SENATE CORPORATIONS AND TRANSPORTATION COMMITTEE SUBSTITUTE FOR

SENATE BILL 406

52nd legislature - STATE OF NEW MEXICO - first session, 2015

AN ACT

RELATING TO HORSE RACING; RENAMING THE RACEHORSE TESTING FUND THE RACEHORSE TESTING AND ENFORCEMENT FUND AND PROVIDING ADDITIONAL PURPOSES OF THE FUND; REMITTING A PORTION OF CERTAIN RACETRACKS' NET TAKE TO THE RACEHORSE TESTING AND ENFORCEMENT FUND.

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

     SECTION 1. Section 60-1A-14.1 NMSA 1978 (being Laws 2013, Chapter 102, Section 1) is amended to read:

     "60-1A-14.1. RACEHORSE TESTING AND ENFORCEMENT FUND--CREATED--PURPOSE.--

          A. The "racehorse testing and enforcement fund" is created in the state treasury. The purpose of the fund is to:

                (1) ensure the testing of racehorses at a laboratory that meets or exceeds the current national laboratory standards for the testing of drugs or other foreign substances not naturally occurring in a horse, as established by the association of racing commissioners international, incorporated; and

                (2) provide additional resources to the commission to enforce the requirements and prohibitions of the Horse Racing Act and commission rules.

          B. The fund consists of:

                (1) one-half of the daily capital outlay tax appropriated and transferred pursuant to Paragraph (4) of Subsection A of Section 60-1A-20 NMSA 1978;

                (2) two-tenths percent of the net take of a gaming operator licensee that is a racetrack remitted and deposited pursuant to Paragraph (2) of Subsection E of Section 60-2E-47 NMSA 1978; and

                (3) appropriations, gifts, grants and donations made to the fund.

          C. Income from investment of the fund shall be credited to the fund.

          D. The commission shall administer the racehorse testing and enforcement fund, and money in the fund is appropriated to the commission:

                (1) for the handling and testing of blood serum plasma, urine or other appropriate test samples taken from racehorses pursuant to Section 60-1A-14 NMSA 1978; and

                (2) to offset enforcement costs.

          E. Any unexpended or unencumbered balance remaining in the racehorse testing and enforcement fund at the end of a fiscal year in excess of [six hundred thousand dollars ($600,000)] one million dollars ($1,000,000) shall revert to the general fund.

          F. Expenditures from the fund shall be made on warrant of the secretary of finance and administration pursuant to vouchers signed by the executive director of the commission."

     SECTION 2. Section 60-1A-20 NMSA 1978 (being Laws 2007, Chapter 39, Section 20, as amended) is amended 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 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;

                (3) through December 31, 2014, 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; and

                (4) on and after January 1, 2015, 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 racehorse testing and enforcement fund.

          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 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 3. Section 60-2E-47 NMSA 1978 (being Laws 1997, Chapter 190, Section 49, as amended) is amended to read:

     "60-2E-47. GAMING TAX--IMPOSITION--ADMINISTRATION.--

          A. An excise tax is imposed on the privilege of engaging in gaming activities in the state. This tax shall be known as the "gaming tax".

          B. The gaming tax is an amount equal to ten percent of the gross receipts of manufacturer licensees from the sale, lease or other transfer of gaming devices in or into the state, except receipts of a manufacturer from the sale, lease or other transfer to a licensed distributor for subsequent sale or lease may be excluded from gross receipts; ten percent of the gross receipts of distributor licensees from the sale, lease or other transfer of gaming devices in or into the state; ten percent of the net take of a gaming operator licensee that is a nonprofit organization; and twenty-six percent of the net take of every other gaming operator licensee. For the purposes of this section, "gross receipts" means the total amount of money or the value of other consideration received from selling, leasing or otherwise transferring gaming devices.

          C. The gaming tax imposed on a licensee is in lieu of all state and local gross receipts taxes on that portion of the licensee's gross receipts attributable to gaming activities.

          D. The gaming tax is to be paid on or before the fifteenth day of the month following the month in which the taxable event occurs. The gaming tax shall be administered and collected by the taxation and revenue department in cooperation with the board. The provisions of the Tax Administration Act apply to the collection and administration of the tax.

          E. In addition to the gaming tax, a gaming operator licensee that is a racetrack shall:

                (1) pay [twenty] nineteen and eight-tenths percent of its net take to purses to be distributed in accordance with rules adopted by the state racing commission. An amount not to exceed twenty percent of the interest earned on the balance of any fund consisting of money for purses distributed by racetrack gaming operator licensees pursuant to this [subsection] paragraph may be expended for the costs of administering the distributions; and

                (2) remit two-tenths percent of its net take to the taxation and revenue department for deposit in the racehorse testing and enforcement fund.

          F. A racetrack gaming operator licensee shall spend no less than one-fourth percent of the net take of its gaming machines to fund or support programs for the treatment and assistance of compulsive gamblers.

          [F.] G. A nonprofit gaming operator licensee shall distribute at least sixty percent of the balance of its net take, after payment of the gaming tax and any income taxes,

for charitable or educational purposes."

     SECTION 4. TEMPORARY PROVISION--FUND NAME CHANGE.--The racehorse testing and enforcement fund is the new name for the racehorse testing fund and is not a new fund created by this act.

     SECTION 5. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2015.

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