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

SPONSOR Komadina

DATE TYPED 2/2/05

HB

SHORT TITLE Compulsive Gambler Funds and Programs

SB 431

ANALYST Collard

APPROPRIATION

Appropriation Contained

Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Fiscal Impact

Section Recurring

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

See Fiscal Impact Section Recurring Compulsive Gam-

bler Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

Gaming Control Board (GCB)

Responses Not Received From

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of Bill

Senate Bill 431 would amend the Tax Administration Act to create a “Compulsive Gambler

Fund” in the state treasury and to create a “Compulsive Gambler Fee” appropriating those funds

to DOH for compulsive gambler programs. Any unexpended or unencumbered balances remain-

ing at the end of the fiscal year would not revert to the general fund.

Senate Bill 431 -- Page 2

Significant Issues

DOH indicates the bill would place the responsibility for compulsive gambler programs on

DOH, removing the responsibility from the gaming licensee.

Currently the treatment for problem gamblers is accomplished in the private sector. Racetracks

and most gaming tribes contribute to the operation of a statewide treatment voucher system. This

treatment system is operated by the New Mexico Council on Problem Gambling.

GCB notes, under this proposal, DOH will make the determination of who receives money to

fund or support programs for the treatment and assistance of compulsive gamblers. This could

allow for the transparency of where and how the monies are being distributed and provide ac-

countability to the public. However, the removing of the compulsive gambling plan requirement

eliminates regulatory agency oversight on the gaming operators regarding the dissemination of

compulsive gambling literature, providing sources of treatment and training for employees.

GCB indicates the plans should remain a requirement and be administered by the DOH as the

department has the expertise in behavior health issues. DOH needs to be able to enforce their

regulatory duties regarding compulsive gambling plans. The plans reflect the state interest in ad-

dressing the social ramifications of compulsive gambling. Currently, DOH and GCB have a

Memoranda of Understanding where DOH reviews and makes recommendations on the ade-

quacy of the compulsive gambling plan development and implementation.

FISCAL IMPLICATIONS

The Compulsive Gambler Fund would be comprised of the net receipts of all compulsive gam-

bler fees collected. Compulsive gambler fees would be comprised of one-fourth percent (1/4%)

of the net take of gaming machines for racetrack gaming operator licensees. This is a recurring

expense. Any unexpended or unencumbered balance remaining at the end of any fiscal year

shall not revert to the general fund.

Continuing Appropriations

This bill creates a new fund and provides for continuing appropriations. The LFC objects to in-

cluding continuing appropriation language in the statutory provisions for newly created funds.

Earmarking reduces the ability of the legislature to establish spending priorities.

DOH states the administration of the Compulsive Gambler Fund would have fiscal implications

on the department, including costs associated with fund administration, contracting and monitor-

ing. DOH estimates a cost of up to $82 thousand per year to support an FTE and contract moni-

toring expenses.

ADMINISTRATIVE IMPLICATIONS

GCB indicates the State Treasurer will need to set up the fund fund, the Taxation and Revenue

Department will need to distribute the monies and DOH will need to provide the monies to fund

or support programs for the treatment and assistance of compulsive gamblers. Additionally,

DOH will need to make decisions on what type of support programs for treatment and what type

of assistance for compulsive gamblers will receive the monies, particular since compulsive gam-

bling plans are no longer required.

Senate Bill 431 -- Page 3

DUPLICATION

Senate Bill 431 duplicates House Bill 630.

TECHNICAL ISSUES

GCB suggests the following language be added to Section 60-2E-47 (F) in order to be consistent

with the language in Section 60-2E-47 (E) pertaining to the racetracks.

F. A nonprofit gaming operator licensee shall distribute at least sixty percent of the balance of

its net take, after payment of the gaming tax and any income taxes, for charitable or educational

purposes. A nonprofit gaming operator licensee shall pay, in addition to other taxes or amounts

required by this section a compulsive gambler fee of one – fourth percent of the net take of its

gaming machines to the taxation and revenue department for distribution to the department of

health pursuant to Section 7-1-6.1 NMSA 1978 to fund or support programs for the treatment

and assistance of compulsive gamblers.

OTHER SUBSTANTIVE ISSUES

DOH also notes the deletion of the compulsive gambling plans, indicating the plans require

tracks to participate in the critical phases of identification and treatment referral process. Race-

track staff training is also currently required to be included in these plans.

KBC/yr