by the [commission] department to be necessary to assess the potential for success of the applicant;

(3) require a statement under oath by the applicant that the information on the application is true;

(4) supervise and oversee the making of pari-mutuel pools and the distribution from those pools;

(5) make on-site inspections of horse racetracks in New Mexico at reasonable intervals;

(6) approve all improvements proposed to be completed on the licensed premises of a horse racetrack, including extensions, additions or improvements of buildings, stables or tracks;

(7) monitor and oversee the pari-mutuel machines and equipment at all horse races or race meets held in the state;

(8) approve contracts for simulcasting, pari-mutuel wagering and capital improvements funded pursuant to Section 60-1A-20 NMSA 1978 entered into by horse racetracks;

(9) regulate the size of the purses to be offered at horse races run in the state;

(10) require background investigations of employees of a racetrack licensee as set forth in the rules of the [commission] department; and

(11) provide an annual report to the governor regarding the [commission's] department's administration of horse racing in the state."

SECTION 5. Section 60-1A-5 NMSA 1978 (being Laws 2007, Chapter 39, Section 5, as amended) is amended to read:

"60-1A-5. [COMMISSION] DEPARTMENT RULES--ALL LICENSES--SUSPENSION, REVOCATION OR DENIAL OF LICENSES--PENALTIES.--

A. The [commission] department shall adopt rules to implement the Horse Racing Act and to ensure that horse racing in New Mexico is conducted with fairness and that the participants and patrons are protected against illegal practices.

B. Every license issued by the [commission] department shall require the licensee to comply with the rules adopted by the [commission] department. A racetrack licensee shall post printed copies of the rules in conspicuous places on the racing grounds and shall maintain them during the period when live horse races are being conducted.

C. The [commission] department may suspend, revoke or deny renewal of a license of a person who violates the provisions of the Horse Racing Act or rules adopted pursuant to that act. The [commission] department shall provide a licensee facing suspension, revocation or denial of renewal of a license reasonable notice and an opportunity for a hearing. The suspension, revocation or denial of renewal of a license shall not relieve the licensee from prosecution for the violations or from the payment of fines and penalties assessed the licensee by the [commission] department.

D. The [commission] department may impose civil penalty fines upon a licensee for a violation of the provisions of the Horse Racing Act or rules adopted by the [commission] department. The fines shall not exceed one hundred thousand dollars ($100,000) or one hundred percent of a purse related to the violation, whichever is greater, for each violation.

E. Fines shall be paid into the current school fund.

F. When a penalty is imposed pursuant to this section for administering a performance-altering substance as provided in Subsection A of Section 60-1A-28 NMSA 1978, the [commission] department shall direct its [executive director] staff to report the violation to the district attorney for the county in which the violation occurred and to the horse racing licensing authority in any other jurisdiction in which the licensee being penalized is also licensed."

SECTION 6. Section 60-1A-6 NMSA 1978 (being Laws 2007, Chapter 39, Section 6) is amended to read:

"60-1A-6. CLASSIFICATION OF RACETRACK LICENSES.--

A. A license to conduct a race meet in New Mexico shall be classified as either a class A or class B license, determined by the [commission] department as follows:

(1) a class A racetrack license shall be issued to a racetrack licensee who received from all race meets in the preceding calendar year a gross amount wagered through the pari-mutuel system of ten million dollars ($10,000,000) or more; and

(2) a class B racetrack license shall be issued to a racetrack licensee who received from all race meets in the preceding calendar year a gross amount wagered through the pari-mutuel system of less than ten million dollars ($10,000,000).

B. A new racetrack license to conduct a race meet in New Mexico shall be given a classification by the [commission] department based on an estimate of the anticipated gross amounts projected to be received by the new racetrack licensee from all pari-mutuel wagering in the racetrack licensee's first full calendar year of racing. After the racetrack licensee's first full calendar year of racing, the [commission] department shall review the classification and change it if necessary.

C. Each class of license is subject to all provisions of the Horse Racing Act, except as otherwise provided in that act. The [commission] department shall adopt and promulgate rules necessary to provide for license classification."

SECTION 7. Section 60-1A-7 NMSA 1978 (being Laws 2007, Chapter 39, Section 7, as amended) is amended to read:

"60-1A-7. ALL LICENSE APPLICATIONS--BACKGROUND INVESTIGATIONS--RULES.--

A. A person applying for a license pursuant to the Horse Racing Act shall submit to a background investigation to be conducted by the board. The [commission] department and the board shall adopt rules to coordinate the manner in which the background investigations are conducted. The rules shall at minimum require that:

(1) an applicant for a license shall submit two fingerprint cards to the [commission] department, with one card to be submitted to the board for a statewide check and the other card to be submitted to the federal bureau of investigation for a nationwide check;

(2) arrest record information from a law enforcement agency or the federal bureau of investigation and information obtained as a result of the background investigation conducted by the board is privileged and shall not be disclosed to persons not directly involved in the decision affecting the specific applicant;

(3) an applicant shall provide all of the information required by the [commission] department; and

(4) the cost of the background investigation shall be paid by the applicant.

B. An applicant for a license who is denied the license by the [commission] department shall have an opportunity to inspect and challenge the validity of the record on which the denial of the license was based."

SECTION 8. Section 60-1A-8 NMSA 1978 (being Laws 2007, Chapter 39, Section 8) is amended to read:

"60-1A-8. RACETRACK LICENSES--APPLICATIONS--SPECIFIC REQUIREMENTS.--

A. It is a violation of the Horse Racing Act for a person to hold a public horse race or a race meet for profit or gain in any manner unless the person has been issued a racetrack license by the [commission] department and has been authorized by the [commission] department to hold the horse race or race meet on specific dates.

B. An application for a racetrack license shall be submitted in writing on forms designated by the [commission] department. An applicant shall affirm that information contained in the application is true and accurate. The application shall be signed by the applicant or the applicant's agent, and the signature shall be notarized.

C. A racetrack license shall be valid for a period not to exceed one year. The [commission] department may renew a racetrack license upon expiration of the term of the license.

D. Renewal applications for racetrack licenses shall be filed no later than June 1 of each year. The race dates for the upcoming year shall be set by the [commission] department after the [commission] department receives all renewal applications.

E. An application shall specify the dates and days of the week of the race meet that the applicant is requesting the [commission] department to approve.

F. An application shall be filed not less than sixty days prior to the first day the proposed horse race or race meet is to be held.

G. The fee for a new racetrack license issued pursuant to this section shall not exceed five thousand dollars ($5,000).

H. The [commission] department may schedule a date for a hearing on the application for a new racetrack license to determine the eligibility of the applicant pursuant to the Horse Racing Act or as needed for determining the eligibility for the renewal of a racetrack license. The applicant shall be notified of the hearing at least five days prior to the date of the hearing. The applicant has the right to present testimony in support of the application. Notice shall be mailed to the address of the applicant appearing upon the application for the racetrack license. Notice of the hearing date, time and location shall be postmarked by United States mail five days prior to the date of the hearing. Deposit of the hearing notice in United States mail constitutes notice.

I. If, after a hearing on the application, the [commission] department finds the applicant ineligible pursuant to the provisions of the Horse Racing Act or rules adopted by the department or rules adopted by the board concerning gaming, the racetrack license shall be denied.

J. If there is more than one application for a racetrack license pending at the same time, the [commission] department shall determine the racing days that will be allotted to each successful applicant. Upon renewal, the [commission] department shall determine the racing days that will be allotted to each applicant upon terms and conditions established by the [commission] department.

K. A person shall not have a direct, indirect or beneficial interest of any nature, whether or not financial, administrative, policymaking or supervisory, in more than two horse racetracks in New Mexico. For purposes of this subsection, a person shall not be considered to have a direct, indirect or beneficial interest in a horse racetrack if the person owns or holds less than ten percent of the total authorized, issued and outstanding shares of a corporation that is licensed to conduct a race meet in New Mexico, unless the person has some other direct, indirect or beneficial interest of any nature, whether or not financial, administrative, policymaking or supervisory, in more than two licensed horse racetracks.

L. To determine interest held in a racetrack, to the extent that the interest is based on stock ownership:

(1) stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust shall be considered as being owned proportionately by its shareholders, partners or beneficiaries;

(2) an individual shall be considered as owning the stock, directly or indirectly, if it is held by an immediate family member. For purposes of this paragraph, an "immediate family member" includes only the individual's siblings, spouse or children; and

(3) stock constructively owned by a person by reason of the application of Paragraph (1) of this subsection shall be considered to be actually owned by the person; and stock shall be constructively owned by an individual by reason of the application of Paragraph (2) of this subsection if the purpose of the constructive ownership is to make a person other than the individual applicant appear as the owner of the stock.

M. A corporation holding a racetrack license shall not issue to a person shares of its stock amounting to ten percent or more of the total authorized, issued and outstanding shares, and a corporation holding a racetrack license shall not issue shares of its stock that would, when combined with that stock transferee's existing shares owned, total more than ten percent of the total authorized, issued and outstanding shares of the corporation, unless:

(1) the corporation gives written notice to the [commission] department at least sixty days before the contemplated stock transfer that the person to whom the stock is being transferred will become an owner of ten percent or more of the total authorized, issued and outstanding shares of the corporation; and

(2) the corporation receives written approval from the [commission] department of the proposed transfer.

N. A determination made by the [commission] department of a matter pursuant to this section shall be final and not subject to appeal."

SECTION 9. Section 60-1A-9 NMSA 1978 (being Laws 2007, Chapter 39, Section 9) is amended to read:

"60-1A-9. SECONDARY LICENSES--APPLICATIONS--SPECIFIC REQUIREMENTS.--

A. A person who is actively and directly engaged in the administration of a horse racetrack, whether in a financial, administrative, policymaking or supervisory capacity, shall hold a secondary license issued by the [commission] department.

B. An application for a secondary license shall be submitted in writing on forms designated by the [commission] department. An applicant shall affirm that information contained in the application is true and accurate. The application shall be signed by the applicant or the applicant's agent, and the signature shall be notarized.

C. If an applicant for a racetrack license is a corporation, all officers, directors, lenders or holders of evidence of indebtedness of the corporation and all persons who participate in any manner in a financial, administrative, policymaking or supervisory capacity are required to hold a secondary license issued by the [commission] department.

D. A person who owns or holds, directly, indirectly or beneficially, ten percent or more of the total authorized, issued and outstanding shares of a corporation that is a racetrack licensee is required to hold a secondary license issued by the [commission] department. If the [commission] department finds that a person who owns or holds, directly, indirectly or beneficially, ten percent or more of the total authorized, issued and outstanding shares of a corporation that is a racetrack licensee is unqualified to be issued a secondary license, the [commission] department shall give notice of its finding to the corporation and to the person owning or holding the interest. The ineligible person shall without delay offer the shares to the corporation for purchase. If the corporation does not elect to purchase the shares, the person owning or holding the interest may offer the interest to other purchasers, subject to prior approval of the purchasers by the [commission] department.

E. A secondary license shall be valid for a period not to exceed three years. The [commission] department may renew a secondary license upon expiration of the term of the license.

F. The fee for a secondary license issued pursuant to this section shall not exceed five hundred dollars ($500)."

SECTION 10. Section 60-1A-10 NMSA 1978 (being Laws 2007, Chapter 39, Section 10) is amended to read:

"60-1A-10. OCCUPATIONAL LICENSES--APPLICATION--SPECIFIC REQUIREMENTS.--

A. A person required by the Horse Racing Act to have an occupational license shall apply for and may be issued an occupational license by the [commission] department.

B. An application for an occupational license shall be submitted in writing on forms designated by the [commission] department. An applicant shall affirm that information contained in the application is true and accurate. The application shall be signed by the applicant or the applicant's agent.

C. An occupational license shall be valid for a period not to exceed five years. The [commission] department may renew an occupational license upon expiration of the term of the license.

D. The fee for an occupational license issued pursuant to this section shall not exceed one hundred dollars ($100)."

SECTION 11. Section 60-1A-11 NMSA 1978 (being Laws 2007, Chapter 39, Section 11, as amended by Laws 2017, Chapter 28, Section 1 and by Laws 2017, Chapter 145, Section 1) is amended to read:

"60-1A-11. GRANTING A LICENSE--STANDARDS--DENIAL AND REVOCATION--SUSPENSION AND PENALTIES.--

A. A license shall not be issued or renewed unless the applicant has satisfied the [commission] department that the applicant:

(1) is of good moral character, is honest and has integrity;

(2) does not currently have a license suspended by a horse racing licensing authority in another jurisdiction;

(3) does not have any prior activities, criminal record, reputation, habits or associations that:

(a) pose a threat to the public interest;

(b) pose a threat to the effective regulation and control of horse racing; or

(c) create or enhance the dangers of unsuitable, unfair or illegal practices, methods and activities in the conduct of horse racing, the business of operating a horse racetrack licensed pursuant to the Horse Racing Act or the financial activities incidental to operating a horse racetrack;

(4) is qualified to be licensed consistent with the Horse Racing Act;

(5) has sufficient business probity, competence and experience in horse racing as determined by the [commission] department;

(6) has proposed financing that is sufficient for the nature of the license and from a suitable source that meets the criteria set forth in this subsection; and

(7) is sufficiently capitalized pursuant to standards set by the [commission] department to conduct the business covered by the license.

B. The [commission] department shall establish by rule additional qualifications for a licensee as it deems in the public interest.

C. A person issued or applying for an occupational license who has positive test results for a controlled substance or who has been convicted of a violation of a [federal or] state controlled substance law shall be denied a license or shall be subject to revocation of an existing license unless sufficient evidence of rehabilitation is presented to the [commission] department.

D. The [commission] department may deny or revoke an occupational license if the applicant or occupational licensee, for the purpose of stimulating or depressing a racehorse or affecting its speed or stamina during a race or workout, is found to have administered, attempted to administer or conspired to administer to a racehorse, internally, externally or by injection, a drug, chemical, stimulant or depressant, or other prohibited substance as defined by the association of racing commissioners international, incorporated, or a successor organization or, if none, by another nationally recognized organization that has published substantially similar guidelines that are generally accepted in the horse racing industry as determined by the [commission] department.

E. In addition to its authority to deny or revoke an occupational license for the conduct described in Subsection D of this section, the [commission] department may suspend a license and impose fines on a licensee. For suspensions and fines, the [commission] department shall adopt as its own rules the model rules for the imposition of penalties for the use of prohibited substances published by the association of racing commissioners international, incorporated, or a successor organization or, if none, by another nationally recognized organization that has published substantially similar rules that are generally accepted in the horse racing industry as determined by the [commission] department.

F. The [commission] department shall revoke for a period not to exceed five years an occupational license if the occupational licensee used, attempted to use or conspired with others to use an electrical or mechanical device, implement or instrument for the purpose of affecting the speed or stamina of a racehorse.

G. The burden of proving the qualifications of an applicant or licensee to be issued a license or have a license renewed shall be on the applicant or licensee."

SECTION 12. Section 60-1A-12 NMSA 1978 (being Laws 2007, Chapter 39, Section 12) is amended to read:

"60-1A-12. STEWARDS--POWERS--DUTIES.--There shall be three stewards, licensed and employed by the [commission] department, to supervise each horse race meet. One of the stewards shall be designated the presiding official steward of the race meet. Stewards, other than the presiding official steward, shall be employed subject to the approval of the racetrack licensee. All stewards shall be licensed or certified by a nationally recognized horse racing organization. Stewards shall exercise those powers and duties prescribed by [commission] department rules. A decision or action of a steward may be reviewed or reconsidered by the [commission] department."

SECTION 13. Section 60-1A-13 NMSA 1978 (being Laws 2007, Chapter 39, Section 13, as amended by Laws 2017, Chapter 28, Section 2 and by Laws 2017, Chapter 145, Section 2) is amended to read:

"60-1A-13. EQUINE HEALTH AND TESTING ADVISOR-- QUALIFICATIONS--DUTIES.--The [commission] department shall hire or contract with an equine health and testing advisor. An equine health and testing advisor shall be a doctor of veterinary medicine or shall hold a doctorate degree in chemistry or a related field and shall be knowledgeable and experienced in the techniques used for testing the specimens collected pursuant to Section 60-1A-14 NMSA 1978. The equine health and testing advisor shall exercise the duties prescribed by rules of the [commission] department."

SECTION 14. Section 60-1A-14 NMSA 1978 (being Laws 2007, Chapter 39, Section 14, as amended by Laws 2017, Chapter 28, Section 3 and by Laws 2017, Chapter 145, Section 3) is amended to read:

"60-1A-14. TESTING SPECIMENS.--

A. The [commission] department shall adopt rules applying to the handling of pre- and post-race, out-of-competition and necropsy testing of blood serum plasma, urine or other appropriate test samples identified by the [commission] department to be taken from racehorses, following guidelines that meet or exceed the standards established in model rules published by the association of racing commissioners international, incorporated, or a successor organization or, if none, by another nationally recognized organization that has published substantially similar guidelines that are generally accepted in the horse racing industry as determined by the [commission] department.

B. Each specimen taken from a racehorse shall be divided into two or more samples, and:

(1) one sample, designated as the "official sample", shall be tested by the [commission] department or its designated laboratory in order to detect the presence of unauthorized drugs, chemicals, stimulants, depressants or other prohibited substances as defined in guidelines published by the association of racing commissioners international, incorporated, or a successor organization or, if none, by another nationally recognized organization that has published substantially similar guidelines that are generally accepted in the horse racing industry as determined by the [commission] department; and

(2) the remaining samples, each designated as a "split sample", may be forwarded by the [commission] department to the scientific laboratory division of the department of health or maintained by the [commission] department in a manner that meets or exceeds the guidelines identified in Paragraph (1) of this subsection.

C. After a positive test result on the official sample tested by the [commission] department or its designated laboratory and upon a written request from the president, executive director or manager of the New Mexico horsemen's association on forms designated by the [commission] department, a corresponding split sample shall be transferred to an independent laboratory in a manner prescribed by [commission] department rule.

D. All samples shall be kept in a controlled environment for a period of time specified by the [commission] department in each case.

E. The [commission] department shall contract with an independent laboratory to maintain a quality assurance program. The laboratory shall meet or exceed the current national laboratory standards for the testing of drugs or other foreign substances in a horse, as established by the association of racing commissioners international, incorporated, or of a successor organization or, if none, of another nationally recognized organization that has published substantially similar guidelines that are generally accepted in the horse racing industry."

SECTION 15. Section 60-1A-14.1 NMSA 1978 (being Laws 2013, Chapter 102, Section 1, as amended by Laws 2017, Chapter 28, Section 4 and by Laws 2017, Chapter 145, Section 4) is amended to read:

"60-1A-14.1. RACEHORSE TESTING FUND--CREATED--PURPOSE.-- The "racehorse testing fund" is created in the state treasury. The purpose of the fund is to ensure the testing of racehorses at a laboratory that meets or exceeds the current national laboratory standards for the testing of drugs or other foreign substances not naturally occurring in a horse, as established by the association of racing commissioners international, incorporated, or of a successor organization or, if none, of another nationally recognized organization that has published substantially similar guidelines that are generally accepted in the horse racing industry. The fund consists of one-half of the daily capital outlay tax appropriated and transferred pursuant to Paragraph (4) of Subsection A of Section 60-1A-20 NMSA 1978 and appropriations, gifts, grants and donations made to the fund. Income from investment of the fund shall be credited to the fund. The [commission] department shall administer the racehorse testing fund, and money in the fund is appropriated to the [commission] department for the handling of pre- and post-race, out-of-competition and necropsy testing of blood serum plasma, urine or other appropriate test samples taken from racehorses pursuant to Section 60-1A-14 NMSA 1978 and to compensate the equine health and testing advisor employed or selected pursuant to Section 60-1A-13 NMSA 1978. Any unexpended or unencumbered balance remaining in the racehorse testing fund at the end of a fiscal year in excess of six hundred thousand dollars ($600,000) shall revert to the general fund. Expenditures from the fund shall be made on warrant of the secretary of finance and administration pursuant to vouchers signed by the [executive director of the commission] superintendent of regulation and licensing or the superintendent's authorized representative."

SECTION 16. Section 60-1A-16 NMSA 1978 (being Laws 2007, Chapter 39, Section 16) is amended to read:

"60-1A-16. SIMULCASTING.--

A. All simulcasting of horse races shall have prior approval of the [commission] department, and the [commission] department shall adopt rules concerning the simulcasting of horse races as provided in this section.

B. A racetrack licensee shall not be allowed to simulcast horse races unless that racetrack licensee offers at least seventeen days per year of pari-mutuel wagering on live horse races run on the premises of the racetrack licensee.

C. The [commission] department may permit exporting of a horse race being run by a racetrack licensee to another racetrack licensee within New Mexico or exporting of a horse race from a racetrack licensee to another location holding a pari-mutuel or gaming license that allows simulcasting of a horse race from outside of the state or jurisdiction that licenses that out-of-state facility.

D. The [commission] department may permit importing by a racetrack licensee of horse races that are being run at racetracks outside of the state licensed by a host state.

E. Pari-mutuel wagering on simulcast horse races shall be prohibited except on the licensed premises of a racetrack licensee during the licensee's race meet at the horse racetrack or when the racetrack licensee is importing a race meet from another New Mexico-licensed horse racetrack.

F. A New Mexico-licensed horse racetrack that is within a radius of eighty miles of any other New Mexico- licensed horse racetrack with a race meet in progress may only conduct pari-mutuel wagering on imported horse races if there is a written agreement between the two racetrack licensees allowing pari-mutuel wagering on imported horse races during the period of time that the live horse races are taking place."

SECTION 17. Section 60-1A-17 NMSA 1978 (being Laws 2007, Chapter 39, Section 17) is amended to read:

"60-1A-17. INTERSTATE COMMON POOL WAGERING--AUTHORIZED.--

A. Subject to the federal Interstate Horseracing Act of 1978, the [commission] department may permit a racetrack licensee to participate in interstate common pools. All provisions of the Horse Racing Act that govern pari-mutuel wagering apply to pari-mutuel wagering in interstate common pools except as otherwise provided in this section.

B. Daily pari-mutuel tax and daily capital outlay tax shall not be imposed upon amounts wagered in an interstate common pool other than upon amounts wagered within New Mexico.

C. Subject to prior approval of the [commission] department, the following provisions apply when a racetrack licensee participates in interstate common pools on a horse race that originates outside of New Mexico:

(1) a racetrack licensee may combine its pari-mutuel pools at the host track and other locations. The types of wagering, takeout, distribution of winnings and rules of racing in effect for pari-mutuel pools at the host track shall govern wagers placed in New Mexico and merged into the interstate common pool. Breakage for interstate common pools shall be calculated in accordance with the rules governing the host track and shall be distributed in a manner agreed upon by the racetrack licensee in New Mexico and the host track;

(2) with the concurrence of the host track, an interstate common pool that excludes the host track may be formed with the racetrack licensee in New Mexico and other locations outside of the host state. When an interstate common pool is formed pursuant to this paragraph, the [commission] department may approve types of wagering, takeout, distribution of winnings, rules of racing and calculation of breakage that are different from those that are in effect in New Mexico; provided that the rules are applied consistently to all persons in the interstate common pool;

(3) the racetrack licensee may deduct from retainage resulting from an interstate common pool a reasonable fee to be paid to the person conducting the horse race at the host track for the privilege of conducting pari-mutuel wagering on the race and participating in the interstate common pool and for payment of costs incurred to transmit the simulcast horse race; and

(4) provisions of New Mexico law or contracts governing the distribution of daily pari-mutuel tax and daily capital outlay tax and breeders' or other awards and purses from the takeout from wagers placed in New Mexico shall remain in effect for wagers placed in an interstate common pool; provided that if the [commission] department approves an adjustment in the takeout rate, the distribution of the takeout within New Mexico shall be adjusted proportionately to reflect the adjustment in the takeout rate; and provided further that with the concurrence of the racetrack licensee and the organization representing a majority of the breeders, horsemen or other persons entitled to shares of the distribution and subject to approval of the [commission] department, the respective shares to breeders' or other awards or purses may be modified.

D. Subject to prior approval of the [commission] department, the following provisions apply when a racetrack licensee in New Mexico participates in interstate common pools as a host track:

(1) a racetrack licensee may permit one or more of its horse races to be used for pari-mutuel wagering at, and may export a horse race to, one or more licensed sites outside of New Mexico. The racetrack licensee may also permit pari-mutuel pools in other locations to be combined with the racetrack licensee's comparable pari-mutuel wagering pools or with wagering pools established in other jurisdictions. The [commission] department may modify its rules and adopt separate rules for the interstate common pools and their calculation of breakage; and

(2) except as otherwise provided in this section, New Mexico law or contracts governing the distribution of shares of the takeout for daily pari-mutuel tax or daily capital outlay tax and breeders' or other awards and purses shall remain in effect for amounts wagered within New Mexico in interstate common pools; provided that with the concurrence of the racetrack licensee of the host track and the organization representing a majority of the breeders, horsemen or other persons entitled to shares of the distribution, and subject to approval of the [commission] department, the respective shares to breeders' or other awards or purses may be modified.

E. When the laws and rules of the host state and guest states permit, an interstate common pool may be established on a regional or other basis between two or more guest states and not include a merger into the host state's pari-mutuel wagering pool, in which case, one of the guest state's tracks shall serve as if it were the host track for the purposes of calculating the pari-mutuel wagering pool. An interstate common pool may include members located outside of the United States. Except as otherwise set forth in [commission] department rules, participation by a person in an interstate common pool with wagering facilities in one or more states or jurisdictions shall not cause the participating person to be deemed to be doing business in a jurisdiction other than the jurisdiction in which that person is physically located.

F. The [commission] department may adopt rules necessary to implement this section."

SECTION 18. Section 60-1A-19 NMSA 1978 (being Laws 2007, Chapter 39, Section 19) is amended to read:

"60-1A-19. RETAINAGE--NEW MEXICO HORSE BREEDERS' ASSOCIATION AND NEW MEXICO HORSEMEN'S ASSOCIATION--BREAKAGE--DISTRIBUTION OF RETAINED AMOUNTS.--

A. Each racetrack licensee shall notify the [commission] department at least thirty days prior to each race meet of the amount of exotic wager retainage that the racetrack licensee will retain pursuant to Paragraph (1) or (2) of this subsection. There shall be an amount retained by the racetrack licensee equal to:

(1) for a class A racetrack licensee:

(a) nineteen percent of the gross amount wagered on win, place and show, of which: 1) eighteen and three-fourths percent shall be retained by the racetrack licensee; and 2) one-fourth percent shall be remitted to the taxation and revenue department for deposit in the general fund; and

(b) not less than twenty-one percent and not greater than twenty-five percent of the gross amount wagered in exotic wagers; and

(2) for a class B racetrack licensee:

(a) not less than eighteen and three-fourths percent and not greater than twenty-five percent of the gross amount wagered daily on win, place and show; and

(b) not less than twenty-one percent and not greater than thirty percent of the gross amount wagered in exotic wagers.

B. There shall be retained by a racetrack licensee for allocation to the New Mexico horse breeders' association amounts equal to:

(1) five-eighths percent of the gross amount wagered on win, place and show to be allocated weekly to the New Mexico horse breeders' association for further distribution pursuant to the provisions of Subsection D of Section 60-1A-24 NMSA 1978; and

(2) one and three-eighths percent of the gross amount wagered in exotic wagers to be allocated weekly to the New Mexico horse breeders' association for further distribution pursuant to the provisions of Subsection D of Section 60-1A-24 NMSA 1978.

C. The breakage from the gross amount wagered through pari-mutuel wagering shall be retained by the licensee and allocated as follows:

(1) fifty percent of the total breakage shall be retained by the racetrack licensee; and

(2) fifty percent of the total breakage shall be allocated by the racetrack licensee to enhance the race purses of established stakes races that include only New Mexico-bred horses that are registered with the New Mexico horse breeders' association. The New Mexico horse breeders' association shall distribute the percentage designated to purses pursuant to Subsection D of Section [60-1-24] 60-1A-24 NMSA 1978, subject to the approval of the [commission] department.

D. All money resulting from the failure of patrons who purchased winning pari-mutuel tickets during a race meet to redeem their winning tickets before the end of the sixty-day period immediately succeeding the closing day of the race meet or from all money resulting from the failure of patrons who purchased pari-mutuel tickets that were entitled to a refund but were not refunded by the end of the sixty-day period immediately following the race meet shall be apportioned as follows:

(1) thirty-three and thirty-three hundredths percent shall be retained by the racetrack licensee;

(2) thirty-three and thirty-four hundredths percent shall be distributed to the New Mexico horse breeders' association to enhance each racetrack licensee's established overnight purses for races that include only horses registered as New Mexico bred pursuant to Paragraph (3) of Subsection D of Section 60-1A-24 NMSA 1978, subject to the approval of the [commission] department; and

(3) thirty-three and thirty-three hundredths percent shall be allocated to the New Mexico horsemen's association for purses.

E. One-half percent of the gross amount wagered on simulcast horse races broadcast to a horse racetrack in New Mexico shall be distributed by the racetrack licensee to the New Mexico horsemen's association for medical benefits for the members of the New Mexico horsemen's association. The [commission] department shall by rule provide for the timing and manner of the distribution required pursuant to this subsection and shall audit or arrange for an independent audit of the distributions required.

F. Amounts to be deducted from the retainage by the racetrack licensee from any form of wager made on the licensed premises of the racetrack licensee are:

(1) the daily pari-mutuel tax imposed by Section 60-1A-18 NMSA 1978;

(2) money allocated in this section to the New Mexico horse breeders' association;

(3) money allocated by this section to the New Mexico horsemen's association;

(4) expenses incurred to engage in intrastate simulcasting pursuant to the Horse Racing Act; provided that the deduction for a racetrack licensee shall be a portion of five percent of the gross amount wagered at all the sites receiving the same simulcast horse races and:

(a) the deduction for a racetrack licensee shall be an amount allocated to the racetrack licensee by agreement voluntarily reached between all the racetracks sending or receiving the same simulcast horse races; or

(b) the deduction for a racetrack licensee shall be an amount identified by the [commission] department if all the racetracks sending or receiving the same simulcast horse races fail to reach a voluntary agreement on the level at which to set the rate of the deduction for expenses incurred for engaging in intrastate simulcasting; and

(5) fees incurred to receive interstate simulcasts pursuant to the Horse Racing Act.

G. A racetrack licensee shall allocate to the New Mexico horse breeders' association five percent of the daily retainage on interstate common pools received from a guest state by a racetrack licensee. Of the net retainage from all wagers, after deductions:

(1) fifty percent shall be allocated to purses; and

(2) fifty percent shall be retained by the racetrack licensee."

SECTION 19. Section 60-1A-20 NMSA 1978 (being Laws 2007, Chapter 39, Section 20, as amended) is amended to read:

"60-1A-20. DAILY CAPITAL OUTLAY TAX--CAPITAL OUTLAY OFFSET [STATE FAIR COMMISSION DISTRIBUTION] DAILY LICENSE FEES.--

A. A "daily capital outlay tax" of two and three-sixteenths percent is imposed on the gross amount wagered each day at a racetrack where horse racing is conducted on the premises of a racetrack licensee and also on the gross amount wagered each day when a racetrack licensee is engaged in simulcasting pursuant to the Horse Racing Act. After deducting the amount of offset allowed pursuant to this section, any remaining daily capital outlay tax shall be paid by the [commission] department to the taxation and revenue department from the retainage of a racetrack licensee from on-site wagers made on the licensed premises of the racetrack licensee for deposit in the general fund. Of the daily capital outlay tax imposed pursuant to this subsection:

(1) for a class A racetrack licensee, not more than one-half of the daily capital outlay tax imposed on the first two hundred fifty thousand dollars ($250,000) of the daily handle may be offset by the amount that the class A racetrack licensee expends for capital improvements or for long-term financing of capital improvements at the racetrack licensee's existing facility;

(2) for a class B racetrack licensee, not more than one-half of the daily capital outlay tax imposed on the first two hundred fifty thousand dollars ($250,000) of the daily handle may be offset:

(a) in an amount not to exceed one-half of the offset allowed, the amount expended by the class B racetrack licensee for capital improvements; and

(b) in an amount not to exceed one-half of the offset allowed, the amount expended by the class B racetrack licensee for advertising, marketing and promoting horse racing in the state; and

[(3) through December 31, 2014, for both class A and class B racetrack licensees, an amount equal to one-half of the daily capital outlay tax is appropriated and transferred to the state fair commission for expenditure on capital improvements at the state fairgrounds and for expenditure on debt service on negotiable bonds issued for the state fairgrounds' capital improvements; and

(4)] (3) on and after January 1, 2015, for both class A and class B racetrack licensees, an amount equal to one-half of the daily capital outlay tax is appropriated and transferred to the racehorse testing fund.

B. An additional daily license fee of five hundred dollars ($500) shall be paid to the [commission] department by the racetrack licensee for each day of live racing on the premises of the racetrack licensee.

C. Accurate records shall be kept by the racetrack licensee to show gross amounts wagered, retainage, breakage and amounts received from interstate common pools and distributions from gross amounts wagered, retainage, breakage and amounts received from interstate common pools, as well as other information the [commission] department may require. Records shall be open to inspection and shall be audited by the [commission] department, its authorized representatives or an independent auditor selected by the [commission] department. The [commission] department may prescribe the method in which records shall be maintained. A racetrack licensee shall keep records that are accurate, legible and easy to understand.

D. Notwithstanding any other provision of law,

a political subdivision of the state shall not impose an occupational tax on a horse racetrack owned or operated by

a racetrack licensee. A political subdivision of the state shall not impose an excise tax on a horse racetrack owned

or operated by a racetrack licensee. Local option gross

receipts taxes authorized by the state may be imposed to the extent authorized and imposed by a subdivision of the state

on a horse racetrack owned or operated by a racetrack licensee."

SECTION 20. Section 60-1A-21 NMSA 1978 (being Laws 2007, Chapter 39, Section 21) is amended to read:

"60-1A-21. INABILITY TO RECEIVE OR ADMINISTER DISTRIBUTIONS--NEW MEXICO HORSE BREEDERS' ASSOCIATION--NEW MEXICO HORSEMEN'S ASSOCIATION--[COMMISSION] DEPARTMENT AUTHORITY--NEW MEXICO-BRED HORSE REGISTRY.--

A. In the event that money allocated to the New Mexico horse breeders' association pursuant to Section 60-1A-19 NMSA 1978 cannot be received or administered by the New Mexico horse breeders' association, the [commission] department or another organization designated by the [commission] department and under the absolute control of the [commission] department shall receive and administer the money that is allocated to be distributed by the New Mexico horse breeders' association pursuant to Section 60-1A-24 NMSA 1978. If the [commission] department or its designee organization is required to receive, administer and distribute money on behalf of the New Mexico horse breeders' association, the maximum percentage of retainage from Paragraph (3) of Subsection D of Section 60-1A-24 NMSA 1978 shall be distributed by the [commission] department to the New Mexico horse breeders' association as a fee to certify the dam and stud of New Mexico-bred horses from the registry maintained by the New Mexico horse breeders' association.

B. In the event that money allocated to the New Mexico horsemen's association pursuant to the Horse Racing Act cannot be received or administered by the New Mexico horsemen's association, the [commission] department or another organization designated by the [commission] department and under the absolute control of the [commission] department shall receive and administer the money that is allocated by Section 60-1A-19 NMSA 1978 to the New Mexico horsemen's association and distribute the money as required by Section 60-1A-19 NMSA 1978."

SECTION 21. Section 60-1A-22 NMSA 1978 (being Laws 2007, Chapter 39, Section 22) is amended to read:

"60-1A-22. PAYMENT OF TAXES--PAYMENT OF LICENSE FEES.--

A. Taxes imposed pursuant to the Horse Racing Act shall be remitted to the [commission] department, and a notice of the remittance shall accompany the taxes paid by a racetrack licensee by the close of the business day on Thursday of every week. Failure to make weekly remittances by the racetrack licensee shall result in an assessment by the [commission] department against the racetrack licensee in an amount equal to one percent of the amount that was due to be submitted.

B. Fees for licenses issued by the [commission] department shall be paid to the [commission] department. Daily license fees imposed by Section 60-1A-20 NMSA 1978 shall be submitted to the [commission] department by the racetrack licensee by the close of the business day on Thursday of each week of on-track or simulcast racing.

C. Except for three thousand dollars ($3,000) to be retained by the [commission] department in the horse racing suspense fund, daily license fees and taxes shall be submitted by the [commission] department to the taxation and revenue department on a date to be set by the taxation and revenue department that is no later than the twenty-fifth day of the month following the month in which the fees and taxes are received from a racetrack licensee."

SECTION 22. Section 60-1A-23 NMSA 1978 (being Laws 2007, Chapter 39, Section 23) is amended to read:

"60-1A-23. HORSE RACING SUSPENSE ACCOUNT.--

A. The "horse racing suspense account" is created in the state treasury to hold funds remitted to the [commission] department for payment of all legal claims for refunds.

B. Money in the horse racing suspense account exceeding three thousand dollars ($3,000) shall be transferred to the [taxation and revenue department for deposit in the] general fund.

C. The money in the horse racing suspense account shall be used to pay claims for refunds that have been determined by the [commission] department to be legally due to the remitter."

SECTION 23. Section 60-1A-24 NMSA 1978 (being Laws 2007, Chapter 39, Section 24, as amended) is amended to read:

"60-1A-24. BREEDERS' AWARDS.--

A. The New Mexico horse breeders' association shall create a fund to pay horse breeders of New Mexico-bred horses merit and incentive awards.

B. A racetrack licensee shall pay into a fund created by the New Mexico horse breeders' association an amount equal to ten percent of the first money of a purse won, except for stakes-race purses, at a horse race in New Mexico by a horse registered with the New Mexico horse breeders' association as a New Mexico-bred horse. From stakes-race purses, a racetrack licensee shall pay into the fund created by the New Mexico horse breeders' association an amount equal to ten percent of the added money.

C. The money deposited with the New Mexico horse breeders' association by a racetrack licensee pursuant to Subsection B of this section shall be paid weekly to the breeder of record as recorded by the New Mexico horse breeders' association upon certification of the [commission] department.

D. In addition to the money distributed pursuant to Subsection B of this section, the New Mexico horse breeders' association shall distribute the money allocated to the New Mexico horse breeders' association pursuant to Subsections B, C and D of Section 60-1A-19 NMSA 1978 in the following manner and pursuant to rules adopted by the [commission] department:

(1) forty-five percent of the money to the breeders of record as recorded by the New Mexico horse breeders' association of the first-, second- and third-place finishers;

(2) seven percent of the money to the owners of the stallions that sired the first-place winners at the time the winners were conceived;

(3) no more than eight percent of the money to be retained by the New Mexico horse breeders' association for the purpose of administering the distribution program set forth in this section; and

(4) the remaining money to be divided among the owners of the first-, second- and third-place finishers during each race meet, provided that the first-, second- and third-place finishers are registered as New Mexico-bred horses with the New Mexico horse breeders' association and the owners are members of the association.

E. The [commission] department shall establish by rule fiduciary, security and insurance safeguards for the money deposited with and paid out or distributed by the New Mexico horse breeders' association pursuant to the Horse Racing Act.

F. A check or other negotiable instrument representing a payment pursuant to Subsection D of this section that is not negotiated within one year from the date of issuance is no longer valid and negotiable. The money represented by the check or other negotiable instrument shall revert to the fund created pursuant to Subsection A of this section and the recipient shall no longer be eligible for the payment.

G. A person otherwise eligible for a payment pursuant to Subsection D of this section shall not be eligible if the person does not provide within ninety days of eligibility for a merit and incentive award information necessary for the New Mexico horse breeders' association to comply with state and federal tax law."

SECTION 24. Section 60-1A-26 NMSA 1978 (being Laws 2007, Chapter 39, Section 26) is amended to read:

"60-1A-26. ILLEGAL USE OF PARI-MUTUEL WAGERING.--

A. A person shall not use pari-mutuel wagering except as permitted by the [commission] department pursuant to the Horse Racing Act or pursuant to other state law providing licensing of persons to use pari-mutuel wagering.

B. A person who, directly or indirectly, uses pari-mutuel wagering in a manner that is not authorized by the [commission] department or other state law is guilty of a fourth degree felony and upon conviction shall be sentenced pursuant to Section 31-18-15 NMSA 1978."

SECTION 25. Section 60-1A-28 NMSA 1978 (being Laws 2007, Chapter 39, Section 28, as amended) is amended to read:

"60-1A-28. AFFECTING SPEED OR STAMINA OF A RACEHORSE--PENALTIES.--

A. A person administering, attempting to administer or conspiring with others to administer to a racehorse a drug, chemical, stimulant or depressant or other performance-altering substance defined as a class 1 or class 2 penalty class A drug by the association of racing commissioners international, incorporated, or a successor organization or, if none, by another nationally recognized organization that has published substantially similar guidelines that are generally accepted in the horse racing industry as determined by the [commission] department whether internally, externally or by injection for the purpose of stimulating or depressing the racehorse or affecting the speed or stamina of the racehorse during a horse race or workout is guilty of a fourth degree felony and upon conviction shall be sentenced pursuant to Section 31-18-15 NMSA 1978.

B. A person who uses, attempts to use or conspires with others to use during a horse race or workout an electrically or mechanically prohibited device, implement or instrument, other than a [commission-approved] department-approved riding crop, is guilty of a fourth degree felony and upon conviction shall be sentenced pursuant to Section 31-18-15 NMSA 1978.

C. A person who sponges the nostrils or trachea of a racehorse or who uses anything to injure a racehorse for the purpose of stimulating or depressing the racehorse or affecting the speed or stamina of the racehorse during a horse race or workout is guilty of a fourth degree felony and upon conviction shall be sentenced pursuant to Section 31-18-15 NMSA 1978.

D. It is prima facie evidence of intent to commit any of the crimes set forth:

(1) in Subsection A of this section for a person to be found within the racing grounds of a racetrack licensee, including the stands, stables, sheds or other areas where racehorses are kept, who possesses with the intent to use, sell, give away or otherwise transfer to another person a drug, chemical, stimulant or depressant or other performance-altering substance defined as a class 1 or class 2 penalty class A drug by the association of racing commissioners international, incorporated, or a successor organization or, if none, by another nationally recognized organization that has published substantially similar guidelines that are generally accepted in the horse racing industry as determined by the [commission] department, to stimulate or depress a racehorse or to affect the speed or stamina of a racehorse;

(2) in Subsection B of this section for a person to be found within the racing grounds of a racetrack licensee, including the stands, stables, sheds or other areas where racehorses are kept, who possesses with the intent to use, sell, give away or otherwise transfer to another person an electrically or mechanically prohibited device, implement or instrument, other than a [commission-approved] department-approved riding crop; and

(3) in Subsection C of this section for a person to be found within the racing grounds of a racetrack licensee, including the stands, stables, sheds or other areas where racehorses are kept, who possesses with the intent to use, sell, give away or otherwise transfer to another person paraphernalia or substances used to sponge the nostrils or trachea of a racehorse or that may be used to injure a racehorse for the purpose of stimulating or depressing the racehorse or affecting its speed or stamina during a horse race or workout."

SECTION 26. Section 60-1A-28.1 NMSA 1978 (being Laws 2014, Chapter 6, Section 1) is amended to read:

"60-1A-28.1. RACETRACK LICENSEES--POWER TO EJECT OR EXCLUDE.--

A. A racetrack licensee may eject or exclude from the association grounds any person whose occupational license has been suspended or revoked by the [commission] department for administering a performance-altering substance as provided in Subsection A of Section 60-1A-28 NMSA 1978.

B. Nothing in this section shall be construed to limit a racetrack licensee's power to eject or exclude a person from the association grounds for any other lawful reason.

C. For the purposes of this section, "association grounds" means all real property used during a race meeting by a person holding a license from the [commission] department to conduct racing with pari-mutuel wagering, including the racetrack, grandstand, casino, concession stands, offices, barns, stable area, employee housing facilities and parking lots."

SECTION 27. Section 60-1A-30 NMSA 1978 (being Laws 2007, Chapter 39, Section 33) is amended to read:

"60-1A-30. TEMPORARY PROVISIONS.--

[A. Members of the state racing commission who are on the commission on June 30, 2007 shall remain on the state racing commission and complete the terms to which they were appointed, or if the member's term expires on June 30, 2007, until a replacement is appointed.

B. all] A. On July 1, 2024, all functions, appropriations, money, personnel, records, equipment, supplies and other property of the state racing commission [on June 30, 2007 shall remain the personnel, records, equipment, supplies and property of the state racing commission created in this 2007 act.

C. Appropriations to and] shall be transferred to the regulation and licensing department for the regulation of horse racing and the purposes of the Horse Racing Act.

B. Money held by or for the state racing commission that does not revert to the general fund or another fund on June 30, [2007] 2024 shall continue on July 1, [2007] 2024 to be held by [or] the regulation and licensing department for the [state racing commission created in this 2007 act] regulation of horse racing and the purposes of the Horse Racing Act.

C. On July 1, 2024, all agreements and contractual obligations of the state racing commission shall be binding on the regulation and licensing department.

D. On July 1, 2024, references in the law to the state racing commission shall be construed as references to the regulation and licensing department as to its regulation of horse racing and the purposes of the Horse Racing Act.

E. The rules of the state racing commission shall be the rules of the regulation and licensing department as to its regulation of horse racing and the purposes of the Horse Racing Act until the department amends or repeals the rules."

SECTION 28. REPEAL.--Sections 60-1A-3 and 60-1A-29 NMSA 1978 (being Laws 2007, Chapter 39, Sections 3 and 29, as amended) are repealed.

SECTION 29. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2024.

- 58 -