SENATE BILL 288
50th legislature - STATE OF NEW MEXICO - first session, 2011
INTRODUCED BY
Gerald Ortiz y Pino
AN ACT
RELATING TO TAXATION; ENACTING THE SWEETENED BEVERAGE EXCISE TAX ACT; PROVIDING FOR ADMINISTRATION; MAKING DISTRIBUTIONS; CREATING A FUND; MAKING APPROPRIATIONS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of the Tax Administration Act is enacted to read:
"[NEW MATERIAL] DISTRIBUTION--SWEETENED BEVERAGE EXCISE TAX--COUNTY-SUPPORTED MEDICAID FUND--CHILD OBESITY PREVENTION FUND.--
A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the county-supported medicaid fund in an amount equal to ninety-five percent of the net receipts, exclusive of penalties and interest, attributable to the sweetened beverage excise tax.
B. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the child obesity prevention fund in an amount equal to five percent of the net receipts, exclusive of penalties and interest, attributable to the sweetened beverage excise tax."
SECTION 2. A new section of Chapter 7 NMSA 1978 is enacted to read:
"[NEW MATERIAL] SHORT TITLE.--Sections 2 through 7 of this act may be cited as the "Sweetened Beverage Excise Tax Act"."
SECTION 3. A new section of Chapter 7 NMSA 1978 is enacted to read:
"[NEW MATERIAL] DEFINITIONS.--As used in the Sweetened Beverage Excise Tax Act:
A. "bottle" means any closed or sealed glass, metal, paper or plastic container or any other type of container regardless of the container's composition or size or the material or combination of materials used to make the container;
B. "bottled sweetened beverage" means any ready-to-consume sweetened beverage contained in a bottle;
C. "caloric sweetener" means a substance that adds calories to and sweetens the flavor of a beverage;
D. "consumer" means a person who purchases a sweetened beverage for consumption and not for resale;
E. "department" means the taxation and revenue department, the secretary or any employee of the department exercising authority lawfully delegated to that employee by the secretary;
F. "distributor" means a person, including a manufacturer or a wholesaler, who receives, stores, manufactures, bottles, distributes or sells bottled sweetened beverages, simple syrup, syrup or powder or base products for mixing, compounding or making sweetened beverages, for sale to retailers doing business in New Mexico, whether or not that person also sells such products to consumers, or for sale to consumers;
G. "natural fruit juice" means the original liquid resulting from the pressing of fruit, the liquid resulting from the reconstitution of fruit juice concentrate or the liquid resulting from the restoration of water to dehydrated fruit juice;
H. "natural vegetable juice" means the original liquid resulting from the pressing of one or more vegetables, the liquid resulting from the reconstitution of vegetable juice concentrate or the liquid resulting from the restoration of water to dehydrated vegetable juice;
I. "nonalcoholic beverage" means a beverage that contains less than one-half percent alcohol per volume;
J. "powder or base product" means a solid mixture of basic ingredients, including sugar, used in making, mixing or compounding sweetened beverages by mixing the powder or other base product with water, ice, syrup, simple syrup, fruits, vegetables, fruit juice, vegetable juice or any other product suitable to make a sweetened beverage;
K. "resale" means to sell again after purchase or acquisition;
L. "retailer" means a person, other than a distributor, manufacturer or wholesaler, who receives, stores, mixes, compounds or manufactures a sweetened beverage and sells or otherwise dispenses the sweetened beverage to the ultimate consumer;
M. "sale" means the transfer of title or possession of tangible personal property for a valuable consideration regardless of the manner in which the transfer is accomplished;
N. "secretary" means the secretary of taxation and revenue or the secretary's delegate;
O. "simple syrup" means a mixture of sugar and water;
P. "sugar" includes sucrose, dextrose, fructose, corn syrup, high-fructose corn syrup, honey or other caloric sweeteners, except those derived from fruit juice;
Q. "sweetened beverage" means a nonalcoholic beverage, whether carbonated or noncarbonated, sold for human consumption, that contains five grams or more of added sugar or other caloric sweetener per twelve ounces; "sweetened beverage" includes soda, water, sports drinks, energy drinks, colas and flavored drinks; diluted fruit or vegetable drinks containing seventy percent or less natural fruit juice or natural vegetable juice; frozen, freeze-dried or other concentrates to which water is added to produce a nonalcoholic beverage containing less than seventy percent natural fruit juice or natural vegetable juice; a powder or base product; and coffee or tea bottled as a liquid for sale; and
R. "syrup" means the liquid mixture of basic ingredients used in making, mixing or compounding sweetened beverages by combining the syrup with water, simple syrup, ice, fruits, vegetables, fruit juice, vegetable juice or any other product suitable to make a sweetened beverage."
SECTION 4. A new section of Chapter 7 NMSA 1978 is enacted to read:
"[NEW MATERIAL] SWEETENED BEVERAGE EXCISE TAX IMPOSED.--
A. For the privilege of selling sweetened beverages in New Mexico, there is imposed an excise tax on distributors of sweetened beverages. The rate of the tax shall be one-half cent ($0.005) per ounce of sweetened beverage sold, whether it is sold as a bottled sweetened beverage or as a sweetened beverage that is produced from simple syrup, syrup or powder or base product. For purposes of calculating the tax, the volume of sweetened beverage produced from simple syrup, syrup or powder or base product shall be the largest of:
(1) the largest volume resulting from use of the simple syrup, syrup or powder or base product according to any manufacturer's instructions;
(2) the volume actually produced by the retailer; or
(3) the volume typically produced by retailers doing business in New Mexico as reasonably determined by the secretary.
B. The tax imposed by this section may be referred to as the "sweetened beverage excise tax".
C. The sweetened beverage excise tax is imposed in addition to all other taxes imposed on sweetened beverages.
D. The tax imposed by this section shall be administered pursuant to the Tax Administration Act."
SECTION 5. A new section of Chapter 7 NMSA 1978 is enacted to read:
"[NEW MATERIAL] EXEMPTIONS.--The following may be exempted from the sweetened beverages subject to the sweetened beverage excise tax:
A. bottled sweetened beverages sold to the United States government and vendors located on the land of a federally recognized Indian nation, tribe or pueblo located wholly or partially in New Mexico;
B. bottled sweetened beverages sold by a distributor or a retailer for resale outside New Mexico; and
C. bottled sweetened beverages sold by a distributor to:
(1) another distributor that is registered with the department as a distributor of sweetened beverages, simple syrups, syrups and powder or base products if the sales invoice clearly indicates that the sale is exempt; and
(2) a person who is both a distributor and a retailer; provided that the tax shall be included in the invoice when the purchaser resells the product to a retailer or a consumer."
SECTION 6. A new section of Chapter 7 NMSA 1978 is enacted to read:
"[NEW MATERIAL] TAX ADMINISTRATION--TAX RETURNS--REQUIREMENTS.--
A. Distributors shall file sweetened beverage excise tax returns on or before the twenty-fifth day of the month following the month in which sweetened beverages are sold in New Mexico. The form and content of the return shall be as prescribed by the secretary. The returns shall be filed electronically.
B. Each person engaged in the business of selling sweetened beverages in New Mexico as a distributor shall register pursuant to Section 7-1-12 NMSA 1978."
SECTION 7. A new section of Chapter 7 NMSA 1978 is enacted to read:
"[NEW MATERIAL] TAX ADMINISTRATION--BOND.--
A. Every sweetened beverage excise tax taxpayer shall file with the department a bond on a form approved by the attorney general with a surety company authorized by the public regulation commission to transact business in this state as a surety and upon which bond the taxpayer is the principal obligor and the state the obligee. The bond shall be conditioned upon the prompt filing of true reports and the payment by the taxpayer to the department of all taxes levied by the Sweetened Beverage Excise Tax Act, together with all applicable penalties and interest thereon.
B. In lieu of the bond, the taxpayer may elect to file with the department cash or bonds of the United States or New Mexico or of any political subdivision of the state.
C. The total amount of the bond, cash or securities required of any taxpayer shall be fixed by the department and may be increased or reduced by the department at any time, subject to the limitations provided in this section.
D. In fixing the total amount of the bond, cash or securities required of any taxpayer required to post bond, the department shall require an amount equivalent to at least two times the amount of the department's estimate of the taxpayer's monthly sweetened beverage excise tax, determined in such manner as the secretary may deem proper; provided, however, that the total amount of bond, cash or securities required of a taxpayer shall never be less than one thousand dollars ($1,000).
E. In the event that the department decides that the amount of the existing bond, cash or securities is insufficient to ensure payment to this state of the amount of the sweetened beverage excise tax and any penalties and interest for which the taxpayer is or may at any time become liable, the taxpayer, upon written demand of the department mailed to the last known address of the taxpayer as shown on the records of the department, shall file an additional bond, cash or securities in the manner, form and amount determined by the department to be necessary to secure at all times the payment by the taxpayer of all taxes, penalties and interest due under the Sweetened Beverage Excise Tax Act.
F. A surety on a bond furnished by a taxpayer as required by this section shall be released and discharged from all liability accruing on the bond after the expiration of ninety days from the date upon which the surety files with the department a written request to be released and discharged; provided, however, that such request shall not operate to release or discharge the surety from any liability already accrued or that shall accrue before the expiration of the ninety-day period, unless a new bond is filed during the ninety-day period, in which case, the previous bond may be canceled as of the effective date of the new bond. On receipt of notice of such request, the department promptly shall notify the taxpayer who furnished the bond that the taxpayer, on or before the expiration of the ninety-day period, shall file with the department a new bond with a surety satisfactory to the department in the amount and form required in this section.
G. A taxpayer who is required to file bond with or provide cash or securities to the department in accordance with this section and who is required by another state law to file another bond with or provide cash or securities to the department may elect to file a combined bond or to provide cash or securities applicable to the provisions of both this section and the other law, with the approval of the secretary. The amount of the combined bond, cash or securities shall be determined by the department, and the form of the combined bond shall be approved by the attorney general."
SECTION 8. Section 27-10-3 NMSA 1978 (being Laws 1991, Chapter 212, Section 3, as amended) is amended to read:
"27-10-3. COUNTY-SUPPORTED MEDICAID FUND CREATED--USE-- APPROPRIATION BY THE LEGISLATURE.--
A. There is created in the state treasury the "county-supported medicaid fund". The fund shall be invested by the state treasurer as other state funds are invested. Income earned from investment of the fund shall be credited to the county-supported medicaid fund. The fund shall not revert in any fiscal year.
B. Money in the county-supported medicaid fund, except for money from the sweetened beverage excise tax, is subject to appropriation by the legislature to support the state medicaid program and to institute or support primary care health care services pursuant to Subsections D and E of Section 24-1A-3.1 NMSA 1978. Of the amount appropriated each year, nine percent shall be appropriated to the department of health to institute or support primary care health care services pursuant to Subsections D and E of Section 24-1A-3.1 NMSA 1978.
C. Up to three percent of the county-supported medicaid fund each year may be expended for administrative costs related to medicaid or for developing new primary care health care centers or facilities.
D. Money in the fund from the sweetened beverage excise tax shall be expended for medicaid services.
[D.] E. In the event federal funds for medicaid are not received by New Mexico for any eighteen-month period, the unencumbered balance remaining in the county-supported medicaid fund and the sole community provider fund at the end of the fiscal year following the end of any eighteen-month period shall be paid within a reasonable time to each county for deposit in the county indigent hospital claims fund in proportion to the payments made by each county through tax revenues or transfers in the previous fiscal year as certified by the local government division of the department of finance and administration. The department will provide for budgeting and accounting of payments to the fund."
SECTION 9. A new section of Chapter 27, Article 10 NMSA 1978 is enacted to read:
"[NEW MATERIAL] CHILD OBESITY PREVENTION FUND--ADMINISTRATION.--
A. The "child obesity prevention fund" is created in the state treasury. The fund shall be invested by the state treasurer as other state funds are invested. Income earned from investment of the fund shall be credited to the child obesity prevention fund. The fund shall not revert in any fiscal year.
B. Five percent of the money from the sweetened beverage excise tax shall be distributed pursuant to the Tax Administration Act to the child obesity prevention fund.
C. Money in the child obesity prevention fund is appropriated to the department of health to support child obesity prevention.
D. The child obesity prevention fund shall be administered by the department of health.
E. Money in the fund shall be expended by warrant issued by the secretary of finance and administration pursuant to vouchers signed by the secretary of health."
SECTION 10. APPLICABILITY.--The distributions pursuant to Section 1 of this act apply to receipts from the sweetened beverage excise tax attributable to sales on or after January 1, 2012.
SECTION 11. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2012.
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