AN ACT

RELATING TO RACETRACKS; DISTRIBUTING A PORTION OF THE PARI‑MUTUEL TAX TO THE STATE FAIR COMMISSION; REDUCING THE CAPITAL IMPROVEMENTS OFFSET; AUTHORIZING THE STATE FAIR TO ENTER INTO A LONG-TERM LEASE WITH A RACETRACK LICENSEE.

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

Section 1. Section 16-6-15 NMSA 1978 (being Laws 1935, Chapter 69, Section 3, as amended) is amended to read:

"16-6-15. ADDITIONAL POWERS.--In addition to the powers which it may now have, the New Mexico state fair shall have power to:

A. acquire, by purchase, gift or the exercise of the right of eminent domain, and hold and dispose of real or personal property or rights or interests therein except as limited by Section 13-6-2.1 NMSA 1978, which provisions requiring state board of finance approval of certain actions are applicable to the state fair. The right of eminent domain shall be exercised in the same manner as is provided for the exercise of such power by the state or any county, municipality or school district;

B. build, construct, improve, repair or maintain buildings, structures, improvements, grounds and equipment which may be required by or convenient for the purpose of operating a state fair;

C. enter into a new long-term lease, not to exceed twenty-five years, for the purpose of providing a lessee that is a racetrack licensee with the use of buildings and other facilities on the grounds of the state fair; provided, however, that a lease entered into pursuant to this subsection shall contain a provision for termination of the lease at the end of any calendar year in which there is no class III tribal gaming being conducted in New Mexico;

D. acquire any project and to own, operate and maintain such project;

E. accept grants of money, materials or property of any kind from a federal agency upon such terms and conditions as the federal agency may impose;

F. borrow money and issue bonds and provide for the payment of the same and for the rights of the holders thereof, provided that the commission shall not issue bonds, negotiate loans or renegotiate loans without the prior approval of the state board of finance; and

G. perform all acts and do all things necessary or convenient to carry out the powers granted in this article, or heretofore granted, to obtain loans or grants or both from any federal agency and to accomplish the purposes of this article and secure the benefits of the Recovery Act."

Section 2. Section 60-1-15 NMSA 1978 (being Laws 1933, Chapter 55, Section 9, as amended) is amended to read:

"60-1-15. TAX LEVIED--CERTAIN LICENSE FEES AND TAXES

PROHIBITED.--

A. In addition to the daily tax provided in Section 60-1-8 NMSA 1978, a tax of two and three-sixteenths percent is levied on the gross amount wagered each day at each place where horse racing is conducted by any state fair association designated by law that in good faith conducts a public fair and exhibition of stock and farming products or where horse racing for profit is held. The tax shall be paid from the commissions of the licensee.

B. To encourage the improvement of horse racing facilities for the benefit of the public, breeders and horse owners and to increase the revenue to the state from the increase in pari-mutuel wagering and tourism resulting from these improvements, not more than one-half of the tax levied under Subsection A of this section for the first two hundred fifty thousand dollars ($250,000) of daily handle only, shall be offset for class A licensees by the amount that the class A licensee expends for capital improvements or in financing term investment in capital improvements at existing racetrack facilities and for class B licensees by the amount that the class B licensee expends for capital improvements, not to exceed fifty percent of the offset amount allowed pursuant to this subsection, and by the amount the class B licensee expends for advertising, marketing and promoting horse racing in the state, not to exceed fifty percent of the offset amount allowed pursuant to this subsection. The offset provided in this paragraph shall also apply to the daily handle generated at its facility by a licensee engaged solely in simulcasting pursuant to Section 60‑1-25 NMSA 1978. The term "capital improvement" means any capital investment in items that are subject to depreciation under the United States Internal Revenue Code of 1986 and are approved by the state racing commission.

C. To compensate for the additional municipal services required by the location of a racetrack within a municipality, an amount of revenue derived from the tax levied on such a racetrack under Subsection A of this section, above the amount offset by capital expenditures and advertising as provided in Subsection B of this section, shall be transferred to the municipal treasurer of the municipality in which the track generating the revenue is located for expenditure by the municipality in providing those additional municipal services. The amount to be transferred shall be determined in accordance with the provisions of Section 60-1-15.2 NMSA 1978.

D. An amount equal to one-half of the tax levied pursuant to Subsection A of this section is appropriated and shall be transferred to the state fair commission for expenditure on capital improvements at the state fairgrounds, other than improvements of the casino, and for expenditure for debt service on negotiable bonds issued for the capital improvements.

E. Accurate records shall be kept by the licensee to show all commissions, total gross amounts wagered and breakage, as well as other information the state racing commission may require. Records shall be open to inspection and shall be audited by the commission or any of its authorized representatives. Should any licensee fail to keep records accurately and intelligibly, the commission may prescribe the method in which the licensee shall keep records.

F. All remaining revenues collected as a result of the tax on the gross amount wagered shall be deposited in the state general fund.

G. Notwithstanding any other provision of law, no political subdivision of this state may impose any occupational tax against a racetrack operating under authority of a license granted by the state racing commission. No political subdivision may levy an excise tax against any racetrack operating under authority of a license granted by the state racing commission, except that local option gross receipts taxes may be imposed to the extent permitted by law."