Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are available on the NM Legislative Website (legis.state.nm.us). Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR	Fidel		DATE TYPED	2/3/04		HB
SHORT TITLE		Gaming Revenue Distributions				SB	211
					ANALYST		Gilbert

APPROPRIATION

Appropriation Contained		Estimated Additional Impact		Recurring or Non-Rec	Fund Affected
FY04	FY05	FY04	FY05
	See Narrative			Recurring	Local Government

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE

Estimated Revenue		Subsequent Years Impact	Recurring or Non-Rec	Fund Affected
FY04	FY05
	(See Narrative)	(See Narrative)	Recurring	General Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Response Received From:

Gaming Control Board (GCB)

No Responses Received From:

Attorney General’s Office (AGO)

Department of Finance and Administration (DFA)

SUMMARY

Synopsis of Bill

Senate Bill 211 implements a two-percent revenue-sharing distribution of the gaming tax currently paid by the tribes within a county with a population range of 25,500 to 26, 000 and a net taxable value for rate-setting purposes for the 2002 property tax year of less than $200 million dollars and in which two tribal gaming enterprises are located in that county. The only county that appears to meet these criteria is Cibola County.

FISCAL IMPLICATIONS

The Gaming Control Board (GCB) considers net revenues figures by tribes as confidential as prescribed under the gaming compacts; therefore an accurate fiscal impact is difficult to ascertain. In order to determine a fiscal impact, figures from the two tribal enterprises in Cibola County will be required.

Continuing Appropriations

SB 211 appropriates two percent of the revenue sharing received from the two tribes with class III gaming compacts in the qualified county to Cibola County. This appropriation continues in subsequent years.

OTHER SUBSTANTIVE ISSUES

Currently, 13 tribes have gaming compacts in New Mexico with Pojoaque and Mescalero under the 1997 compact and 11 others under the 2001 compact. However, 16 casinos are in operation because four tribes have more than one casino and the Jicarilla Apache Nation is not currently operating a casino. As described by GCB and the Attorney General, three legal actions

related to the compacts are pending:

As provided under the 1997 gaming compacts, the Gaming Control Board initiated arbitration with the pueblos of Taos and Acoma and the Mescalero Apache tribe over the nonpayment of revenue sharing. After arbitration was initiated, it became apparent the tribes and arbitrators intended to decide the legal question of whether or not revenue sharing was legal under the federal Indian Gaming Regulatory Act. The New Mexico Attorney General determined the legality of revenue sharing under the federal law was not subject to arbitration but must be decided in the courts. The arbitration has been stayed by the New Mexico Supreme Court.

New Mexico Supreme Court Case. The New Mexico Attorney General and GCB filed a suit with the Supreme Court in 2000 to halt the arbitration proceedings between GCB and three tribes because the arbitrators had decided they would determine if revenue sharing in the 1997 compact was legal under federal law. The Supreme Court stayed the arbitration proceedings until it makes a final determination on the merits of the Attorney General’s claim. A final decision by the Supreme Court is pending.

Federal Lawsuit. In June 2000, the Attorney General filed suit in federal court against 12 gaming tribes in New Mexico for failure to make their revenue sharing payments under the 1997 gaming compacts. The lawsuit filed by the state seeks (1) a declaration that the revenue-sharing

provisions of the 1997 compacts are legal under the Indian Gaming Regulatory Act; (2) a

declaration that the tribe’s failure to make all revenue-sharing payments is a violation of the

compact; and (3) an injunction against all Class III gaming conducted by the tribes, or, if the

revenue-sharing provision is not enforceable, a ruling that the compact is invalid. Ten of the 12

tribes settled the case by signing the 2001 compact and paying the state collectively $91 million.

The two remaining tribes, Pojoaque Pueblo and Mescalero Apache, have a motion to compel

arbitration pending in front of the federal court. Once that motion is filed, the Attorney General

will either be in arbitration or proceeding on the merits of the claim.

The current gaming compacts, which became effective in December 2001 and expire in 2015, provide for revenue sharing at the rate of 8 percent per annum for net win over $12 million and, if under $12 million, 3 percent per annum for the first $4 million. Additionally, the compacts state the tribes will pay the state $100.0 per year as “reimbursement of the state’s costs of regulation. The tribe and the state further agree that such amount fairly reflects the state’s costs of regulation ...” This amount is to increase by 3 percent each succeeding year.

The following information shows tribal activity since inception of the 1997 compacts:

Tribal Revenue Sharing and Regulatory Fee Payments

1997 Compact:

FY98-FY00 $ 66,818.9

FY02 Settlement Agreement 91,000.0

Total 157,818.9

2001 Compact:

FY02 $ 9,717.2

FY03 (2nd qtr. pd. in July) 7,989.2

Total 17,706.4

Total Received from Tribal Gaming $175,525.3

2001 Compacting Tribes, Net Win* 12/15/01 - 6/30/02

Acoma $23,334.0

Isleta $51,120.4

Laguna $8,568.3

Sandia $58,888.5

San Felipe $13,025.5

San Juan $12,032.1

Santa Ana $22,617.2

Santa Clara $16,939.6

Taos $3,660.5

RLG/yr