SENATE FINANCE COMMITTEE SUBSTITUTE FOR

SENATE PUBLIC AFFAIRS COMMITTEE SUBSTITUTE FOR

SENATE BILL 7

51st legislature - STATE OF NEW MEXICO - first session, 2013

AN ACT

RELATING TO TAXATION; REQUIRING THE DEVELOPMENT OF A TAX EXPENDITURE BUDGET AND A DEDICATED REVENUE BUDGET; REQUIRING REPORTING; AUTHORIZING THE TAXATION AND REVENUE DEPARTMENT TO REVEAL CERTAIN RETURN INFORMATION TO THE CONSENSUS REVENUE ESTIMATING GROUP; PROVIDING A PENALTY.

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] TAX EXPENDITURE BUDGET--MANDATORY REPORT--DEADLINE.--

          A. No later than October 15 of each year, the consensus revenue estimating group shall compile a tax expenditure budget for the upcoming fiscal year and present the tax expenditure budget, including an analysis of tax expenditures, to the governor, the legislative interim revenue stabilization and tax policy committee and the legislative finance committee. The tax expenditure budget shall report on tax expenditures chosen by the consensus revenue estimating group; provided that all tax expenditures with revenue impacts of more than one million dollars ($1,000,000) in the aggregate for a specific tax expenditure shall be reported before the end of the five-year period following the effective date of the provisions of this section, and each five-year period thereafter.

          B. A tax expenditure budget shall detail the

approximate costs in foregone revenue from tax expenditures.

A tax expenditure budget shall:

                (1) include a projection of the costs of tax

expenditures for all significant general fund revenue sources;

                (2) identify each tax expenditure and its

statutory basis, purpose, year of enactment and date of repeal, if any;

                (3) quantify the revenue expended by the state

from each tax expenditure;

                (4) identify the aggregate amount of each tax expenditure and the number of businesses that used the tax expenditure;

                (5) identify unexpected effects of the tax expenditure that were not within the original expected outcomes of the tax expenditure that have come to the attention of the department;

                (6) provide a total of all of the costs in

each fiscal year for all tax expenditures; and

                (7) include an estimate of jobs created and the number of businesses that potentially qualified for but failed to apply for a tax expenditure from reports provided by the economic development department.

          C. The consensus revenue estimating group may request from a state agency or a local government agency official information necessary to complete the tax expenditure budget required by this section, and an agency or official shall comply with a request made pursuant to this section.

          D. The economic development department shall estimate the jobs created and the number of businesses that potentially qualified for but failed to apply for a tax expenditure and shall report those projections to the consensus revenue estimating group.

          E. As used in this section:

                (1) "consensus revenue estimating group" means the professional economists of the department of finance and administration, the department of transportation, the taxation and revenue department and the legislative finance committee;

                (2) "jobs created" means the net increase of full-time jobs that exceeds the full-time equivalent of jobs that existed at the beginning of the reporting period; provided that the additional jobs can specifically be attributed to use of a tax expenditure, including:

                     (a) the net increase if jobs are changed from part time to full time;

                     (b) the full-time equivalent of jobs created that were previously filled by employees on contract; and

                     (c) new jobs created;

                (3) "significant general fund revenue

sources" means state taxes, including but not limited to the gross receipts tax, compensating tax, corporate income tax, personal income tax, tobacco excise tax, liquor excise tax, taxes levied on natural resource production and sale, motor vehicle excise tax, gaming excise tax and other sources of revenue such as rents and royalties, tribal revenue sharing, fire protection fund reversions, premium taxes and the leased vehicle surcharge;

                (4) "tax expenditure" means a deduction, credit, exemption, exclusion, rebate, offset, preferential tax rate, subtraction or allowance or related tax structure that reduces tax liability when compared with a normal tax system as determined by the consensus revenue estimating group; and

                (5) "tax expenditure budget" means a

compilation of information about New Mexico's tax expenditures

that includes data from the three years preceding the current

fiscal year, the current fiscal year and the upcoming fiscal

year."

     SECTION 2. A new section of the Tax Administration Act is enacted to read:

     "[NEW MATERIAL] DEDICATED REVENUE BUDGET--MANDATORY REPORT--DEADLINE.--

          A. No later than October 15 of each year, the

consensus revenue estimating group shall compile a dedicated revenue budget for the upcoming fiscal year and present the dedicated revenue budget, including an analysis of tax expenditures, to the governor, the legislative interim revenue stabilization and tax policy committee and the legislative finance committee. The dedicated revenue budget shall report on dedicated annual revenues chosen by the consensus revenue estimating group; provided that all dedicated annual revenues with revenue impacts of more than one million dollars ($1,000,000) in the aggregate for a specific dedicated revenue beneficiary shall be reported before the end of the five-year period following the effective date of the provisions of this section, and each five-year period thereafter.

          B. A dedicated revenue budget shall detail the

approximate projected dedicated revenue for the following fiscal year that will be unavailable to the general fund.

A dedicated revenue budget shall:

                (1) identify each dedicated revenue item and its statutory basis, purpose, year of enactment and date of repeal, if any;

                (2) identify the beneficiaries of each dedicated revenue item, including the uses of the dedicated revenue;

                (3) identify the outcomes resulting from the expenditure of dedicated revenue, if any are quantifiable;

                (4) identify significant unintended effects of the dedicated revenue that have come to the attention of the department; and

                (5) provide a total of all of the collections and appropriations in each fiscal year for all dedicated revenue.

          C. The consensus revenue estimating group may request from a state agency or a local government agency official information necessary to complete the dedicated revenue budget required by this section. An agency or official shall comply with a request made pursuant to this section unless a specific statutory confidentiality provision prohibits doing so.

          D. As used in this section:

                (1) "consensus revenue estimating group" means the professional economists of the department of finance and administration, the department of transportation, the taxation and revenue department and the legislative finance committee; and

                (2) "dedicated revenue" means an expenditure of a tax or fee that is dedicated to a specific program or purpose, as defined by constitution or statute."

     SECTION 3. Section 7-1-8.8 NMSA 1978 (being Laws 2009, Chapter 243, Section 10) is amended to read:

     "7-1-8.8. INFORMATION THAT MAY BE REVEALED TO OTHER STATE AGENCIES AND STATE PROFESSIONAL ECONOMISTS.--An employee of the department may reveal to:

          A. a committee of the legislature for a valid legislative purpose, return information concerning any tax or fee imposed pursuant to the Cigarette Tax Act;

          B. the attorney general, return information acquired pursuant to the Cigarette Tax Act for purposes of Section 6-4-13 NMSA 1978 and the master settlement agreement defined in Section 6-4-12 NMSA 1978;

          C. the commissioner of public lands, return information for use in auditing that pertains to rentals, royalties, fees and other payments due the state under land sale, land lease or other land use contracts;

          D. the secretary of human services or the secretary's delegate, under a written agreement with the department, the last known address with date of all names certified to the department as being absent parents of children receiving public financial assistance, but only for the purpose of enforcing the support liability of the absent parents by the child support enforcement division or any successor organizational unit;

          E. the department of information technology, by electronic media, a database updated quarterly that contains the names, addresses, county of address and taxpayer identification numbers of New Mexico personal income tax filers, but only for the purpose of producing the random jury list for the selection of petit or grand jurors for the state courts pursuant to Section 38-5-3 NMSA 1978;

          F. the state courts, the random jury lists produced by the department of information technology under Subsection E of this section;

          G. the director of the New Mexico department of agriculture or the director's authorized representative, upon request of the director or representative, the names and addresses of all gasoline or special fuel distributors, wholesalers and retailers;

          H. the public regulation commission, return information with respect to the Corporate Income and Franchise Tax Act required to enable the commission to carry out its duties;

          I. the state racing commission, return information with respect to the state, municipal and county gross receipts taxes paid by racetracks;

          J. the gaming control board, tax returns of license applicants and their affiliates as provided in Subsection E of Section 60-2E-14 NMSA 1978;

          K. the director of the workers' compensation administration or to the director's representatives authorized for this purpose, return information to facilitate the identification of taxpayers that are delinquent or noncompliant in payment of fees required by Section 52-1-9.1 or 52-5-19 NMSA 1978; [and]

          L. the secretary of workforce solutions or the secretary's delegate, return information for use in enforcement of unemployment insurance collections pursuant to the terms of a written reciprocal agreement entered into by the department with the secretary of workforce solutions for exchange of information; and

          M. the professional economists of the department of finance and administration, the department of transportation and the legislative finance committee, return information necessary, not including a taxpayer's name, address or government-issued identification number, to facilitate the compilation of the tax expenditure budget pursuant to Section 1 of this 2013 act and the dedicated revenue budget pursuant to Section 2 of this 2013 act."

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