NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Suite 101 of the State Capitol Building North.

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SJR 2

SOURCES OF INFORMATION

LFC Files

New Mexico Gaming Control Board and the Attorney General

SUMMARY

Synopsis of Bill

House Joint Resolution 7 requests tribes and the governor to enter into negotiations to develop new tribal-state compacts or amend the Indian gaming compacts enacted in 1997. These negotiations would be conducted under the Compact Negotiation Act. The resolution directs that a new tribal-state gaming compact be submitted to the legislative committee on compacts as soon as possible for review and action at the 2002 legislative session.

Significant Issues

The Joint Resolution is not binding. There could be an issue on the scope of the negotiations because of the litigation between the State and the tribes over back payments. See Substantive Issues below.

PERFORMANCE IMPLICATIONS

According to the Gaming Control Board, a new or amended tribal-state compact could impact the Board's performance measures as a result of new or amended regulatory responsibilities.

FISCAL IMPLICATIONS

Last spring, all tribes ceased making revenue sharing and regulatory fee payments to the state under the 1997 compacts. State consensus revenue estimators are currently forecasting no tribal gaming payments through FY05.

Gaming tribes paid the state a total of $68 million in revenue sharing and regulatory fees under the 1997 compacts, substantially below state estimates of total liability under compact provisions.

Fiscal considerations of the negotiations would be two-fold:

1) Ability to collect back payments due to the state.

2) Nature and scope of state receipts from tribes under amended or new compacts.

ADMINISTRATIVE IMPLICATIONS

According to the Gaming Control Board, indeterminable until specifics about a new or amended tribal-state compact are known.

OTHER SUBSTANTIVE ISSUES

Without a new or amended tribal-state compact, the courts could determine the legality of revenue sharing requirements as specified in the existing compacts.

According to the Attorney General, the current litigation will continue if there is no settlement of the dispute over revenue sharing. The Attorney General sued twelve tribes and pueblos for non-payment of the revenue sharing provisions of the 1997 compacts. The Legislature may not enact legislation that forgives debts owed the State. See New Mexico Const., Art. IV, Sec. 24. Therefore, if the negotiations are to address the past payments, the Attorney General must approve any agreements through the settlement of the lawsuit currently pending.

The Gaming Control Board is in arbitration with three tribes and the Attorney General has filed a complaint in U.S. District Court for injunctive relief for non-payment by the tribes.

AW/ar