44th legislature - STATE OF NEW MEXICO - first session, 1999

RELATING TO GAMING; AUTHORIZING WORDING FOR A SUPPLEMENT TO AN INDIAN GAMING COMPACT; REVISING THE REVENUE-SHARING PROVISIONS; CLARIFYING DISPUTE RESOLUTIONS PROVISIONS; AMENDING THE GAMING TAX; 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.--

A. The governor of the state may enter into an Indian Gaming Compact in the form set forth in Section 11-13-1 NMSA 1978 as supplemented by the Supplement to the Indian Gaming Compact set forth in Subsection C of this section upon written request from an Indian nation, tribe or pueblo located in whole or in part in the state that has not entered into a previous Indian Gaming Compact. Notwithstanding any provision of Section 11-13-2 NMSA 1978, an Indian nation, tribe or pueblo is not required to enter into revenue-sharing provisions other than those set forth in the Supplement to the Indian Gaming Compact of Subsection C of this section.

B. 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 Subsection C of this section. The governor has no authority, however, to enter into an agreement in the form set forth in Subsection C of this section with an Indian nation, tribe or pueblo that has an outstanding balance due to the state of money owed pursuant to a revenue-sharing agreement entered into between that Indian nation, tribe or pueblo and the state in 1997; with an Indian nation, tribe or pueblo that has not entered into a payment agreement pursuant to Section 11-13-3 NMSA 1978 if one is required by the provisions of that section; or with an Indian nation, tribe or pueblo that filed a court or arbitration action under the provisions of its Indian gaming compact or revenue-sharing agreement in which there has been no settlement, dismissal or final judgment entered on the action.

C. The Supplement to the Indian Gaming Compact or a new Indian Gaming Compact entered into pursuant to Section 11-13-1 NMSA 1978 and supplemented with the language that follows 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, SECTION 13 or any other provision of that Indian Gaming Compact or Revenue-Sharing Agreement, 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 that shall be 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 to 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 Indian Gaming 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 regulatory fees or as reimbursement of costs incurred by the State.

SECTION 4. Consideration, Revenue-Sharing Calculation.

A. The Tribe shall agree to contribute to the state a portion of its Class III Gaming revenues, in return for which the State agrees that the Tribe:

1. shall have the exclusive right within the State to conduct the types of Class III Gaming described in the Indian Gaming Compact, with the sole exception of the operation of Gaming Machines, which the State may permit on a limited basis to be operated by racetracks and nonprofit organizations; and

2. will share with the State that part of its revenues derived from the operation of Gaming Machines and all other revenue received by the Tribe from its gaming activities is exclusively the Tribe's.

B. The parties agree that, after the effective date of the Supplement to the Indian Gaming Compact, the Tribe shall make the quarterly payments and contributions provided for in Subsection D of this section to the state treasurer for deposit into the State General Fund.

C. As used in the Supplement to the Indian Gaming Compact, "net win" means the total amount wagered at a Gaming Facility on Gaming Machines less the following amounts:

1. the 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 sixty-two thousand five hundred dollars ($62,500) per quarter as an amount representing tribal regulatory costs, which amount shall increase by five percent (5%) each year beginning on the first day of January occurring after the Indian Gaming Compact has been in effect for at least twelve months.

D. The Tribe shall agree to contribute to the state eight percent (8%) of the Tribe's net win in each calendar quarter.

E. 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.

SECTION 5. Limitations. The Tribe's obligation to make the payments provided for in SECTION 4 of the Supplement to the Indian Gaming Compact 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 that 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; provided, however, that none of the following shall be considered an expansion of non-tribal Class III Gaming for purposes of this Supplement to the Indian Gaming Compact:

1. the operation of a State lottery;

2. the licensing of nonprofit organizations as defined in the Gaming Control Act, to operate Gaming Machines consistent with the level of gaming permitted by the provisions of Section 60-2E-28 NMSA 1978 as enacted in 1997;

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

4. the licensing of horse racetracks to operate Gaming Machines on days on which live or simulcast horse racing occurs consistent with the provisions of Section 60-2E-27 NMSA 1978 as enacted in 1997.

SECTION 6. Definitions. All definitions contained in the Indian Gaming Compact shall apply to the terms used in the Supplement to the Indian Gaming Compact.

SECTION 7. Dispute Resolution. The dispute resolution provisions of the Indian Gaming Compact shall apply to disputes arising under the terms of the Supplement to the Indian Gaming Compact.

SECTION 8. Termination of Compact on Default of Agreed Upon Contributions. If the Tribe is in default of its agreed upon contributions in any amount due to the State pursuant to its Indian Gaming Compact, its Supplement to the Indian Gaming Compact or a Payment Agreement entered into pursuant to Section 11-13-3 NMSA 1978, and notwithstanding any provision of the Tribe's original Indian Gaming Compact to the contrary, the Gaming Control Board may make a determination that the Indian Gaming Compact entered into between the Tribe and the State be terminated. To terminate the Indian Gaming Compact the Gaming Control Board shall send a Notice of Default and Intent to Terminate to the Tribe. The Indian Gaming Compact in total, including the Supplement to the Indian Gaming Compact, shall terminate automatically and without the need for further action thirty days following the date on which the Notice of Default and Intent to Terminate is received, unless the dispute resolution provisions of the Indian Gaming Compact are invoked or the default is cured during that thirty-day period.

SECTION 9. Supplement Negotiated by Parties. This Supplement to the Indian Gaming Compact and the Indian Gaming Compact, as of the date it is signed by the appropriate official of the Tribe and the Governor of the State, is deemed to have been negotiated in good faith and written by the parties who are signatories to this Supplement to the Indian Gaming Compact.

SECTION 10. Revenue-Sharing Agreements Void. On the date on which the action of or failure to act by the Secretary of the Interior on this Supplement to the Indian Gaming Compact entered into by the Tribe and the State is published in the federal register, the Revenue-Sharing Agreement entered into in 1997 between the Tribe and the State is void."."

Section 2. A new Section 11-13-3 NMSA 1978 is enacted to read:

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

A. If a tribe wishes to enter into a supplement to the Indian Gaming Compact, 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 all amounts due from and contributed 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.

B. If the total amount contributed, as determined in Subsection A of this section, is less than the amount owed, the governor of the state and the appropriate official of the tribe shall execute a payment agreement that shall be deemed part of the Indian Gaming Compact. The payment 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; provided that the payment agreement shall provide that the deficit owed by the tribe to the state shall be paid within two years following the effective date of the Supplement to the Indian Gaming Compact."

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; and [twenty-five] fifteen percent of the net take of every 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 pay twenty percent of its net take to purses to be distributed in accordance with regulations adopted by the state racing commission. A racetrack gaming operator licensee shall spend no less than one-fourth of one percent of the net take of its gaming machines to fund or support programs for the treatment and assistance of compulsive gamblers.

F. A nonprofit gaming operator licensee shall distribute at least eighty-eight 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. EFFECTIVE DATE.--The effective date of the provisions of Section 3 of this act is July 1, 1999.