44TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 1999

RELATING TO GAMING; AMENDING THE PROVISIONS OF THE REVENUE- SHARING AGREEMENT; AMENDING THE GAMING TAX; AMENDING SECTIONS OF THE NMSA 1978.

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

Section 1. Section 11-13-2 NMSA 1978 (being Laws 1997, Chapter 190, Section 2) is amended to read:

"11-13-2. REVENUE SHARING OF TRIBAL GAMING REVENUE.--The governor is authorized to execute a revenue-sharing agreement in the form substantially set forth in this section with any New Mexico Indian nation, tribe or pueblo that has also entered into an Indian gaming compact as provided by law. Execution of an Indian gaming compact is conditioned upon execution of a revenue-sharing agreement. The consideration for the Indian entity entering into the revenue-sharing agreement is the condition of the agreement providing limited exclusivity of gaming activities to the tribal entity. The revenue-sharing agreement shall be in substantially the following form [and is effective when executed by the governor on behalf of the state and the appropriate official of the Indian entity]:

SECTION 1. Summary and Consideration. The Tribe shall agree to contribute a portion of its Class III Gaming revenues identified in and under procedures of this Revenue-Sharing Agreement, in return for which the State agrees that the Tribe:

A. has the exclusive right within the State to provide all types of Class III Gaming described in the Indian Gaming Compact, with the sole exception of the use of Gaming Machines, which the State may permit on a limited basis for racetracks and veterans' and fraternal organizations; and

B. will only share that part of its revenue arising from the use of Gaming Machines and all other gaming revenue is exclusively the Tribe's.

SECTION 2. Revenue to State. The parties agree that, after the effective date hereof, the Tribe shall make the quarterly payments provided for in [Paragraph] SECTION 3 of the Revenue-Sharing Agreement to the state treasurer for deposit into the [General Fund of the State] State General Fund.

SECTION 3. Calculation of Revenue to State.

A. As used in this Revenue-Sharing Agreement, "net win" means the annual total amount wagered at a Gaming Facility on Gaming Machines less the following amounts:

(1) the annual amount paid out in prizes from gaming on Gaming Machines;

(2) the actual amount of regulatory fees paid to the State; and

(3) the sum of two hundred fifty thousand dollars ($250,000) per year as an amount representing tribal regulatory fees, with these amounts increasing by five percent (5%) each year beginning on the first day of January occurring after the Indian Gaming Compact has been in effect for at least twelve months.

B. The Tribe shall pay the state [sixteen percent (16%)] eight percent (8%) of the net win.

C. For purposes of these payments, all calculations of amounts due shall be based upon the quarterly activity of the Gaming Facility. Quarterly payments due to the State pursuant to these terms shall be paid no later than twenty-five (25) days after the last day of each calendar quarter. Any payments due and owing from the Tribe in the quarter the Indian Gaming Compact is approved, or the final quarter the Indian Gaming Compact is in force, shall reflect the net win, but only for the portion of the quarter the Indian Gaming Compact is in effect.

SECTION 4. Limitations. The Tribe's obligation to make the payments provided for in [Paragraphs] SECTIONS 2 and 3 of [this section] the Revenue-Sharing Agreement shall apply and continue only so long as there is a binding Indian Gaming Compact in effect between the Tribe and the State, which compact provides for the play of Class III Gaming, but shall terminate in the event of any of the following conditions:

A. If the State passes, amends or repeals any law, or takes any other action, which would directly or indirectly attempt to restrict, or has the effect of restricting, the scope of Indian gaming.

B. If the State permits any expansion of nontribal Class III Gaming in the State. Notwithstanding this general prohibition against permitted expansion of gaming activities, the State may permit: (1) the [enactment] operation of a State Lottery, (2) any fraternal, veterans or other nonprofit membership organization to operate [such electronic gaming devices] Gaming Machines lawfully, but only for the benefit of such organization's members, (3) limited fundraising activities conducted by nonprofit tax-exempt organizations pursuant to Section 30-19-6 NMSA 1978, and (4) any horse racetracks to operate [electronic gaming devices] Gaming Machines on days on which live or simulcast horse racing occurs.

SECTION 5. Effect of Variance. In the event the acts or omissions of the State cause the Tribe's obligation to make payments under [Paragraph] SECTION 3 of [this section] the Revenue-Sharing Agreement to terminate under the provisions of [Paragraph] SECTION 4 of [this section, such] the Revenue-Sharing Agreement, the cessation of obligation to pay will not adversely affect the validity of the Indian Gaming Compact, but the amount that the Tribe agrees to reimburse the State for regulatory fees under the Indian Gaming Compact shall automatically increase by twenty percent (20%).

SECTION 6. Third-Party Beneficiaries. This Agreement is not intended to create any third-party beneficiaries and is entered into solely for the benefit of the Tribe and the State."."

Section 2. Section 60-2E-47 NMSA 1978 (being Laws 1997, Chapter 190, Section 49, as amended) is amended to read:

"60-2E-47. GAMING TAX--IMPOSITION--ADMINISTRATION.--

A. An excise tax is imposed on the privilege of engaging in gaming activities in the state. This tax shall be known as the "gaming tax".

B. The gaming tax is an amount equal to ten percent of the gross receipts of manufacturer licensees from the sale, lease or other transfer of gaming devices in or into the state, except receipts of a manufacturer from the sale, lease or other transfer to a licensed distributor for subsequent sale or lease may be excluded from gross receipts; ten percent of the gross receipts of distributor licensees from the sale, lease or other transfer of gaming devices in or into the state; and [twenty-five] fifteen percent of the net take of every gaming operator licensee. For the purposes of this section, "gross receipts" means the total amount of money or the value of other consideration received from selling, leasing or otherwise transferring gaming devices.

C. The gaming tax imposed on a licensee is in lieu of all state and local gross receipts taxes on that portion of the licensee's gross receipts attributable to gaming activities.

D. The gaming tax is to be paid on or before the fifteenth day of the month following the month in which the taxable event occurs. The gaming tax shall be administered and collected by the taxation and revenue department in cooperation with the board. The provisions of the Tax Administration Act apply to the collection and administration of the tax.

E. In addition to the gaming tax, a gaming operator licensee that is a racetrack shall pay twenty percent of its net take to purses to be distributed in accordance with regulations adopted by the state racing commission. A racetrack gaming operator licensee shall spend no less than one-fourth of one percent of the net take of its gaming machines to fund or support programs for the treatment and assistance of compulsive gamblers.

F. A nonprofit gaming operator licensee shall distribute at least eighty-eight percent of the balance of its net take, after payment of the gaming tax and any income taxes, for charitable or educational purposes."

Section 3. EFFECTIVE DATES.--

A. The effective date of the provisions of this act is July 1, 1999.

B. The effective date of the provisions of the amended version of a revenue-sharing agreement executed by a tribal official authorized by the Indian nation, tribe or pueblo entering into that agreement and the governor of New Mexico on behalf of the state is the date on which the amended version of the revenue-sharing agreement has been approved pursuant to the provisions of the federal Indian Gaming Regulatory Act.