SENATE BILL 541
49th legislature - STATE OF NEW MEXICO - first session, 2009
INTRODUCED BY
Lynda M. Lovejoy
FOR THE INDIAN AFFAIRS COMMITTEE
AN ACT
RELATING TO TAXATION; AMENDING SECTIONS OF THE NMSA 1978 CONCERNING THE NATIVE AMERICAN VETERANS' INCOME TAX SETTLEMENT FUND; MAKING APPROPRIATIONS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 7-2H-1 NMSA 1978 (being Laws 2008, Chapter 89, Section 1) is amended to read:
"7-2H-1. LEGISLATIVE FINDINGS.--
A. Native Americans have had a long history of serving their country through active duty in the armed forces of the United States during periods of both war and peace and have made great sacrifices in serving their country through active duty in the military during periods of war and peace.
B. Native American veterans domiciled [on] within the boundaries of their tribal lands or their spouse's tribal lands during their periods of active military service may have been exempt from paying state personal income taxes on their military income, but may have had state personal income taxes [improperly] withheld from their military income.
C. Native American veterans now are barred by the state statute of limitations from claiming refunds of state personal income taxes that may have been [improperly] withheld from their military income when they were domiciled within the boundaries of their tribal lands or their spouse's tribal lands during the period of their active military duty, and even if not barred by the statute of limitations, the passage of time extending to decades will make it difficult for many Native American veterans to meet strict standards of proof that they are entitled to a refund of [improperly] withheld state personal income taxes.
D. It is incumbent upon the state to ensure that it was not unjustly enriched by the [improper] withholding of state personal income taxes from Native American veterans who were domiciled within the boundaries of their tribal lands or their spouse's tribal lands during the period of their active military duty, and the state should implement a feasible means of refunding to Native American veterans any state personal income taxes that were [improperly] withheld from military [pay] income while they were domiciled within the boundaries of their tribal lands or their spouse's tribal lands during the period of their active military duty."
Section 2. Section 7-2H-2 NMSA 1978 (being Laws 2008, Chapter 89, Section 2) is amended to read:
"7-2H-2. [DEFINITIONS] DEFINITION.--As used in [this act:
A. "department" means the veterans' services department;
B.] Chapter 7, Article 2H NMSA 1978, "fund" means the Native American veterans' income tax settlement fund [and
C. "secretary" means the secretary of veterans' services]."
Section 3. Section 7-2H-3 NMSA 1978 (being Laws 2008, Chapter 89, Section 3) is amended to read:
"7-2H-3. NATIVE AMERICAN VETERANS' INCOME TAX SETTLEMENT FUND--CREATED--PURPOSE--APPROPRIATIONS.--
A. The "Native American veterans' income tax settlement fund" is created as a nonreverting fund in the state treasury and shall be administered by the taxation and revenue department. The fund shall consist of money that is appropriated or donated or that otherwise accrues to the fund. Money in the fund shall be invested by the state investment officer in the manner that land grant permanent funds are invested pursuant to Chapter 6, Article 8 NMSA 1978. Income from investment of the fund shall be credited to the fund.
B. The taxation and revenue department shall establish procedures and adopt rules as required to administer the fund and to make settlement payments from the fund as approved by the secretary of taxation and revenue.
C. Money in the fund is appropriated to the taxation and revenue department to make settlement payments to Native American veterans who were domiciled within the boundaries of their tribal lands or their spouse's tribal lands during the period of their active military duty and had state personal income taxes [improperly] withheld from their military [pay] income. Settlement payments shall include the amount of state personal income taxes withheld from eligible Native American veterans that have not been previously refunded to the veterans and interest on the amount withheld from the date of withholding computed on a daily basis at the rate specified for individuals pursuant to Section 6621 of the Internal Revenue Code of 1986. No settlement payments shall be made for any taxable year for which a refund claim may be timely filed with the taxation and revenue department, or for which an application for settlement is received after December 31, 2012. Money shall be disbursed from the fund only on warrant of the secretary of finance and administration upon vouchers signed by the secretary of [veterans' services] taxation and revenue or the secretary's authorized representative. Any unexpended or unencumbered balance remaining in the fund at the end of a fiscal year shall not revert to the general fund.
D. Beginning in fiscal year 2010 and in subsequent fiscal years, not more than five percent of the fund is appropriated from the fund to the taxation and revenue department for expenditure in the fiscal year in which it is appropriated to administer the fund. Any unexpended or unencumbered balance remaining at the end of any fiscal year shall revert to the fund.
E. Beginning in fiscal year 2010 and in subsequent fiscal years, not more than five percent of the fund is appropriated from the fund to the veterans' services department for expenditure in the fiscal year in which it is appropriated to assist in outreach and public relations and in determining eligibility for settlement payments. Any unexpended or unencumbered balance remaining at the end of any fiscal year shall revert to the fund."
Section 4. Section 7-2H-4 NMSA 1978 (being Laws 2008, Chapter 89, Section 4) is amended to read:
"7-2H-4. DUTIES OF THE SECRETARY.--
A. The secretary of veterans' services shall conduct a study in cooperation with the taxation and revenue department to determine whether Native American veterans who were domiciled [on] within the boundaries of their tribal lands or their spouse's tribal lands during the period of their active military duty had state personal income taxes [improperly] withheld from their [pay] military income and if so, to determine the amount of such state personal income taxes [improperly] withheld and the number and identity of Native American veterans or their survivors affected by the [improper] withholding of such state personal income taxes.
B. The secretary of taxation and revenue and the secretary of veterans' services shall promulgate rules for a state program to compensate Native American veterans or their survivors for state personal income taxes [improperly] withheld from military income while on active military duty and domiciled within the boundaries of the veteran's or the veteran's spouse's tribal lands.
C. The secretary of taxation and revenue shall report to the appropriate interim legislative committee no later than October 1 of each year regarding estimates of the amount of state personal income taxes [improperly] withheld from the military [pay] income of Native American veterans domiciled on their respective tribal lands, the number of Native American veterans or their survivors affected by [the improper] such withholding of state personal income taxes, total expenditures from the fund for the previous fiscal year and the anticipated appropriations to the fund needed to pay for settlements to be entered into for the next fiscal year."
Section 5. APPROPRIATION.--Two million dollars ($2,000,000) is appropriated from the general fund to the Native American veterans' income tax settlement fund for expenditure in fiscal year 2010 and subsequent fiscal years to carry out the purposes of the fund. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.
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