The bill, which now goes to the Senate, would nearly triple state funding for equine drug testing.
"That would be a huge help for us," said Gayla McCulloch of Farmington, who serves on the New Mexico Racing Commission.
The commission is hamstrung by inadequate funding to carry out drug testing and to hire quality investigators, McCulloch said.
"In order to help clean up the industry, we have to have more funding for drug testing," she said.
The bill would divert revenue from a tax on racetrack wagers to create a racehorse testing fund. Under current law, that revenue goes to the state's general fund.
"It really will help police the integrity of the horse racing that these animals are safe and not taking any intrusive drugs," said state Rep. James Strickler, R-Farmington, who voted in favor of the bill. Rep. Tom Taylor, R-Farmington, also supported it.
New Mexico's horse racing industry was rocked last year by intense media scrutiny of racehorses doped with everything from cocaine to Viagra, and some of the nation's highest rates of horse breakdowns.
A widely circulated New York Times report titled "Death and disarray at America's racetracks," focused on Ruidoso Downs. The Downs had the highest incident rate in the nation of horse breakdowns and injury. SunRay Park and Casino outside Farmington had the lowest rate in New Mexico, but it still far exceeded the national average.
Lonnie Barber, SunRay Park director of racing, said Tuesday the funding would dramatically expand the availability of drug testing.
"It'll help SunRay Park, it'll help every track in the state because they'll be able to do more testing and broader testing," he said.
State officials already test every winner at SunRay and other horses selected randomly. Horses are tested in a barn at the racetrack by veterinarians under the commission's supervision.
McCulloch said the commission aims to test every horse that dies on the racetrack. It also wants to hire more investigators. She said a lack of investigators has contributed to commission sanctions being overturned in district court.
"Some of this additional funding that we get will help us fill vacancies for investigators that we haven't been able to fill," she said. "We have been really handicapped with filling vacancies for investigators. We're hopeful we'll get the funds we need to crack down on the cheaters."
The funding would begin going to the commission in 2015. The bill as proposed would also prohibit local governments from enacting an occupational or excise tax on racetracks.
Under the legislation, New Mexico would adopt standards set by the Association of Racing Commissioners International. McCulloch said many states have adopted the association's standards, helping to reduce the patchwork of state-by-state enforcement.
"That's just a whole lot easier so the horsemen know the rules wherever they are, they're going to be the same," she said.
The commission next meets March 28 in Albuquerque. It's only scheduled meeting outside of Albuquerque is set for June 20 in Farmington.
The racing season begins April 19 at SunRay and runs through June 23. Races will be held on Tuesday, Friday, Saturday and Sunday each week.
Chuck Slothower may be reached at firstname.lastname@example.org; 505-564-4638. Follow him on Twitter @DTChuck