44TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 1999

RELATING TO TRIBAL-STATE GAMING COMPACT REGULATORY FEES AND REVENUE-SHARING AGREEMENTS; AUTHORIZING WORDING FOR A SUPPLEMENT; REVISING THE REVENUE-SHARING PROVISIONS; CLARIFYING MECHANISMS OF DISPUTE RESOLUTION; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978.

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

Section 1. A supplemental section of the Indian Gaming Compact, Section 11-13-1.1 NMSA 1978, is enacted to read:

"11-13-1.1. [NEW MATERIAL] INDIAN GAMING COMPACT SUPPLEMENT AUTHORIZED.--The governor of the state upon written request from an Indian nation, tribe or pueblo located in whole or in part in the state that has entered into an Indian Gaming Compact in the form set forth in Section 11-13-1 NMSA 1978 is authorized to execute a supplement to the existing Indian Gaming Compact in the form set forth in this section. The Supplement to the Indian Gaming Compact shall be effective when executed by the governor of the state on behalf of the state and the appropriate official of the Indian nation, tribe or pueblo, and approved pursuant to the federal Indian Gaming Regulatory Act and shall be in substantially the following form:

"SUPPLEMENT TO THE INDIAN GAMING COMPACT

SECTION 1. Maximum regulatory fee payment. On and after the effective date of this Supplement to the Indian Gaming Compact that was entered into between the State of New Mexico and the on the day of , 199 , and that took effect on the day of , 199 , and notwithstanding anything to the contrary contained in Paragraph 5 of Subsection E of SECTION 4 or any other provision of that Indian Gaming Compact, the maximum and only amount that the Tribe shall be required to pay the State in any State fiscal year as reimbursement of costs the State incurs in carrying out the regulatory functions authorized by the terms of the Indian Gaming Compact is the actual amount of expenses incurred by the State during the preceding fiscal year, as shown by an accounting of the expenses provided by the State to the Tribe within ninety (90) days following the end of the fiscal year.

SECTION 2. Tribal payment of total State regulatory costs required. The tribe shall pay the State the full amount shown by the accounting provided by the State within thirty (30) days of receiving the accounting from the State. If the Tribe raises a question as to the amount that cannot be resolved informally by the parties, the Tribe may invoke the dispute resolution procedures of SECTION 7 of the Compact to resolve the dispute.

SECTION 3. Tribal regulatory fee payments limited to payment required in this Supplement. Except as expressly provided in this Supplement to the Indian Gaming Compact, the Tribe shall not be required to pay the State any additional sum as reimbursement of costs incurred by the State.

SECTION 4. Extension of Compact Terms. Notwithstanding any provisions in the Indian Gaming Compact to the contrary, upon the approval of this Supplement to the Indian Gaming Compact, the term of the Indian Gaming Compact shall be extended beyond its expiration date by an additional three years."

Section 2. Section 11-13-2 NMSA 1978 (being Laws 1997, Chapter 190, Section 2) is amended to read:

"11-13-2. REVENUE SHARING OF TRIBAL GAMING REVENUE.--The governor is authorized to execute a revenue-sharing agreement in the form substantially set forth in this section with any New Mexico Indian nation, tribe or pueblo that has also entered into an Indian gaming compact as provided by law. Execution of an Indian gaming compact, as set forth in Section 11-13-1 NMSA 1978, is conditioned upon the tribe's execution of a revenue-sharing agreement [the consideration for the Indian entity entering into the revenue-sharing agreement is the condition of the agreement providing limited exclusivity of gaming activities to the tribal entity] as provided in this section. The revenue-sharing agreement shall be in substantially the following form and is effective when executed by the governor on behalf of the state and the appropriate official of the Indian entity and approved pursuant to the federal Indian Gaming Regulatory Act:

SECTION 1. Summary and consideration. The Tribe shall [agree to contribute] pay to the state a portion of its Class III Gaming revenues identified in [and under] the procedures of this Revenue-Sharing Agreement, in return for which the State agrees that the Tribe:

A. [has] shall have the exclusive right within the State to [provide all] conduct the types of Class III Gaming described in the Indian Gaming Compact, with the sole exception of the [use] operation of Gaming Machines, which the State may permit on a limited basis [for] to be operated by racetracks and veterans' and fraternal organizations; and

B. will only [share that part of its revenue arising] be required to pay to the State a portion of its revenues derived from the [use] operation of Gaming Machines and all other [gaming] revenue received by the Tribe from its gaming activities is exclusively the Tribe's.

SECTION 2. Revenue to State. The parties agree that, after the effective date [hereof] of this Revenue-Sharing Agreement, the Tribe shall make the quarterly payments provided for in [Paragraph] SECTION 3 of the Revenue-Sharing Agreement to the state treasurer for deposit into the State General Fund [of the State ("State General Fund")].

SECTION 3. Calculation of Revenue to State.

A. As used in this Revenue-Sharing Agreement, "net win" means the [annual] total amount wagered at a Gaming Facility on Gaming Machines less the following amounts:

(1) the [annual] amount paid out in prizes from gaming on Gaming Machines;

(2) the actual amount of regulatory fees paid to the state; and

(3) the sum of [two hundred fifty thousand dollars ($250,000) per year] sixty-two thousand five hundred dollars ($62,500) per quarter as an amount representing tribal regulatory [fees, with these] cost, which amounts [increasing] shall increase by five percent (5%) each year beginning on the first day of January occurring after the Compact has been in effect for at least twelve months.

B. The Tribe shall pay the state: [sixteen percent (16%) of the net win]

(1) two percent (2%) of the first one million dollars ($1,000,000) of the Tribe's net win in each calendar quarter;

(2) four percent (4%) of the second one million dollars ($1,000,000) of the Tribe's net win in each calendar quarter; and

(3) six percent (6%) of the Tribe's net win in excess of two million dollars ($2,000,000) in each calendar quarter.

C. [For purposes of these payments, all calculations of amounts due shall be based upon the quarterly activity of the gaming facility.] Quarterly payments due to the State pursuant to these terms shall be paid no later than twenty-five (25) days after the last day of each calendar quarter. [Any payments due and owing from the Tribe in the quarter the Compact is approved, or the final quarter the Compact is in force, shall reflect the net win, but only for the portion of the quarter the Compact is in effect.]

SECTION 4. Limitations. The Tribe's obligation to make the payments provided for in [Paragraphs] SECTIONS 2 and 3 of [this section] the Revenue-Sharing Agreement shall apply and continue only so long as there is a binding [Indian Gaming] Compact in effect between the Tribe and the State, which Compact provides for the [play] operation of Class III Gaming by the Tribe, but the Tribe's obligation to make payments shall terminate in the event of any of the following conditions:

A. if the State passes, amends, or repeals any law, or takes any other action, which would directly or indirectly attempt to restrict, or has the effect of restricting, the scope of Indian gaming; or

B. if the State permits any expansion of nontribal Class III Gaming in the State; [Notwithstanding this general prohibition against permitted expansion of gaming activities, the State may permit] provided, however, that none of the following shall be considered an expansion of non-tribal Class III Gaming for purposes of this agreement:

(1) the [enactment] operation of a State lottery;

(2) [any] the licensing of a fraternal, veterans or other nonprofit membership organization to operate [such electronic gaming devices] Gaming Machines lawfully, but only for the benefit of [such] the organization's members;

(3) limited fundraising activities conducted by nonprofit tax-exempt organizations pursuant to Section 30-19-6 NMSA 1978; and

(4) [any] the licensing of horse racetracks to operate [electronic gaming devices] Gaming Machines on days on which live or simulcast horse racing occurs.

[5. Effect of Variance. In the event the acts or omissions of the State cause the Tribe's obligation to make payments under Paragraph 3 of this section to terminate under the provisions of Paragraph 4 of this section, such cessation of obligation to pay will not adversely affect the validity of the Compact, but the amount that the Tribe agrees to reimburse the State for regulatory fees under the Compact shall automatically increase by twenty percent (20%).

6. Third-Party Beneficiaries. This Agreement is not intended to create any third-party beneficiaries and is entered into solely for the benefit of the Tribe and the State.]

SECTION 5. Definitions. All definitions contained in the Compact shall apply to the terms used in this section and the Revenue-Sharing Agreement.

SECTION 6. Dispute Resolution. The dispute resolution provisions of the Compact shall apply to disputes arising under the terms of this section and the Revenue-Sharing Agreement."."

Section 3. A new Section 11-13-3 NMSA 1978 is enacted to read:

"11-13-3. [NEW MATERIAL] RECONCILIATION OF PRIOR REVENUE-SHARING PAYMENTS.

A. The governor of the state and the appropriate official of a tribe that has entered into a compact and revenue-sharing agreement with the state shall jointly prepare an accounting of:

(1) all amounts paid by the tribe to the state pursuant to the terms of the revenue-sharing agreement that was in effect between the tribe and the state beginning in 1997 and all regulatory fees deducted from the tribe's gaming net win, as defined in Section 11-13-2 NMSA 1978, and regulatory fees due to the state pursuant to the terms of Paragraph 5 of Subsection E of SECTION 4 of the Indian Gaming Compact between the tribe and the state; and

(2) the total amount that the tribe would have been required to pay the state had the revenue-sharing agreement amendments of Section 2 of this act became effective on the date that the tribe's Indian Gaming Compact went into effect in 1997, increased by twenty-five thousand dollars ($25,000) for each calendar year or part of a calendar year that the compact has been in effect.

B. If the total amount determined in Paragraph (1) of Subsection A of this section is greater than the amount determined in Paragraph (2) of Subsection A of this section, the tribe shall be entitled to a credit in the full amount of the difference, against future revenue-sharing payments due to the state pursuant to the amended terms of the revenue-sharing agreement adopted in the form set forth in Section 2 of this act. The governor of the state and the appropriate official of the tribe shall execute a credit agreement that shall be deemed part of the revenue-sharing agreement, setting forth the amount of the credit to which the tribe is entitled, stating that the credit shall apply to payments due pursuant to the revenue-sharing agreement until the credit is exhausted, requiring that the tribe continue to submit on a quarterly basis an accounting of the amount of revenue-sharing against which the credit is being taken and the tribe's calculation of the remaining balance on the credit and requiring the tribe to pay to the state the full amount of revenue-sharing due to the state once the credit is exhausted.

C. If the total amount determined in Paragraph (1) of Subsection A of this section is less than the amount determined by the terms of Paragraph (2) Subsection A of this section, the governor of the state and the appropriate official of the tribe shall execute a repayment agreement that shall be deemed part of the revenue-sharing agreement. The repayment agreement shall set forth the amount of the deficit owed to the state by the tribe and specify the date by which and the manner in which the tribe shall pay the amount of the deficit. The tribe shall agree to pay the deficit within the two-year period following the date on which Section 2 of this act is executed by the governor of the state and the appropriate official of the tribe."