HOUSE BILL 492
51st legislature - STATE OF NEW MEXICO - first session, 2013
INTRODUCED BY
Larry A. Larrañaga and Timothy M. Keller
AN ACT
RELATING TO PROCUREMENT; CLARIFYING REQUIREMENTS FOR CERTIFICATION TO RECEIVE A RESIDENT PREFERENCE FOR A BUSINESS OR CONTRACTOR PREVIOUSLY CERTIFIED AS A RESIDENT BUSINESS OR CONTRACTOR; ALLOWING THE TAXATION AND REVENUE DEPARTMENT TO SUSPEND OR REVOKE THE CERTIFICATION OF A BUSINESS OR CONTRACTOR PREFERENCE IN CERTAIN CIRCUMSTANCES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 13-1-22 NMSA 1978 (being Laws 1969, Chapter 184, Section 1, as amended) is amended to read:
"13-1-22. [RESIDENT BUSINESS, RESIDENT VETERAN BUSINESS, RESIDENT CONTRACTOR AND RESIDENT VETERAN CONTRACTOR] CERTIFICATION FOR RESIDENT PREFERENCE--PROCEDURES--REVOCATION AND SUSPENSION--RIGHT TO JUDICIAL REVIEW.--
A. To receive a [resident business or resident veteran business] preference pursuant to Section 13-1-21 [NMSA 1978 or a resident contractor or resident veteran contractor preference pursuant to Section] or 13-4-2 NMSA 1978, a business or contractor shall submit with its bid or proposal a copy of a valid [resident business certificate, valid resident veteran business certificate, valid resident contractor certificate or valid resident veteran contractor] certificate issued by the taxation and revenue department pursuant to this section.
B. An application for a resident business certificate shall include an affidavit from a certified public accountant, licensed attorney or enrolled agent authorized to practice before the internal revenue service setting forth that the business is licensed to do business in this state and [that]:
(1) that the business has paid property taxes or rent on real property in the state and has paid at least one other tax administered by the state in each of the three years immediately preceding the submission of the affidavit;
(2) if the business is a new business, that the owner or majority of owners has paid property taxes or rent on real property in the state and has paid at least one other tax administered by the state in each of the three years immediately preceding the submission of the affidavit and has not applied for a resident business or resident contractor certificate pursuant to this section during that time period;
(3) if the business is a relocated business, that at least eighty percent of the total personnel of the business in the year immediately preceding the submission of the affidavit were residents of the state and that, prior to the submission of the affidavit, the business either leased real property for ten years or purchased real property greater than one hundred thousand dollars ($100,000) in value in the state; or
(4) if the business [is a] was previously certified [business or was eligible for certification] pursuant to this subsection and the business [has changed its name] has reorganized into one or more different legal entities, was purchased by another legal entity but operates in the state as substantially the same commercial enterprise or has merged with a different legal entity but operates in the state as substantially the same commercial enterprise and the business has obtained a new tax identification number, that the business meets the requirements pursuant to Paragraph (1) of this subsection.
C. An application for a resident veteran business certificate shall include the affidavit required by Subsection B of this section, an affidavit from a certified public accountant providing the previous year's annual revenues of the resident veteran business and:
(1) verification by the federal department of veterans affairs as being either a veteran-owned small business or a service-disabled veteran-owned small business; or
(2) verification of veteran status as indicated by the United States department of defense DD form 214 of release or discharge from active duty with an honorable discharge or of service-disabled veteran status by the department of veterans affairs and proof that a veteran or veterans own a majority of the business.
D. An application for a resident contractor certificate shall include an affidavit from a certified public accountant, licensed attorney or enrolled agent authorized to practice before the internal revenue service setting forth that the contractor is currently licensed as a contractor in this state and [that]:
(1) that the contractor has:
(a) registered with the state at least one vehicle; and
(b) in each of the five years immediately preceding the submission of the affidavit: 1) paid property taxes or rent on real property in the state and paid at least one other tax administered by the state; and 2) paid unemployment insurance on at least three full-time employees who are residents of the state; provided that if a contractor is a legacy contractor, the requirement of at least three full-time employees who are residents of the state is waived;
(2) if the contractor is a new contractor, that the owner or majority of owners has paid property taxes or rent on real property in the state and has paid at least one other tax administered by the state in each of the five years immediately preceding the submission of the affidavit and has not applied for a resident business or resident contractor certificate pursuant to this section during that time period;
(3) if the contractor is a relocated business, that at least eighty percent of the total personnel of the business in the year immediately preceding the submission of the affidavit were residents of the state and that, prior to the submission of the affidavit, the contractor either leased real property for ten years or purchased real property greater than one hundred thousand dollars ($100,000) in value in the state; or
(4) if the contractor [is a] was previously certified [contractor or was eligible for certification] pursuant to this subsection and the contractor [has changed its name] has reorganized into one or more different legal entities, was purchased by another legal entity but operates in the state as substantially the same enterprise or has merged with a different legal entity but operates in the state as substantially the same commercial enterprise and the contractor has obtained a new tax identification number, that the contractor meets the requirements pursuant to Paragraph (1) of this subsection.
E. An application for a resident veteran contractor certificate shall include the affidavit required by Subsection D of this section, an affidavit from a certified public accountant providing the previous year's annual revenues for the resident veteran contractor and:
(1) verification by the federal department of veterans affairs as being either a veteran-owned small business or a service-disabled veteran-owned small business; or
(2) verification of veteran status as indicated by the United States department of defense DD form 214 of release or discharge from active duty with an honorable discharge or of service-disabled veteran status by the department of veterans affairs and proof that a veteran or veterans own a majority of the business.
F. The taxation and revenue department shall prescribe the form and content of an application for certification and required affidavit. The taxation and revenue department shall examine the application and affidavit and, if necessary, may seek additional information to ensure that the business or contractor is eligible to receive the certificate pursuant to the provisions of this section. If the taxation and revenue department determines that an applicant is eligible, the department shall issue a certificate pursuant to the provisions of this section. If the taxation and revenue department determines that the applicant is not eligible, the department shall issue notification within thirty days. If no notification is provided by the department, the certificate is deemed approved. A certificate is valid for three years from the date of its issuance; provided that if there is a change of ownership of more than fifty percent, a resident business, resident veteran business, resident contractor or resident veteran contractor shall reapply for a certificate.
G. A business or contractor whose application for a certificate is denied, or is suspended or revoked pursuant to Subsection I of this section, has fifteen days from the date of the taxation and revenue department's decision to file an objection with the taxation and revenue department. The person filing the objection shall submit evidence to support the objection. The taxation and revenue department shall review the evidence and issue a decision within fifteen days of the filing of the objection. If the department denies, suspends or revokes a certificate, the business or contractor may request a hearing.
H. If, following a hearing and an opportunity to be heard, the taxation and revenue department finds that a business or contractor provided false information to the taxation and revenue department in order to obtain a certificate or that a business or contractor used a certificate to obtain a [resident business, resident veteran business, resident contractor or resident veteran contractor] preference for a bid or proposal and the [resident business, resident veteran business, resident contractor or resident veteran] business or contractor did not perform the percentage of the contract specified in the bid or proposal, the business or contractor:
(1) is not eligible to receive a certificate or a preference pursuant to Section 13-1-21 or 13-4-2 NMSA 1978 for a period of five years from the date on which the taxation and revenue department became aware of the submission of the false information or the failure to perform the contract as specified in the bid or proposal; and
(2) is subject to an administrative penalty of up to fifty thousand dollars ($50,000) for each violation.
I. In the administration of the provisions of this section, the taxation and revenue department may:
(1) deny or suspend a business' or contractor's certification if the department's records show the business or contractor to be a delinquent taxpayer or to have a period of non-filing until the delinquency or non-filing is cured;
(2) revoke a business' or contractor's certificate if:
(a) the information on the application for certification is determined to be incorrect or misleading; or
(b) the department determines the business or contractor no longer meets the requirements for certification pursuant to Subsection B or D of this section, as applicable; and
(3) notwithstanding the restrictions to reveal taxpayer return information pursuant to Section 7-1-8 NMSA 1978, notify the public or provide for notice to the public of the suspension or revocation of a business' or contractor's certification.
[I.] J. In a decision issued pursuant to Subsection F, G or H of this section, the taxation and revenue department shall state the reasons for the action taken and inform an aggrieved business or contractor of the right to judicial review of the determination pursuant to the provisions of Section 39-3-1.1 NMSA 1978.
[J.] K. The taxation and revenue department may assess a reasonable fee for the issuance of a certificate not to exceed the actual cost of administering the taxation and revenue department's duties pursuant to this section.
[K.] L. The secretary of taxation and revenue or the state auditor may audit or review the issuance or validity of certificates.
[L.] M. For purposes of this section:
(1) "new business" means a person that did not exist as a business in any form and that has been in existence for less than three years;
(2) "new contractor" means a person that did not exist as a business in any form and that has been in existence for less than five years;
(3) "legacy contractor" means a construction business that has been licensed in this state for ten consecutive years; and
(4) "relocated business" means a business that moved eighty percent of its total domestic personnel from another state to New Mexico in the past five years."
SECTION 2. Section 13-1-22 NMSA 1978 (being Laws 2012, Chapter 56, Section 4) is repealed and a new Section 13-1-22 NMSA 1978 is enacted to read:
"13-1-22. [NEW MATERIAL] CERTIFICATION FOR RESIDENT PREFERENCE--PROCEDURES--REVOCATION AND SUSPENSION--RIGHT TO JUDICIAL REVIEW.--
A. To receive a preference pursuant to Section 13-1-21 or 13-4-2 NMSA 1978, a business or contractor shall submit with its bid or proposal a copy of a valid certificate issued by the taxation and revenue department pursuant to this section.
B. An application for a resident business certificate shall include an affidavit from a certified public accountant, licensed attorney or enrolled agent authorized to practice before the internal revenue service setting forth that the business is licensed to do business in this state and:
(1) that the business has paid property taxes or rent on real property in the state and has paid at least one other tax administered by the state in each of the three years immediately preceding the submission of the affidavit;
(2) if the business is a new business, that the owner or majority of owners has paid property taxes or rent on real property in the state and has paid at least one other tax administered by the state in each of the three years immediately preceding the submission of the affidavit and has not applied for a resident business or resident contractor certificate pursuant to this section during that time period;
(3) if the business is a relocated business, that at least eighty percent of the total personnel of the business in the year immediately preceding the submission of the affidavit were residents of the state and that, prior to the submission of the affidavit, the business either leased real property for ten years or purchased real property greater than one hundred thousand dollars ($100,000) in value in the state; or
(4) if the business was previously certified pursuant to this subsection and the business has reorganized into one or more different legal entities, was purchased by another legal entity but operates in the state as substantially the same commercial enterprise or has merged with a different legal entity but operates in the state as substantially the same commercial enterprise and the business has obtained a new tax identification number, that the business meets the requirements pursuant to Paragraph (1) of this subsection.
C. An application for a resident contractor certificate shall include an affidavit from a certified public accountant, licensed attorney or enrolled agent authorized to practice before the internal revenue service setting forth that the contractor is currently licensed as a contractor in this state and:
(1) that the contractor has:
(a) registered with the state at least one vehicle; and
(b) in each of the five years immediately preceding the submission of the affidavit: 1) paid property taxes or rent on real property in the state and paid at least one other tax administered by the state; and 2) paid unemployment insurance on at least three full-time employees who are residents of the state; provided that if a contractor is a legacy contractor, the requirement of at least three full-time employees who are residents of the state is waived;
(2) if the contractor is a new contractor, that the owner or majority of owners has paid property taxes or rent on real property in the state and has paid at least one other tax administered by the state in each of the five years immediately preceding the submission of the affidavit and has not applied for a resident business or resident contractor certificate pursuant to this section during that time period;
(3) if the contractor is a relocated business, that at least eighty percent of the total personnel of the business in the year immediately preceding the submission of the affidavit were residents of the state and that, prior to the submission of the affidavit, the contractor either leased real property for ten years or purchased real property greater than one hundred thousand dollars ($100,000) in value in the state; or
(4) if the contractor was previously certified pursuant to this subsection and has reorganized into one or more different legal entities, was purchased by another legal entity but operates in the state as substantially the same enterprise or has merged with a different legal entity but operates in the state as substantially the same commercial enterprise and the contractor has obtained a new tax identification number, that the contractor meets the requirements pursuant to Paragraph (1) of this subsection.
D. The taxation and revenue department shall prescribe the form and content of the application and required affidavit. The taxation and revenue department shall examine the application and affidavit and, if necessary, may seek additional information to ensure that the business or contractor is eligible to receive the certificate pursuant to the provisions of this section. If the taxation and revenue department determines that an applicant is eligible, the department shall issue a certificate pursuant to the provisions of this section. If the taxation and revenue department determines that the applicant is not eligible, the department shall issue notification within thirty days. If no notification is provided by the department, the certificate is deemed approved. A certificate is valid for three years from the date of its issuance; provided that if there is a change of ownership of more than fifty percent, a resident business or resident contractor shall reapply for a certificate.
E. A business or contractor whose application for a certificate is denied, or is suspended or revoked pursuant to Subsection G of this section, has fifteen days from the date of the taxation and revenue department's decision to file an objection with the taxation and revenue department. The person filing the objection shall submit evidence to support the objection. The taxation and revenue department shall review the evidence and issue a decision within fifteen days of the filing of the objection. If the department denies, suspends or revokes a certificate, the business or contractor may request a hearing.
F. If, following a hearing and an opportunity to be heard, the taxation and revenue department finds that a business or contractor provided false information to the taxation and revenue department in order to obtain a certificate or that a business or contractor used a certificate to obtain a preference for a bid or proposal and the business or contractor did not perform the percentage of the contract specified in the bid or proposal, the business or contractor:
(1) is not eligible to receive a certificate or a preference pursuant to Section 13-1-21 or 13-4-2 NMSA 1978 for a period of five years from the date on which the taxation and revenue department became aware of the submission of the false information or the failure to perform the contract as specified in the bid or proposal; and
(2) is subject to an administrative penalty of up to fifty thousand dollars ($50,000) for each violation.
G. In the administration of the provisions of this section, the taxation and revenue department may:
(1) suspend a business' or contractor's certification if the department's records show the business or contractor to be a delinquent taxpayer or to have a period of non-filing until the delinquency or non-filing is cured;
(2) revoke a business' or contractor's certificate if:
(a) the information on the application for certification is determined to be incorrect or misleading; or
(b) the department determines the business or contractor no longer meets the requirements for certification pursuant to Subsection B or D of this section, as applicable; and
(3) notwithstanding the restrictions to reveal taxpayer return information pursuant to Section 7-1-8 NMSA 1978, may notify the public or provide for notice to the public of the suspension or revocation of a business' or contractor's certification.
H. In a decision issued pursuant to Subsection E, F or G of this section, the taxation and revenue department shall state the reasons for the action taken and inform an aggrieved business or contractor of the right to judicial review of the determination pursuant to the provisions of Section 39-3-1.1 NMSA 1978.
I. The taxation and revenue department may assess a reasonable fee for the issuance of a certificate not to exceed the actual cost of administering the taxation and revenue department's duties pursuant to this section.
J. The secretary of taxation and revenue or the state auditor may audit or review the issuance or validity of certificates.
K. For purposes of this section:
(1) "new business" means a person that did not exist as a business in any form and that has been in existence for less than three years;
(2) "new contractor" means a person that did not exist as a business in any form and that has been in existence for less than five years;
(3) "legacy contractor" means a construction business that has been licensed in this state for ten consecutive years; and
(4) "relocated business" means a business that moved eighty percent of its total domestic personnel from another state to New Mexico in the past five years."
SECTION 3. EFFECTIVE DATE.--
A. The effective date of the provisions of Section 1 of this act is July 1, 2013.
B. The effective date of the provisions of Section 2 of this act is July 1, 2022.
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