HOUSE BILL 230

56th legislature - STATE OF NEW MEXICO - first session, 2023

INTRODUCED BY

Joanne J. Ferrary and Antoinette Sedillo Lopez

and D. Wonda Johnson and Shannon D. Pinto

and Elizabeth "Liz" Thomson

 

 

 

AN ACT

RELATING TO TAXATION; INCREASING LIQUOR EXCISE TAX RATES; ELIMINATING RATE DIFFERENTIALS FOR MICROBREWERS, SMALL WINEGROWERS AND CRAFT DISTILLERS; INDEXING THE RATES TO INFLATION; DISTRIBUTING A PORTION OF THE REVENUE FROM THE TAX TO A NEW ALCOHOL HARMS ALLEVIATION FUND; MAKING AN APPROPRIATION.

 

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

     SECTION 1. Section 7-1-6.40 NMSA 1978 (being Laws 1997, Chapter 182, Section 1, as amended) is amended to read:

     "7-1-6.40. DISTRIBUTION OF LIQUOR EXCISE TAX--LOCAL DWI GRANT FUND--CERTAIN MUNICIPALITIES--DRUG COURT FUND--ALCOHOL HARMS ALLEVIATION FUND.--

          A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 in an amount equal to [forty-five] twelve percent of the net receipts attributable to the liquor excise tax shall be made to the local DWI grant fund.

          B. A distribution pursuant to Section 7-1-6.1 NMSA 1978 of [twenty thousand seven hundred fifty dollars ($20,750) monthly from] one-fourth percent of the net receipts attributable to the liquor excise tax shall be made to a municipality that is located in a class A county and that has a population according to the most recent federal decennial census of more than thirty thousand but less than sixty thousand and shall be used by the municipality only for the provision of alcohol treatment and rehabilitation services for street inebriates.

          C. [Beginning July 1, 2019] A distribution pursuant to Section 7-1-6.1 NMSA 1978 in an amount equal to [five] one and one-half percent of the net receipts attributable to the liquor excise tax shall be made to the drug court fund.

          D. A distribution pursuant to Section 7-1-6.1 NMSA 1978 in an amount equal to eighty-six and one-fourth percent of the net receipts attributable to the liquor excise tax shall be made to the alcohol harms alleviation fund."

     SECTION 2. Section 7-17-5 NMSA 1978 (being Laws 1993, Chapter 65, Section 8, as amended) is amended to read:

     "7-17-5. IMPOSITION AND RATE OF LIQUOR EXCISE TAX.--

          A. There is imposed on a wholesaler who sells alcoholic beverages on which the tax imposed by this section has not been paid an excise tax, to be referred to as the "liquor excise tax", at the following rates on alcoholic beverages sold:

                [(1) on spirituous liquors, except as provided in Paragraph (9) of this subsection, one dollar sixty cents ($1.60) per liter;

                (2) on beer, except as provided in Paragraph (5) of this subsection, forty-one cents ($.41) per gallon;

                (3) on wine, except as provided in Paragraphs (4) and (6) of this subsection, forty-five cents ($.45) per liter;

                (4) on fortified wine, one dollar fifty cents ($1.50) per liter;

                (5) on beer manufactured or produced by a microbrewer and sold in this state, provided that proof is furnished to the department that the beer was manufactured or produced by a microbrewer, eight cents ($.08) per gallon on the first thirty thousand barrels sold, twenty-eight cents ($.28) per gallon for all barrels sold over thirty thousand barrels but less than sixty thousand barrels and forty-one cents ($.41) per gallon for sixty thousand or more barrels sold;

                (6) on wine manufactured or produced by a small winegrower and sold in this state, provided that proof is furnished to the department that the wine was manufactured or produced by a small winegrower:

                     (a) ten cents ($.10) per liter on the first eighty thousand liters; sold;

                     (b) twenty cents ($.20) per liter on each liter sold over eighty thousand liters but not over nine hundred fifty thousand liters; and

                     (c) thirty cents ($.30) per liter on each liter sold over nine hundred fifty thousand liters but not over one million five hundred thousand liters;

                (7) on cider, except as provided in Paragraph (8) of this subsection forty-one cents ($.41) per gallon

                (8) on cider manufactured or produced by a small winegrower and sold in this state, provided that proof is furnished to the department that the cider was manufactured or produced by a small winegrower, eight cents ($.08) per gallon on the first thirty thousand barrels sold, twenty-eight cents ($.28) per gallon for all barrels sold over thirty thousand barrels but less than sixty thousand barrels and forty-one cents ($.41) per gallon for sixty thousand or more barrels sold; and

                (9) on spirituous liquors manufactured or produced by a craft distiller licensed pursuant to Section 60-6A-6.1 NMSA 1978, provided that proof is provided to the department that the spirituous liquors were manufactured or produced by a craft distiller, for products up to ten percent alcohol by volume, eight cents ($.08) per liter for the first two hundred fifty thousand liters sold and twenty-eight cents ($.28) per liter for the next two hundred fifty thousand liters sold and for products over ten percent alcohol by volume, thirty-two cents ($.32) per liter on the first one hundred seventy-five thousand liters sold and sixty-five cents ($.65) per liter on the next two hundred thousand liters sold;]

                (1) from July 1, 2023 through June 30, 2027:

                     (a) on spirituous liquors, twenty-five cents ($.25) per one and one-half ounce serving;

                     (b) on beer and cider, twenty-five cents ($.25) per twelve ounce serving;

                     (c) on wine, twenty-five cents ($.25) per five ounce serving; and

                     (d) on fortified wine, twenty-five cents ($.25) per three and one-half ounce serving; and

                (2) on and after July 1, 2027, the rates as determined pursuant to Subsection B of this section.

          B. No later than April 30, 2027 and April 30 of each subsequent year, the department shall calculate the rates

of liquor excise tax to be imposed as of July 1 of that year. The rates of the liquor excise tax shall be equal to the product, rounded down to the nearest whole cent, of the rates provided in Paragraph (1) of Subsection A of this section, multiplied by a fraction with a numerator equal to the consumer price index for the previous calendar year and a denominator equal to the consumer price index for the most current calendar year available.

          [B.] C. The volume of wine transferred from one winegrower to another winegrower for processing, bottling or storage and subsequent return to the transferor shall be excluded pursuant to Section 7-17-6 NMSA 1978 from the taxable volume of wine of the transferee. Wine transferred from an initial winegrower to a second winegrower remains a tax liability of the transferor, provided that if the wine is transferred to the transferee for the transferee's use or for resale, the transferee then assumes the liability for the tax due pursuant to this section.

          [C.] D. A transfer of wine from a winegrower to a wholesaler for distribution of the wine transfers the liability for payment of the liquor excise tax to the wholesaler upon the sale of the wine by the wholesaler.

          E. As used in this section, "consumer price index" means the consumer price index for all urban consumers published by the United States department of labor for the month ending September 30."

     SECTION 3. [NEW MATERIAL] ALCOHOL HARMS ALLEVIATION FUND.--

          A. The "alcohol harms alleviation fund" is created as a reverting fund in the state treasury. The fund consists of appropriations, distributions, gifts, grants, donations and bequests made to the fund and income from investment of the fund. The department of finance and administration shall administer the fund, and money in the fund is subject to appropriation by the legislature to the human services department, department of health, early childhood education and care department, public education department and higher education department for:

                (1) alcohol harms prevention, treatment and recovery services;

                (2) behavioral health treatment for justice-involved populations and others not covered by the state medicaid program or other health insurance;

                (3) addressing social determinants of health related to alcohol misuse;

                (4) support for victims of alcohol-related crimes, including domestic violence and sexual assault; and

                (5) prevention and reduction of alcohol harms on lands of Indian nations, tribes and pueblos.

          B. Money in the fund shall be expended by warrant of the secretary of finance and administration pursuant to vouchers signed by the secretary or the secretary's authorized representative.

     SECTION 4. APPROPRIATION.--Two hundred thousand dollars ($200,000) is appropriated from the general fund to the department of finance and administration for expenditure in fiscal year 2024 to contract for services to coordinate proposals to the legislature for the expenditure of funds in the alcohol harms alleviation fund. Any unexpended or unencumbered balance remaining at the end of fiscal year 2024 shall revert to the general fund.

     SECTION 5. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2023.

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