46th legislature - STATE OF NEW MEXICO - first session, 2003

RELATING TO HORSE RACING; REQUIRING PERSONS LICENSED TO CONDUCT HORSE RACE MEETS TO BE NEW MEXICO RESIDENTS; DECLARING AN EMERGENCY.

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

Section 1. Section 60-1-6 NMSA 1978 (being Laws 1973, Chapter 323, Section 4, as amended) is amended to read:

"60-1-6. QUALIFICATIONS FOR LICENSE TO CONDUCT A HORSE RACE MEET.--

A. A license to conduct a horse [racing] race meet in this state may be issued by the state racing commission to [any person whom the commission determines] a person who is a New Mexico resident and is determined by the commission to be a qualified applicant. [Such] Qualification shall be decided by the commission after due consideration for the proper protection of the public health, safety, morals and good order and the general welfare of the inhabitants of the state. The burden of proving his qualifications to receive and hold a license to conduct a horse [racing] race meet shall be at all times on the applicant or licensee. The state racing commission may establish by regulation such qualifications for licenses to conduct horse race meets as it deems to be in the public interest.

B. Without limiting the power of the state racing commission to adopt by regulation additional qualifications pursuant to Subsection A of this section, [no] a person [shall be] is not qualified to be licensed under this section if he:

(1) has been convicted of a felony under the laws of New Mexico, the laws of any other state or the laws of the United States, unless sufficient evidence of rehabilitation has been presented to the [racing] commission; however, the provisions of this paragraph shall not apply to [any] a person who [has been] was convicted of a felony prior to June 1, 1977, with respect to [such] that prior conviction, if with knowledge of the conviction the [state racing] commission, [has as of] by June 1, 1977, granted him a license to conduct a horse race meet;

(2) has been guilty of or attempted any fraud or misrepresentation in connection with racing, breeding or otherwise, unless sufficient proof of rehabilitation has been presented to the [racing] commission;

(3) has violated or attempted to violate any law or regulation with respect to racing in any jurisdiction, unless sufficient proof of rehabilitation has been presented to the [racing] commission;

(4) has consorted or associated with bookmakers, touts or persons of similar pursuits, unless sufficient proof of rehabilitation has been presented to the [racing] commission;

(5) is consorting or associating with bookmakers, touts or persons of similar pursuits;

(6) is financially irresponsible; or

(7) is a past or present member of or participant in organized crime, as such membership or participation may be found or determined by the [racing] commission.

C. [No] A person [shall be] is not eligible to receive or hold [any] a license to conduct a horse race meet unless each [person] individual having [any] a direct or indirect interest [therein] in the meet of any nature whatsoever, whether financial, administrative, policy-making or supervisory, is a resident of New Mexico and is individually licensed under this section. If the applicant for a license is a corporation, all officers, directors, lenders or holders of evidence of indebtedness of the corporation and all [persons] individuals who participate in any manner in a financial, administrative, policy-making or supervisory capacity [must] shall individually be residents of New Mexico and shall be licensed under this section. This subsection shall not apply to [any] a person owning or holding, directly, indirectly or beneficially, less than ten percent of the total authorized, issued and outstanding shares of a corporation [which] that is licensed to conduct a horse race meet in this state, unless [such] that person has some other direct or indirect financial interests therein of any nature whatsoever, whether financial, administrative, policy-making or supervisory.

D. The state racing commission may prescribe a limit to the number of persons directly or indirectly financially interested in the licensee to conduct a horse race meet [and]. The commission shall [also] determine whether the financial interests of [any] an applicant or group of applicants are compatible with the general welfare of the inhabitants of this state.

E. Without limiting the power of the state racing commission, pursuant to Subsection D of this section, to limit the number of persons directly or indirectly interested in racetracks licensed in this state, no person or group of persons shall have a direct or indirect interest of any nature whatsoever, whether financial, administrative, policy-making or supervisory, in more than two racetracks in this state. For purposes of this subsection, a person or group of persons shall not be considered to have a direct or indirect interest in any racetrack if they own or hold, directly, indirectly or beneficially, less than ten percent of the total authorized, issued and outstanding shares of a corporation [which] that is licensed to conduct a horse race meet in this state, unless [such] the person or group of persons has some other direct or indirect interest of any nature whatsoever, whether financial, administrative, policy-making or supervisory, in more than two licensed [tracks. Any] racetracks. A person or group of persons having a direct or indirect interest in more than two racetracks shall be immediately ordered by the commission to divest themselves of such interest. Beginning with the time the commission gives notice to divest such interest, the provisions of Subsection H of this section shall apply to such person or persons.

F. [Any] A corporation holding a license to conduct a horse race meet in this state shall not issue to [any] a person shares of its stock amounting to ten percent or more of its total authorized, issued and outstanding shares, nor shall it issue shares [which] that would, when added to a person's existing owned or held shares, amount to that person owning or holding, directly, indirectly or beneficially, ten percent or more of the total authorized, issued and outstanding shares of the corporation, unless:

(1) it has given written notice to the state racing commission, at least sixty days prior to the contemplated date of [such] the transfer; and

(2) it receives written notice from the commission of its approval of [such] the transfer.

G. It [shall be] is the duty of every corporation holding a license to conduct a horse race meet in this state to notify, immediately, the state racing commission when it appears from the stock records of the corporation that a person not licensed by the commission holds ten percent or more of the total authorized, issued and outstanding shares of the corporation.

H. [Any] A person owning or holding, directly, indirectly or beneficially, ten percent or more of the total authorized, issued and outstanding shares of a corporation [which] that is licensed to conduct a horse race meet in this state, but who has not been licensed by the state racing commission to hold [such] the shares or whose license has been revoked, shall not directly or indirectly in any manner:

(1) exercise [any] financial, administrative, policy-making or supervisory power with respect to [such] the corporation;

(2) be an officer or director of [such] the corporation;

(3) receive dividends, either in stock or in cash;

(4) hold or receive interest on [any] a certificate of indebtedness of [such] the corporation;

(5) exercise, individually or through any trustee, nominee or agent, any voting right or other power or privilege conferred by [such securities] the shares; or

(6) otherwise receive [any] remuneration of whatsoever kind or nature from the corporation.

I. A person who owns or holds, directly, indirectly or beneficially, ten percent or more of the total authorized, issued and outstanding shares of [the] a corporation licensed to conduct a horse race meet in this state shall be licensed pursuant to Subsection A of this section. If the state racing commission finds [such] the person is not qualified to be licensed to own or hold, or to continue to own or hold, [said] the ten percent interest in [such] the corporation, [it] the commission shall give notice of [such] that finding to the corporation and to the person owning or holding [such] the interest, and that person shall immediately offer [such securities] the shares to [such] the corporation for purchase. If the corporation does not elect to purchase [said] the shares, [then] that person may offer the shares to other purchasers, subject to prior approval of [such] the purchasers by the commission pursuant to this section. Beginning from the time the commission gives the corporation and the shareholder written notice of disapproval and divestiture, the provisions of Subsection H of this section shall apply until final commission approval of the owner or holder of [such] the shares is given.

J. The state racing commission may at any time issue a written request to any nominee or trustee holding an equity interest in a corporation [which] that is licensed to conduct a horse race meet in this state for the name, address and internal revenue service identification number of the real party in interest owning [said] the shares. If the nominee or trustee fails within thirty days from [said] the request to furnish the information requested to the commission, the commission may invoke the divestiture procedures in Subsection I [above] of this section.

K. Every security [hereafter] issued by a corporation [which] that holds a license shall bear a statement, on both sides of the certificate evidencing [such] the security, of the restrictions and penalties imposed by this section.

L. [Any] A person violating [any provisions] a provision of this section [shall be deemed] is guilty of a misdemeanor and upon conviction shall be punished by a fine of not less than one thousand dollars ($1,000) and not more than ten thousand dollars ($10,000) or by imprisonment in the county jail for not more than six months or by both such fine and imprisonment.

M. The state racing commission shall deny or revoke a license of a corporation [which] that is not in compliance with the provisions of this section.

N. For purposes of determining interest in a racetrack, insofar as [such] the determination 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 owned, directly or indirectly, by or for his family or by or for his partner. For purposes of this paragraph, the family of an individual includes only his brothers and sisters, whether by the whole or half blood, spouse, ancestors and lineal descendants; and

(3) stock constructively owned by a person by reason of the application of Paragraph (1) of this subsection shall, for the purposes of applying Paragraph (1) or (2) of this subsection, be treated as actually owned by [such] that person, but stock constructively owned by an individual by reason of the application of Paragraph (2) of this subsection shall not be treated as owned by him for purposes of again applying [such] that paragraph in order to make another the constructive owner of [such] the stock.

O. As used in this section, "New Mexico resident" means an individual who:

(1) files a personal income tax return annually with the taxation and revenue department;

(2) has resided in New Mexico for one year prior to being granted a license and will file income taxes for that year in New Mexico;

(3) is currently residing in New Mexico; and

(4) maintains his primary residence in New Mexico during the period in which he is an owner of a racetrack or is licensed to conduct a horse race meet by the state racing commission.

P. An individual who was licensed on January 1, 2003 pursuant to this section to conduct a horse race meet and who is not a New Mexico resident shall not be disqualified from renewing his license based on his residency. However, an individual shall not be qualified to be licensed to operate horse race meets at a location other than the location for which he was licensed on January 1, 2003, unless the individual becomes a New Mexico resident."

Section 2. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.