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F I S C A L I M P A C T R E P O R T
SPONSOR Lujan, B.
ORIGINAL DATE
LAST UPDATED
2/8/07
3/5/07 HB 664/aHTRC/aSCORC
SHORT TITLE Horse Racing Licensure & Regulation
SB
ANALYST Ortiz
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
NFI
(Parenthesis ( ) Indicate Expenditure Decreases)
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
FY09
$0.1
(see narrative)
Recurring
NEW FUND
CREATED:
HORSE
RACING
SUSPENSE
ACCOUNT
(Parenthesis ( ) Indicate Revenue Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
State Racing Commission (SRC)
Attorney General’s Office (AGO)
Corrections Department (CD)
Taxation and Revenue Department (TRD)
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House Bill 664/aHTRC/aSCORC – Page
2
SUMMARY
Synopsis of SCORC Amendment
Senate Corporations and Transportation Committee Amendment declares an emergency and
inserts Section 60-2E-14 NMSA 1978, amending it so that an applicant for a license must submit
two sets of fingerprint cards to GCB, which constitute consent to a criminal background check.
It adds that GCB’s law enforcement officers may request criminal history information from the
FBI or any law enforcement agency.
Synopsis of HTRC Amendment
House Taxation and Revenue Committee Amendment increases the number of pari-mutuel
wagering on live horse races run on the premises from nine to seventeen days. If the seventeen
days are met than the racetrack licensee is allowed to simulcast horse races.
Pari-mutuel wagering on simulcast horse races shall be prohibited except on the licensed
premises of a
racetrack licensee during the licensee’s race meet instead of “on days when live horse racing
occurs".
Specify that the 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.
Simplifies the language that currently states that the net retainage from interstate common pools
wagered at off-site locations, after deduction of the allocation to the New Mexico horse breeders'
association to instead read that of the net retainage from all wagers after deductions.
The money in the horse racing suspense account shall be used to pay claims for that have been
determined by the commission to be legally due to the remitter.
Synopsis of Original Bill
House Bill 664 makes numerous changes to the current laws regulating horse racing by adopting
definitions as they generally exist within the current regulations of the Racing Commission;
reorganizing the current statute regulating horse racing; requiring the Gaming Control Board and
the Racing Commission to coordinate with each other in conducting background checks for the
Racing Commission; raising civil penalties for violations of the Act from a maximum of $5,000
to $10,000; and raising the licensing fees for race track applicants and secondary license
applicants.
FISCAL IMPLICATIONS
The State Racing Commission points out that anyone currently involved in both racing and
gaming must obtain two licenses and two backgrounds, which results in a negative fiscal impact.
With implementation of this bill, there will be a significant savings to the public and will prevent
duplication of services.
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House Bill 664/aHTRC/aSCORC – Page
3
According to Taxation and Revenue Department there is no fiscal impact. There is no change in
daily pari-mutuel daily tax rate of $650 for a Class A racetrack, of which there is a distribution of
$150 to the municipality where the racetrack is located. The amount is deducted from the daily
tax rate. Proceeds of daily pari-mutuel tax are deposited to the General Fund.
The "horse racing suspense account" is created in the state treasury to hold funds remitted to the
commission for payment of daily license fees, daily pari-mutuel tax and daily capital outlay tax.
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. The money in
the horse racing suspense account shall be used to pay claims for refunds of daily license fees,
daily pari-mutuel tax or daily capital outlay taxes that have been determined by the commission
to be legally due to the remitter.
SIGNIFICANT ISSUES
According to the AGO, the major change caused by HB 664 is to allow the Gaming Control
Board to conduct background checks for applicants for licenses with the Racing Commission and
to re-organize the current laws establishing the Racing Commission.
The State Racing Commission confirms the AGO remarks and adds that HB 664 does not
constitute a consolidation of Racing Commission and Gaming Control Board, however, because
the Racing Commission has limited resources, GCB will conduct background checks. The focus
of this bill is simply to re-organize the Act and modernize the language.
PERFORMANCE IMPLICATIONS
The State Racing Commission notes that if HB 664 is adopted it would allow for a more timely
background investigations.
ADMINISTRATIVE IMPLICATIONS
The Racing Commission will have to review its current regulations to bring them into
compliance with the provisions of HB 664.
The State Racing Commission explains that currently racing participants are required to have
licenses for both racing and gaming. This bill will eliminate the duplication of background
checks, which will benefit the public. The State Racing Commission will only license
concession employees in a restricted area, all other concession employees will not be licensed by
the State Racing Commission nor will it approve admission and concession prices.
OTHER SUBSTANTIVE ISSUES
The State Racing Commission assures that neither Racing Commission nor Gaming Control
Board is proposing any substantive changes that will upset the achieved power within the racing
community. There will not be any transfer of decision making authority from racing to gaming.
WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL
The AGO acknowledges that background checks conducted by the Racing Commission may be
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House Bill 664/aHTRC/aSCORC – Page
4
slower and less efficient then would be under HB 664 because of the greater resources available
to the Gaming Control Board to conduct such checks.
OTHER
Why is the new fund necessary.
EO/mt:nt