45th legislature - STATE OF NEW MEXICO - first session, 2001

RELATING TO TAXATION; AMENDING THE SUPPLEMENTAL MUNICIPAL GROSS RECEIPTS TAX ACT TO ALLOW CERTAIN MUNICIPALITIES TO IMPOSE AN EXCISE TAX TO FUND MUNICIPAL WATER AND WASTEWATER PROJECTS AND SYSTEMS; DECLARING AN EMERGENCY.

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

Section 1. Section 7-19-11 NMSA 1978 (being Laws 1979, Chapter 397, Section 2, as amended) is amended to read:

"7-19-11. DEFINITIONS.--As used in the Supplemental Municipal Gross Receipts Tax Act:

A. "department" or "division" means the taxation and revenue department, the secretary of taxation and revenue or any employee of the department exercising authority lawfully delegated to that employee by the secretary;

B. "governing body" means the city council or city commission of a municipality;

C. "municipality" means:

(1) any incorporated city, town or village having previously qualified to impose and did impose the tax pursuant to the provisions of the Supplemental Municipal Gross Receipts Tax Act in effect prior to this 1997 act; and

(2) a municipality having a population of more than eight thousand but less than nine thousand according to the 1990 federal decennial census and having a net taxable value for rate-setting purposes for the 1999 property tax year of over ninety million dollars ($90,000,000);

D. "person" means an individual or any other legal entity;

E. "refunding bonds" means bonds issued pursuant to the provisions of the Supplemental Municipal Gross Receipts Tax Act to refund supplemental municipal gross receipts tax bonds issued pursuant to the provisions of that act;

F. "state gross receipts tax" means the gross receipts tax imposed under the Gross Receipts and Compensating Tax Act; and

G. "supplemental municipal gross receipts tax" means the tax authorized to be imposed under the Supplemental Municipal Gross Receipts Tax Act."

Section 2. Section 7-19-12 NMSA 1978 (being Laws 1979, Chapter 397, Section 3, as amended) is amended to read:

"7-19-12. AUTHORIZATION TO IMPOSE SUPPLEMENTAL MUNICIPAL GROSS RECEIPTS TAX--[AUTHORIZATION FOR ISSUANCE OF SUPPLEMENTAL MUNICIPAL GROSS RECEIPTS BONDS] ELECTION REQUIRED.--

A. The majority of the members elected to the governing body of a municipality may enact an ordinance imposing an excise tax on any person engaging in business in the municipality for the privilege of engaging in business in the municipality. This tax is to be referred to as the "supplemental municipal gross receipts tax" and is to be dedicated for the purposes of acquiring water rights or designing, constructing, acquiring, equipping, purchasing or otherwise improving municipal water and wastewater systems or the payment of special obligation bonds issued for those purposes. The rate of the tax shall not exceed one percent of the gross receipts of the person engaging in business and shall be imposed in [one-fourth] one-sixteenth percent increments if less than one percent.

B. The governing body of a municipality enacting an ordinance imposing the tax authorized in Subsection A of this section shall submit the question of imposing [such] the tax [and the question of the issuance of supplemental municipal gross receipts bonds in an amount not to exceed nine million dollars ($9,000,000), for which the revenue from the supplemental municipal gross receipts tax is dedicated] to the qualified electors of the municipality at a regular or special election.

C. The [questions] question referred to in Subsection B of this section shall be submitted to a vote of the qualified electors of the municipality [as two separate ballot questions, which shall be] in substantially [in] the following form:

[(1) "Shall the municipality be authorized to issue supplemental municipal gross receipts bonds in an amount of not exceeding ____________________ dollars for the purpose of constructing and equipping and otherwise acquiring a municipal water supply system?

For __________ Against __________"; and

(2)] "Shall the municipality impose an excise tax for the privilege of engaging in business in the municipality [which] that shall be known as the "supplemental municipal gross receipts tax" and [which] that shall be imposed at a rate of __________ percent of the gross receipts of the person engaging in business, the proceeds of which are dedicated [to the payment of supplemental municipal gross receipts bonds] for the purposes of acquiring water rights or designing, constructing, acquiring, equipping, purchasing or otherwise improving municipal water and wastewater systems or the payment of special obligation bonds issued for those purposes?

For __________ Against __________".

D. Only those voters who are registered electors who reside within the municipality shall be permitted to vote on [these two] the question. The procedures for conducting the election shall be substantially the same as the applicable provisions in Sections 3-30-1, 3-30-6 and 3-30-7 NMSA 1978 relating to municipal debt.

E. If at an election called pursuant to this section a majority of the voters voting on [each of the two questions vote] the question vote in the affirmative, [on each such question, then] the ordinance imposing the supplemental municipal gross receipts tax shall be approved. If at [such] the election a majority of the voters voting on [such questions fail] the question fail to approve [any of] the [questions, then] question, the ordinance imposing the tax shall be disapproved and the [questions] question required to be submitted by Subsection B of this section shall not be submitted to the voters for a period of one year from the date of the election.

F. Any ordinance enacted under the provisions of this section shall include an effective date of either July 1 or January 1, whichever date occurs first after the expiration of at least [five] three months from the date of the election. A certified copy of any ordinance imposing a supplemental municipal gross receipts tax shall be mailed or delivered to the [division] department within five days after the ordinance is adopted by the approval by the electorate. Any ordinance repealing the imposition of a tax under the provisions of the Supplemental Municipal Gross Receipts Tax Act shall become effective on either July 1 or January 1, after the expiration of at least [five] three months from the date the ordinance is repealed by the governing body.

G. Nothing in this section [is intended to or does alter] alters the effectiveness or validity of [any] actions taken in accordance with [Subsection G of Section 80 of Chapter 20 of Laws 1986] prior law governing supplemental municipal gross receipts taxes."

Section 3. Section 7-19-15 NMSA 1978 (being Laws 1979, Chapter 397, Section 6, as amended) is amended to read:

"7-19-15. COLLECTION BY DEPARTMENT--TRANSFER OF PROCEEDS--DEDUCTIONS.--

A. The department shall collect the supplemental municipal gross receipts tax in the same manner and at the same time it collects the state gross receipts tax.

B. The department shall withhold an administrative fee pursuant to Section [1 of this 1997 act] 7-1-6.41 NMSA 1978. The department shall transfer to each municipality for which it is collecting a supplemental municipal gross receipts tax the amount of the tax collected less the administrative fee withheld and less any disbursements for tax credits, refunds and the payment of interest applicable to the supplemental municipal gross receipts tax. Transfer of the tax to a municipality shall be made within the month following the month in which the tax is collected."

Section 4. Section 7-19-17 NMSA 1978 (being Laws 1979, Chapter 397, Section 8, as amended) is amended to read:

"7-19-17. ISSUANCE OF BONDS--PURPOSES.--

A. If the ordinance imposing the supplemental municipal gross receipts tax is approved as provided in Subsection E of Section 7-19-12 NMSA 1978, the governing body of a municipality may issue bonds pursuant to the Supplemental Municipal Gross Receipts Tax Act [in an amount not to exceed nine million dollars ($9,000,000)]. The supplemental municipal gross receipts bonds shall be issued for the purpose of [constructing and equipping and otherwise acquiring a municipal water supply system, including the purchase of water rights and easements, equipment and professional fees related thereto, to be paid back from the proceeds of the supplemental municipal gross receipts tax imposed] acquiring water rights or designing, constructing, acquiring, equipping, purchasing or otherwise improving municipal water and wastewater systems.

B. Supplemental municipal gross receipts bonds shall be issued and sold as provided in the Supplemental Municipal Gross Receipts Tax Act. The bonds shall be authorized by an ordinance adopted by a majority of the members of the governing body, and the governing body [of the municipality] shall determine at its discretion the terms, covenants and conditions of the supplemental municipal gross receipts bonds, including but not limited to date of issuance, denomination, maturity, [coupon] interest rates, call features, premium, registration, refundability and other matters covering the general and technical aspects of their issuance. [These] The bonds may be either serial or term and may be sold by the governing body [of the municipality] at the time and in the manner as the governing body may elect, at either public or private sale. The supplemental municipal gross receipts bonds shall not be considered or held to be general obligations of the municipality issuing them and are payable [solely from the revenue accruing from the revenue of] from the net receipts derived from the supplemental municipal gross receipts tax and from other properly pledged revenues. The ordinance authorizing the tax shall be irrepealable until these bonds are fully paid."

Section 5. Section 7-19-17.1 NMSA 1978 (being Laws 1997, Chapter 219, Section 4) is amended to read:

"7-19-17.1. REFUNDING BONDS--AUTHORIZATION.--

A. Any municipality may issue refunding bonds for the purpose of refinancing, paying and discharging all or any part of outstanding supplemental municipal gross receipts [tax] bonds of any one or more or all outstanding issues:

(1) for the acceleration, deceleration or other modification of the payment of such obligations, including without limitation any capitalization of any interest thereon in arrears or about to become due for any period not exceeding one year from the date of the refunding bonds;

(2) for the purpose of reducing interest costs or affecting other economies;

(3) for the purpose of modifying or eliminating restrictive contractual limitations pertaining to the issuance of additional bonds, otherwise concerning the outstanding bonds or to any facilities relating thereto; or

(4) for any combination of such purposes.

B. The municipality may pledge irrevocably for the payment of interest and principal on refunding bonds the appropriate pledged revenues, which may be pledged to an original issue of bonds as provided in the Supplemental Municipal Gross Receipts Tax Act. Nothing in this section shall [permit] prohibit the pledge of the supplemental municipal gross receipts tax revenue to the payment of bonds that refund bonds issued under any other provision of law for the purposes of acquiring water rights or designing, constructing, acquiring, equipping, purchasing or otherwise improving municipal water or wastewater systems.

C. Refunding bonds may be issued separately or issued in combination in one series or more.

D. Refunding bonds issued pursuant to the Supplemental Municipal Gross Receipts Tax Act shall be authorized by ordinance adopted by a majority of the members of the governing body. Any bonds that are refunded under the provisions of this section shall be paid at maturity or on any permitted prior redemption date in the amounts, at the time and places and, if called prior to maturity, in accordance with any applicable notice provisions, all as provided in the proceedings authorizing the issuance of the refunded bonds, or otherwise appertaining thereto, except for any such bond that is voluntarily surrendered for exchange or payment by the holder or owner.

E. Provision shall be made for paying the bonds refunded at the time or places provided in Subsection D of this section. The principal amount of the refunding bonds [shall not] may exceed, [but may] be less than or be the same as, the principal amount of the bonds being refunded so long as provision is duly and sufficiently made for the payment of the refunded bonds.

F. The proceeds of refunding bonds, including any accrued interest and premium appertaining to the sale of refunding bonds, shall either be immediately applied to the retirement of the bonds being refunded or be placed in escrow in a commercial bank or trust company that possesses and is exercising trust powers and that is a member of the federal deposit insurance corporation, to be applied to the payment of the principal of, interest on and any prior redemption premium due in connection with the bonds being refunded; provided that such refunding bond proceeds, including any accrued interest and any premium appertaining to a sale of refunding bonds, may be applied to the establishment and maintenance of a reserve fund and to the payment of expenses incidental to the refunding and the issuance of the refunding bonds, the interest on the refunding bonds and the principal of the refunding bonds or both interest and principal as the municipality may determine. Nothing in this section requires the establishment of an escrow if the refunded bonds become due and payable within one year from the date of the refunding bonds and if the amounts necessary to retire the refunded bonds within that time are deposited with the paying agent for the refunded bonds. Any such escrow shall not necessarily be limited to proceeds of refunding bonds but may include other money available for its escrow purpose. Any proceeds in escrow pending such use may be invested or reinvested in bills, certificates of indebtedness, notes or bonds that are direct obligations of or the principal and interest of which obligations are unconditionally guaranteed by the United States or in certificates of deposit of banks that are members of the federal deposit insurance corporation, the par value of which certificates of deposit is collateralized by a pledge of obligations of or the payment of which is unconditionally guaranteed by the United States, the par value of which obligations is at least seventy-five percent of the par value of the certificates of deposit. Such proceeds and investments in escrow, together with any interest or other income to be derived from any such investment, shall be in an amount at all times sufficient as to principal, interest, any prior redemption premium due and any charges of the escrow agent payable therefrom to pay the bonds being refunded as they become due at their respective maturities or due at any designated prior redemption date in connection with which the municipality shall exercise a prior redemption option. Any purchaser of any refunding bond issued pursuant to the provisions of the Supplemental Municipal Gross Receipts Tax Act is in no manner responsible for the application of the proceeds thereof by the municipality or any of its officers, agents or employees.

G. Refunding bonds may be sold at a public or negotiated sale and may bear such additional terms and provisions as may be determined by the municipality subject to limitations in the Supplemental Municipal Gross Receipts Tax Act. The terms, provisions and authorization of the refunding bonds are not subject to the provisions of any other statute, provided that the Public Securities Limitation of Action Act shall be fully applicable to the issuance of refunding bonds.

H. The municipality shall receive from the department of finance and administration written approval of any refunding bonds issued pursuant to the provisions of this section."

Section 6. Section 7-19-18 NMSA 1978 (being Laws 1979, Chapter 397, Section 9, as amended) is amended to read:

"7-19-18. SUPPLEMENTAL MUNICIPAL GROSS RECEIPTS TAX--USE OF PROCEEDS--RESTRICTION.--

A. The proceeds from the supplemental municipal gross receipts tax [shall be deposited in a special improvement account of the municipality and] shall be used only for:

(1) the payment of the principal of, interest on, any prior redemption premiums due in connection with and other expenses related to the supplemental municipal gross receipts bonds issued pursuant to the Supplemental Municipal Gross Receipts Tax Act;

(2) the funding of any reserves and other accounts in connection with such bonds;

(3) refunding bonds; and

(4) to the extent not needed for those purposes, [the improvement of the municipality's water system] for the purposes of acquiring water rights or designing, constructing, acquiring, equipping, purchasing or otherwise improving municipal water and wastewater systems.

B. When any issue of supplemental municipal gross receipts bonds or refunding bonds is fully paid, the supplemental municipal gross receipts tax shall cease to be imposed for that issue, but may continue to be imposed for [bonds enacted and approved pursuant to Section 7-19-12 NMSA 1978 and thereafter issued, or for refunding bonds issued pursuant to Section 4 of this 1997 act. Any money remaining in a special improvement account after the obligations for supplemental municipal gross receipts bonds and refunding bonds are fully paid may be transferred to any other fund of the municipality] other purposes permitted by the Supplemental Municipal Gross Receipts Tax Act."

Section 7. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.