2005 Senate Bill text for SB0370

AN ACT

RELATING TO GAMING; AUTHORIZING THE GAMING CONTROL BOARD TO REGULATE BINGO AND RAFFLE ACTIVITIES; ESTABLISHING A TAX RATE FOR MANUFACTURERS, DISTRIBUTORS AND COMMERCIAL LESSORS OF BINGO AND RAFFLE EQUIPMENT; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978.

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

Section 1. Section 60-2B-3 NMSA 1978 (being Laws 1981, Chapter 259, Section 3, as amended) is amended to read:

"60-2B-3. DEFINITIONS.--As used in the Bingo and Raffle Act:

A. "charitable organization" means any organization, not for pecuniary profit, which is operated for the relief of poverty, distress or other condition of public concern in New Mexico and which has been so engaged for three years immediately prior to making application for a license under the Bingo and Raffle Act and which has been granted an exemption from federal income tax by the United States commissioner of internal revenue as an organization described in Section 501 (c) of the United States Internal Revenue Code of 1954, as amended or renumbered;

B. "chartered branch, lodge or chapter of a national or state organization" means any branch, lodge or chapter which is a civic or service organization, not for pecuniary profit, and authorized by its written constitution, charter, articles of incorporation or bylaws to engage in a fraternal, civic or service purpose in New Mexico and which has been so engaged for three years immediately prior to making application for a license under the Bingo and Raffle Act;

C. "commercial lessor" means an entity that leases space to a qualified organization;

D. "distributor" means a person who supplies equipment to a qualified organization but does not manufacture equipment;

E. "educational organization" means any organization within the state, not organized for pecuniary profit, whose primary purpose is educational in nature and designed to develop the capabilities of individuals by instruction and which has been in existence in New Mexico for three years immediately prior to making application for a license under the Bingo and Raffle Act;

F. "fraternal organization" means any organization within the state, except college and high school fraternities, not for pecuniary profit, which is a branch, lodge or chapter of a national or state organization and exists for the common business, brotherhood or other interests of its members and which has existed in New Mexico for three years immediately prior to making application for a license under the Bingo and Raffle Act;

G. "labor organization" means any organization, not for pecuniary profit, within the state, which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment or conditions of work and which has existed in New Mexico for that purpose and has been so engaged for three years immediately prior to making application for a license under the Bingo and Raffle Act;

H. "qualified organization" means any bona fide chartered branch, lodge or chapter of a national or state organization or any bona fide religious, charitable, environmental, fraternal, educational or veterans' organization operating without profit to its members which has been in existence in New Mexico continuously for a period of three years immediately prior to the making of an application for a license under the Bingo and Raffle Act and which has had, during the entire three-year period, a dues-paying membership engaged in carrying out the objects of the corporation or organization. A voluntary firemen's organization is a qualified organization and a labor organization is a qualified organization for the purpose of the Bingo and Raffle Act if it uses the proceeds from a game of chance solely for scholarship or charitable purposes;

I. "environmental organization" means any organization primarily concerned with the protection and preservation of the natural environment and which has existed in New Mexico for three years immediately prior to making application for a license under the Bingo and Raffle Act;

J. "religious organization" means any organization, church, body of communicants or group, not for pecuniary profit, gathered in common membership for mutual support and edification in piety, worship and religious observances or a society, not for pecuniary profit, of individuals united for religious purposes at a definite place, which organization, church, body of communicants, group or society has been so gathered or united in New Mexico for three years immediately prior to making application for a license under the Bingo and Raffle Act;

K. "veterans' organization" means any organization within the state or any branch, lodge or chapter of a national or state organization within this state, not for pecuniary profit, the membership of which consists of individuals who were members of the armed services or forces of the United States, which has been in existence in New Mexico for three years immediately prior to making application for a license under the Bingo and Raffle Act;

L. "voluntary firemen's organization" means any organization for firefighting within the state, not for pecuniary profit, established by the state or any of its political subdivisions, which has been in existence in New Mexico for three years immediately prior to making application for a license under the Bingo and Raffle Act;

M. "dues-paying membership" means those members of an organization who pay regular monthly, annual or other periodic dues or who are excused from paying such dues by the charter, articles of incorporation or bylaws of the organization and those who contribute voluntarily to the corporation or organization to which they belong for the support of the corporation or organization;

N. "equipment" means:

(1) with respect to bingo or lotto:

(a) the receptacle and numbered objects drawn from it;

(b) the master board upon which the numbered objects are placed as drawn;

(d) the board or signs, however operated, used to announce or display the numbers or designations as they are drawn;

(e) the public address system; and

(f) all other articles essential to the operation, conduct and playing of bingo or lotto; and

(2) with respect to a raffle, implements, devices and machines designed, intended or used for the conduct of raffles and the identification of the winning number or unit and the ticket or other evidence or right to participate in raffles;

O. "game of chance" means that specific kind of game of chance commonly known as bingo or lotto in which prizes are awarded on the basis of designated numbers or symbols on a card conforming to numbers or symbols selected at random and that specific kind of game of chance commonly known as a raffle which is conducted by drawing for prizes or the allotment of prizes by chance or by the selling of shares, tickets or rights to participate in the game;

P. "gross receipts" means receipts from the sale of shares, tickets or rights in any manner connected with participation in a game of chance or the right to participate in a game of chance, including any admission fee or charge, the sale of equipment or supplies and all other miscellaneous receipts;

Q. "lawful purposes" means educational, charitable, patriotic, religious or public-spirited purposes, which terms are defined to be the benefiting of an indefinite number of persons either by bringing their minds or hearts under the influence of education or religion, by relieving their bodies from disease, suffering or constraint, by assisting them in establishing themselves in life, by erecting or maintaining public buildings or works, by providing legal assistance to peace officers or firemen in defending civil or criminal actions arising out of the performance of their duties or by otherwise lessening the burden of government. These terms include the erection, acquisition, improvement, maintenance, insurance or repair of property, real, personal or mixed, if the property is used for one or more of the purposes stated in this subsection;

R. "lawful use" means the devotion of the entire net proceeds of a game of chance exclusively to lawful purposes;

S. "licensee" means any qualified organization to which a license has been issued by the licensing authority;

T. "licensing authority" means the gaming control board;

U. "manufacturer" means a person who manufacturers, fabricates, assembles, produces, programs or makes modifications to equipment for use or play in New Mexico or for sale or distribution outside of New Mexico;

V. "member" means an individual who has qualified for membership in a qualified organization pursuant to its charter, articles of incorporation, bylaws, rules or other written statement;

W. "net proceeds" means the receipts less the expenses, charges, fees and deductions as are specifically authorized under the Bingo and Raffle Act;

X. "occasion" means a single gathering or session at which a series of successive bingo or lotto games are played;

Y. "person" means a natural person, firm, association, corporation or other legal entity; and

Z. "premises" means any room, hall, enclosure or outdoor area used for the purpose of playing a game of chance."

Section 2. Section 60-2B-4 NMSA 1978 (being Laws 1981, Chapter 259, Section 4, as amended) is amended to read:

"60-2B-4. LICENSING AUTHORITY--POWERS--DUTIES--HEARINGS--APPEALS.--

A. The licensing authority has the powers and duties as follows:

(1) to grant or refuse licenses under the Bingo and Raffle Act. In addition, the licensing authority has the power, on its own motion based on reasonable grounds or on complaint made and after investigation by the licensing authority or by the special investigations division of the department of public safety and public hearing at which the licensee shall be afforded an opportunity to be heard, to assess administrative fines to the licensee and to suspend or revoke any license issued by the licensing authority for any violation by the licensee or any officer, director, agent, member or employee of the licensee of the provisions of that act or any rule authorized under that act. Notice of suspension or revocation, as well as notice of the hearing, shall be given by certified mail to the licensee at the address contained in the license. Any license may be temporarily suspended for a period not to exceed thirty days pending any prosecution, investigation or public hearing;

(2) to supervise the administration of the Bingo and Raffle Act and to adopt, amend and repeal rules governing the holding, operating and conducting of games of chance, the rental of premises and the purchase of equipment to the end that games of chance shall be held, operated and conducted only by licensees for the purposes and in conformity with the constitution of New Mexico and the provisions of that act;

(3) to hear and determine at public hearings all complaints against any licensee and to administer oaths and issue subpoenas to require the presence of persons and production of papers, books and records necessary to the determination of any hearing held;

(4) to keep records of all actions and transactions of the licensing authority;

(5) to prepare and transmit annually, in the form and manner prescribed by the licensing authority pursuant to the provisions of law, a report accounting to the governor and the legislature for the efficient discharge of all responsibilities assigned by law or directive to the licensing authority;

(6) to issue publications of the licensing authority intended for circulation in quantity outside the executive branch in accordance with fiscal rules promulgated by the licensing authority;

(7) to adopt rules establishing a system of licensing governing commercial lessors, distributors, manufacturers and qualified organizations;

(8) to adopt rules establishing a system of permits for all individuals employed or engaged in the conduct of games of chance or the manufacture or distribution of equipment;

(9) to adopt rules establishing reasonable amounts for expenses; and

(10) to develop, adopt and promulgate all rules necessary to implement and administer the provisions of the Bingo and Raffle Act.

B. Proceedings brought against a licensee for a violation of the Bingo and Raffle Act shall be brought by the licensing authority by serving, in the manner provided in the rules of civil procedure, a complaint upon the licensee and notifying the licensee of the place and date, not less than twenty days after the date of service, at which a hearing shall be held. The complaint shall set forth, in the manner of complaints in civil action, the violations of the Bingo and Raffle Act or the rules of the licensing authority that the licensing authority alleges the licensee has committed. The licensing authority or the department of public safety may stop the operation of a game of chance pending hearing, in which case the hearing shall be held within ten days after notice.

C. The licensing authority shall cause the notice of hearing to be served personally upon an officer of the licensee or the member in charge of the conduct of the game of chance or to be sent by registered or certified mail to the licensee at the address shown in the license.

D. When proceedings are brought against a licensee for a violation of the Bingo and Raffle Act, the licensing authority shall hear the matter and make written findings in support of its decision. The licensee shall be informed immediately of the decision and, in the event of a suspension or revocation, the effective date of the suspension or revocation.

E. For the first violation by a licensee of the Bingo and Raffle Act, the licensing authority may assess an administrative fine of not to exceed one thousand dollars ($1,000). For a second or subsequent violation by the licensee of that act, the licensing authority may assess an administrative fine of not to exceed two thousand five hundred dollars ($2,500). The amount of the administrative fine shall be determined by the severity and nature of the violation of the Bingo and Raffle Act and by the number of prior violations of that act.

F. When a license is ordered suspended or revoked, the licensee shall surrender the license to the licensing authority on or before the effective date of the suspension or revocation. No license is valid beyond the effective date of the suspension or revocation, whether surrendered or not.

G. Upon the finding of a violation of the Bingo and Raffle Act or the rules that would warrant the suspension or revocation of a license, the licensing authority, in addition to any other penalties that may be imposed, may declare the violator ineligible to conduct a game of chance and to apply for a license under that act for a period not exceeding twelve months. The declaration of ineligibility may be extended to include, in addition to the violator, any of its subsidiary organizations, its parent organization or an organization otherwise affiliated with the violator when in the opinion of the licensing authority the circumstances of the violation warrant that action.

H. Upon receipt by a licensee of a complaint signed by the licensing authority and notice of a hearing, the licensee shall answer, in the manner of civil actions, the complaint and inform the licensing authority whether oral argument is desired and whether the licensee desires to produce witnesses.

I. At the request of any party and for good cause shown, the licensing authority shall issue subpoenas for the attendance of witnesses and the production of books, records and other documents, but in no case shall a subpoena be made returnable more than five days after service.

J. Whenever oral testimony of witnesses is taken at the hearing, the licensing authority shall have a certified reporter present to prepare a record of the proceedings. The original transcript shall be filed with the licensing authority. Any party is entitled to secure a copy from the reporter at the party's own expense.

K. Hearings may be convened by the licensing authority from time to time at the request of any party, but only for good cause shown. Hearings shall be held and concluded with reasonable dispatch and without unnecessary delay. The licensing authority shall decide any matter within thirty days of the hearing.

L. Upon the determination of any matter heard, the licensing authority shall state its findings. All parties shall be notified by the licensing authority of the action of the licensing authority and shall be furnished a copy of the findings.

M. Applicants for a license or the licensee may be represented by counsel.

N. Any person appearing before the licensing authority in a representative capacity shall be required to show his authority to act in that capacity.

O. No person shall be excused from testifying or producing any book or document in any investigation or hearing when ordered to do so by the licensing authority upon the ground that testimony or documentary evidence required of the person may tend to incriminate or subject the person to penalty or forfeiture, but no person may be prosecuted, punished or subjected to any penalty or forfeiture on account of any matter or thing concerning which the person, under oath, testified or produced documentary evidence, except that the person shall not be exempt from prosecution or punishment for any perjury committed by the person in the person's testimony.

P. If a person subpoenaed to attend in any investigation or hearing fails to obey the command of the subpoena without reasonable cause or if a person in attendance in any investigation or hearing refuses, without lawful cause, to be examined or to answer a legal or pertinent question or to exhibit any book, account, record or other document when ordered to do so by the representative of the licensing authority holding the hearing or by either the licensing authority or the department of public safety performing the investigation, the licensing authority may apply to any judge of the district court, upon proof by affidavit of the facts, for an order returnable in not less than five nor more than ten days directing the person to show cause before the judge why the person should not comply with the subpoena or order.

Q. Upon return of the order, the judge before whom the matter comes for hearing shall examine the person under oath. If the judge determines after giving the person an opportunity to be heard that the person refused without lawful excuse to comply with the subpoena of the licensing authority or refused without lawful authority to comply with the order of the licensing authority or the department of public safety holding the investigation, the judge may order the person to comply with the subpoena or order forthwith, and any failure to obey the order of the judge may be punished as a contempt of the district court.

R. Every witness is entitled to be paid for attendance or attendance and travel by the party on whose behalf he is subpoenaed, at the rates prescribed by law, before being required to testify.

S. The decision of the licensing authority in suspending or revoking any license under the Bingo and Raffle Act shall be subject to review. A licensee aggrieved by a decision of the licensing board may appeal to the district court pursuant to the provisions of Section 39-3-1.1 NMSA 1978.

T. No proceeding to vacate, reverse or modify any final order rendered by the licensing authority shall operate to stay the execution or effect of any final order unless the district court, on application and three days' notice to the licensing authority, allows the stay. In the event a stay is ordered, the petitioner shall be required to execute his bond in a sum the court may prescribe, with sufficient surety to be approved by the judge or clerk of the court, which bond shall be conditioned upon the faithful performance by the petitioner of his obligation as a licensee and upon the prompt payment of all damages arising from or caused by the delay in the taking effect or enforcement of the order complained of and for all costs that may be assessed or required to be paid in connection with the proceedings."

Section 3. Section 60-2B-9 NMSA 1978 (being Laws 1981, Chapter 259, Section 9, as amended) is amended to read:

"60-2B-9. REPORTS REQUIRED--CRITERIA.--

A. On April 15, July 15, October 15 and January 15 of each year, the licensee shall file with the licensing authority upon forms prescribed by the licensing authority a duly verified statement covering the preceding calendar quarter showing the amount of the gross receipts derived during that period from games of chance, the expenses incurred or paid and a brief description of the classification of the expenses, the name and address of each person to whom has been paid two hundred fifty dollars ($250) or more and the purpose of the expenditure, the net proceeds derived from each game of chance and the uses to which the net proceeds have been or are to be applied. It is the duty of each licensee to maintain and keep the books and records necessary to substantiate the particulars of each report.

B. If a licensee fails to file reports within the time required or if the reports are not properly verified or not fully, accurately and truthfully completed, any existing license may be suspended until the default has been corrected.

C. All money collected or received from the sale of admission, extra regular cards, special game cards, sale of supplies and all other receipts from the games of bingo shall be deposited in a special account of the licensee which shall contain only such money. All expenses for the game shall be withdrawn from the account by consecutively numbered checks duly signed by specified officers of the licensee and payable to a specific person or organization. There shall be written on the check the nature of the expense for which the check is drawn. No check shall be drawn to "cash" or a fictitious payee.

D. No part of the net profits, after they have been given over to another organization, shall be used by the donee organization to pay any person for services rendered or materials purchased in connection with the conducting of games of bingo by the donor organization.

E. No item of expense shall be incurred or paid in connection with holding, operating or conducting any game of chance pursuant to any license except bona fide expenses of a reasonable amount as determined by the licensing authority. Expenses may be incurred only for the following purposes:

(1) the purchase of goods, wares and merchandise furnished;

(2) payment for services rendered that are reasonably necessary for repairs of equipment, operating or conducting the game of bingo;

(3) for rent if the premises are rented or for janitorial services if not rented;

(4) for accountant's fees;

(5) for license fees; and

(6) for utilities."

Section 4. A new section of the Bingo and Raffle Act is enacted to read:

"BINGO AND RAFFLE TAX.--

A. A bingo and raffle tax equal to three percent of the net proceeds of any game of chance held, operated or conducted for or by a qualified organization shall be imposed on the qualified organization pursuant to the Bingo and Raffle Act.

B. No other state or local gross receipts tax shall apply to a qualified organization's gross receipts or net proceeds generated by a game of chance authorized by the Bingo and Raffle Act.

C. The tax imposed pursuant to this section shall be submitted monthly to the taxation and revenue department on or before the twenty-fifth day of the month following the month in which the gross receipts or net proceeds that are taxable were generated by the taxpayer.

D. The taxation and revenue department shall administer the tax imposed in this section pursuant to the Tax Administration Act.

E. For purposes of this section, "gross receipts" means the total amount of money or the value of consideration received from selling, leasing or otherwise transferring equipment or leasing premises for use by or for a qualified organization for offering games of chance pursuant to the Bingo and Raffle Act."

Section 5. Section 60-2B-13 NMSA 1978 (being Laws 1981, Chapter 259, Section 13) is amended to read:

"60-2B-13. EXEMPTIONS.--Nothing in the Bingo and Raffle Act shall be construed to apply to:

A. a drawing or a prize at a fair or fiesta held in New Mexico under the sponsorship or authority of the state or any of its political subdivisions, or for the benefit of a church situated in this state or for charitable purposes when all the proceeds of the sale or drawing shall be expended within New Mexico for the benefit of that church or charitable purpose, provided the fair or fiesta has been held on an annual basis for not less than two years immediately preceding and for a period of not more than fourteen consecutive calendar days in each year; or

B. bingo or a raffle held by a group or organization as defined in Section 60-2B-3 NMSA 1978 that holds bingo or a raffle only once during three consecutive calendar months and not exceeding four occasions in one calendar year."

Section 6. Section 60-2E-7 NMSA 1978 (being Laws 1997, Chapter 190, Section 9, as amended) is amended to read:

"60-2E-7. BOARD'S POWERS AND DUTIES.--

A. The board shall implement the state's policy on gaming consistent with the provisions of the Gaming Control Act and the Bingo and Raffle Act. It has the duty to fulfill all responsibilities assigned to it pursuant to those acts, and it has all authority necessary to carry out those responsibilities. It may delegate authority to the executive director, but it retains accountability. The board is an adjunct agency.

B. The board shall:

(1) employ the executive director;

(2) make the final decision on issuance, denial, suspension and revocation of all licenses pursuant to and consistent with the provisions of the Gaming Control Act and the Bingo and Raffle Act;

(3) develop, adopt and promulgate all regulations necessary to implement and administer the provisions of the Gaming Control Act and the Bingo and Raffle Act;

(4) conduct itself, or employ a hearing officer to conduct, all hearings required by the provisions of the Gaming Control Act and other hearings it deems appropriate to fulfill its responsibilities;

(5) meet at least once each month; and

(6) prepare and submit an annual report in December of each year to the governor and the legislature, covering activities of the board in the most recently completed fiscal year, a summary of gaming activities in the state and any recommended changes in or additions to the laws relating to gaming in the state.

C. The board may:

(1) impose civil fines not to exceed

twenty-five thousand dollars ($25,000) for the first violation and fifty thousand dollars ($50,000) for subsequent violations of any prohibitory provision of the Gaming Control Act or any prohibitory provision of a regulation adopted pursuant to that act;

(2) conduct investigations;

(3) subpoena persons and documents to compel access to or the production of documents and records, including books and memoranda, in the custody or control of a licensee;

(4) compel the appearance of employees of a licensee or persons for the purpose of ascertaining compliance with provisions of the Gaming Control Act or a regulation adopted pursuant to its provisions;

(5) administer oaths and take depositions to the same extent and subject to the same limitations as would apply if the deposition were pursuant to discovery rules in a civil action in the district court;

(6) sue and be sued subject to the limitations of the Tort Claims Act;

(7) contract for the provision of goods and services necessary to carry out its responsibilities;

(8) conduct audits, relevant to their gaming activities, of applicants, licensees and persons affiliated with licensees;

(9) inspect, examine, photocopy and audit all documents and records of an applicant or licensee relevant to his gaming activities in the presence of the applicant or licensee or his agent;

(10) require verification of income and all other matters pertinent to the gaming activities of an applicant or licensee affecting the enforcement of any provision of the Gaming Control Act;

(11) inspect all places where gaming activities are conducted and inspect all property connected with gaming in those places;

(12) summarily seize, remove and impound from places inspected any gaming devices, property connected with gaming, documents or records for the purpose of examination or inspection;

(13) inspect, examine, photocopy and audit documents and records, relevant to his gaming activities, of any affiliate of an applicant or licensee that the board knows or reasonably suspects is involved in the financing, operation or management of the applicant or licensee. The inspection, examination, photocopying and audit shall be in the presence of a representative of the affiliate or its agent when practicable; and

(14) except for the powers specified in Paragraphs (1) and (4) of this subsection, carry out all or part of the foregoing powers and activities through the executive director.

D. The board shall monitor all activity authorized in an Indian gaming compact between the state and an Indian nation, tribe or pueblo. The board shall appoint the state gaming representative for the purposes of the compact."