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F I S C A L I M P A C T R E P O R T

SPONSOR Gutierrez

DATE TYPED 02/15/05 HB 911

SHORT TITLE Racetrack & Gaming Revenue For Scholarships

SB

ANALYST Padilla-Jackson

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$3,500.0

Recurring

Commission on

Higher Educa-

tion

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

$3,500.0

Similar Recurring

Graduate Student

Scholarship Fund

($3,500.0)

Similar Recurring

General Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Taxation and Revenue Department (TRD)

Gaming Control Board (GCB)

SUMMARY

Synopsis of Bill

House Bill 911 creates the “graduate student scholarship fund”, to be administered and distrib-

uted by the commission on higher education (CHE) to public post-secondary educational institu-

tions with graduate schools for the purpose of providing scholarships to New Mexico residents

pursuing advanced degrees. The CHE would be responsible for developing guidelines, proce-

House Bill 911 -- Page 2

dures and qualifications for the scholarships. The investment return earnings would remain in

the fund as well as any unexpended and unencumbered balances.

The bill creates a distribution to the graduate student scholarship fund in the amount of one third

of the net receipts attributable to the gaming tax paid by those gaming operator licensees that are

racetracks and located in a class B county with a population of greater than 50 thousand and less

than 80 thousand and with a net taxable value for property tax purposes of greater than $1 bil-

lion. Applicable tax receipts include:

A.

The daily tax imposed by Section 60-1-8;

B.

One fourth percent of the gross amount wagered on win, place and show and received as

commission by a class A licensee;

C.

The tax on gross amount wagered imposed by Section 60-1-15k, after deducting the off-

sets, transfers and appropriations provided in that section; and

D.

The additional daily license fee imposed by Section 60-1-15.3.

The effective date of this bill is July 1, 2005.

FISCAL IMPLICATIONS

The total fiscal impact, based on TRD’s estimate, is -$3.5 million to the general fund and $3.5

million to the graduate student scholarship fund. TRD’s estimate is based on projected revenue

from the Zia Park racetrack in Hobbs. This fiscal impact estimate implies a total gaming tax

revenue collected from the Zia Park of approximately $10.5 million. TRD cautions that the pro-

jection is uncertain because the racetrack has only been operating for a few months.

The appropriation of $3.5 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of the fiscal year would not re-

vert to the general fund. This bill creates a new fund and provides for continuing appropriations.

The LFC objects to including continuing appropriation language in the statutory provisions for

newly created funds. Earmarking reduces the ability of the legislature to establish spending pri-

orities.

ADMINISTRATIVE IMPLICATIONS

No significant impact to TRD.

OPJ/lg