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AN ACT

RELATING TO REGULATION OF HORSE RACING; ENACTING THE HORSE

RACING ACT; PROVIDING FOR LICENSING AND REGULATION OF HORSE

RACING; PROVIDING FOR COOPERATIVE COMPLETION OF BACKGROUND

INVESTIGATIONS WITH THE GAMING CONTROL BOARD; DISTRIBUTING

PROCEEDS FROM PARI-MUTUEL WAGERS; PROVIDING PENALTIES;

AMENDING, REPEALING AND ENACTING SECTIONS OF THE NMSA 1978;

DECLARING AN EMERGENCY.

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

Section 1. A new Section 60-1A-1 NMSA 1978 is enacted

to read:

"60-1A-1. SHORT TITLE.--Chapter 60, Article 1A NMSA

1978 may be cited as the "Horse Racing Act"."

Section 2. A new Section 60-1A-2 NMSA 1978 is enacted

to read:

"60-1A-2. DEFINITIONS.--As used in the Horse Racing

Act:

A. "board" means the gaming control board;

B. "breakage" means the odd cents by which the

amount payable on each dollar wagered exceeds a multiple of

ten;

C. "commission" means the state racing commission;

D. "exotic wagering" means all wagering other than

on win, place or show, through pari-mutuel wagering;

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E. "export" means to send a live audiovisual

broadcast of a horse race in the process of being run at a

horse racetrack from the originating horse racetrack to

another location;

F. "guest state" means a jurisdiction, other than

the jurisdiction in which a horse race is run, in which a

horse racetrack, off-track wagering facility or other facility

that is a member of and subject to an interstate common pool

is located;

G. "guest track" means a horse racetrack, off-

track wagering facility or other licensed facility in a

location other than the state in which a horse race is run

that is a member of and subject to an interstate common pool;

H. "handle" means the total of all pari-mutuel

wagering sales, excluding refunds and cancellations;

I. "horse race" means a competition among

racehorses on a predetermined course in which the horse

completing the course in the least amount of time generally

wins;

J. "host state" means the jurisdiction within

which a sending track is located, also known as a "sending

state";

K. "host track" means the horse racetrack from

which a horse race subject to an interstate common pool is

transmitted to members of that interstate common pool, also

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known as a "sending track";

L. "import" means to receive a live audiovisual

broadcast of a horse race;

M. "interstate common pool" means a pari-mutuel

pool that combines comparable pari-mutuel pools from one or

more locations that accept wagers on a horse race run at a

sending track for purposes of establishing payoff prices at

the pool members' locations, including pools in which pool

members from more than one state simultaneously combine pari-

mutuel pools to form an interstate common pool;

N. "jockey club" means an organization that

administers thoroughbred registration records and registers

thoroughbreds;

O. "licensed premises" means land, together with

all buildings, other improvements and personal property

located on the land, that is under the direct control of a

racetrack licensee, including the restricted areas, grandstand

and public parking areas;

P. "licensee" means a person licensed by the

commission and includes a holder of an occupational, secondary

or racetrack license;

Q. "occupational license" means a license issued

by the commission to a vendor or to a person having access to

a restricted area on the licensed premises, including a horse

owner, trainer, jockey, agent, apprentice, groom, exercise

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person, veterinarian, valet, farrier, starter, clocker, racing

secretary, pari-mutuel clerk and other personnel designated by

the commission whose work, in whole or in part, is conducted

around racehorses or pari-mutuel betting windows;

R. "pari-mutuel wagering" means a system of

wagering in which bets on a live or simulcast horse race are

pooled and held by the racetrack licensee for distribution of

the total amount, less the deductions authorized by law, to

holders of winning tickets; "pari-mutuel wagering" does not

include bookmaking or pool selling;

S. "pari-mutuel wagering pool" means the money

wagered on a specific horse race through pari-mutuel wagering;

T. "practical breeder" means a person who has

practical experience in breeding horses, although the person

may not be actively involved in breeding horses;

U. "primary residence" means the domicile where a

person resides for most of the year, and, if the person is

temporarily out of state, the address where a person will

return when the person returns to New Mexico or the address

that a person uses for purposes of a driver's license,

passport or voting;

V. "quarter horse" means a racehorse that is

registered with the American quarter horse association or any

successor association;

W. "race meet" means a period of time within dates

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specified by the commission in which a racetrack licensee is

authorized to conduct live racing on the racing grounds;

X. "racehorse" means a quarter horse or

thoroughbred that is bred and trained to compete in horse

races;

Y. "racetrack license" means a license to conduct

horse races issued by the commission;

Z. "racetrack licensee" means a person who has

been issued a racetrack license;

AA. "racing grounds" means the area of the

restricted area of licensed premises used for the purpose of

conducting horse races and all activities ancillary to the

conduct of horse races, including the track, stable area,

jockey's quarters and horse training areas;

BB. "retainage" means money that is retained from

wagers on win, place and show and on exotic wagers by a

racetrack licensee pursuant to the Horse Racing Act;

CC. "restricted areas" means the stable area, the

area behind the pari-mutuel betting windows and anywhere on

the racing grounds;

DD. "secondary licensee" means all officers,

directors, shareholders, lenders or holders of evidence of

indebtedness of a corporation or legal entity owning a horse

racetrack, and all persons holding a direct or indirect

interest of any nature whatsoever in the horse racetrack,

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including interests or positions that deal with the funds of

the racetrack or that are administrative, policymaking or

supervisory;

EE. "simulcast" means a transmission of a live

audiovisual broadcast of a horse race being run at a horse

racetrack other than the horse racetrack or other licensed

facility at which the broadcast is being received for viewing

pursuant to a simulcasting contract;

FF. "stakes race" means a horse race in which

nominations or entry or starting fees contribute to the purse;

an overnight race is not a stakes race;

GG. "steward" means an employee of the commission

who supervises horse races and oversees a race meet while in

progress, including holding hearings regarding licensees and

enforcing the rules of the commission and the horse racetrack;

HH. "takeout" means amounts authorized by statute

to be deducted from the pari-mutuel wagers;

II. "thoroughbred" means a racehorse that is

registered with the jockey club;

JJ. "track" means the surfaced oval area on which

horse races are conducted; and

KK. "vendor" means a person who provides goods or

services to or in the racing grounds or restricted area of the

licensed premises of a horse racetrack."

Section 3. A new Section 60-1A-3 NMSA 1978 is enacted

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to read:

"60-1A-3. COMMISSION CREATED--APPOINTMENT OF MEMBERS--

TERMS OF OFFICE.--

A. The "state racing commission" is created and is

administratively attached to the tourism department.

B. The commission shall consist of five members,

no more than three of whom shall be members of the same

political party. The commission members shall be appointed by

the governor and be confirmed by the senate. All members of

the commission shall hold at-large positions on the

commission.

C. At least three of the members of the commission

shall be practical breeders of racehorses within New Mexico.

D. A commission member shall have primary

residence in New Mexico and shall be of high character and

reputation so that public confidence in the administration of

horse racing is maintained.

E. The term of each member of the commission shall

be six years from the date of the member's appointment. The

member shall serve until a successor is appointed. In the

case of a vacancy in the membership of the commission, the

governor shall fill the vacancy by appointment for the

unexpired term.

F. A person shall not be eligible for appointment

as a member of the commission who is an officer, official or

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director in a corporation conducting horse racing within the

state.

G. Members of the commission shall receive no

salary, but each member of the commission shall receive per

diem and mileage pursuant to the Per Diem and Mileage Act.

H. The commission may appoint an executive

director and establish the executive director's duties and

compensation."

Section 4. A new Section 60-1A-4 NMSA 1978 is enacted

to read:

"60-1A-4. COMMISSION--POWERS--DUTIES.--

A. The commission may:

(1) grant, deny, suspend or revoke

occupational licenses, secondary licenses and racetrack

licenses, establish the terms for each classification of a

racetrack license and set fees for submitting an application

for a license;

(2) exclude or compel the exclusion of a

person from all horse racetracks who the commission deems

detrimental to the best interests of horse racing or who

willfully violates the Horse Racing Act, a rule or order of

the commission or a law of the United States or New Mexico;

(3) compel the production of documents,

books and tangible items, including documents showing the

receipts and disbursements of a racetrack licensee;

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(4) investigate the operations of a licensee

and place a designated representative on the licensed premises

of a racetrack licensee for the purpose of observing

compliance with the Horse Racing Act and rules or orders of

the commission;

(5) employ staff as required to administer

the Horse Racing Act and employ staff with basic law

enforcement training to be stationed at racetracks to maintain

peace and order, enforce the law, conduct investigations and

enforce the Horse Racing Act or rules or orders of the

commission; provided that staff employed with law enforcement

training may not carry firearms or other deadly weapons while

on duty for the commission;

(6) summon witnesses;

(7) administer oaths for the effective

discharge of the commission's authority; and

(8) appoint a hearing officer to conduct

hearings required by the Horse Racing Act or a rule adopted

pursuant to that act.

B. The commission shall:

(1) make rules to hold, conduct and operate

all race meets and horse races held in the state and to

identify and assign racing dates;

(2) require the following information for

each applicant on an application for a license:

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(a) the full name, address and contact

information of the applicant, and if the applicant is a

corporation, the name of the state of incorporation and the

names, addresses and contact information of officers, members

of the board of directors and managers of the corporation;

(b) the exact location at which the

applicant desires to conduct a horse race or race meet;

(c) whether the horse racetrack is

owned or leased, and, if leased, the name and residence of the

fee owner of the land or, if the owner is a corporation, the

names of the directors and stockholders;

(d) a statement of the assets and

liabilities of the person or corporation making the

application;

(e) the kind of racing to be conducted;

(f) the beginning and ending dates

desired for the race meet and the days during that time period

when horse races are to be scheduled; and

(g) other information determined by the

commission to be necessary to assess the potential for success

of the applicant;

(3) require a statement under oath by the

applicant that the information on the application is true;

(4) supervise and oversee the making of

pari-mutuel pools and the distribution from those pools;

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(5) make on-site inspections of horse

racetracks in New Mexico at reasonable intervals;

(6) approve all improvements proposed to be

completed on the licensed premises of a horse racetrack,

including extensions, additions or improvements of buildings,

stables or tracks;

(7) monitor and oversee the pari-mutuel

machines and equipment at all horse races or race meets held

in the state;

(8) approve contracts for simulcasting,

pari-mutuel wagering and capital improvements funded pursuant

to Section 60-1A-20 NMSA 1978 entered into by horse

racetracks;

(9) regulate the size of the purses to be

offered at horse races run in the state;

(10) require background investigations of

employees of a racetrack licensee as set forth in the rules of

the commission; and

(11) provide an annual report to the

governor regarding the commission's administration of horse

racing in the state."

Section 5. A new Section 60-1A-5 NMSA 1978 is enacted

to read:

"60-1A-5. COMMISSION RULES--ALL LICENSES--SUSPENSION,

REVOCATION OR DENIAL OF LICENSES--PENALTIES.--

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A. The commission shall adopt rules to implement

the Horse Racing Act and to ensure that horse racing in New

Mexico is conducted with fairness and that the participants

and patrons are protected against illegal practices on the

racing grounds.

B. Every license issued by the commission shall

require the licensee to comply with the rules adopted by the

commission. A racetrack licensee shall post printed copies of

the rules in conspicuous places on the racing grounds and

shall maintain them during the period when live horse races

are being conducted.

C. The commission may suspend, revoke or deny

renewal of a license of a person who violates the provisions

of the Horse Racing Act or rules adopted pursuant to that act.

The commission shall provide a licensee facing suspension,

revocation or denial of renewal of a license reasonable notice

and an opportunity for a hearing. The suspension, revocation

or denial of renewal of a license shall not relieve the

licensee from prosecution for the violations or from the

payment of fines and penalties assessed the licensee by the

commission.

D. The commission may impose civil penalties upon

a licensee for a violation of the provisions of the Horse

Racing Act or rules adopted by the commission. The fines

shall not exceed ten thousand dollars ($10,000) for each

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violation and shall be paid into the current school fund."

Section 6. A new Section 60-1A-6 NMSA 1978 is enacted

to read:

"60-1A-6. CLASSIFICATION OF RACETRACK LICENSES.--

A. A license to conduct a race meet in New Mexico

shall be classified as either a class A or class B license,

determined by the commission as follows:

(1) a class A racetrack license shall be

issued to a racetrack licensee who received from all race

meets in the preceding calendar year a gross amount wagered

through the pari-mutuel system of ten million dollars

($10,000,000) or more; and

(2) a class B racetrack license shall be

issued to a racetrack licensee who received from all race

meets in the preceding calendar year a gross amount wagered

through the pari-mutuel system of less than ten million

dollars ($10,000,000).

B. A new racetrack license to conduct a race meet

in New Mexico shall be given a classification by the

commission based on an estimate of the anticipated gross

amounts projected to be received by the new racetrack licensee

from all pari-mutuel wagering in the racetrack licensee's

first full calendar year of racing. After the racetrack

licensee's first full calendar year of racing, the commission

shall review the classification and change it if necessary.

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C. Each class of license is subject to all

provisions of the Horse Racing Act, except as otherwise

provided in that act. The commission shall adopt and

promulgate rules necessary to provide for license

classification."

Section 7. A new Section 60-1A-7 NMSA 1978 is enacted

to read:

"60-1A-7. ALL LICENSE APPLICATIONS--BACKGROUND

INVESTIGATIONS--RULES.--

A. A person applying for a license pursuant to the

Horse Racing Act shall submit to a background investigation to

be conducted by the board. The commission and the board shall

adopt rules to coordinate the manner in which the background

investigations are conducted. The rules shall at minimum

require that:

(1) an applicant for a license or license

renewal shall submit two fingerprint cards to the commission,

with one card to be submitted to the board for a statewide

check and the other card to be submitted to the federal bureau

of investigation for a nationwide check;

(2) arrest record information from a law

enforcement agency or the federal bureau of investigation and

information obtained as a result of the background

investigation conducted by the board is privileged and shall

not be disclosed to persons not directly involved in the

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decision affecting the specific applicant;

(3) an applicant shall provide all of the

information required by the commission; and

(4) the cost of the background investigation

shall be paid by the applicant.

B. An applicant for a license who is denied the

license by the commission shall have an opportunity to inspect

and challenge the validity of the record on which the denial

of the license was based."

Section 8. A new Section 60-1A-8 NMSA 1978 is enacted

to read:

"60-1A-8. RACETRACK LICENSES--APPLICATIONS--SPECIFIC

REQUIREMENTS.--

A. It is a violation of the Horse Racing Act for a

person to hold a public horse race or a race meet for profit

or gain in any manner unless the person has been issued a

racetrack license by the commission and has been authorized by

the commission to hold the horse race or race meet on specific

dates.

B. An application for a racetrack license shall be

submitted in writing on forms designated by the commission.

An applicant shall affirm that information contained in the

application is true and accurate. The application shall be

signed by the applicant or the applicant's agent, and the

signature shall be notarized.

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C. A racetrack license shall be valid for a period

not to exceed one year. The commission may renew a racetrack

license upon expiration of the term of the license.

D. Renewal applications for racetrack licenses

shall be filed no later than June 1 of each year. The race

dates for the upcoming year shall be set by the commission

after the commission receives all renewal applications.

E. An application shall specify the dates and days

of the week of the race meet that the applicant is requesting

the commission to approve.

F. An application shall be filed not less than

sixty days prior to the first day the proposed horse race or

race meet is to be held.

G. The fee for a new racetrack license issued

pursuant to this section shall not exceed five thousand

dollars ($5,000).

H. The commission may schedule a date for a

hearing on the application for a new racetrack license to

determine the eligibility of the applicant pursuant to the

Horse Racing Act or as needed for determining the eligibility

for the renewal of a racetrack license. The applicant shall

be notified of the hearing at least five days prior to the

date of the hearing. The applicant has the right to present

testimony in support of the application. Notice shall be

mailed to the address of the applicant appearing upon the

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application for the racetrack license. Notice of the hearing

date, time and location shall be postmarked by United States

mail five days prior to the date of the hearing. Deposit of

the hearing notice in United States mail constitutes notice.

I. If, after a hearing on the application, the

commission finds the applicant ineligible pursuant to the

provisions of the Horse Racing Act or rules adopted by the

board, the racetrack license shall be denied.

J. If there is more than one application for a

racetrack license pending at the same time, the commission

shall determine the racing days that will be allotted to each

successful applicant. Upon renewal, the commission shall

determine the racing days that will be allotted to each

applicant upon terms and conditions established by the

commission.

K. A person shall not have a direct, indirect or

beneficial interest of any nature, whether or not financial,

administrative, policymaking or supervisory, in more than two

horse racetracks in New Mexico. For purposes of this

subsection, a person shall not be considered to have a direct,

indirect or beneficial interest in a horse racetrack if the

person owns or holds less than ten percent of the total

authorized, issued and outstanding shares of a corporation

that is licensed to conduct a race meet in New Mexico, unless

the person has some other direct, indirect or beneficial

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interest of any nature, whether or not financial,

administrative, policymaking or supervisory, in more than two

licensed horse racetracks.

L. To determine interest held in a racetrack, to

the extent that the interest is based on stock ownership:

(1) stock owned, directly or indirectly, by

or for a corporation, partnership, estate or trust shall be

considered as being owned proportionately by its shareholders,

partners or beneficiaries;

(2) an individual shall be considered as

owning the stock, directly or indirectly, if it is held by an

immediate family member. For purposes of this paragraph, an

"immediate family member" includes only the individual's

siblings, spouse or children; and

(3) stock constructively owned by a person

by reason of the application of Paragraph (1) of this

subsection shall be considered to be actually owned by the

person; and stock shall be constructively owned by an

individual by reason of the application of Paragraph (2) of

this subsection if the purpose of the constructive ownership

is to make a person other than the individual applicant appear

as the owner of the stock.

M. A corporation holding a racetrack license shall

not issue to a person shares of its stock amounting to ten

percent or more of the total authorized, issued and

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outstanding shares, and a corporation holding a racetrack

license shall not issue shares of its stock that would, when

combined with that stock transferee's existing shares owned,

total more than ten percent of the total authorized, issued

and outstanding shares of the corporation, unless:

(1) the corporation gives written notice to

the commission at least sixty days before the contemplated

stock transfer that the person to whom the stock is being

transferred will become an owner of ten percent or more of the

total authorized, issued and outstanding shares of the

corporation; and

(2) the corporation receives written

approval from the commission of the proposed transfer.

N. A determination made by the commission of a

matter pursuant to this section shall be final and not subject

to appeal."

Section 9. A new Section 60-1A-9 NMSA 1978 is enacted

to read:

"60-1A-9. SECONDARY LICENSES--APPLICATIONS--SPECIFIC

REQUIREMENTS.--

A. A person who is actively and directly engaged

in the administration of a horse racetrack, whether in a

financial, administrative, policymaking or supervisory

capacity, shall hold a secondary license issued by the

commission.

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B. An application for a secondary license shall be

submitted in writing on forms designated by the commission.

An applicant shall affirm that information contained in the

application is true and accurate. The application shall be

signed by the applicant or the applicant's agent, and the

signature shall be notarized.

C. If an applicant for a racetrack license is a

corporation, all officers, directors, lenders or holders of

evidence of indebtedness of the corporation and all persons

who participate in any manner in a financial, administrative,

policymaking or supervisory capacity are required to hold a

secondary license issued by the commission.

D. A person who owns or holds, directly,

indirectly or beneficially, ten percent or more of the total

authorized, issued and outstanding shares of a corporation

that is a racetrack licensee is required to hold a secondary

license issued by the commission. If the commission finds

that a person who owns or holds, directly, indirectly or

beneficially, ten percent or more of the total authorized,

issued and outstanding shares of a corporation that is a

racetrack licensee is unqualified to be issued a secondary

license, the commission shall give notice of its finding to

the corporation and to the person owning or holding the

interest. The ineligible person shall without delay offer the

shares to the corporation for purchase. If the corporation

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does not elect to purchase the shares, the person owning or

holding the interest may offer the interest to other

purchasers, subject to prior approval of the purchasers by the

commission.

E. A secondary license shall be valid for a period

not to exceed three years. The commission may renew a

secondary license upon expiration of the term of the license.

F. The fee for a secondary license issued pursuant

to this section shall not exceed five hundred dollars ($500)."

Section 10. A new Section 60-1A-10 NMSA 1978 is enacted

to read:

"60-1A-10. OCCUPATIONAL LICENSES--APPLICATION--SPECIFIC

REQUIREMENTS.--

A. A person required by the Horse Racing Act to

have an occupational license shall apply for and may be issued

an occupational license by the commission.

B. An application for an occupational license

shall be submitted in writing on forms designated by the

commission. An applicant shall affirm that information

contained in the application is true and accurate. The

application shall be signed by the applicant or the

applicant's agent.

C. An occupational license shall be valid for a

period not to exceed five years. The commission may renew an

occupational license upon expiration of the term of the

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license.

D. The fee for an occupational license issued

pursuant to this section shall not exceed one hundred dollars

($100)."

Section 11. A new Section 60-1A-11 NMSA 1978 is enacted

to read:

"60-1A-11. GRANTING A LICENSE--STANDARDS.--

A. A license shall not be issued or renewed unless

the applicant has satisfied the commission that the applicant:

(1) is of good moral character, honesty and

integrity;

(2) does not have prior activities, criminal

record, reputation, habits or associations that:

(a) pose a threat to the public

interest;

(b) pose a threat to the effective

regulation and control of horse racing; or

(c) create or enhance the dangers of

unsuitable, unfair or illegal practices, methods and

activities in the conduct of horse racing, the business of

operating a horse racetrack or the financial activities

incidental to operating a horse racetrack;

(3) is qualified to be licensed consistent

with the Horse Racing Act;

(4) has sufficient business probity,

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competence and experience in horse racing as determined by the

commission;

(5) has proposed financing that is

sufficient for the nature of the license and from a suitable

source that meets the criteria set forth in this subsection;

and

(6) is sufficiently capitalized pursuant to

standards set by the commission to conduct the business

covered by the license.

B. The commission shall establish by rule

additional qualifications for a licensee as it deems in the

public interest.

C. A person issued or applying for an occupational

license who has positive test results for a controlled

substance or who has been convicted of a violation of a

federal or state controlled substance law shall be denied a

license or shall be subject to revocation of an existing

license unless sufficient evidence of rehabilitation is

presented to the commission.

D. If the commission finds that an applicant for

an occupational license or an occupational licensee has been

convicted of any of the provisions of Subsection E of this

section, the applicant shall be denied the occupational

license or the occupational licensee shall have the

occupational license revoked. An occupational license shall

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not be issued by the commission to an applicant or

occupational licensee for a period of five years from the date

of denial or revocation pursuant to this subsection.

E. An occupational license shall be denied or

revoked if the applicant or occupational licensee, for the

purpose of stimulating or depressing a race horse or affecting

its speed or stamina during a race or workout, is found to

have:

(1) administered, attempted to administer or

conspired to administer to a race horse, internally,

externally or by injection, a drug, chemical, stimulant or

depressant, or other foreign substances not naturally

occurring in a race horse, unless the applicant or

occupational licensee has been specifically permitted to do so

by the commission or a steward; or

(2) attempted to use, used or conspired with

others to use an electrical or mechanical device, implement or

instrument, except an ordinary whip, unless the applicant or

occupational licensee has been specifically permitted by the

commission or a steward to use the device, implement or

instrument.

F. The burden of proving the qualifications of an

applicant or licensee to be issued or have a license renewed

shall be on the applicant or licensee.

G. A determination by the commission of a matter

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pursuant to this section shall be final and conclusive and not

subject to appeal."

Section 12. A new Section 60-1A-12 NMSA 1978 is enacted

to read:

"60-1A-12. STEWARDS--POWERS--DUTIES.--There shall be

three stewards, licensed and employed by the commission, to

supervise each horse race 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 racetrack licensee.

All stewards shall be licensed or certified by a nationally

recognized horse racing organization. Stewards shall exercise

those powers and duties prescribed by commission rules. A

decision or action of a steward may be reviewed or

reconsidered by the commission."

Section 13. A new Section 60-1A-13 NMSA 1978 is enacted

to read:

"60-1A-13. OFFICIAL CHEMIST--QUALIFICATIONS--DUTIES.--

The commission shall designate at least one official chemist.

An official 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, chemicals, stimulants, depressants or

other foreign substances not naturally occurring in a horse.

The official chemist may be an employee of a private

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laboratory located in New Mexico or an employee of an agency

of New Mexico. The official chemist shall exercise the duties

prescribed by rules of the commission."

Section 14. A new Section 60-1A-14 NMSA 1978 is enacted

to read:

"60-1A-14. TESTING SPECIMENS.--

A. The commission shall adopt rules applying to

the handling and testing of urine and other specimens

identified by the commission to be taken from racehorses.

B. Each specimen taken from a racehorse shall be

divided into two or more samples, and:

(1) one sample shall be tested by the

commission or its designated laboratory in order to detect the

presence of unauthorized drugs, chemicals, stimulants,

depressants or other foreign substances not naturally

occurring in a horse; and

(2) the second sample shall be forwarded by

the commission to the scientific laboratory division of the

department of health.

C. After an inconclusive or positive test result

on the sample tested by the commission or its designated

laboratory and upon a written request from the president,

executive director or manager of the New Mexico horsemen's

association on forms designated by the commission, the

scientific laboratory division shall transmit the

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corresponding second sample to the New Mexico horsemen's

association.

D. The scientific laboratory division shall keep

all samples in a controlled environment for a period of at

least three months.

E. The commission shall contract with an

independent laboratory to maintain a quality assurance

program."

Section 15. A new Section 60-1A-15 NMSA 1978 is enacted

to read:

"60-1A-15. PARI-MUTUEL WAGERING AUTHORIZED--GAMBLING

STATUTES DO NOT APPLY.--

A. A racetrack licensee may conduct pari-mutuel

wagering on live horse races or on simulcasted horse races.

B. Pari-mutuel wagering may be conducted only on

the licensed premises where a live horse race is conducted or

where a simulcast horse race is televised or projected on the

racing grounds of the licensed premises of a racetrack

licensee.

C. The sale to patrons present on the licensed

premises of a racetrack licensee of pari-mutuel tickets or

certificates is not gambling as defined in Section 30-19-2 or

30-19-3 NMSA 1978.

D. Placing a wager while on the licensed premises

of a racetrack licensee is not placing a bet pursuant to

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Section 30-19-1 NMSA 1978.

E. The licensed premises of a horse racetrack is

not a gambling place as defined in Section 30-19-1 NMSA 1978."

Section 16. A new Section 60-1A-16 NMSA 1978 is enacted

to read:

"60-1A-16. SIMULCASTING.--

A. All simulcasting of horse races shall have

prior approval of the commission, and the commission shall

adopt rules concerning the simulcasting of horse races as

provided in this section.

B. A racetrack licensee shall not be allowed to

simulcast horse races unless that racetrack licensee offers at

least seventeen days per year of pari-mutuel wagering on live

horse races run on the premises of the racetrack licensee.

C. The commission may permit exporting of a horse

race being run by a racetrack licensee to another racetrack

licensee within New Mexico or exporting of a horse race from a

racetrack licensee to another location holding a pari-mutuel

or gaming license that allows simulcasting of a horse race

from outside of the state or jurisdiction that licenses that

out-of-state facility.

D. The commission may permit importing by a

racetrack licensee of horse races that are being run at

racetracks outside of the state licensed by a host state.

E. Pari-mutuel wagering on simulcast horse races

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shall be prohibited except on the licensed premises of a

racetrack licensee during the licensee's race meet at the

horse racetrack or when the racetrack licensee is importing a

race meet from another New Mexico-licensed horse racetrack.

F. A New Mexico-licensed horse racetrack that is

within a radius of eighty miles of any other New Mexico-

licensed horse racetrack with a race meet in progress may only

conduct pari-mutuel wagering on imported horse races if there

is a written agreement between the two racetrack licensees

allowing pari-mutuel wagering on imported horse races during

the period of time that the live horse races are taking

place."

Section 17. A new Section 60-1A-17 NMSA 1978 is enacted

to read:

"60-1A-17. INTERSTATE COMMON POOL WAGERING--

AUTHORIZED.--

A. Subject to the federal Interstate Horseracing

Act of 1978, the commission may permit a racetrack licensee to

participate in interstate common pools. All provisions of the

Horse Racing Act that govern pari-mutuel wagering apply to

pari-mutuel wagering in interstate common pools except as

otherwise provided in this section.

B. Daily pari-mutuel tax and daily capital outlay

tax shall not be imposed upon amounts wagered in an interstate

common pool other than upon amounts wagered within New Mexico.

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C. Subject to prior approval of the commission,

the following provisions apply when a racetrack licensee

participates in interstate common pools on a horse race that

originates outside of New Mexico:

(1) a racetrack licensee may combine its

pari-mutuel pools at the 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 host track

shall govern wagers placed in New Mexico and merged into the

interstate common pool. Breakage for interstate common pools

shall be calculated in accordance with the rules governing the

host track and shall be distributed in a manner agreed upon by

the racetrack licensee in New Mexico and the host track;

(2) with the concurrence of the host track,

an interstate common pool that excludes the host track may be

formed with the racetrack licensee in New Mexico and other

locations outside of the host state. When an interstate

common pool is formed pursuant to this paragraph, the

commission may approve types of wagering, takeout,

distribution of winnings, rules of racing and calculation of

breakage that are different from those that are in effect in

New Mexico; provided that the rules are applied consistently

to all persons in the interstate common pool;

(3) the racetrack licensee may deduct from

retainage resulting from an interstate common pool a

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reasonable fee to be paid to the person conducting the horse

race at the host track 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 simulcast horse race; and

(4) provisions of New Mexico law or

contracts governing the distribution of daily pari-mutuel tax

and daily capital outlay tax and breeders' or other awards and

purses from the takeout from wagers placed in New Mexico shall

remain in effect for wagers placed in an interstate common

pool; 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 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 breeders'

or other awards or purses may be modified.

D. Subject to prior approval of the commission,

the following provisions apply when a racetrack licensee in

New Mexico participates in interstate common pools as a host

track:

(1) a racetrack licensee may permit one or

more of its horse races to be used for pari-mutuel wagering

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at, and may export a horse race to, one or more licensed sites

outside of New Mexico. The racetrack licensee may also permit

pari-mutuel pools in other locations to be combined with the

racetrack 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

the interstate common pools and their calculation of breakage;

and

(2) except as otherwise provided in this

section, New Mexico law or contracts governing the

distribution of shares of the takeout for daily pari-mutuel

tax or daily capital outlay tax and breeders' or other awards

and purses shall remain in effect for amounts wagered within

New Mexico in interstate common pools; provided that with the

concurrence of the racetrack licensee of the host track 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 breeders' or other awards or purses may

be modified.

E. When the laws and rules of the host state 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 state's

pari-mutuel wagering pool, in which case, one of the guest

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state's tracks shall serve as if it were the host track for

the purposes of calculating the pari-mutuel wagering pool. An

interstate common pool may include members located outside of

the United States. Except as otherwise set forth in

commission rules, participation by a person in an interstate

common pool with wagering facilities in one or more states or

jurisdictions shall not cause the participating person to be

deemed to be doing business in a jurisdiction other than the

jurisdiction in which that person is physically located.

F. The commission may adopt rules necessary to

implement this section."

Section 18. A new Section 60-1A-18 NMSA 1978 is enacted

to read:

"60-1A-18. DAILY PARI-MUTUEL TAX--IMPOSED--RATE.--

A. The "daily pari-mutuel tax" is imposed on a

racetrack licensee that offers pari-mutuel wagering at the

racetrack licensee's licensed premises and shall be remitted

to the taxation and revenue department for deposit in the

general fund.

B. The daily pari-mutuel tax imposed on class A

racetrack licensees pursuant to this section shall be:

(1) for each racing day a class A racetrack

licensee offers pari-mutuel wagering on live on-track horse

races, six hundred fifty dollars ($650); provided, however,

that a class A racetrack licensee shall deduct from the six

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hundred fifty dollars ($650) and remit to the municipality in

which the racetrack licensee is located one hundred fifty

dollars ($150) if the racetrack licensee is located in a

municipality having a population according to the 2000 federal

decennial census of:

(a) less than six thousand located in a

county with a population of more than ten thousand but less

than fifteen thousand; or

(b) more than eight thousand but less

than ten thousand located in a county with a population of

more than one hundred thousand but less than one hundred fifty

thousand; and

(2) for each day a class A racetrack

licensee offers no pari-mutuel wagering on live on-track horse

races and offers solely pari-mutuel wagering on simulcast

races pursuant to the Horse Racing Act, one-eighth percent of

the racetrack licensee's gross daily handle, not to exceed

three hundred dollars ($300) per racing day.

C. The daily pari-mutuel tax imposed on a class B

racetrack licensee pursuant to this section shall be:

(1) for each racing day a class B racetrack

licensee offers pari-mutuel wagering on live on-track horse

races, one-eighth percent of the racetrack licensee's gross

daily handle, not to exceed three hundred dollars ($300) per

racing day; and

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(2) for each day a class B racetrack

licensee offers no pari-mutuel wagering on live on-track horse

races and offers solely pari-mutuel wagering on simulcast

races pursuant to the Horse Racing Act, one-eighth percent of

the class B racetrack licensee's gross daily handle, not to

exceed three hundred dollars ($300) per racing day."

Section 19. A new Section 60-1A-19 NMSA 1978 is enacted

to read:

"60-1A-19. RETAINAGE--NEW MEXICO HORSE BREEDERS'

ASSOCIATION AND NEW MEXICO HORSEMEN'S ASSOCIATION--BREAKAGE--

DISTRIBUTION OF RETAINED AMOUNTS.--

A. Each racetrack licensee shall notify the

commission at least thirty days prior to each race meet of the

amount of exotic wager retainage that the racetrack licensee

will retain pursuant to Paragraph (1) or (2) of this

subsection. There shall be an amount retained by the

racetrack licensee equal to:

(1) for a class A racetrack licensee:

(a) nineteen percent of the gross

amount wagered on win, place and show, of which: 1) eighteen

and three-fourths percent shall be retained by the racetrack

licensee; and 2) one-fourth percent shall be remitted to the

taxation and revenue department for deposit in the general

fund; and

(b) not less than twenty-one percent

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and not greater than twenty-five percent of the gross amount

wagered in exotic wagers; and

(2) for a class B racetrack licensee:

(a) not less than eighteen and three-

fourths percent and not greater than twenty-five percent of

the gross amount wagered daily on win, place and show; and

(b) not less than twenty-one percent

and not greater than thirty percent of the gross amount

wagered in exotic wagers.

B. There shall be retained by a racetrack licensee

for allocation to the New Mexico horse breeders' association

amounts equal to:

(1) five-eighths percent of the gross amount

wagered on win, place and show to be allocated weekly to the

New Mexico horse breeders' association for further

distribution pursuant to the provisions of Subsection D of

Section 60-1A-24 NMSA 1978; and

(2) one and three-eighths percent of the

gross amount wagered in exotic wagers to be allocated weekly

to the New Mexico horse breeders' association for further

distribution pursuant to the provisions of Subsection D of

Section 60-1A-24 NMSA 1978.

C. The breakage from the gross amount wagered

through pari-mutuel wagering shall be retained by the licensee

and allocated as follows:

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(1) fifty percent of the total breakage

shall be retained by the racetrack licensee; and

(2) fifty percent of the total breakage

shall be allocated by the racetrack licensee to enhance the

race purses of established stakes races that include only New

Mexico-bred horses that are registered with the New Mexico

horse breeders' association. The New Mexico horse breeders'

association shall distribute the percentage designated to

purses pursuant to Subsection D of Section 60-1-24 NMSA 1978,

subject to the approval of the commission.

D. All 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 succeeding the closing day of the race

meet or from all money resulting from the failure of patrons

who purchased pari-mutuel tickets that were entitled to a

refund but were not refunded by the end of the sixty-day

period immediately following the race meet shall be

apportioned as follows:

(1) thirty-three and thirty-three hundredths

percent shall be retained by the racetrack licensee;

(2) thirty-three and thirty-four hundredths

percent shall be distributed to the New Mexico horse breeders'

association to enhance each racetrack licensee's established

overnight purses for races that include only horses registered

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as New Mexico bred pursuant to Paragraph (3) of Subsection D

of Section 60-1A-24 NMSA 1978, subject to the approval of the

commission; and

(3) thirty-three and thirty-three hundredths

percent shall be allocated to the New Mexico horsemen's

association for purses.

E. One-half percent of the gross amount wagered on

simulcast horse races broadcast to a horse racetrack in New

Mexico shall be distributed by the racetrack licensee to the

New Mexico horsemen's association for medical benefits for the

members of the New Mexico horsemen's association. The

commission shall by rule provide for the timing and manner of

the distribution required pursuant to this subsection and

shall audit or arrange for an independent audit of the

distributions required.

F. Amounts to be deducted from the retainage by

the racetrack licensee from any form of wager made on the

licensed premises of the racetrack licensee are:

(1) the daily pari-mutuel tax imposed by

Section 60-1A-18 NMSA 1978;

(2) money allocated in this section to the

New Mexico horse breeders' association;

(3) money allocated by this section to the

New Mexico horsemen's association;

(4) expenses incurred to engage in

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intrastate simulcasting pursuant to the Horse Racing Act;

provided that the deduction for a racetrack licensee shall be

a portion of five percent of the gross amount wagered at all

the sites receiving the same simulcast horse races and:

(a) the deduction for a racetrack

licensee shall be an amount allocated to the racetrack

licensee by agreement voluntarily reached between all the

racetracks sending or receiving the same simulcast horse

races; or

(b) the deduction for a racetrack

licensee shall be an amount identified by the commission if

all the racetracks sending or receiving the same simulcast

horse races fail to reach a voluntary agreement on the level

at which to set the rate of the deduction for expenses

incurred for engaging in intrastate simulcasting; and

(5) fees incurred to receive interstate

simulcasts pursuant to the Horse Racing Act.

G. A racetrack licensee shall allocate to the New

Mexico horse breeders' association five percent of the daily

retainage on interstate common pools received from a guest

state by a racetrack licensee. Of the net retainage from all

wagers, after deductions:

(1) fifty percent shall be allocated to

purses; and

(2) fifty percent shall be retained by the

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racetrack licensee."

Section 20. A new Section 60-1A-20 NMSA 1978 is enacted

to read:

"60-1A-20. DAILY CAPITAL OUTLAY TAX--CAPITAL OUTLAY

OFFSET--STATE FAIR COMMISSION DISTRIBUTION--DAILY LICENSE

FEES.--

A. A "daily capital outlay tax" of two and three-

sixteenths percent is imposed on the gross amount wagered each

day at a racetrack where horse racing is conducted on the

premises of a racetrack licensee and also on the gross amount

wagered each day when a racetrack licensee is engaged in

simulcasting pursuant to the Horse Racing Act. After

deducting the amount of offset allowed pursuant to this

section, any remaining daily capital outlay tax shall be paid

by the commission to the taxation and revenue department from

the retainage of a racetrack licensee from on-site wagers made

on the licensed premises of the racetrack licensee for deposit

in the general fund. Of the daily capital outlay tax imposed

pursuant to this subsection:

(1) for a class A racetrack licensee, not

more than one-half of the daily capital outlay tax imposed on

the first two hundred fifty thousand dollars ($250,000) of the

daily handle may be offset by the amount that the class A

racetrack licensee expends for capital improvements or for

long-term financing of capital improvements at the racetrack

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licensee's existing facility;

(2) for a class B racetrack licensee, not

more than one-half of the daily capital outlay tax imposed on

the first two hundred fifty thousand dollars ($250,000) of the

daily handle may be offset:

(a) in an amount not to exceed one-half

of the offset allowed, the amount expended by the class B

racetrack licensee for capital improvements; and

(b) in an amount not to exceed one-half

of the offset allowed, the amount expended by the class B

racetrack licensee for advertising, marketing and promoting

horse racing in the state; and

(3) for both class A and class B racetrack

licensees, an amount equal to one-half of the daily capital

outlay tax is appropriated and transferred to the state fair

commission for expenditure on capital improvements at the

state fairgrounds and for expenditure on debt service on

negotiable bonds issued for the state fairgrounds' capital

improvements.

B. An additional daily license fee of five hundred

dollars ($500) shall be paid to the commission by the

racetrack licensee for each day of live racing on the premises

of the racetrack licensee.

C. Accurate records shall be kept by the racetrack

licensee to show gross amounts wagered, retainage, breakage

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and amounts received from interstate common pools and

distributions from gross amounts wagered, retainage, breakage

and amounts received from interstate common pools, as well as

other information the commission may require. Records shall

be open to inspection and shall be audited by the commission,

its authorized representatives or an independent auditor

selected by the commission. The commission may prescribe the

method in which records shall be maintained. A racetrack

licensee shall keep records that are accurate, legible and

easy to understand.

D. Notwithstanding any other provision of law, a

political subdivision of the state shall not impose an

occupational tax on a horse racetrack owned or operated by a

racetrack licensee. A political subdivision of the state

shall not impose an excise tax on a horse racetrack owned or

operated by a racetrack licensee. Local option gross receipts

taxes authorized by the state may be imposed to the extent

authorized and imposed by a subdivision of the state on a

horse racetrack owned or operated by a racetrack licensee."

Section 21. A new Section 60-1A-21 NMSA 1978 is enacted

to read:

"60-1A-21. INABILITY TO RECEIVE OR ADMINISTER

DISTRIBUTIONS--NEW MEXICO HORSE BREEDERS' ASSOCIATION--NEW

MEXICO HORSEMEN'S ASSOCIATION--COMMISSION AUTHORITY--NEW

MEXICO-BRED HORSE REGISTRY.--

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A. In the event that money allocated to the New

Mexico horse breeders' association pursuant to Section

60-1A-19 NMSA 1978 cannot be received or administered by the

New Mexico horse breeders' association, the commission or

another organization designated by the commission and under

the absolute control of the commission shall receive and

administer the money that is allocated to be distributed by

the New Mexico horse breeders' association pursuant to Section

60-1A-24 NMSA 1978. If the commission or its designee

organization is required to receive, administer and distribute

money on behalf of the New Mexico horse breeders' association,

the maximum percentage of retainage from Paragraph (3) of

Subsection D of Section 60-1A-24 NMSA 1978 shall be

distributed by the commission to the New Mexico horse

breeders' association as a fee to certify the dam and stud of

New Mexico-bred horses from the registry maintained by the New

Mexico horse breeders' association.

B. In the event that money allocated to the New

Mexico horsemen's association pursuant to the Horse Racing Act

cannot be received or administered by the New Mexico

horsemen's association, the commission or another organization

designated by the commission and under the absolute control of

the commission shall receive and administer the money that is

allocated by Section 60-1A-19 NMSA 1978 to the New Mexico

horsemen's association and distribute the money as required by

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Section 60-1A-19 NMSA 1978."

Section 22. A new Section 60-1A-22 NMSA 1978 is enacted

to read:

"60-1A-22. PAYMENT OF TAXES--PAYMENT OF LICENSE FEES.--

A. Taxes imposed pursuant to the Horse Racing Act

shall be remitted to the commission, and a notice of the

remittance shall accompany the taxes paid by a racetrack

licensee by the close of the business day on Thursday of every

week. Failure to make weekly remittances by the racetrack

licensee shall result in an assessment by the commission

against the racetrack licensee in an amount equal to one

percent of the amount that was due to be submitted.

B. Fees for licenses issued by the commission

shall be paid to the commission. Daily license fees imposed

by Section 60-1A-20 NMSA 1978 shall be submitted to the

commission by the racetrack licensee by the close of the

business day on Thursday of each week of on-track or simulcast

racing.

C. Except for three thousand dollars ($3,000) to

be retained by the commission in the horse racing suspense

fund, daily license fees and taxes shall be submitted by the

commission to the taxation and revenue department on a date to

be set by the taxation and revenue department that is no later

than the twenty-fifth day of the month following the month in

which the fees and taxes are received from a racetrack

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licensee."

Section 23. A new Section 60-1A-23 NMSA 1978 is enacted

to read:

"60-1A-23. HORSE RACING SUSPENSE ACCOUNT.--

A. The "horse racing suspense account" is created

in the state treasury to hold funds remitted to the commission

for payment of all legal claims for refunds.

B. Money in the horse racing suspense account

exceeding three thousand dollars ($3,000) shall be transferred

to the taxation and revenue department for deposit in the

general fund.

C. The money in the horse racing suspense account

shall be used to pay claims for refunds that have been

determined by the commission to be legally due to the

remitter."

Section 24. A new Section 60-1A-24 NMSA 1978 is enacted

to read:

"60-1A-24. BREEDERS' AWARDS.--

A. The New Mexico horse breeders' association

shall create a fund to pay horse breeders of New Mexico-bred

horses merit and incentive awards.

B. A racetrack licensee shall pay into a fund

created by the New Mexico horse breeders' association an

amount equal to ten percent of the first money of a purse won,

except for stakes-race purses, at a horse race in New Mexico

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by a horse registered with the New Mexico horse breeders'

association as a New Mexico-bred horse. From stakes-race

purses, a racetrack licensee shall pay into the fund created

by the New Mexico horse breeders' association an amount equal

to ten percent of the added money.

C. The money deposited with the New Mexico horse

breeders' association by a racetrack licensee pursuant to

Subsection B of this section shall be paid weekly to the owner

of the dam of the horse at the time that the animal was foaled

upon certification of the commission and the New Mexico horse

breeders' association.

D. In addition to the money distributed pursuant

to Subsection B of this section, the New Mexico horse

breeders' association shall distribute the money allocated to

the New Mexico horse breeders' association pursuant to

Subsections B, C and D of Section 60-1A-19 NMSA 1978 in the

following manner and pursuant to rules adopted by the

commission:

(1) forty-five percent of the money to the

owners at the time the winners were foaled of the dams of the

first-place winners;

(2) seven percent of the money to the owners

at the time the winners were foaled of the studs that sired

the first-place winners;

(3) no more than eight percent of the money

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to be retained by the New Mexico horse breeders' association

for the purpose of administering the distribution program set

forth in this section; and

(4) the remaining money to be divided among

the first-, second- and third-place finishers during each race

meet, provided that the first-, second- and third-place

finishers are registered as New Mexico-bred horses with the

New Mexico horse breeders' association.

E. The New Mexico horse breeders' association

shall file a fiduciary bond with the commission in a face

amount equal to the total money distributed during the

previous calendar year pursuant to Subsection C of this

section. 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)."

Section 25. A new Section 60-1A-25 NMSA 1978 is enacted

to read:

"60-1A-25. VIOLATIONS OF HORSE RACING ACT--FOURTH

DEGREE FELONY.--A person who willfully violates, attempts to

violate or conspires to violate a requirement of the Horse

Racing Act or a prohibition specifically set forth in the

Horse Racing Act is guilty of a fourth degree felony and shall

be sentenced pursuant to the provisions of Section 31-18-15

NMSA 1978."

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Section 26. A new Section 60-1A-26 NMSA 1978 is enacted

to read:

"60-1A-26. ILLEGAL USE OF PARI-MUTUEL WAGERING.--

A. A person shall not use pari-mutuel wagering

except as permitted by the commission pursuant to the Horse

Racing Act or pursuant to other state law providing licensing

of persons to use pari-mutuel wagering.

B. A person who, directly or indirectly, uses

pari-mutuel wagering in a manner that is not authorized by the

commission or other state law is guilty of a fourth degree

felony and upon conviction shall be sentenced pursuant to

Section 31-18-15 NMSA 1978."

Section 27. A new Section 60-1A-27 NMSA 1978 is enacted

to read:

"60-1A-27. PREDETERMINING HORSE RACES--INFLUENCING OR

ATTEMPTING TO INFLUENCE--FOURTH DEGREE FELONY.--

A. A person shall not influence or attempt to

influence the outcome of a horse race by offering money, a

thing of value, a future benefit, a favor, preferred treatment

or a form of pressure or threat.

B. A person shall not enter into an agreement with

an owner, jockey, groom or any other person associated with or

having an interest in a racehorse to predetermine the outcome

of a horse race.

C. A person who influences or attempts to

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influence the outcome of a horse race or a person who enters

into an agreement to predetermine the outcome of a horse race

is guilty of a fourth degree felony and upon conviction shall

be sentenced pursuant to Section 31-18-15 NMSA 1978."

Section 28. A new Section 60-1A-28 NMSA 1978 is enacted

to read:

"60-1A-28. AFFECTING SPEED OR STAMINA OF A RACE HORSE--

PENALTIES.--

A. A person administering, attempting to

administer or conspiring with others to administer to a

racehorse a drug, chemical, stimulant or depressant or other

foreign substances not naturally occurring in a racehorse

whether internally, externally or by injection for the purpose

of stimulating or depressing the race horse or affecting the

speed or stamina of the race horse during a horse race or

workout is guilty of a fourth degree felony and upon

conviction shall be sentenced pursuant to Section 31-18-15

NMSA 1978.

B. A person who uses, attempts to use or conspires

with others to use during a horse race or workout an

electrically or mechanically prohibited device, implement or

instrument, other than an ordinary whip, is guilty of a fourth

degree felony and upon conviction shall be sentenced pursuant

to Section 31-18-15 NMSA 1978.

C. A person who sponges the nostrils or trachea of

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a racehorse or who uses anything to injure a racehorse for the

purpose of stimulating or depressing the racehorse or

affecting the speed or stamina of the racehorse during a horse

race or workout is guilty of a fourth degree felony and upon

conviction shall be sentenced pursuant to Section 31-18-15

NMSA 1978.

D. It is prima facie evidence of intent to commit

any of the crimes set forth:

(1) in Subsection A of this section for a

person to be found within the racing grounds of a racetrack

licensee, including the stands, stables, sheds or other areas

where racehorses are kept, who possesses with the intent to

use, sell, give away or otherwise transfer to another person a

drug, chemical, stimulant or depressant or other foreign

substance not naturally occurring in a racehorse to stimulate

or depress a racehorse or to affect the speed or stamina of a

racehorse;

(2) in Subsection B of this section for a

person to be found within the racing grounds of a racetrack

licensee, including the stands, stables, sheds or other areas

where racehorses are kept, who possesses with the intent to

use, sell, give away or otherwise transfer to another person

an electrically or mechanically prohibited device, implement

or instrument, other than an ordinary whip; and

(3) in Subsection C of this section for a

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person to be found within the racing grounds of a racetrack

licensee, including the stands, stables, sheds or other areas

where racehorses are kept, who possesses with the intent to

use, sell, give away or otherwise transfer to another person

paraphernalia or substances used to sponge the nostrils or

trachea of a racehorse or that may be used to injure a

racehorse for the purpose of stimulating or depressing the

racehorse or affecting its speed or stamina during a horse

race or workout."

Section 29. A new Section 60-1A-29 NMSA 1978 is enacted

to read:

"60-1A-29. TERMINATION OF AGENCY LIFE--DELAYED

REPEAL.--The state racing commission is terminated on July 1,

2011 pursuant to the Sunset Act. The commission shall

continue to operate according to the provisions of Chapter 60,

Article 1A NMSA 1978 until July 1, 2012. Effective July 1,

2012, Chapter 60, Article 1A NMSA 1978 is repealed."

Section 30. 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

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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.

C. The board may:

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(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

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with licensees;

(9) inspect, examine, photocopy and audit

all documents and records of an applicant or licensee relevant

to the applicant's or licensee's gaming activities in the

presence of the applicant or licensee or 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 the affiliate's gaming

activities, of an 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;

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(14) conduct background investigations

pursuant to the Horse Racing Act; and

(15) 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."

Section 31. 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.

C. The board shall issue work permits for gaming

employees.

D. A licensee shall not be issued more than one

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type of license, but this provision does not prohibit a

licensee from owning, leasing, acquiring or having in 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. An applicant for a license, a certification of

finding of suitability or a work permit shall apply on forms

provided by the board and shall furnish to the board two sets

of fingerprint cards and all other information requested by

the board. Submission of an application constitutes consent

to a national criminal background check of the applicant, 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.

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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. The supplemental forms shall require

two sets of fingerprint cards and complete information and

details with respect to the applicant's antecedents, habits,

immediate family, character, state and federal criminal

records, business activities, financial affairs and business

associates, covering at least a ten-year period immediately

preceding the date of filing of the application.

J. In conducting a background investigation and

preparing an investigative report on the applicant, the

board's law enforcement officers may request and receive

criminal history information from the federal bureau of

investigation or any other law enforcement agency or

organization. The board's law enforcement officers shall

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maintain confidentiality regarding information received from a

law enforcement agency that may be imposed by the agency as a

condition for providing the information to the board."

Section 32. Section 60-2E-16 NMSA 1978 (being Laws

1997, Chapter 190, Section 18) is amended to read:

"60-2E-16. ACTION BY BOARD ON APPLICATIONS.--

A. A person that the board determines is qualified

to receive a license pursuant to the provisions of the Gaming

Control Act may be issued a license. The burden of proving

qualifications is on the applicant.

B. A license shall not be issued unless the board

is satisfied that the applicant is:

(1) a person of good moral character,

honesty and integrity;

(2) a person whose prior activities, state

and federal criminal records, reputation, habits and

associations do not pose a threat to the public interest or to

the effective regulation and control of gaming or create or

enhance the dangers of unsuitable, unfair or illegal

practices, methods and activities in the conduct of gaming or

the carrying on of the business and financial arrangements

incidental thereto; and

(3) in all other respects qualified to be

licensed consistent with the laws of this state.

C. A license shall not be issued unless the

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applicant has satisfied the board that:

(1) the applicant has adequate business

probity, competence and experience in business and gaming;

(2) the proposed financing of the applicant

is adequate for the nature of the proposed license and from a

suitable source; any lender or other source of money or credit

that the board finds does not meet the standards set forth in

Subsection B of this section shall be deemed unsuitable; and

(3) the applicant is sufficiently

capitalized under standards set by the board to conduct the

business covered by the license.

D. An application to receive a license,

certification or work permit constitutes a request for a

determination of the applicant's general moral character,

integrity and ability to participate or engage in or be

associated with gaming. Any written or oral statement made in

the course of an official proceeding of the board or by a

witness testifying under oath that is relevant to the purpose

of the proceeding is absolutely privileged and does not impose

liability for defamation or constitute a ground for recovery

in any civil action.

E. The board shall not issue a license or

certification to an applicant who has been denied a license or

certification in this state or another state, who has had a

certification, permit or license issued pursuant to the gaming

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laws of a state or the United States permanently suspended or

revoked for cause or who is currently under suspension or

subject to any other limiting action in this state or another

state involving gaming activities or licensure for gaming

activities.

F. The board shall investigate the qualifications

of each applicant before a license, certification or work

permit is issued by the board and shall continue to observe

and monitor the conduct of all licensees, work permit holders,

persons certified as being suitable and the persons having a

material involvement directly or indirectly with a licensee.

G. The board has the authority to deny an

application or limit, condition, restrict, revoke or suspend a

license, certification or permit for any cause.

H. After issuance, a license, certification or

permit shall continue in effect upon proper payment of the

initial and renewal fees, subject to the power of the board to

revoke, suspend, condition or limit licenses, certifications

and permits.

I. The board has full and absolute power and

authority to deny an application for any cause it deems

reasonable. If an application is denied, the board shall

prepare and file its written decision on which its order

denying the application is based."

Section 33. TEMPORARY PROVISIONS.--

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A. Members of the state racing commission who are

on the commission on June 30, 2007 shall remain on the state

racing commission and complete the terms to which they were

appointed, or if the member's term expires on June 30, 2007,

until a replacement is appointed.

B. All personnel, records, equipment, supplies and

other property of the state racing commission on June 30, 2007

shall remain the personnel, records, equipment, supplies and

property of the state racing commission created in this 2007

act.

C. Appropriations to and money held by or for the

state racing commission that does not revert to the general

fund or another fund on June 30, 2007 shall continue on July

1, 2007 to be held by or for the state racing commission

created in this 2007 act.

Section 34. REPEAL.--Sections 60-1-1 through 60-1-26

NMSA 1978 (being Laws 1933, Chapter 55, Section 1, Laws 1977,

Chapter 245, Section 123, Laws 1933, Chapter 55, Section 2,

Laws 1955, Chapter 87, Section 2, Laws 1973, Chapter 323,

Sections 3 and 4, Laws 1991, Chapter 7, Section 1, Laws 1933,

Chapter 55, Sections 3 through 7, Laws 1973, Chapter 323,

Section 7, Laws 1975, Chapter 189, Section 1, Laws 1933,

Chapter 55, Sections 8 and 9, Laws 1992, Chapter 110, Section

2, Laws 1993, Chapter 300, Section 1, Laws 1933, Chapter 55,

Section 10, Laws 1977, Chapter 161, Section 2, Laws 1965,

Chapter 270, Section 1, Laws 1933, Chapter 55, Section 11,

Laws 1947, Chapter 94, Sections 1 and 2, Laws 1975, Chapter

190, Section 1, Laws 1973, Chapter 323, Sections 10 and 11,

Laws 1991, Chapter 195, Sections 6 and 4 and Laws 1987,

Chapter 333, Section 3, as amended) are repealed.

Section 35. EFFECTIVE DATE.--The effective date of the

provisions of Sections 1 through 30, 33 and 34 of this act is

July 1, 2007.

Section 36. EMERGENCY.--It is necessary for the public

peace, health and safety that this act take effect

immediately.

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