HOUSE BUSINESS AND INDUSTRY COMMITTEE SUBSTITUTE FOR

HOUSE BILL 864

47th legislature - STATE OF NEW MEXICO - second session, 2006

AN ACT

RELATING TO REGULATION OF WAGERING; TRANSFERRING REGULATORY AUTHORITY FOR PARI-MUTUEL WAGERING, CERTAIN LICENSING AUTHORITY AND OTHER ADMINISTRATIVE AND FINANCIAL OVERSIGHT DUTIES TO THE GAMING CONTROL BOARD; RECONCILING MULTIPLE AMENDMENTS TO THE SAME SECTION OF LAW IN LAWS 1989; AMENDING, REPEALING AND ENACTING SECTIONS OF THE NMSA 1978.

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

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

     "60-1-1. CONDUCTING A RACE WITHOUT LICENSE PROHIBITED.--It is unlawful for any person [firm, association or corporation] to hold public horse races or race [meetings] meets for profit or gain in any manner unless [a license therefor has first been obtained from the racing commission as provided in the Horse Racing Act] the person is licensed as a racetrack gaming operator by the board pursuant to the Gaming Control Act."

     Section 2. A new section of the Horse Racing Act, Section 60-1-1.1 NMSA 1978, is enacted to read:

     "60-1-1.1. [NEW MATERIAL] DEFINITIONS.--As used in the Horse Racing Act:

          A. "board" means the gaming control board created in the Gaming Control Act;

          B. "commission" means the state racing commission;

          C. "concessionaire" means a person who has entered into a contract with the commission to operate a concession on the racing grounds of a racetrack gaming operator licensee;

          D. "gaming employee":

                (1) means a person who is connected directly with:

                     (a) a gaming activity; or

                     (b) a horse racetrack performing accounting, administration or management, cash handling, pari-mutuel wagering operations, security and simulcasting operations; and

                (2) does not include:

                     (a) bartenders, cocktail servers or other persons engaged solely in preparing or serving food or beverages;

                     (b) secretarial or janitorial personnel;

                     (c) stage, sound and light technicians;

                     (d) a horseman's bookkeeper; or

                     (e) other nongaming personnel;

          E. "horse" includes a mule;

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

          G. "horse racetrack" means a place where horse races are conducted;

          H. "horse racing activity" means a horse race or any activity or service provided at a horse race, that if conducted in compliance with the Horse Racing Act or Gaming Control Act or rules adopted pursuant to those acts, requires a license or work permit;

          I. "licensee" means a person licensed by the commission who is not a gaming employee;

          J. "pari-mutuel wagering" means a system of wagering in which bets on a live or simulcasted horse race are placed in a common pool and then paid, less a management fee and taxes, to those holding winning tickets;

          K. "permittee" means a person who has been issued a work permit by the commission;

          L. "race meet" means a period of horse racing authorized by the commission in which live horse races are conducted on the racing grounds of a racetrack gaming operator licensee;

          M. "racehorse" means a horse bred and trained to compete in horse races;

          N. "racing grounds" means the area of a racetrack gaming operator licensee's premises used for the purpose of conducting horse races and all activities ancillary to the conduct of horse races, including the track, horse barns and stalls, jockey's quarters and horse training areas;

          O. "racetrack employee" means a person issued a work permit or license by the commission, who is not a gaming employee and is not licensed by the board;

          P. "racetrack gaming operator licensee" means a person licensed pursuant to the Gaming Control Act by the board to conduct gaming and horse races on the licensee's premises; and

          Q. "simulcast" means a live audio-visual broadcast of a horse race being run at a horse racetrack other than the horse racetrack at which the broadcast is being received for viewing pursuant to a simulcasting contract."

     Section 3. Section 60-1-3 NMSA 1978 (being Laws 1933, Chapter 55, Section 2, as amended by Laws 1989, Chapter 99, Section 1 and also by Laws 1989, Chapter 377, Section 1) is amended to read:

     "60-1-3. APPLICATION FOR LICENSES--STATE RACING COMMISSION CREATED--MEMBERS--TERMS OF OFFICE--VACANCIES--POWERS AND DUTIES.--

          [A. Any person, firm, association or corporation desiring to hold a horse race or to engage in horse race meetings shall apply to the state racing commission for a license.

          B. There is created] A. The "state racing commission" is created and is administratively attached to the tourism department. The state racing commission shall consist of five members, no more than three of whom shall be members of the same political party. They shall be appointed by the governor, and no less than three of them shall be practical breeders of racehorses within the state. Each member shall be an actual resident of New Mexico and of [such] good character and reputation [as to promote] that public confidence in the administration of racing affairs is promoted in the state.

          [C.] B. The term of office of each member of the [state racing] commission shall be six years from [his] the member's appointment, and [he] the member shall serve until [his] a successor is appointed and qualified. In case of [any] a vacancy in the membership of the commission, the governor shall fill the vacancy by appointment for the unexpired term.

          [D.] C. No person shall be eligible for appointment as a member of the [state racing] commission who is an officer, official or director in [any] an association or corporation conducting racing within the state.

          [E.] D. During [his] the member's term of office, [no] a member of the [state racing] commission shall not be permitted to participate in [any] horse races or [meetings] race meets as an owner or trainer.

          [F.] E. Members of the [state racing] commission shall receive no salary, but each member of the commission shall receive per diem and mileage in accordance with the Per Diem and Mileage Act. The commission may appoint [a secretary] an executive director and fix [his] the executive director's duties and compensation.

          [G.] F. The [state racing] commission [has the power to] may:

                (1) grant, refuse and revoke licenses for horse racetrack employees or for horseracing activities, but not for people or activities licensed by the board pursuant to the Gaming Control Act;

                (2) make rules [and regulations for the holding, conducting and operating of] necessary to conduct all race meets and horse races held in the state, [and to] fix and set racing dates and approve horseraces to be simulcasted from within the state;

                (3) make an annual report to the governor of its administration of the racing laws;

                (4) require of each applicant for a license the full name of the person, association or corporation applying and, if the applicant is a corporation or an association, the name of the state in which incorporated, the nationality and residence of the members of the association and the names of the stockholders and directors of the corporation;

                [(5) require of an applicant for a license the exact location where it is desired to conduct or hold a race or race meeting, whether or not the racetrack or plant is owned or leased and, if leased, the name and residence of the fee owner or, if the owner is a corporation, the names of the directors and stockholders, a statement of the assets and liabilities of the person, association or corporation making the application, the kind of racing to be conducted and the period desired and such other information as the commission may require;

                (6)] (5) require on each application a statement under oath that the information contained in the application is true;

                [(7) personally or by agents and representatives supervise and check the making of pari-mutuel pools and the distribution from those pools;

                (8) cause the various places where race meets are held to be visited and inspected at reasonable intervals;

                (9) make rules governing, restricting or regulating bids on leases;

                (10)] (6) approve simulcasting interstate common pool contracts and scheduling of all simulcasted races broadcasted within the state;

                (7) regulate rates charged by the licensee for admission to races or for the performance of [any] a service or the sale of [any] an article on the premises of the racetrack gaming operator licensee;

                [(11)] (8) approve all proposed extensions, additions or improvements to the buildings, stables or tracks upon property owned or leased by a licensee and require the removal of any employee or official employed by the licensee;

                [(12) completely supervise and control the pari-mutuel machines and equipment at all races held or operated by the state or any state agency or commission;

                (13) approve all contracts and agreements for the payment of money and all salaries, fees and compensations by any licensee;

                (14)] (9) regulate the size of the purse, stake or [reward] award to be offered for the conducting of [any] a horse race;

                [(15)] (10) exclude or compel the exclusion of, from all [racecourses, any] racing grounds, a person whom the commission deems detrimental to the best interests of racing or [any] a person who willfully violates the racing laws or [any] a rule [regulation] or order of the commission or [any] a law of the United States or of [this] the state;

                [(16)] (11) compel the production of all documents showing the receipts and disbursements of [any] a licensee; [and]

                (12) determine the manner in which [such] financial records of a licensee shall be kept;

                [(17) investigate the operations of any licensee, and the commission has authority to place attendants and such other persons as may be deemed necessary in the offices, on the tracks or in places of business of any licensee for the purpose of satisfying itself that the rules and regulations are strictly complied with; and

                (18)] (13) employ staff as peace officers for the purpose of conducting investigations and for enforcing rules [and regulations] of the [racing] commission and the laws of the state [and to obtain documents and information from other agencies in order to assist the racing commission]. Staff employed as peace officers shall be required to satisfactorily complete a basic law enforcement training program, but such peace officers shall not carry firearms or other deadly weapons while on duty; and

                (14) visit and inspect the racing grounds of each horse racetrack in the state where horse races are conducted.

          [H.] G. The [state racing] commission shall publicly state its reasons for refusing an application for a license. [The reasons shall be included in the minute book of the commission, and the minute book shall be subject to public inspection at all reasonable times.

          I.] H. The [state racing] commission [has the power to] may summon witnesses, books, papers, documents or tangible things and [to] administer oaths for the [effectual] effective discharge of the commission's duties. The commission may appoint a hearing officer to conduct [any] a hearing to adopt rules or for any purpose required by the Horse Racing Act or any rule [or regulation promulgated] adopted pursuant to that act.

          I. The commission shall work cooperatively with the board to develop rules and procedures to exercise the following powers and duties:

                (1) approve all contracts and agreements for the payment of money and all salaries, fees and compensation pertaining to the operation of the horse racetrack by a racetrack gaming operator licensee;

                (2) exclude or compel the exclusion from any or all horse racetracks in the state of a person whose behavior is found to be detrimental to the best interests of horse racing, as defined by the board, or a person who willfully violates the racing laws or rules of this state or another state;

                (3) observe and investigate the operations of licensees or permittees to ensure that the racing laws and rules of New Mexico and other relevant jurisdictions are complied with; and

                (4) approve or reject an applicant for an original racetrack gaming operator's license or approve the continued operation of a horse racetrack by certifying to the board that the horse racetrack on the premises of a racetrack gaming operator licensee has complied with the requirements of the commission."

     Section 4. Section 60-1-4 NMSA 1978 (being Laws 1955, Chapter 87, Section 2) is amended to read:

     "60-1-4. APPOINTMENT OF MEMBERS OF COMMISSION.--The five [racing commissioners] members of the commission shall be appointed at large from the state by the governor [and] with the advice and consent of the senate."

     Section 5. Section 60-1-5 NMSA 1978 (being Laws 1973, Chapter 323, Section 3, as amended) is amended to read:

     "60-1-5. LICENSES--[QUALIFICATIONS] WORK PERMITS--BACKGROUND CHECKS--COMMISSION DUTIES.--

          [A. All persons engaged in racing, or employed on a licensee's premises by those engaged in racing, or operating a horse racing meeting, and persons operating concessions for or under authority of any licensee or employed by the concessionaire shall be licensed by the state racing commission after a background check has been conducted. The commission shall develop policies and procedures for conducting the background checks. The policies and procedures shall:

                (1) require two fingerprint cards to be submitted for each applicant for a license or license renewal, one card to be transmitted to the department of public safety for a statewide check and the other to be transmitted to the federal bureau of investigation for a nationwide check;

                (2) if an application for license or license renewal is denied, provide the applicant with the ability to inspect or challenge the validity of the record upon which the denial was based;

                (3) provide that arrest record information, received from the department of public safety or the federal bureau of investigation, is privileged and shall not be disclosed to persons not directly involved in the decision affecting the specific applicant or employee; and

                (4) require the applicant to pay the cost of the background check.

          B. Racetracks shall be licensed each calendar year.

          C. The state racing commission may provide by regulation for the issuance of licenses for terms not to exceed five years for horse owners, trainers, jockeys and their employees; veterinarians; and employees of a racetrack. Fees for licenses under this subsection, not to exceed one hundred dollars ($100), shall be set by regulation of the commission.]

          A. The commission may issue licenses or work permits to authorize the presence on the racing grounds during a race meet of persons who are necessary to the conduct of a race meet, including racetrack employees, persons engaged in racing, concessionaires, persons employed by concessionaires or other persons who are engaged in necessary activities on the racing grounds but are not licensed by the board.

          B. The commission shall adopt rules specifying what categories of service providers, contractors or employees shall be issued licenses and what categories of service providers, contractors or employees shall be issued work permits.

          C. The board shall conduct all background checks on behalf of the commission and shall forward the findings to the commission for a final decision on granting the person a work permit or license. Background checks shall be performed pursuant to the procedures adopted by the board regarding background checks.

          D. The commission may adopt procedures that are complementary to and comply with the background check requirements of the board, including:

                (1) providing a means to transmit the board's findings and recommendations to the commission;

                (2) assessing a fee, not to exceed the actual cost for the background check, to the person applying for a license or work permit; and

                (3) maintaining confidentiality of information, documents and communications provided to the commission by the board; provided, however, that if information, documents or communications that are provided to the commission by the board are also obtained by the commission from another source, the information, documents or communications from that other source may be made public.

          E. All licenses and work permits issued by the commission shall be renewed on an annual basis unless otherwise specified by rule of the commission. No license shall be valid for more than five years without renewal.

          F. The commission shall set license and work permit fees by rule, provided that no license fee or work permit fee exceeds one hundred dollars ($100) annually and work permit fees are less than license fees.

          [D.] G. The [state racing] commission shall not issue or renew a license or work permit and shall revoke or suspend [any] a license or work permit issued pursuant to this section if, after due consideration for the proper protection of public health, safety, morals, good order and the general welfare of the inhabitants of this state, it finds that the issuance of the license or work permit or the holding of the license or work permit is inconsistent with the public interest. The burden of proving [his] the qualifications to receive and hold a license [under] or work permit issued pursuant to this section shall be at all times on the applicant, [or] licensee or permittee. The [state racing] commission shall establish by [regulation such] rule the qualifications for licenses to be issued pursuant to this section. [as it deems in the public interest.

          E. Any] H. A person who is addicted to or uses narcotic drugs or who has been convicted of a violation of any federal or state narcotics law shall not be licensed [on any New Mexico racetrack] or issued a work permit by the commission to work on the racing grounds of a gaming operator licensee, unless sufficient evidence of rehabilitation is presented to the [state racing] commission.

          [F.] I. If the [state racing] commission finds that [any] a person has [done any of] participated in one or more of the following acts, the person shall not be licensed or issued a work permit by the commission for a period of five years from the date of the finding that the person, for the purpose of stimulating or depressing a horse or affecting its speed or stamina in a race or workout:

                (1) administered, attempted to administer or conspired with others to administer to [any] a horse, in or prior to a horse race, [any dope] a drug, chemical agent, stimulant or depressant, either internally, externally or hypodermically;

                (2) attempted to use, used or conspired with others to use in [any] a horse race [any] an electrical or mechanical buzzer, goad, device, implement or instrument, [excepting only the] with the exception of an ordinary whip [and] or spur, or acted to sponge the nostrils or windpipe of a racehorse; or

                (3) used [any] another method, whether injurious or [otherwise, for the purpose of stimulating or depressing] not, to stimulate or depress a horse or [affecting] affect its speed or stamina in a race or workout.

          [G. The validity of any license issued by the state racing commission shall be conditioned upon the licensee not engaging in racing, operating a horse racing meeting or participating as an employee or concessionaire at any racetrack in New Mexico operating or permitting to be operated an organized wagering system not licensed by the commission. Any licensee not complying with that condition shall, after reasonable notice and hearing, have his license revoked, and the license shall not be reissued until the expiration of one year from the date of revocation.]

          J. The commission shall:

                (1) deny a license or work permit to an applicant if the commission verifies that the applicant has participated in or is participating in horse racing activities conducted in the state in violation of the provisions of the Horse Racing Act or rules adopted pursuant to that act; or

                (2) revoke or deny a renewal for the license or work permit of a licensee or permittee if the commission verifies that the licensee or permittee has participated in or is participating in horse racing activities conducted in the state in violation of the provisions of the Horse Racing Act or rules adopted pursuant to that act.

          K. The commission shall provide due process and an opportunity for an applicant, licensee or permittee to present exculpatory evidence prior to having that applicant's, licensee's or permittee's license or work permit denied or revoked. Appeals of decisions made by the commission pursuant to a hearing before a hearing officer shall be heard and decided by the full commission. 

          L. A license or work permit that is revoked or denied renewal by the commission pursuant to Subsection J of this section shall not be reissued for one year from the date of revocation or denial. An applicant who is denied a license or work permit pursuant to Subsection J of this section shall not reapply for the license or work permit for one year from the date of the denial."

     Section 6. Section 60-1-11 NMSA 1978 (being Laws 1933, Chapter 55, Section 7, as amended) is amended to read:

     "60-1-11. RULES [AND REGULATIONS]--LICENSURE--REPRESENTATIVES OF COMMISSION--[SPECIAL POLICEMEN] REVOCATION [OR CANCELLATION] OF LICENSES OR WORK PERMITS--PENALTIES.--

          A. The [racing] commission shall adopt reasonable rules [and regulations in writing to achieve the objectives that all horse races be] necessary to assure that all horse races are conducted with fairness and that the participants and the patrons [be] are protected against [all] wrongful, unlawful or unfair conduct and practices [of every kind on the grounds where the races are held]. The commission shall [give reasonable public notice of the promulgation of its regulations] promulgate rules pursuant to the Administrative Procedures Act.

          [B. Every license issued by the commission shall require the applicant to abide by the rules and regulations promulgated by the commission, and the holder of each license shall post printed copies of the rules and regulations in conspicuous places upon the grounds where the races are being conducted and shall maintain them during the period when races are held.

          C.] B. The [racing] commission shall appoint a representative [or representatives] to be personally present at horse races to oversee them, to require strict observance of rules [and regulations] adopted by the commission, to avoid violations [thereof] of those rules and to [protect against the want of integrity on the part of the licensee or his representatives in conducting the races] prevent violations of the Horse Racing Act.

          [D.] C. For the purpose of preserving order and preventing violations of the Horse Racing Act and rules [and regulations promulgated] adopted pursuant [thereto] to that act, a [track] horse racetrack licensed to conduct a [horse] race meet, with the prior approval of the commission, shall appoint special [policemen] police officers, who shall have the same powers and immunities within and around the grounds of the [track] horse racetrack as are vested in county sheriffs to protect the property within [such] the racing grounds, to eject or arrest all persons within the racing grounds who are guilty of disorderly conduct or who [shall] neglect to pay fees or neglect to observe the rules of the commission. The appointment of [any such person] special police officers shall not be deemed to supersede the authority of peace officers within the grounds of the racetrack.

          [E.] D. In the event of [any] a violation by a [license holder] licensee or permittee of the provisions of the Horse Racing Act or of [any of] the rules [and regulations promulgated] adopted by the [racing] commission, the license or work permit of the offending [license holder] licensee or permittee may be [cancelled or] revoked at any time by the commission, provided [however] that the licensee or permittee shall have reasonable notice and opportunity to be heard before [cancellation or] revocation, and provided further that the [cancellation or] revocation of [any] a license or work permit shall not [relieve the licensee from] prevent the prosecution of the licensee or permittee for [any of] the violations or [from payment] the assessment of fines and penalties.

          [F.] E. The commission [is authorized to] may impose civil penalties upon [any] a licensee or permittee for a violation of the Horse Racing Act or [any rules or regulations promulgated] a rule adopted pursuant [thereto not exceeding] to that act. The fines shall not exceed five thousand dollars ($5,000) for each violation [which penalties] and shall be paid into the current school fund.

          [G. The commission shall not approve the hiring of any personnel or any special policemen pursuant to this section unless it finds that the system of security services to be provided will be at least equal to the services which would be provided by the thoroughbred racing protective bureau of the thoroughbred racing association of the United States under similar conditions.]"

     Section 7. Section 60-1-12 NMSA 1978 (being Laws 1973, Chapter 323, Section 7, as amended) is amended to read:

     "60-1-12. STEWARDS--POWERS AND DUTIES--REVIEW.--There shall be three stewards, licensed and employed by the [state racing] commission, to supervise each horse race [meeting] 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 licensee. All stewards shall be licensed or certified by a nationally recognized horse racing organization. Stewards shall exercise those powers and duties prescribed by the rules [and regulations] of the commission. [Any] A decision or action of the stewards may be reviewed or reconsidered by the commission."

     Section 8. Section 60-1-13 NMSA 1978 (being Laws 1975, Chapter 189, Section 1) is amended to read:

     "60-1-13. OFFICIAL STATE RACING CHEMIST--QUALIFICATIONS--DUTIES.--The [racing] commission shall designate one or more "official state racing [chemist] chemists". An official state racing chemist shall hold a doctorate degree in chemistry or a related field and shall be knowledgeable and experienced in the techniques used for testing the blood, urine and saliva of horses for drugs, [dope] chemical agents, stimulants and depressants. [He] The official state racing chemist may be either an employee of a private laboratory located in New Mexico or an employee of an agency of the state. [of New Mexico He] The chemist shall exercise [those] the duties [as] prescribed by the rules [and regulations] of the commission."

     Section 9. Section 60-1-17 NMSA 1978 (being Laws 1977, Chapter 161, Section 2, as amended) is amended to read:

     "60-1-17. BREEDERS' AWARDS.--

          A. To promote and improve the quality of racehorse breeding in New Mexico, the [track] horse racetrack shall pay a sum of money equal to ten percent of the first money of each purse won in New Mexico by a [horse] racehorse registered with the New Mexico horse breeders' association or the New Mexico Appaloosa racing association as New Mexico bred, except stake-race purses, in which case an amount equal to ten percent of the added money shall be paid.

          B. The sum of money provided for in Subsection A of this section shall be paid weekly to the owner of the dam of the [animal] horse at the time the [animal] horse was foaled upon certification of the [state racing] commission and either the New Mexico horse breeders' association or the New Mexico Appaloosa racing association, depending on the registry of the [horse] racehorse.

          C. In addition to the money distributed pursuant to Subsection A of this section, the New Mexico horse breeders' association shall distribute the money collected by the association pursuant to [Subsections C and D of] Section [60-1-10 NMSA 1978] 60-2E-47.7 NMSA 1978 in the following manner and in accordance with the rules [and regulations promulgated] adopted by the [state racing] commission:

                (1) forty-five percent of the money to the owners of the dams of the first place winners at the time the winners were foaled;

                (2) seven percent of the money to the owners of the studs that sired the first place winners at the time the winners were foaled;

                (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 commission distribution program; and

                (4) the remaining money to be divided among the first, second and third place finishers during each New Mexico [commercial] race meet [which finishers] that are registered as New Mexico bred with the New Mexico horse breeders' association.

          D. The New Mexico horse breeders' association shall file a fiduciary bond with the [state racing] commission in a face amount equal to the total money distributed during the previous calendar year pursuant to Subsection C of this section. [which] The bond shall be executed by a surety company authorized to do business in New Mexico; provided that the fiduciary bond shall be in an amount not less than two million dollars ($2,000,000).

          E. In the event that money to be distributed to the New Mexico horse breeders' association or the New Mexico Appaloosa racing association pursuant to this section cannot be properly administered or distributed to the members of the association by one of those associations, the commission shall receive the distribution for the New Mexico horse breeders' association or the New Mexico Appaloosa racing association due pursuant to this section and shall administer and distribute the money as required. If the commission is required to administer or distribute money on behalf of the New Mexico horse breeders' association or the New Mexico Appaloosa racing association, the maximum percentage of funds required to be distributed pursuant to this section shall be distributed to the commission and shall be paid by the commission to the New Mexico horse breeders' association or the New Mexico Appaloosa racing association as a fee to obtain the certification of the registry of the dam and stud of New Mexico bred horses.

          F. In the event that money to be distributed to the New Mexico horsemen's association pursuant to this section cannot be properly administered or distributed to the members of the association by that association, the commission shall receive, administer and distribute the money to the horsemen as required by Section 60-2E-47.7 NMSA 1978. If the commission is required to administer or distribute funds to horsemen, the maximum percentage of funds to be distributed pursuant to this section shall be distributed to the commission to administer and distribute."

     Section 10. Section 60-1-20 NMSA 1978 (being Laws 1947, Chapter 94, Section 1) is amended to read:

     "60-1-20. INFLUENCING RACE RESULTS--PENALTY.--Any person influencing or attempting to influence in any manner by offer of money, thing of value, future benefit, favor [preferment] or preferential treatment or by [any] a form of pressure or threat, or seeking or having an agreement or understanding or [conniving] conspiring with [any] an owner, jockey, groom or other person associated with or [interested] having an interest in [any] a stable of horses, a horse or [race] a horserace, in which [any such] a horse participates, to predetermine the result of [any such race shall be deemed] a horserace is guilty of a felony and upon conviction [thereof] shall be imprisoned in the state penitentiary for not less than one [(1)] year or more than two [(2)] years or fined not less than one thousand [($1,000.00)] dollars ($1,000) or more than five thousand [($5,000.00)] dollars ($5,000), or [penalized by] both [such imprisonment and fine, in the discretion of the Court]."

     Section 11. Section 60-1-21 NMSA 1978 (being Laws 1947, Chapter 94, Section 2) is amended to read:

     "60-1-21. AFFECTING SPEED OR STAMINA OF HORSE--PENALTY.--Any person:

          A. administering, [or] attempting to administer or conspiring with others to administer to [any] a horse, in or prior to a race, [or prior thereto, any dope] a drug, chemical agent, stimulant or depressant, either internally, externally or hypodermically; [or]

          B. attempting to use, using or conspiring with others to use in [any] a race [any] an electrical or mechanical buzzer, goad, device, implement or instrument, excepting only [the] an ordinary whip and spur; [or the act of]

          C. sponging the nostrils or windpipe of a racehorse; [or]

          D. using [any] a method, whether injurious or [otherwise] not, for the purpose of stimulating or depressing [such] a horse or affecting its speed or stamina in a race or workout; [and any person] or

          E. within the confines of the track, stands, stables, sheds or other places where horses are kept [which] that are eligible to race [over] on the racetrack of [any racing association or] a racetrack gaming operator licensee, having [within his] in the person's possession with intent to use, sell, give away, exchange or deliver to another, [and possession shall be prima facie evidence of intent, any such dope] a drug, chemical agent, stimulant, depressant; or an electrical or mechanical buzzer, goad, device, implement, instrument or applicator, [excepting only the] not including an ordinary whip and spur, [which could] that may be used for the purpose of affecting the speed or stamina of a horse, [shall be deemed] is guilty of a misdemeanor [and]. Each offense shall be punished by a fine of not less than five hundred [($500.00)] dollars ($500) and not more than one thousand [($1,000.00] dollars ($1,000) or by imprisonment in the county jail for not more than six [(6)] months, or [by] both [such fine and imprisonment]."

     Section 12. Section 60-1-22 NMSA 1978 (being Laws 1975, Chapter 190, Section 1) is amended to read:

     "60-1-22. TESTING SPECIMENS--FORWARDING TO THE DEPARTMENT OF HEALTH [AND SOCIAL SERVICES DEPARTMENT].--The commission shall adopt rules [and regulations] for the testing of urine and other specimens taken from [such] racehorses [as are] designated by the commission. Provided that a sufficient amount of specimen is available, each specimen taken from a racehorse shall be divided into two or more portions. One portion shall be tested by the commission or its designated agent in order to detect the presence of [any] a drug, [dope] chemical agent, stimulant or depressant. A second portion shall be forwarded by the commission to the scientific laboratory [system] of the department of health. [and social services department. After] If a questionable, cloudy or positive test result is obtained on the portion tested by the commission or its designated agent [and] or upon the written request of the president or manager of the New Mexico horsemen's association on forms prepared and approved by the commission, the scientific laboratory [system] shall transmit the corresponding second portion to the New Mexico horsemen's association. The scientific laboratory [system] shall keep all other specimens in a safe place in a controlled environment for a period of at least three months [and shall, after the expiration of at least ten days from the date of receipt, perform random tests on the specimens in order to detect the presence of any drug, dope, chemical agent, stimulant or depressant. The results of all such tests performed by the laboratory under this section shall be transmitted immediately by the laboratory to the commission, but they shall have no evidentiary value in any hearing before the commission.] The commission may contract for quality assurance drug testing services from a second laboratory or a national program that provides those services."

     Section 13. Section 60-1-25 NMSA 1978 (being Laws 1991, Chapter 195, Section 6, as amended) is amended to read:

     "60-1-25. SIMULCASTING.--

          A. As used in this section, "simulcasting" means a live audio-visual broadcast of an actual horse race at the time it is run.

          B. The [state racing] commission may permit simulcasting of live horse races [being run at] from licensed New Mexico racetracks to racetracks or other locations holding a pari-mutuel or gaming license outside the state, as well as to other licensed New Mexico racetracks, and of live horse races [being run at] from racetracks outside New Mexico to [licensed racetracks] racetrack gaming operator licensees in this state.

          C. Pari-mutuel wagering on simulcasted races shall be prohibited except at licensed New Mexico racetracks on days that [such] horse racetracks have race meets in progress or on days [that such] during weeks when horse racetracks do not have race meets in progress but are simulcasting races from another licensed New Mexico racetrack [provided, however, that].

          D. Pari-mutuel wagering on simulcasted races shall only be allowed [at any licensed New Mexico racetrack] by a racetrack gaming operator licensee within a radius of eighty miles of any other licensed New Mexico racetrack with race meets in progress if there is mutual agreement of the two licensees [and provided further that no licensed New Mexico racetrack].

          E. A racetrack gaming operator licensee shall not be allowed to receive broadcasts of simulcast races unless that racetrack offers at least seventeen days per year of pari-mutuel wagering on on-track live horse races.

          F. The commission shall promulgate rules concerning the simulcasting of racing as provided in this section.

          [C.] G. All simulcasting of races shall have prior approval of the [state racing] commission."

     Section 14. Section 60-1-25.1 NMSA 1978 (being Laws 1991, Chapter 195, Section 4) is amended to read:

     "60-1-25.1. INTERSTATE COMMON-POOL WAGERING AUTHORIZED.--

          A. Subject to the Interstate Horseracing Act, 15 U.S.C.A. Sections 3001 et seq. (1978), the [state racing] commission may permit a licensed New Mexico racetrack to participate in interstate common pools. [All provisions of the Horse Racing Act that govern pari-mutuel betting apply to pari-mutuel betting in interstate common pools except as otherwise provided in this section.] Pari-mutuel wagering on simulcasted and live horse races shall be conducted pursuant to the provisions of the Gaming Control Act and this section.

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

                (1) the licensee may combine its pari-mutuel pools with comparable pari-mutuel pools at the [sending racetrack] 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 [sending racetrack] host track shall govern wagers placed in this state and merged into the interstate common pool. Breakage for interstate common pools shall be calculated in accordance with the rules governing the [sending racetrack] host track and shall be distributed in a manner agreed upon by the [licensed New Mexico] racetrack gaming operator licensee guest track and the [sending racetrack] host track;

                (2) with the concurrence of the [sending racetrack] host track, an interstate common pool that excludes the [sending racetrack] host track may be formed among the racetrack gaming operator licensee guest track and other locations outside the state where the [sending racetrack] host track is located. When [such] an interstate common pool excluding the host track is formed, the commission may approve types of wagering, takeout, distribution of winnings, rules of racing and calculation of breakage that are different than those that would otherwise be in effect in New Mexico, provided that they are applied consistently to all persons in the interstate common pool and are reported in a timely manner to the board;

                (3) the racetrack gaming operator licensee may deduct from retainage resulting from an interstate common pool any reasonable fee paid to the person conducting the horse race 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 broadcast of the horse race; and

                (4) provisions of law or contract governing the distribution of pari-mutuel taxes, breeder or other awards and purses from the takeout of wagers placed in this state shall remain in effect for wagers placed in interstate common pools; provided that if the commission 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 gaming operator 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, the respective shares to breeder or other awards or purses may be modified.

          C. Subject to prior approval of the [state racing] commission, the following provisions apply when a [licensed New Mexico] racetrack gaming operator licensee participates in interstate common pools on a horse race that originates at the racetrack gaming operator licensee's racetrack:

                (1) a racetrack gaming operator licensee may permit one or more of its races to be utilized for pari-mutuel wagering at, and may transmit audio-visual signals of races the licensee conducts to, one or more locations outside New Mexico. The licensee may also permit pari-mutuel pools in other locations to be combined with the licensee's comparable pari-mutuel wagering pools or with wagering pools established in other jurisdictions. The commission may modify its rules and adopt separate rules for interstate common pools and their calculation of breakage;

                (2) daily pari-mutuel excise and daily racing taxes shall not be imposed upon any amounts wagered in an interstate common pool other than upon amounts wagered within this state;

                (3) except as otherwise provided in this section, any provisions of law or contract governing the distribution of shares of the takeout as New Mexico pari-mutuel taxes, breeder or other awards and purses shall remain in effect for amounts wagered within this state in interstate common pools, provided that with the concurrence of the racetrack gaming operator 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, the respective shares to breeder or other awards or purses may be modified; and

                (4) with respect to the retainage on interstate common pooling received from a guest state by a racetrack gaming operator licensee, the licensee shall allocate to the New Mexico horse breeder's association five percent of the daily retainage. Of the retainage remaining after the allocation to the New Mexico horse [breeder's] breeders' association, fifty percent shall be allocated to race purses and fifty percent shall be retained by the licensee.

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

          E. The [state racing] commission is authorized to adopt rules [and regulations] necessary [or appropriate] to exercise its powers pursuant to this section.

          F. For the purposes of this section:

                (1) "guest state" means the jurisdiction within which a guest track is located;

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

                (3) "host state" means the jurisdiction within which a host track is located;

                (4) "host track" ["sending racetrack" or "sending track"] means the horse racetrack from which the horse race is run that is transmitted to members of and is subject to an interstate common pool; and

                (5) "interstate common pool" means a pari-mutuel pool that combines comparable pari-mutuel pools of one or more locations accepting wagers on a horse race run at the host track for purposes of establishing payoff prices at the pool members' locations. Pool members from more than one state may simultaneously combine pari-mutuel pools into an interstate common pool."

     Section 15. Section 60-2E-3 NMSA 1978 (being Laws 1997, Chapter 190, Section 5, as amended) is amended to read:

     "60-2E-3. DEFINITIONS.--As used in the Gaming Control Act:

          A. "affiliate" means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with a specified person;

          B. "affiliated company" means a company that:

                (1) controls, is controlled by or is under common control with a company licensee; and

                (2) is involved in gaming activities or involved in the ownership of property on which gaming is conducted;

          C. "applicant" means a person who has applied for a license or for approval of an act or transaction for which approval is required or allowed pursuant to the provisions of the Gaming Control Act;

          D. "application" means a request for the issuance

of a license or for approval of an act or transaction for which approval is required or allowed pursuant to the provisions of the Gaming Control Act, but "application" does not include a supplemental form or information that may be required with the application;

          E. "associated equipment" means equipment or a mechanical, electrotechnical or electronic contrivance, component or machine used in connection with gaming activity;

          F. "board" means the gaming control board;

          G. "certification" means a notice of approval by the board of a person required to be certified by the board;

          H. "certified technician" means a person certified by a manufacturer licensee to repair and service gaming devices, but who is prohibited from programming gaming devices;           I. "company" means a corporation, partnership, limited partnership, trust, association, joint stock company, joint venture, limited liability company or other form of business organization that is not a natural person; "company" does not mean a nonprofit organization;

          J. "distributor" means a person who supplies gaming devices to a gaming operator but does not manufacture gaming devices;

          K. "equity security" means an interest in a company that is evidenced by:

                (1) voting stock or similar security;

                (2) a security convertible into voting stock or similar security, with or without consideration, or a security carrying a warrant or right to subscribe to or purchase voting stock or similar security;

                (3) a warrant or right to subscribe to or purchase voting stock or similar security; or

                (4) a security having a direct or indirect participation in the profits of the issuer;

          L. "executive director" means the chief administrative officer appointed by the board pursuant to Section 60-2E-7 NMSA 1978;

          M. "finding of suitability" means a certification of approval issued by the board permitting a person to be involved directly or indirectly with a licensee, relating only to the specified involvement for which it is made;

          N. "game" means an activity in which, upon payment of consideration, a player receives a prize or other thing of value, the award of which is determined by chance even though accompanied by some skill; "game" does not include an activity played in a private residence in which no person makes money for operating the activity except through winnings as a player;

          O. "gaming" means offering a game for play;

          P. "gaming activity" means an endeavor associated with the manufacture or distribution of gaming devices or the conduct of gaming;

          Q. "gaming device" means associated equipment or a gaming machine and includes a system for processing information that can alter the normal criteria of random selection that affects the operation of a game or determines the outcome of a game;

          R. "gaming employee":

                (1) means a person connected directly with:

                     (a) a gaming activity; ["gaming employee"] or

                     (b) a horse racetrack who performs accounting, administration or management, cash handling, pari-mutuel wagering operations, security and simulcasting operations for the racetrack; and

                (2) does not include:

                     [(1)] (a) bartenders, cocktail servers or other persons engaged solely in preparing or serving food or beverages;

                     [(2)] (b) secretarial or janitorial personnel;

                     [(3)] (c) stage, sound and light technicians; [or]

                     (d) a horseman's bookkeeper; or

                     [(4)] (e) other nongaming personnel;

          S. "gaming establishment" means the premises on or in which gaming is conducted;

          T. "gaming machine" means a mechanical, electrotechnical or electronic contrivance or machine that, upon insertion of a coin, token or similar object, or upon payment of any consideration, is available to play or operate a game, whether the payoff is made automatically from the machine or in any other manner;

          U. "gaming operator" means a person who conducts gaming at a gaming establishment or pari-mutuel wagering at a horse racetrack on live or simulcast horse races;

          V. "holding company" means a company that directly or indirectly owns or has the power or right to control a company that is an applicant or licensee, but a company that does not have a beneficial ownership of more than ten percent of the equity securities of a publicly traded corporation is not a holding company;

          W. "horse race" means a competition among horses on a predetermined course, in which the horse completing the course in the least time generally wins;

          X. "horse racetrack" means a place where horse races are conducted;

          [W.] Y. "immediate family" means natural persons who are related to a specified natural person by affinity or consanguinity in the first through the third degree;

          [X.] Z. "independent administrator" means a person who administers an annuity, who is not associated in any manner with the gaming operator licensee for which the annuity was purchased and is in no way associated with the person who will be receiving the annuity;

          [Y.] AA. "institutional investor" means a state or federal government pension plan or a person that meets the requirements of a qualified institutional buyer as defined in Rule 144A of the federal Securities Act of 1933, and is:

                (1) a bank as defined in Section 3(a)(6) of the federal Securities Exchange Act of 1934;

                (2) an insurance company as defined in Section 2(a)(17) of the federal Investment Company Act of 1940;

                (3) an investment company registered under Section 8 of the federal Investment Company Act of 1940;

                (4) an investment adviser registered under Section 203 of the federal Investment Advisers Act of 1940;

                (5) collective trust funds as defined in Section 3(c)(11) of the federal Investment Company Act of 1940;

                (6) an employee benefit plan or pension fund that is subject to the federal Employee Retirement Income Security Act of 1974, excluding an employee benefit plan or pension fund sponsored by a publicly traded corporation registered with the board; or

                (7) a group comprised entirely of persons specified in Paragraphs (1) through (6) of this subsection;

          [Z.] BB. "intermediary company" means a company that:

                (1) is a holding company with respect to a company that is an applicant or licensee; and

                (2) is a subsidiary with respect to any holding company;

          [AA.] CC. "key executive" means an executive of a licensee or other person having the power to exercise significant influence over decisions concerning any part of the licensed operations of the licensee or whose compensation exceeds an amount established by the board in a rule;

          [BB.] DD. "license" means an authorization required by the board for engaging in gaming activities or for engaging in pari-mutuel wagering on live or simulcasted horse races;

          [CC.] EE. "licensee" means a person to whom a valid license has been issued;

          [DD.] FF. "manufacturer" means a person who manufactures, fabricates, assembles, produces, programs or makes modifications to any gaming device for use or play in New Mexico or for sale, lease or distribution outside New Mexico from any location within New Mexico;

          [EE.] GG. "net take" means the total of the following, less the total of all cash paid out as losses to winning patrons and those amounts paid to purchase annuities to fund losses paid to winning patrons over several years by independent administrators:

                (1) cash received from patrons for playing a game;

                (2) cash received in payment for credit extended by a licensee to a patron for playing a game; and

                (3) compensation received for conducting a game in which the licensee is not a party to a wager;

          [FF.] HH. "nonprofit organization" means:

                (1) a bona fide chartered or incorporated branch, lodge, order or association, in existence in New Mexico prior to January 1, 1997, of a fraternal organization that is described in Section 501(c)(8) or (10) of the federal Internal Revenue Code of 1986 and that is exempt from federal income taxation pursuant to Section 501(a) of that code; or

                (2) a bona fide chartered or incorporated post, auxiliary unit or society of, or a trust or foundation for the post or auxiliary unit, in existence in New Mexico prior to January 1, 1997, of a veterans' organization that is described in Section 501(c)(19) or (23) of the federal Internal Revenue Code of 1986 and that is exempt from federal income taxation pursuant to Section 501(a) of that code;

          II. "pari-mutuel wagering" means a system of wagering in which bets on a live or simulcasted horse race are placed in a common pool and then paid, less a management fee and taxes, to those holding winning tickets;

          [GG.] JJ. "person" means a legal entity;

          [HH.] KK. "premises" means land, together with all buildings, improvements and personal property located on the land;

          [II.] LL. "progressive jackpot" means a prize that increases over time or as gaming machines that are linked to a progressive system are played and upon conditions established by the board may be paid by an annuity;

          [JJ.] MM. "public post-secondary educational institution" means an institution designated in Article 12, Section 11 of the constitution of New Mexico and an institution designated in Chapter 21, Articles 13, 14 and 16 [and 17] NMSA 1978;

          [KK.] NN. "progressive system" means one or more gaming machines linked to one or more common progressive jackpots;

          [LL.] OO. "publicly traded corporation" means a corporation that:

                (1) has one or more classes of securities registered pursuant to the securities laws of the United States or New Mexico;

                (2) is an issuer subject to the securities laws of the United States or New Mexico; or

                (3) has one or more classes of securities registered or is an issuer pursuant to applicable foreign laws that, the board finds, provide protection for institutional investors that is comparable to or greater than the stricter of the securities laws of the United States or New Mexico;

          PP. "race meet" means a period of live horse racing conducted on the racing grounds of a racetrack gaming operator licensee and authorized by the state racing commission pursuant to the Horse Racing Act;

          QQ. "racing grounds" means the area of a licensee's premises used for the purpose of conducting horse races and all activities ancillary to the conduct of horse races, including the track, horse barns and stalls, jockeys' quarters and horse training areas;

          [MM.] RR. "registration" means a board action that authorizes a company to be a holding company with respect to a company that holds or applies for a license or that relates to other persons required to be registered pursuant to the Gaming Control Act;

          SS. "simulcast" means a live audio-visual broadcast of a horse race being run at a horse racetrack other than the horse racetrack at which the broadcast is being received for viewing pursuant to a simulcasting contract;

          [NN.] TT. "subsidiary" means a company, all or a part of whose outstanding equity securities are owned, subject to a power or right of control or held, with power to vote, by a holding company or intermediary company; and

          [OO.] UU. "work permit" means a card, certificate or permit issued by the board, whether denominated as a work permit, registration card or otherwise, authorizing the employment of the holder as a gaming employee."

     Section 16. Section 60-2E-5 NMSA 1978 (being Laws 1997, Chapter 190, Section 7, as amended) is amended to read:

     "60-2E-5. GAMING CONTROL BOARD CREATED.--

          A. The "gaming control board" is created and consists of five members. [Four] Members are appointed by the governor with the advice and consent of the senate [and one ex-officio member is the chairman of the state racing commission]. All members of the board shall be residents of New Mexico and citizens of the United States. One [appointed] member of the board shall have a minimum of five years of previous employment in a supervisory and administrative position in a law enforcement agency; one [appointed] member of the board shall be a certified public accountant in New Mexico who has had at least five years of experience in public accountancy; one [appointed] member of the board shall be an attorney who has been admitted to practice before the supreme court of New Mexico; one member of the board shall be a public member of the state racing commission; and one [appointed] member of the board shall be a public member who has knowledge and experience in business management and financing.

          B. The [appointed] members of the board shall be appointed for terms of five years, except, of the members who are first appointed, the member with law enforcement experience shall be appointed for a term of five years; the member who is a certified public accountant shall be appointed for a term of four years; the member who is an attorney shall be appointed for a term of three years; and the public member, who is not a state racing commissioner, shall be appointed for a term of two years. Thereafter, all members shall be appointed for terms of five years. [No] A person shall not serve as a board member for more than two consecutive terms or ten years total.

          C. [No] A full-time board member who receives a salary pursuant to Subsection G of this section may not be employed in any other capacity or shall not in any manner receive compensation for services rendered to any person or entity other than the board while a member of the board.

          D. A vacancy on the board of an appointed member shall be filled within thirty days by the governor with the advice and consent of the senate for the unexpired portion of the term in which the vacancy occurs. A person appointed to fill a vacancy shall meet all qualification requirements of the office established in this section.

          E. The governor shall choose a [chairman] chair annually from the board's appointed full-time, salaried members.

          F. No more than three members of the board shall be from the same political party.

          G. The law enforcement, certified public accountant and attorney members of the board shall be full-time state officials and shall receive a salary set by the governor. The public member and [ex-officio] state racing commission member of the board shall not receive salaries for their work for the board. All [appointed] members of the board shall receive per diem and mileage pursuant to the provisions of the Per Diem and Mileage Act.

          H. The department of public safety shall conduct background investigations of all members of the board prior to confirmation by the senate. To assist the department in the background investigation, a prospective board member shall furnish a disclosure statement to the department on a form provided by the department containing that information deemed by the department as necessary for completion of a detailed and thorough background investigation. The required information shall include at least:

                (1) a full set of fingerprints made by a law enforcement agency on forms supplied by the department;

                (2) complete information and details with respect to the prospective board member's antecedents, habits, immediate family, character, criminal record, business activities, financial affairs and business associates covering at least a ten-year period immediately preceding the date of submitting the disclosure statement;

                (3) complete disclosure of any equity interest held by the prospective board member or a member of [his] the prospective board member's immediate family in a company that is an applicant or licensee or an affiliate, affiliated company, intermediary company or holding company in respect to an applicant or licensee; and

                (4) the names and addresses of members of the immediate family of the prospective board member.

           I. [No] A person may not be appointed or confirmed as a member of the board if that person or member of [his] that person's immediate family holds an equity interest in a company that is an applicant or licensee or an affiliate, affiliated company, intermediary company or holding company in respect to an applicant or licensee.

          J. A prospective board member shall provide assistance and information requested by the department of public safety or the governor and shall cooperate in any inquiry or investigation of the prospective board member's fitness or qualifications to hold the office to which he is appointed. The senate shall not confirm a prospective board member if it has reasonable cause to believe that the prospective board member has:

                (1) knowingly misrepresented or omitted a material fact required in a disclosure statement;

                (2) been convicted of a felony, a gaming related offense or a crime involving fraud, theft or moral turpitude within ten years immediately preceding the date of submitting a disclosure statement required pursuant to the provisions of Subsection H of this section;

                (3) exhibited a history of willful disregard for the gaming laws of this or any other state or the United States; or

                (4) had a permit or license issued pursuant to the gaming laws of this or any other state or the United States permanently suspended or revoked for cause.

          K. At the time of taking office, each board member shall file with the secretary of state a sworn statement that [he] the board member is not disqualified under the provisions of Subsection I of this section."

     Section 17. Section 60-2E-7 NMSA 1978 (being Laws 1997, Chapter 190, Section 9, as amended) is amended to read:

     "60-2E-7. BOARD'S POWERS AND DUTIES.--

          A. The board shall implement the state's policy on gaming consistent with the provisions of the Gaming Control Act and the Bingo and Raffle Act. It has the duty to fulfill all responsibilities assigned to it pursuant to those acts, and it has all authority necessary to carry out those responsibilities. It may delegate authority to the executive director, but it retains accountability. The board is an adjunct agency.

          B. The board shall:

                (1) employ the executive director;

                (2) make the final decision on issuance, denial, suspension and revocation of all licenses pursuant to and consistent with the provisions of the Gaming Control Act and the Bingo and Raffle Act;

                (3) develop, adopt and promulgate all regulations necessary to implement and administer the provisions of the Gaming Control Act and the Bingo and Raffle Act;

                (4) conduct itself, or employ a hearing officer to conduct, all hearings required by the provisions of the Gaming Control Act and other hearings it deems appropriate to fulfill its responsibilities;

                (5) meet at least once each month; [and]

                (6) prepare and submit an annual report in December of each year to the governor and the legislature, covering activities of the board in the most recently completed fiscal year, a summary of gaming activities in the state and any recommended changes in or additions to the laws relating to gaming in the state;

                (7) issue or renew a racetrack gaming operator's license only after the state racing commission approves the applicant for an original license or approves the continued operation of the horse racetrack and certifies to the board that the horse racetrack of the gaming operator licensee has complied with the requirements of the state racing commission, and issue work permits for gaming employees who are employed on the racing grounds or performing duties for the horse racetrack of the racetrack gaming operator licensee;

                (8) personally or by agents or representatives, supervise and verify the making of pari-mutuel pools and the distribution from those pools;

                (9) adopt rules governing, restricting or regulating bids on leases at racetracks; and

                (10) supervise and control the pari-mutuel machines and equipment at all horse races, including simulcasted races, held or licensed by the state, its agencies or commissions.

           C. The board may:

                (1) impose civil fines not to exceed

twenty-five thousand dollars ($25,000) for the first violation and fifty thousand dollars ($50,000) for subsequent violations of any prohibitory provision of the Gaming Control Act or any prohibitory provision of a regulation adopted pursuant to that act;

                (2) conduct investigations;

                (3) subpoena persons and documents to compel access to or the production of documents and records, including books and memoranda, in the custody or control of a licensee;

                (4) compel the appearance of employees of a licensee or persons for the purpose of ascertaining compliance with provisions of the Gaming Control Act or a regulation adopted pursuant to its provisions;

                (5) administer oaths and take depositions to the same extent and subject to the same limitations as would apply if the deposition were pursuant to discovery rules in a civil action in the district court;

                (6) sue and be sued subject to the limitations of the Tort Claims Act;

                (7) contract for the provision of goods and services necessary to carry out its responsibilities;

                (8) conduct audits, relevant to their gaming activities, of applicants, licensees and persons affiliated with licensees;

                (9) inspect, examine, photocopy and audit all documents and records of an applicant or licensee relevant to [his] the applicant's or licensee's gaming activities in the presence of the applicant or licensee or [his] the applicant's or licensee's agent;

                (10) require verification of income and all other matters pertinent to the gaming activities of an applicant or licensee affecting the enforcement of any provision of the Gaming Control Act;

                (11) inspect all places where gaming activities are conducted and inspect all property connected with gaming in those places;

                (12) summarily seize, remove and impound from places inspected any gaming devices, property connected with gaming, documents or records for the purpose of examination or inspection;

                (13) inspect, examine, photocopy and audit documents and records, relevant to [his] the affiliate's gaming activities, of any affiliate of an applicant or licensee that the board knows or reasonably suspects is involved in the financing, operation or management of the applicant or licensee. The inspection, examination, photocopying and audit shall be in the presence of a representative of the affiliate or its agent when practicable; and

                (14) except for the powers specified in Paragraphs (1) and (4) of this subsection, carry out all or part of the foregoing powers and activities through the executive director.

          D. The board shall monitor all activity authorized in an Indian gaming compact between the state and an Indian nation, tribe or pueblo. The board shall appoint the state gaming representative for the purposes of the compact.

          E. The board shall work cooperatively with the state racing commission to develop rules and procedures to exercise the following powers and duties:

                (1) approve all contracts and agreements for the payment of money and all salaries, fees and compensation by a racetrack gaming operator licensee;

                (2) exclude or compel the exclusion from any or all horse racetracks in the state a person whose behavior is found to be detrimental to the best interests of horse racing, as defined by the board, or a person who willfully violates the racing laws or rules of this state or another state;

                (3) observe and investigate the operations of a licensee to assure that the racing laws and rules of New Mexico and other relevant jurisdictions are complied with; and

                (4) withhold final approval of an original license or a renewal license for a racetrack gaming operator until the state racing commission has approved an applicant for an original license or approved the continued operation of the horse racetrack and certified to the board that the horse racetrack on the premises of a racetrack gaming operator licensee is in compliance with the requirements of the commission.

          F. All powers and duties of the Horse Racing Act not expressly transferred to the board or not expressly identified as a power or duty to be cooperatively exercised by the board and the state racing commission shall remain within the exclusive jurisdiction and authority of the state racing commission."

     Section 18. Section 60-2E-10 NMSA 1978 (being Laws 1997, Chapter 190, Section 12, as amended) is amended to read:

     "60-2E-10. EXECUTIVE DIRECTOR--POWERS--DUTIES.--

          A. The executive director shall implement the policies of the board.

          B. The executive director shall employ all personnel who work for the board. The employees shall be covered employees pursuant to the provisions of the Personnel Act. Among those personnel, [he] the executive director shall employ and designate an appropriate number of individuals as law enforcement officers subject to proper certification pursuant to the Law Enforcement Training Act. Law enforcement officers shall not carry firearms on racing grounds, except as provided in rules adopted by the board, and pursuant to approval of the state racing commission.

          C. The executive director shall establish organizational units [he] the executive director determines are appropriate to administer the provisions of the Gaming Control Act.

          D. The executive director:

                (1) may delegate authority to subordinates as [he] the executive director deems necessary and appropriate, clearly delineating the delegated authority and the limitations on it, if any;

                (2) shall take administrative action by issuing orders and instructions consistent with the Gaming Control Act and regulations of the board to assure implementation of and compliance with the provisions of that act and those regulations;

                (3) may issue administrative citations to [any] a licensee upon a reasonable belief that the licensee has violated or is violating any provision of the Gaming Control Act or regulations of the board;

                (4) may conduct research and studies that will improve the operations of the board and the provision of services to the citizens of the state;

                (5) may provide courses of instruction and practical training for employees of the board and other persons involved in the activities regulated by the board with the objectives of improving operations of the board and achieving compliance with the law and regulations;

                (6) shall prepare an annual budget for the board and submit it to the board for approval; and

                (7) shall make recommendations to the board of proposed regulations and any legislative changes needed to provide better administration of the Gaming Control Act and fair and efficient regulation of gaming activities in the state."

     Section 19. Section 60-2E-14 NMSA 1978 (being Laws 1997, Chapter 190, Section 16, as amended) is amended to read:

     "60-2E-14. LICENSURE--APPLICATION.--

          A. The board shall establish and issue the following categories of licenses:

                (1) manufacturer;

                (2) distributor;

                (3) gaming operator; and

                (4) gaming machine.

          B. The board shall issue certifications of findings of suitability for key executives and other persons for whom certification is required. The board may issue one certification of finding of suitability for a key executive or other person found suitable for employment in both gaming and racing operations.

          C. The board shall issue work permits for gaming employees. The board may issue one permit to allow a gaming employee to work in both gaming and racing operations.

          D. A licensee shall not be issued more than one type of license, but this provision does not prohibit a licensee from owning, leasing, acquiring or having in [his] the licensee's possession licensed gaming machines if that activity is otherwise allowed by the provisions of the Gaming Control Act. A licensee shall not own a majority interest in, manage or otherwise control a holder of another type of license issued pursuant to the provisions of that act.

          E. Applicants shall apply on forms provided by the board and furnish all information requested by the board. Submission of an application constitutes consent to a credit check of the applicant and all persons having a substantial interest in the applicant and any other background investigations required pursuant to the Gaming Control Act or deemed necessary by the board. The board may obtain from the taxation and revenue department copies of tax returns filed by or on behalf of the applicant or its affiliates and information concerning liens imposed on the applicant or its affiliates by the taxation and revenue department.

          F. All licenses issued by the board pursuant to the provisions of this section shall be reviewed for renewal annually unless revoked, suspended, canceled or terminated.

          G. A license shall not be transferred or assigned.

          H. The application for a license shall include:

                (1) the name of the applicant;

                (2) the location of the proposed operation;

                (3) the gaming devices to be operated, manufactured, distributed or serviced;

                (4) the names of all persons having a direct or indirect interest in the business of the applicant and the nature of such interest; and

                (5) such other information and details as the board may require.

          I. The board shall furnish to the applicant supplemental forms that the applicant shall complete and file with the application. [Such] The supplemental forms shall require complete information and details with respect to the applicant's antecedents, habits, immediate family, character, criminal record, business activities, financial affairs and business associates, covering at least a ten-year period immediately preceding the date of filing of the application."

     Section 20. A new section of the Gaming Control Act, Section 60-2E-14.1 NMSA 1978, is enacted to read:

     "60-2E-14.1. [NEW MATERIAL] CLASSIFICATION OF LICENSES--RACETRACK GAMING OPERATOR LICENSEES.--

          A. A gaming operator licensee authorized to conduct pari-mutuel wagering on live horse races on the racing grounds of the racetrack gaming operator licensee and on simulcasted horse races received on the racetrack gaming operator licensee's premises shall be issued either a class A or class B racetrack gaming operator license pursuant to the following:

                (1) a class A license shall be issued to a gaming operator licensee for a horse racetrack at which the total gross amount wagered through the pari-mutuel system in the preceding calendar year from live horse races and simulcasted races was ten million dollars ($10,000,000) or more; and

                (2) a class B license shall be issued to a gaming operator licensee for a horse racetrack at which the total gross amount wagered through the pari-mutuel system in the preceding calendar year from live horse races and simulcasted races was less than ten million dollars ($10,000,000).

          B. A new gaming operator licensee shall be given a classification by the board based on the best estimate of the projected total gross amount to be wagered at the new horse racetrack through the pari-mutuel system from live horse races and simulcasted races.

          C. Each class of license is subject to the provisions of the Gaming Control Act and the Horse Racing Act, except as explicitly stated in one of those acts.

          D. The board shall adopt rules as necessary to provide for racetrack gaming operator license classification."

     Section 21. A new section of the Gaming Control Act, Section 60-2E-16.1 NMSA 1978, is enacted to read:

     "60-2E-16.1. [NEW MATERIAL] LICENSING REQUIREMENTS--RACETRACK GAMING OPERATOR LICENSEES--SPECIAL CONDITIONS.--

          A. The board may limit the number of persons holding direct or indirect financial interests in a gaming operator's license.

          B. The board shall determine if the financial interests of an applicant or group of applicants are compatible with the general welfare of the residents of the state.

          C. A person shall not have a direct or indirect interest of any nature in gaming operator's licenses at more than two horse racetracks in the state.

          D. The board shall order a person having a direct or indirect interest in more than two horse racetracks in New Mexico to immediately divest himself of the interest. From the date the board issues the order to divest, the person shall not:

                (1) exercise financial, administrative, policymaking or supervisory power with respect to the horse racetrack;

                (2) act as an officer or director of the horse racetrack;

                (3) receive dividends, either in cash or stock from the horse racetrack;

                (4) hold or receive interest on a certificate of indebtedness from the horse racetrack;

                (5) exercise, individually or through a trustee, nominee or agent, a voting right or other power or privilege conferred by the person's direct or indirect interest in the horse racetrack; or

                (6) otherwise receive remuneration of any kind or nature from the business.

          E. As used in this section, "direct or indirect interest" means an administrative, policymaking, supervisory, financial interest or other interest deemed by the board to provide significant control over the conduct of horse racing, the handling or generation of proceeds or the development or implementation of policy of a horse racetrack; a financial interest is one held directly or indirectly, or beneficially, comprising ten percent or more of the total authorized, issued and outstanding securities of a business that is licensed to conduct horse racing in New Mexico."

     Section 22. Section 60-2E-27 NMSA 1978 (being Laws 1997, Chapter 190, Section 29, as amended) is amended to read:

     "60-2E-27. GAMING OPERATOR LICENSEES--SPECIAL CONDITIONS FOR RACETRACKS--NUMBER OF GAMING MACHINES--DAYS AND HOURS OF OPERATIONS.--

          A. The board may issue a gaming operator's license to a horse racetrack [licensed by the state racing commission pursuant to the Horse Racing Act] to conduct live horse races or simulcast races [may be issued a gaming operator's license] and to operate gaming machines [on its premises where live racing is conducted], provided that the state racing commission approves the applicant for operation of a horse racetrack and certifies to the board that the horse racetrack is in compliance with the requirements of the commission.

          B. The board may approve the renewal of the license of a racetrack gaming operator licensee only after the state racing commission has approved the continued operation of the horse racetrack and certified to the board that the horse racetrack on the premises of the racetrack gaming operator licensee has complied with the requirements of the commission.

          [B.] C. A [racetrack's] racetrack gaming operator's license shall automatically become void if

                [(1) the racetrack no longer holds an active license to conduct pari-mutuel wagering; or

                (2)] the horse racetrack fails to maintain a minimum of four live race days a week with at least nine live races on each race day during its licensed race meet.

          [C.] D. A racetrack gaming operator licensee [that is a racetrack] may have up to six hundred licensed gaming machines, but the number of gaming machines to be located on the licensee's premises shall be specified in the gaming operator's license.

          [D.] E. By execution of an allocation agreement, signed by both the allocating horse racetrack and the horse racetrack to whom the allocation is made, a gaming operator licensee that is a horse racetrack may allocate any number of its authorized gaming machines to another racetrack gaming operator licensee [that is a racetrack]. To be valid, the allocation agreement must bear the written approval of the board and the state racing commission, and this approval shall make specific reference to the [meeting] meetings at which the action of approval was taken and the number of votes cast both for and against the approval. By allocating a number of its authorized machines to another horse racetrack, the allocating horse racetrack automatically surrenders all rights to operate the number of machines allocated. No horse racetrack shall operate or be authorized to operate more than seven hundred fifty gaming machines.

          [E.] F. Gaming machines on a racetrack gaming operator licensee's premises may be played only on days when the racetrack is either conducting live horse races or simulcasting horse [race meets] races. On days when gaming machines are permitted to be operated, a racetrack gaming operator licensee may offer gaming machines for operation for up to eighteen hours per day; provided that the total number of hours in which gaming machines are operated does not exceed one hundred twelve hours in a one-week period beginning on Tuesday at 8:00 a.m. and ending at 8:00 a.m. on the following Tuesday. A racetrack gaming operator licensee may offer gaming machines for play at any time during a day, provided that the total hours of operation in each day from just after midnight of the previous day until midnight of the current day does not exceed eighteen hours. A racetrack gaming operator licensee shall determine, within the limitations imposed by this subsection, the hours it will offer gaming machines for operation each day and shall notify the board in writing of those hours.

          [F.] G. Alcoholic beverages shall not be sold, served, delivered or consumed in the area restricted pursuant to Subsection F of Section 60-2E-26 NMSA 1978."

     Section 23. A new section of the Gaming Control Act, Section 60-2E-27.1 NMSA 1978, is enacted to read:

     "60-2E-27.1. [NEW MATERIAL] PARI-MUTUEL WAGERING--RACETRACK GAMING OPERATOR LICENSEES--LIMITED TO ENCLOSURE WHERE HORSE RACES ARE CONDUCTED.--

          A. A racetrack gaming operator licensed by the board may conduct pari-mutuel wagering on live horse races or on simulcasted horse races.

          B. Pari-mutuel wagering may be conducted only within the enclosure where horse races are conducted on the racing grounds of a racetrack gaming operator licensee.

          C. A racetrack gaming operator licensee may sell pari-mutuel tickets or certificates only for:

                (1) live races being conducted on the racing grounds on the premises of the racetrack gaming operator licensee; or

                (2) simulcasted races received on the premises of the racetrack gaming operator licensee.  

          D. Pari-mutuel tickets or certificates may be sold only in the racing enclosure on the racing grounds of a gaming operator licensee or in areas set aside for viewing simulcasted races on the premises of the gaming operator licensee.

          E. Pari-mutuel wagering on the racing grounds of a gaming operator licensee on simulcasted races is permitted on all days during a live race meet or on all days of the weeks during which the licensee is receiving simulcasted races from another licensed horse racetrack in New Mexico.

          F. A racetrack gaming operator licensee shall not receive broadcasts of simulcasted horse races unless that horse racetrack offers at least seventeen days per year of pari-mutuel wagering on on-premises live horse races."

     Section 24. A new section of the Gaming Control Act, Section 60-2E-27.2 NMSA 1978, is enacted to read:

     "60-2E-27.2. [NEW MATERIAL] INTERSTATE COMMON-POOL WAGERING AUTHORIZED--RACETRACK GAMING OPERATOR LICENSEES.--

          A. Subject to the federal Interstate Horseracing Act of 1978, the state racing commission may permit a racetrack gaming operator licensee to participate in interstate common pools. All provisions of the Gaming Control Act that govern pari-mutuel wagering apply to pari-mutuel wagering in interstate common pools, except as approved by the state racing commission and reported to the board.

          B. Daily pari-mutuel excise and daily racing taxes shall not be imposed upon amounts wagered in an interstate common pool other than upon amounts wagered within this state.

          C. As used in this section, "interstate common pool" means a pari-mutuel pool that combines comparable pari-mutuel pools of one or more locations accepting wagers on a horse race run at the host track for purposes of establishing payoff prices at the pool members' locations. Pool members from more than one state may simultaneously combine pari-mutuel pools into an interstate common pool."

     Section 25. Section 60-2E-41 NMSA 1978 (being Laws 1997, Chapter 190, Section 43) is amended to read:

     "60-2E-41. COMMUNICATION OR DOCUMENT OF APPLICANT OR LICENSEE ABSOLUTELY CONFIDENTIAL--CONFIDENTIALITY NOT WAIVED--DISCLOSURE OF CONFIDENTIAL INFORMATION PROHIBITED.--

          A. Any communication or document of an applicant or licensee is confidential and does not impose liability for defamation or constitute a ground for recovery in any civil action if it is required by:

                (1) law or the regulations of the board; or

                (2) a subpoena issued by the board to be made or transmitted to the board.

          B. The confidentiality created pursuant to Subsection A of this section is not waived or lost because the document or communication is disclosed to the board.

          C. Notwithstanding the powers granted to the board by the Gaming Control Act, the board:

                (1) may release or disclose any confidential information, documents or communications provided by an applicant or licensee only with the prior written consent of the applicant or licensee or pursuant to a lawful court order after timely notice of the proceedings has been given to the applicant or licensee;

                (2) shall maintain all confidential information, documents and communications in a secure place accessible only to members of the board; [and]

                (3) shall adopt procedures and regulations to protect the confidentiality of information, documents and communications provided by an applicant or licensee; and

                (4) shall release or disclose confidential information, documents or communications provided by an applicant or licensee or obtained from a background check to the state racing commission upon request or as necessary to allow the state racing commission to approve and certify an applicant for an original racetrack gaming operator's license or a licensee for renewal of a racetrack gaming operator's license."

     Section 26. A new section of the Gaming Control Act, Section 60-2E-47.1 NMSA 1978, is enacted to read:

     "60-2E-47.1. [NEW MATERIAL] HORSE RACING--DAILY PARI-MUTUEL EXCISE TAX--IMPOSITION--AMOUNT.--

          A. A tax that may be cited as the "daily pari-mutuel excise tax" is imposed for the privilege of conducting pari-mutuel wagering on the racing grounds of a racetrack gaming operator licensee.

          B. The amount of the daily pari-mutuel excise tax to be paid when the licensee offers pari-mutuel wagering on live races conducted on the racing grounds of the premises of the racetrack gaming operator licensee shall be:

                (1) for a class A license, six hundred fifty dollars ($650) for each racing day authorized by the state racing commission; and

                (2) for a class B license, one-eighth percent of a class B licensee's gross amount wagered each day, up to a maximum of three hundred dollars ($300), for each racing day authorized by the state racing commission for the class B licensee.

           C. The daily pari-mutuel excise tax to be paid when a racetrack gaming operator licensee offers no pari-mutuel wagering on live races on the racing grounds on its premises and offers pari-mutuel wagering solely on simulcasted races shall be one-eighth percent of the licensee's gross amount wagered each day, up to a maximum of three hundred dollars ($300) for each racing day authorized by the state racing commission.

          D. The daily pari-mutuel excise tax for a state fair association designated by law, that in good faith conducts a public fair and exhibition of stock and farming products, shall be six hundred fifty dollars ($650) per day for each racing day authorized; provided, however, that when a licensed state fair association offers no pari-mutuel wagering on live races on the racing grounds on its premises and offers pari-mutuel wagering solely on simulcasted races, the daily pari-mutuel excise tax shall be one-eighth percent of the racetrack gaming operator licensee's gross amount wagered each day, up to a maximum of three hundred dollars ($300)."

     Section 27. A new section of the Gaming Control Act, Section 60-2E-47.2 NMSA 1978, is enacted to read:

     "60-2E-47.2. [NEW MATERIAL] DAILY RACING TAX--IMPOSITION--RACETRACK GAMING OPERATOR LICENSEES--AMOUNT--PROHIBITION OF CERTAIN OTHER TAXES.--

          A. In addition to the daily pari-mutuel excise tax imposed pursuant to Section 60-2E-47.1 NMSA 1978, but in lieu of the gross receipts tax imposed pursuant to the Gross Receipts and Compensating Tax Act on receipts of a racetrack gaming operator licensee from the gross amount wagered each day, a tax that may be referred to as the "daily racing tax" is imposed in an amount of two and three-sixteenths percent of the gross amount wagered each day on horse races on the premises of a racetrack gaming operator licensee. The tax shall be paid from the commissions on pari-mutuel wagering of the racetrack gaming operator licensee. The tax shall be paid on the gross amount wagered each day from live racing on the racing grounds of the racetrack gaming operator licensee or on simulcasted races on the premises of the racetrack gaming operator licensee.

          B. A deduction or offset from the daily racing tax due and owed by a racetrack gaming operator licensee may be taken on forms provided by the taxation and revenue department by the racetrack gaming operator licensee of not more than one-half of the annual daily racing tax due and owed for the first two hundred fifty thousand dollars ($250,000) of the gross amount wagered each day for a taxable year, as follows:

                (1) a class A racetrack gaming operator licensee may deduct the amount that the class A racetrack gaming operator licensee expends for capital improvements or in financing capital improvements at existing racetrack facilities; and

                (2) a class B racetrack gaming operator licensee may deduct:

                     (a) the amount that the class B racetrack gaming operator licensee expends for capital improvements, not to exceed fifty percent of the offset amount allowed pursuant to this subsection; and

                     (b) the amount that the class B racetrack gaming operator licensee expends for advertising, marketing and promoting horse racing in the state, not to exceed fifty percent of the offset allowed pursuant to this subsection.

          C. An amount equal to one-half of the daily racing tax imposed pursuant to Subsection A of this section is appropriated and is transferred to the state fair commission for expenditure as needed on capital improvements at the state fairgrounds and expenditure for debt service on negotiable bonds issued for the capital improvements. The unexpended or unencumbered balance remaining at the end of a fiscal year from the transfers to the state fair commission made pursuant to this subsection shall not revert to the general fund.

          D. Accurate records shall be kept by a racetrack gaming operator licensee to show all commissions, total amounts wagered, retainage, distributions and breakage and other information requested by the board. Records shall be open to inspection and shall be audited by the board or its authorized representatives. A racetrack gaming operator licensee is required to maintain records for pari-mutuel wagering and all other financial transactions of the horse racetrack according to generally accepted accounting principles, pursuant to requirements established by the board.

          E. Notwithstanding any other provision of law, a political subdivision of the state shall not impose an occupational or excise tax on a racetrack operating pursuant to the provisions of the Gaming Control Act or the Horse Racing Act. A political subdivision may impose local option gross receipts taxes on businesses within the political subdivision's jurisdiction to the extent authorized and permitted by law.

          F. As used in this section, "capital improvement" means a capital investment in infrastructure that is subject to depreciation pursuant to the federal Internal Revenue Code of 1986 and is approved by the state racing commission."

     Section 28. A new section of the Gaming Control Act, Section 60-2E-47.3 NMSA 1978, is enacted to read:

     "60-2E-47.3. [NEW MATERIAL] DETERMINATION OF MUNICIPAL COMPENSATION.--

          A. No later than August 31 of each year, the taxation and revenue department shall determine the total amount of local option gross receipts taxes paid in the previous fiscal year by a racetrack gaming operator licensee to the municipality in which the racetrack gaming operator licensee is located, that is subject to distribution pursuant to Section 7-1-6.12 NMSA 1978 to the municipality in which the premises of the racetrack gaming operator licensee is located.

          B. If the total distribution pursuant to Section 7-1-6.12 NMSA 1978 to a municipality from the racetrack gaming operator licensee is:

                (1) less than fifty thousand dollars ($50,000), then the taxation and revenue department shall distribute the difference between fifty thousand dollars ($50,000) and the amount of local option gross receipts taxes distributed to the municipality from payments of local option gross receipts taxes made by the racetrack gaming operator licensee in the last fiscal year from the revenue remitted in daily racing taxes pursuant to Section 60-2E-47.2 NMSA 1978; or

                (2) equal to or exceeds fifty thousand dollars ($50,000), then no amount of daily racing taxes from that racetrack gaming operator licensee shall be distributed to the municipality.

          C. The taxation and revenue department shall update the board periodically of its progress in calculating the distributions and notify the board when the distributions are complete.

          D. The taxation and revenue department shall inform the board of the amount of daily racing tax distributed pursuant to this section to municipalities from each racetrack gaming operator licensee no later than August 31 of each year.

          E. Balances of daily racing tax remaining after distribution to municipalities shall be deposited to the credit of the general fund."

     Section 29. A new section of the Gaming Control Act, Section 60-2E-47.4 NMSA 1978, is enacted to read:

     "60-2E-47.4. [NEW MATERIAL] DAILY RACE LICENSE FEE--IMPOSITION--AMOUNT--RACETRACK GAMING OPERATOR LICENSEE.--In addition to all other daily racing taxes, a daily race license fee of five hundred dollars ($500) is imposed on a racetrack gaming operator licensee for each day of live racing conducted on the racing grounds of the racetrack gaming operator licensee."

     Section 30. A new section of the Gaming Control Act, Section 60-2E-47.5 NMSA 1978, is enacted to read:

     "60-2E-47.5. [NEW MATERIAL] PAYMENT OF FEES AND TAXES--DELINQUENT PAYMENTS--FINES AND INTEREST.--

          A. Daily race license fees, daily pari-mutuel excise taxes and daily racing taxes imposed by the Gaming Control Act shall be paid to the taxation and revenue department at the close of the business day on Thursday of every week.

          B. Failure to make weekly remittances by the licensee shall result in an assessment by the taxation and revenue department against the licensee of a fine of one percent per month of the amount due, computed on a daily basis.

          C. Interest on amounts due shall be assessed by the taxation and revenue department at a rate of one percent per month computed on a daily basis and administered pursuant to the Tax Administration Act.

          D. Tax penalties and fines shall be distributed from the racing suspense account to the current school fund pursuant to Article 12, Section 4 of the constitution of New Mexico."

     Section 31. A new section of the Gaming Control Act, Section 60-2E-47.6 NMSA 1978, is enacted to read:

     "60-2E-47.6. [NEW MATERIAL] RACING SUSPENSE ACCOUNT CREATED.--

          A. The "racing suspense account" is created in the tax administration suspense fund. All revenue attributable to the daily racing tax, the daily pari-mutuel excise tax, all daily racing fees and any associated interest and penalties not otherwise distributed pursuant to the provisions of the Gaming Control Act shall be credited to the racing suspense account and distributed pursuant to the Tax Administration Act.

          B. The taxation and revenue department shall administer the racing suspense account pursuant to the Tax Administration Act.

          C. All money in the racing suspense account shall be identified as to the source of the money. 

          D. The board shall obtain information about the deposits, distributions and daily balances in the racing suspense account on a monthly basis and upon request of the board to the taxation and revenue department."

     Section 32. A new section of the Gaming Control Act, Section 60-2E-47.7 NMSA 1978, is enacted to read:

     "60-2E-47.7. [NEW MATERIAL] HORSEMEN'S COMMISSIONS-- MAXIMUM--COMMISSION DISTRIBUTION--COMMISSION FEE.--

          A. A class A racetrack gaming operator licensee shall be paid a commission of nineteen percent of the gross amount wagered on win, place and show through the pari-mutuel system, of which eighteen and three-fourths percent shall be retained by the class A racetrack gaming operator licensee. A fee in the amount of one-fourth percent on the commission retained by the class A racetrack gaming operator licensee shall be remitted to the racing suspense account for deposit in the general fund.

          B. A class B racetrack gaming operator licensee shall be paid a commission in an amount determined by the class B racetrack gaming operator licensee of not less than eighteen and three-fourths percent and not greater than twenty-five percent of the gross amount wagered on win, place and show through the pari-mutuel system. The commission shall be retained by a class B racetrack gaming operator licensee. Each class B racetrack gaming operator licensee shall advise the board not less than thirty days prior to the first day of each horse race meet of the percentage of commission that the licensee will retain.

          C. From the commissions, each racetrack gaming operator licensee shall allocate five-eighths percent to the New Mexico horse breeders' association weekly for distribution pursuant to the provisions of Section 60-1-17 NMSA 1978.

          D. In regard to exotic wagers:

                (1) a class A racetrack gaming operator licensee shall retain a commission of not less than twenty-one percent and not more than twenty-five percent of the gross amount wagered in exotic wagers;

                (2) a class B racetrack gaming operator licensee shall elect, with the approval of the board, to retain a commission of not less than twenty-one percent and not greater than thirty percent of the gross amount wagered in exotic wagers;

                (3) each racetrack gaming operator licensee shall advise the board not less than thirty days prior to the first day of a race meet of the amount of commission to be retained by the licensee from the gross amount wagered in exotic wagers; and

                (4) a racetrack gaming operator licensee shall allocate one and three-eighths percent to the New Mexico horse breeders' association weekly of redistribution pursuant to the provisions of Section 60-1-17 NMSA 1978.

          E. The odd cents of all redistributions to the wagerer over the next lowest multiple of ten from the gross amount wagered through the pari-mutuel system shall be retained by the racetrack gaming operator licensee, with fifty percent of the total of the odd cents wagered being allocated to enhance the race purses of established stake races that include only horses registered as New Mexico bred with the New Mexico horse breeders' association, to be distributed by the New Mexico horse breeders' association pursuant to Section 60-1-17 NMSA 1978 subject to the approval of the state racing commission.

          F. 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 following the closing day of the race meet and money resulting from the failure of patrons who purchased pari-mutuel tickets that were entitled to refund but were not refunded during the same sixty-day period shall be apportioned as follows:

                (1) the racetrack gaming operator licensee shall retain thirty-three and thirty-three hundredths percent;

                (2) the New Mexico horse breeders' association shall receive a distribution of thirty-three and thirty-four hundredths percent to enhance each horse racetrack's established overnight purses for races that include only horses registered as New Mexico bred with the New Mexico horse breeders' association, subject to board approval, pursuant to Section 60-1-17 NMSA 1978; and

                (3) thirty-three and thirty-three hundredths percent shall be allocated to horsemen's race purses.

          G. To promote and improve the quality of horse racing and simulcasting and the participation of interested persons in horse racing in New Mexico, one-half percent of the gross amount wagered on simulcasted horse races at each licensed racetrack in New Mexico that receives simulcasted horse races shall be allocated by each racetrack gaming operator licensee for distribution to the New Mexico horsemen's association, provided that at least one-fourth percent of the gross amount wagered on simulcasted races that is allocated to the New Mexico horsemen's association is used solely for medical benefits for the members of the New Mexico horsemen's association, and provided further that the remaining one-fourth percent of the gross amount wagered on simulcasted races that is allocated to the New Mexico horsemen's association shall be used to enhance purses at each licensed racetrack.

          H. The board shall by rule provide for the timing and manner of the distributions required by this section and shall audit, or arrange for an independent audit of, the disbursements required by this section.

          I. Fifty percent of the net retainage of each licensee shall be allocated to race purses. For purposes of this section, "net retainage" of the licensee means the commission retained by the licensee on all forms of wagers minus:

                (1) the daily taxes imposed on racetrack gaming operator licensees pursuant to the Gaming Control Act;

                (2) money allocated to the New Mexico horse breeders' association by this section and Section 60-1-17 NMSA 1978;

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

                (4) a deduction for expenses incurred to engage in intrastate simulcasting pursuant to Section 60-1-25 NMSA 1978; provided that:

                     (a) the deduction for each racetrack gaming operator licensee shall be a portion of five percent of the gross amount wagered at all the sites receiving the same simulcasted horse races;

                     (b) the deduction portion for each racetrack gaming operator licensee shall be an amount allocated to that licensee by agreement voluntarily reached among all of the horse racetracks sending or receiving the same simulcasted horse races; and

                     (c) the deduction portion for each racetrack gaming operator licensee shall be an amount allocated to that licensee by the state racing commission if all of the licensees sending or receiving the same simulcasted horse races fail to reach a voluntary agreement pursuant to Section 60-1-25.1 NMSA 1978; and

                (5) a deduction for fees and commissions incurred to receive interstate simulcasts.

          J. As used in this section, "exotic wager" means a wager made on other than win, place or show through the pari-mutuel system."

     Section 33. A new section of the Gaming Control Act is enacted to read:

     "[NEW MATERIAL] HORSE RACING--UNLAWFUL ACTS.--Prohibitions against horse racing, bookmaking, pool selling or other methods of wagering on horse races are not repealed. Pari-mutuel wagering on horse races that are conducted on the premises of a racetrack gaming operator licensee is the only authorized method of wagering on horse races permitted in the state, on Sunday or any other day."

     Section 34. A new section of the Gaming Control Act, Section 60-2E-63 NMSA 1978, is enacted to read:

     "60-2E-63. [NEW MATERIAL] PENALTY.--If a person directly or indirectly uses a pari-mutuel system of wagering except when licensed as a racetrack gaming operator licensee by the board and pursuant to the provisions of the Gaming Control Act and the Horse Racing Act, the person is guilty of a misdemeanor and upon conviction shall be fined an amount not to exceed five thousand dollars ($5,000) or sentenced to imprisonment for not more than ninety days or sentenced with both a fine and imprisonment. An officer of a corporation or company violating a provision of the Gaming Control Act pertaining to horse racing shall be deemed personally responsible and subject to the penalties imposed pursuant to this section."

     Section 35. A new section of the Tax Administration Act is enacted to read:

     "[NEW MATERIAL] DISTRIBUTIONS--DAILY HORSE RACING TAXES--MUNICIPAL SHARES.--The following distributions shall be made pursuant to the provisions of Section 7-1-6.1 NMSA 1978 from the following amounts transferred to the department from the racing suspense account:

          A. one hundred fifty dollars ($150) of the daily pari-mutuel excise tax imposed by Section 60-2E-47.1 NMSA 1978 remitted by a class A racetrack gaming operator licensee shall be distributed to the treasury of the municipality in which the class A racetrack gaming operator licensee's horse racetrack is located if the class A racetrack gaming operator licensee's racetrack is located in an incorporated municipality with a population according to the 1990 federal decennial census that is either:

                (1) less than six thousand persons if located in a county with a population of more than ten thousand but less than fifteen thousand persons; or

                (2) more than eight thousand persons but less than ten thousand persons if located in a county with a population of more than one hundred thousand persons but less than one hundred fifty thousand persons; and

          B. the balance of the daily racing tax imposed by Section 60-2E-47.2 NMSA 1978 after deductions pursuant to Subsection B of that section are taken shall be distributed to the treasury of a municipality in which a horse racetrack is located that is eligible for distributions pursuant to Section 60-2E-47.3 NMSA 1978."

     Section 36. A new section of the Tax Administration Act is enacted to read:

     "[NEW MATERIAL] RACING SUSPENSE ACCOUNT--GAMING CONTROL BOARD ACCESS TO INFORMATION.--The department shall provide the gaming control board with monthly reports on the deposits, balances, refunds and transfers from the racing suspense account and shall provide additional information about the account upon request by the gaming control board. Information about the account may be disclosed fully to the gaming control board, including deposits attributed to specific horse racetracks."

     Section 37. Section 10-15-1 NMSA 1978 (being Laws 1974, Chapter 91, Section 1, as amended) is amended to read:

     "10-15-1. FORMATION OF PUBLIC POLICY--PROCEDURES FOR OPEN MEETINGS--EXCEPTIONS AND PROCEDURES FOR CLOSED

MEETINGS.--

          A. In recognition of the fact that a representative government is dependent upon an informed electorate, it is declared to be public policy of this state that all persons are entitled to the greatest possible information regarding the affairs of government and the official acts of those officers and employees who represent them. The formation of public policy or the conduct of business by vote shall not be conducted in closed meeting. All meetings of any public body except the legislature and the courts shall be public meetings, and all persons so desiring shall be permitted to attend and listen to the deliberations and proceedings. Reasonable efforts shall be made to accommodate the use of audio and video recording devices.

          B. All meetings of a quorum of members of any board, commission, administrative adjudicatory body or other policymaking body of any state agency, any agency or authority of any county, municipality, district or [any] political subdivision, held for the purpose of formulating public policy, including the development of personnel policy, rules, regulations or ordinances, discussing public business or [for the purpose of] taking any action within the authority of or the delegated authority of any board, commission or other policymaking body are declared to be public meetings open to the public at all times, except as otherwise provided in the constitution of New Mexico or the Open Meetings Act. No public meeting once convened that is otherwise required to be open pursuant to the Open Meetings Act shall be closed or dissolved into small groups or committees for the purpose of permitting the closing of the meeting.

          C. If otherwise allowed by law or rule of the public body, a member of a public body may participate in a meeting of the public body by means of a conference telephone or other similar communications equipment when it is otherwise difficult or impossible for the member to attend the meeting in person, provided that each member participating by conference telephone can be identified when speaking, all participants are able to hear each other at the same time and members of the public attending the meeting are able to hear any member of the public body who speaks during the meeting.

          D. Any meetings at which the discussion or adoption of any proposed resolution, rule, regulation or formal action occurs and at which a majority or quorum of the body is in attendance, and any closed meetings, shall be held only after reasonable notice to the public. The affected body shall determine at least annually in a public meeting what notice for a public meeting is reasonable when applied to that body. That notice shall include broadcast stations licensed by the federal communications commission and newspapers of general circulation that have provided a written request for such notice.

          E. A public body may recess and reconvene a meeting to a day subsequent to that stated in the meeting notice if, prior to recessing, the public body specifies the date, time and place for continuation of the meeting and, immediately following the recessed meeting, posts notice of the date, time and place for the reconvened meeting on or near the door of the place where the original meeting was held and in at least one other location appropriate to provide public notice of the continuation of the meeting. Only matters appearing on the agenda of the original meeting may be discussed at the reconvened meeting.

          F. Meeting notices shall include an agenda containing a list of specific items of business to be discussed or transacted at the meeting or information on how the public may obtain a copy of such an agenda. Except in the case of an emergency, the agenda shall be available to the public at least twenty-four hours prior to the meeting. Except for emergency matters, a public body shall take action only on items appearing on the agenda. For purposes of this subsection, [an] "emergency" refers to unforeseen circumstances that, if not addressed immediately by the public body, will likely result in injury or damage to persons or property or substantial financial loss to the public body.

          G. The board, commission or other policymaking body shall keep written minutes of all its meetings. The minutes shall include at a minimum the date, time and place of the meeting, the names of members in attendance and those absent, the substance of the proposals considered and a record of any decisions and votes taken that show how each member voted. All minutes are open to public inspection. Draft minutes shall be prepared within ten working days after the meeting and shall be approved, amended or disapproved at the next meeting where a quorum is present. Minutes shall not become official until approved by the policymaking body.

          H. The provisions of Subsections A, B and G of this section do not apply to:

                (1) meetings pertaining to issuance, suspension, renewal or revocation of a license, except that a hearing at which evidence is offered or rebutted shall be open. All final actions on the issuance, suspension, renewal or revocation of a license shall be taken at an open meeting;

                (2) limited personnel matters; provided that for purposes of the Open Meetings Act, "limited personnel matters" means the discussion of hiring, promotion, demotion, dismissal, assignment or resignation of or the investigation or consideration of complaints or charges against any individual public employee; provided further that this [subsection] paragraph is not to be construed as to exempt final actions on personnel from being taken at open public meetings, nor does it preclude an aggrieved public employee from demanding a public hearing. Judicial candidates interviewed by any commission shall have the right to demand an open interview;

                (3) deliberations by a public body in connection with an administrative adjudicatory proceeding. For purposes of this paragraph, [an] "administrative adjudicatory proceeding" means a proceeding brought by or against a person before a public body in which individual legal rights, duties or privileges are required by law to be determined by the public body after an opportunity for a trial-type hearing. Except as otherwise provided in this section, the actual administrative adjudicatory proceeding at which evidence is offered or rebutted and any final action taken as a result of the proceeding shall occur in an open meeting;

                (4) the discussion of personally identifiable information about any individual student, unless the student, [his] the student's parent or guardian requests otherwise;

                (5) meetings for the discussion of bargaining strategy preliminary to collective bargaining negotiations between the policymaking body and a bargaining unit representing the employees of that policymaking body and collective bargaining sessions at which the policymaking body and the representatives of the collective bargaining unit are present;

                (6) that portion of meetings at which a decision is made concerning purchases in an amount exceeding two thousand five hundred dollars ($2,500) that can be made only from one source and that portion of meetings at which the contents of competitive sealed proposals solicited pursuant to the Procurement Code are discussed during the contract negotiation process. The actual approval of purchase of the item or final action regarding the selection of a contractor shall be made in an open meeting;

                (7) meetings subject to the attorney-client privilege pertaining to threatened or pending litigation in which the public body is or may become a participant;

                (8) meetings for the discussion of the purchase, acquisition or disposal of real property or water rights by the public body;

                (9) those portions of meetings of committees or boards of public hospitals where strategic and long-range business plans or trade secrets are discussed; [and]

                (10) that portion of a meeting of the gaming control board dealing with information made confidential pursuant to the provisions of the Gaming Control Act; and

                (11) that portion of a meeting of the state racing commission in which confidential information, documents or communications obtained from the gaming control board are reviewed or discussed.

          I. If any meeting is closed pursuant to the exclusions contained in Subsection H of this section [the closure]:

                (1) the closure, if made in an open meeting, shall be approved by a majority vote of a quorum of the policymaking body; the authority for the closure and the subject to be discussed shall be stated with reasonable specificity in the motion calling for the vote on a closed meeting; the vote shall be taken in an open meeting; and the vote of each individual member shall be recorded in the minutes. Only those subjects announced or voted upon prior to closure by the policymaking body may be discussed in a closed meeting; and

                (2) the meeting, if a closure is called for when the policymaking body is not in an open meeting, shall not be held until public notice, appropriate under the circumstances, stating the specific provision of the law authorizing the closed meeting and stating with reasonable specificity the subject to be discussed is given to the members and to the general public.

          J. Following completion of any closed meeting, the minutes of the open meeting that was closed or the minutes of the next open meeting if the closed meeting was separately scheduled shall state that the matters discussed in the closed meeting were limited only to those specified in the motion for closure or in the notice of the separate closed meeting. This statement shall be approved by the public body under Subsection G of this section as part of the minutes."

     Section 38. REPEAL.--Sections 60-1-2, 60-1-6 through

60-1-10, 60-1-14, 60-1-15, 60-1-15.2 through 60-1-16, 60-1-18, 60-1-19 and 60-1-24 NMSA 1978 (being Laws 1977, Chapter 245, Section 123, Laws 1973, Chapter 323, Section 4, Laws 1991, Chapter 7, Section 1, Laws 1933, Chapter 55, Sections 3 through 6, 8 and 9, Laws 1992, Chapter 110, Section 2, Laws 1993, Chapter 300, Section 1, Laws 1933, Chapter 55, Section 10, Laws 1965, Chapter 270, Section 1, Laws 1933, Chapter 55, Section 11 and Laws 1973, Chapter 323, Section 11, as amended) are repealed.

     Section 39. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2006.

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