HOUSE BILL 323
56th legislature - STATE OF NEW MEXICO - first session, 2023
INTRODUCED BY
Jason C. Harper and Derrick J. Lente and Micaela Lara Cadena and Javier Martínez and Antonio Maestas
AN ACT
RELATING TO TAXATION; CHANGING THE NAME OF THE GROSS RECEIPTS TAX TO THE SALES TAX; CHANGING THE NAME OF THE COMPENSATING TAX TO THE USE TAX; CHANGING THE NAME OF THE GOVERNMENTAL GROSS RECEIPTS TAX TO THE GOVERNMENTAL SALES TAX; CHANGING THE NAME OF THE INTERSTATE TELECOMMUNICATIONS GROSS RECEIPTS TAX TO THE INTERSTATE TELECOMMUNICATIONS SALES TAX; CHANGING THE NAME OF THE LEASED VEHICLE GROSS RECEIPTS TAX TO THE LEASED VEHICLE SALES TAX; CHANGING THE NAMES OF MUNICIPAL LOCAL OPTION GROSS RECEIPTS TAXES TO MUNICIPAL LOCAL OPTION SALES TAXES; CHANGING THE NAME OF THE MUNICIPAL COMPENSATING TAX TO THE MUNICIPAL USE TAX; CHANGING THE NAME OF COUNTY LOCAL OPTION GROSS RECEIPTS TAXES TO COUNTY LOCAL OPTION SALES TAXES; CHANGING THE NAME OF THE COUNTY COMPENSATING TAX TO THE COUNTY USE TAX; CHANGING THE NAMES OF THE ACTS AND REVENUE BONDS RELATED TO THOSE TAXES TO CONFORM TO THE NEW TAX NAMES; RECONCILING CONFLICTING AMENDMENTS TO THE SAME SECTIONS OF LAW; AMENDING AND REPEALING SECTIONS OF THE NMSA 1978.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 3-31-1 NMSA 1978 (being Laws 1973, Chapter 395, Section 3, as amended) is amended to read:
"3-31-1. REVENUE BONDS--AUTHORITY TO ISSUE--PLEDGE OF REVENUES--LIMITATION ON TIME OF ISSUANCE.--
A. In addition to any other law and constitutional home rule powers authorizing a municipality to issue revenue bonds, a municipality may issue revenue bonds pursuant to Chapter 3, Article 31 NMSA 1978 for the purposes specified in this section.
B. Utility revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing or otherwise improving a municipal utility or for any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the net revenues from the operation of the municipal utility or of any one or more of other such municipal utilities for payment of the interest on and principal of the revenue bonds.
C. Joint utility revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing or otherwise improving joint water facilities, sewer facilities, gas facilities or electric facilities or for any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the net revenues from the operation of these municipal utilities for the payment of the interest on and principal of the bonds.
D. [Gross receipts] Sales tax revenue bonds may be issued for any municipal purpose. A municipality may pledge irrevocably any or all of the [gross receipts] sales tax revenue received by the municipality pursuant to Section 7-1-6.4 or 7-1-6.12 NMSA 1978 to the payment of the interest on and principal of the [gross receipts] sales tax revenue bonds or for any area of municipal government services. A law that imposes or authorizes the imposition of a tax authorized by the Municipal Local Option [Gross Receipts] Sales and Use Taxes Act or that affects the tax, or a law supplemental thereto or otherwise appertaining thereto, shall not be repealed or amended or otherwise directly or indirectly modified in such a manner as to impair adversely any outstanding revenue bonds that may be secured by a pledge of such tax unless the outstanding revenue bonds have been discharged in full or provision has been fully made therefor. Revenues in excess of the annual principal and interest due on [gross receipts] sales tax revenue bonds secured by a pledge of [gross receipts] sales tax revenue may be accumulated in a debt service reserve account. The governing body of the municipality may appoint a commercial bank trust department to act as trustee of the [gross receipts] sales tax revenue and to administer the payment of principal of and interest on the bonds.
E. Gasoline tax revenue bonds may be issued for laying off, opening, constructing, reconstructing, resurfacing, maintaining, acquiring rights of way, repairing and otherwise improving municipal buildings, alleys, streets, public roads and bridges or any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the gasoline tax revenue received by the municipality to the payment of the interest on and principal of the gasoline tax revenue bonds.
F. Project revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing, improving, constructing, purchasing, furnishing, equipping and rehabilitating any revenue-producing project, including, where applicable, purchasing, otherwise acquiring or improving the ground therefor, including acquiring and improving parking lots, or for any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the net revenues from the operation of the revenue-producing project for which the particular project revenue bonds are issued to the payment of the interest on and principal of the project revenue bonds. The net revenues of any revenue-producing project may not be pledged to the project revenue bonds issued for a revenue-producing project that clearly is unrelated in nature; but nothing in this subsection shall prevent the pledge to such project revenue bonds of any revenues received from existing, future or disconnected facilities and equipment that are related to and that may constitute a part of the particular revenue-producing project. A general determination by the governing body that any facilities or equipment is reasonably related to and constitutes a part of a specified revenue-producing project shall be conclusive if set forth in the proceedings authorizing the project revenue bonds.
G. Fire district revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing, improving, constructing, purchasing, furnishing, equipping and rehabilitating any fire district project, including, where applicable, purchasing, otherwise acquiring or improving the ground therefor, or for any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the revenues received by the fire district from the fire protection fund as provided in the Fire Protection Fund Law and any or all of the revenues provided for the operation of the fire district project for which the particular bonds are issued to the payment of the interest on and principal of the bonds. The revenues of any fire district project shall not be pledged to the bonds issued for a fire district project that clearly is unrelated in its purpose; but nothing in this section prevents the pledge to such bonds of any revenues received from existing, future or disconnected facilities and equipment that are related to and that may constitute a part of the particular fire district project. A general determination by the governing body of the municipality that any facilities or equipment is reasonably related to and constitutes a part of a specified fire district project shall be conclusive if set forth in the proceedings authorizing the fire district bonds.
H. Law enforcement protection revenue bonds may be issued for the repair and purchase of law enforcement apparatus and equipment that meet nationally recognized standards. The municipality may pledge irrevocably any or all of the revenues received by the municipality from the law enforcement protection fund distributions pursuant to the Law Enforcement Protection Fund Act to the payment of the interest on and principal of the law enforcement protection revenue bonds.
I. Except for the purpose of refunding previous revenue bond issues, no municipality may sell revenue bonds payable from pledged revenues after the expiration of two years from the date of the ordinance authorizing the issuance of the bonds or, for bonds to be issued and sold to the New Mexico finance authority as authorized in Subsection C of Section 3-31-4 NMSA 1978, after the expiration of two years from the date of the resolution authorizing the issuance of the bonds. However, any period of time during which a particular revenue bond issue is in litigation shall not be counted in determining the expiration date of that issue."
SECTION 2. Section 3-31-1.1 NMSA 1978 (being Laws 2019, Chapter 274, Section 2) is amended to read:
"3-31-1.1. DEFINITIONS.--As used in Chapter 3, Article 31 NMSA 1978:
A. "bond" means any obligation of a municipality issued under Chapter 3, Article 31 NMSA 1978, whether designated as a bond, note, loan, warrant, debenture, lease-purchase agreement or other instrument evidencing an obligation of a municipality to make payments;
B. "gasoline tax revenue" means all or portions of the amounts of tax revenues distributed to municipalities pursuant to Sections 7-1-6.9 and 7-1-6.27 NMSA 1978;
C. "gasoline tax revenue bonds" means the bonds authorized by Subsection E of Section 3-31-1 NMSA 1978;
[D. "gross receipts tax revenue" means the amount of money distributed to a municipality pursuant to Section 7-1-6.4 NMSA and transferred to a municipality pursuant to Section 7-1-6.12 NMSA 1978 for any municipal gross receipts tax imposed pursuant to the Municipal Local Option Gross Receipts Taxes Act;
E. "gross receipts tax revenue bonds" means the bonds authorized by Subsection D of Section 3-31-1 NMSA 1978;
F.] D. "joint utility revenue bonds" or "joint utility bonds" means the bonds authorized by Subsection C of Section 3-31-1 NMSA 1978;
[G.] E. "pledged revenues" means the revenues, net income or net revenues authorized to be pledged to the payment of revenue bonds as specifically provided in Chapter 3, Article 31 NMSA 1978;
[H.] F. "project revenue bonds" means the bonds authorized by Subsection F of Section 3-31-1 NMSA 1978; [and]
G. "sales tax revenue" means the amount of money distributed to a municipality pursuant to Section 7-1-6.4 NMSA 1978 and transferred to a municipality pursuant to Section 7-1-6.12 NMSA 1978 for any municipal sales tax imposed pursuant to the Municipal Local Option Sales and Use Taxes Act;
H. "sales tax revenue bonds" means the bonds authorized by Subsection D of Section 3-31-1 NMSA 1978; and
I. "utility revenue bonds" or "utility bonds" means the bonds authorized by Subsection B of Section 3-31-1 NMSA 1978."
SECTION 3. Section 3-31-4 NMSA 1978 (being Laws 1965, Chapter 300, Section 14-30-4, as amended) is amended to read:
"3-31-4. ORDINANCE AUTHORIZING REVENUE BONDS--[THREE-FOURTHS] THREE-FOURTHS' MAJORITY REQUIRED--RESOLUTION AUTHORIZING REVENUE BONDS TO BE ISSUED AND SOLD TO THE NEW MEXICO FINANCE AUTHORITY.--
A. At a regular or special meeting called for the purpose of issuing revenue bonds as authorized in Section 3-31-1 NMSA 1978, the governing body may adopt an ordinance that:
(1) declares the necessity for issuing revenue bonds;
(2) authorizes the issuance of revenue bonds by an affirmative vote of three-fourths of all the members of the governing body; and
(3) designates the source of the pledged revenues.
B. If a majority of the governing body, but less than three-fourths of all the members, votes in favor of adopting the ordinance authorizing the issuance of revenue bonds, the ordinance is adopted but shall not become effective until the question of issuing the revenue bonds is submitted to a vote of the qualified electors for their approval at a special or regular local election. If an election is necessary, the election shall be conducted in the manner provided in the Local Election Act.
C. In addition and as an alternative to adopting an ordinance as required by the provisions of Subsections A and B of this section, at a regular or special meeting called for the purpose of issuing revenue bonds as authorized in Section 3-31-1 NMSA 1978, the governing body may authorize the issuance and sale, from time to time, of revenue bonds in amounts not to exceed one million dollars ($1,000,000) at any one time to the New Mexico finance authority by adoption of a resolution that:
(1) declares the necessity for issuing and selling revenue bonds to the New Mexico finance authority;
(2) authorizes the issuance and sale of revenue bonds to the New Mexico finance authority by an affirmative vote of a majority of all the members of the governing body; and
(3) designates the source of the pledged revenues.
At the option of the governing body, revenue bonds in an amount in excess of one million dollars ($1,000,000) may be authorized by an ordinance adopted in accordance with Subsections A and B of this section and issued and sold to the New Mexico finance authority.
D. [No] An ordinance or resolution [may] shall not be adopted under the provisions of this section that uses as pledged revenues the municipal [gross receipts] sales tax authorized by Section 7-19D-9 NMSA 1978 for a purpose that would be inconsistent with the purpose for which that municipal [gross receipts] sales tax revenue was dedicated. Any revenue in excess of the amount necessary to meet all principal and interest payments and other requirements incident to repayment of the bonds shall be used for the purposes to which the revenue was dedicated."
SECTION 4. Section 3-31-9 NMSA 1978 (being Laws 1973, Chapter 399, Section 1, as amended) is amended to read:
"3-31-9. REFUNDING BONDS--ESCROW--DETAIL.--
A. Refunding bonds issued pursuant to Sections 3-31-1 through 3-31-12 NMSA 1978 shall be authorized by ordinance or by resolution if the refunding bonds are to be issued and sold to the New Mexico finance authority pursuant to Subsection C of Section 3-31-4 NMSA 1978. Any bonds that are refunded under the provisions of this section shall be paid at maturity or on any permitted prior redemption date in the amounts, at the time and places and, if called prior to maturity, in accordance with any applicable notice provisions, all as provided in the proceedings authorizing the issuance of the refunded bonds or otherwise appertaining thereto, except for any such bond that is voluntarily surrendered for exchange or payment by the holder or owner.
B. Provision shall be made for paying the bonds refunded at the time or times provided in Subsection A of this section. The principal amount of the refunding bonds may exceed the principal amount of the refunded bonds and may also be less than or the same as the principal amount of the bonds being refunded so long as provision is duly and sufficiently made for the payment of the refunded bonds.
C. The proceeds of refunding bonds, including any accrued interest and premium appertaining to the sale of refunding bonds, shall either be immediately applied to the retirement of the bonds being refunded or be placed in escrow in a commercial bank or trust company, which possesses and is exercising trust powers and which is a member of the federal deposit insurance corporation, to be applied to the payment of the principal of, interest on and any prior redemption premium due in connection with the bonds being refunded; provided that such refunding bond proceeds, including any accrued interest and any premium appertaining to a sale of refunding bonds, may be applied to the establishment and maintenance of a reserve fund and to the payment of expenses incidental to the refunding and the issuance of the refunding bonds, the interest thereon and the principal thereof or both interest and principal as the municipality may determine. Nothing in this section requires the establishment of an escrow if the refunded bonds become due and payable within one year from the date of the refunding bonds and if the amounts necessary to retire the refunded bonds within that time are deposited with the paying agent for the refunded bonds. Any such escrow shall not necessarily be limited to proceeds of refunding bonds but may include other money available for its purpose. Any proceeds in escrow pending such use may be invested or reinvested in bills, certificates of indebtedness, notes or bonds that are direct obligations of or the principal and interest of which obligations are unconditionally guaranteed by the United States of America or in certificates of deposit of banks that are members of the federal deposit insurance corporation, the par value of which certificates of deposit is collateralized by a pledge of obligations of or the payment of which is unconditionally guaranteed by the United States of America, the par value of which obligations is at least seventy-five percent of the par value of the certificates of deposit. Such proceeds and investments in escrow together with any interest or other income to be derived from any such investment shall be in an amount at all times sufficient as to principal, interest, any prior redemption premium due and any charges of the escrow agent payable therefrom to pay the bonds being refunded as they become due at their respective maturities or due at any designated prior redemption date or dates in connection with which the municipality shall exercise a prior redemption option. Any purchaser of any refunding bond issued under Sections 3-31-1 through 3-31-12 NMSA 1978 is in no manner responsible for the application of the proceeds thereof by the municipality or any of its officers, agents or employees.
D. Refunding bonds may bear such additional terms and provisions as may be determined by the municipality subject to the limitations in this section and Section 3-31-10 NMSA 1978 and, to the extent applicable, Sections 3-31-1 through 3-31-12 NMSA 1978 relating to original bond issues, and the refunding bonds are not subject to the provisions of any other statute except as may be incorporated by reference in Sections 3-31-1 through 3-31-12 NMSA 1978.
E. The municipality shall receive from the department of finance and administration written approval of any [gross receipts] sales tax refunding revenue bonds, gasoline tax refunding revenue bonds or project refunding revenue bonds issued pursuant to the provisions of Sections 3-31-8 through 3-31-12 NMSA 1978."
SECTION 5. Section 3-37A-2 NMSA 1978 (being Laws 1979, Chapter 284, Section 2, as amended) is amended to read:
"3-37A-2. DEFINITIONS.--As used in the Small Cities Assistance Act:
A. "municipality" means an incorporated city, town or village, whether incorporated under general act, special act or special charter, and incorporated counties and H-class counties;
B. "municipal share" means one and thirty-five one-hundredths percent of the taxable gross receipts as defined in the [Gross Receipts and Compensating] Sales and Use Tax Act reported annually for each municipality to the taxation and revenue department during a twelve-month period ending June 30;
C. "total municipal share" means the sum of all municipal shares;
D. "statewide per capita average" means the quotient of the total municipal share divided by the total population in all municipalities;
E. "municipal per capita average" means the quotient of the municipal share divided by the municipality's population;
F. "population" means the most recent official census or estimate determined by the United States census bureau [of the census], or, if neither is available, "population" means an estimate as determined by the local government division of the department of finance and administration;
G. "local tax effort" means the amount produced by a one-fourth of one percent municipal [gross receipts] sales tax in the previous fiscal year;
H. "qualifying municipality" means a municipality with a population of less than ten thousand that has enacted on or before the last day of the preceding fiscal year an ordinance or ordinances imposing a municipal [gross receipts] sales tax pursuant to Section 7-19D-9 NMSA 1978 at a rate of one-fourth of one percent or more;
I. "enacted" means adopted by a majority of the members of the governing body of the municipality pursuant to Section 7-19D-9 NMSA 1978 and:
(1) for which no election has been called in the manner and within the time provided by Section 7-19D-9 NMSA 1978; or
(2) that has been approved by a majority of the registered voters voting on the question pursuant to Section 7-19D-9 NMSA 1978; and
J. "minimum amount" means an amount equal to ninety thousand dollars ($90,000)."
SECTION 6. Section 3-38-14 NMSA 1978 (being Laws 1969, Chapter 199, Section 2, as amended) is amended to read:
"3-38-14. DEFINITIONS.--As used in the Lodgers' Tax Act:
A. "gross taxable rent" means the total amount of rent paid for lodging, not including the state [gross receipts] sales tax or local option sales taxes;
B. "lodging" means the transaction of furnishing rooms or other accommodations by a vendor to a vendee who for rent uses, possesses or has the right to use or possess the rooms or other units of accommodations in or at a taxable premises;
C. "lodgings" means the rooms or other accommodations furnished by a vendor to a vendee by a taxable service of lodging;
D. "occupancy tax" means the tax on lodging authorized by the Lodgers' Tax Act;
E. "person" means a corporation, firm, other body corporate, partnership, association or individual. "Person" includes an executor, administrator, trustee, receiver or other representative appointed according to law and acting in a representative capacity. "Person" does not include the United States of America, the state of New Mexico, any corporation, department, instrumentality or agency of the federal government or the state government or any political subdivision of the state;
F. "rent" means the consideration received by a vendor in money, credits, property or other consideration valued in money for lodgings subject to an occupancy tax authorized in the Lodgers' Tax Act;
G. "taxable premises" means a hotel, motel or other premises used for lodging that is not the vendee's household or primary residence;
H. "temporary lodging" means lodgings for the purpose of housing a vendee within proximity of the vendee's employment or job location;
I. "tourist" means a person who travels for the purpose of business, pleasure or culture to a municipality or county imposing an occupancy tax;
J. "tourist-related events" means events that are planned for, promoted to and attended by tourists;
K. "tourist-related facilities and attractions" means facilities and attractions that are intended to be used by or visited by tourists;
L. "tourist-related transportation systems" means transportation systems that provide transportation for tourists to and from tourist-related facilities and attractions and tourist-related events;
M. "vendee" means a natural person to whom lodgings are furnished in the exercise of the taxable service of lodging; and
N. "vendor" means a person or the person's agent furnishing lodgings in the exercise of the taxable service of lodging."
SECTION 7. Section 3-38A-2 NMSA 1978 (being Laws 2003, Chapter 417, Section 2) is amended to read:
"3-38A-2. DEFINITIONS.--As used in the Hospitality Fee Act:
A. "gross rent" means the total amount of rent paid for tourist accommodations, not including the state and local option [gross receipts] sales taxes paid on the rent receipts;
B. "municipality" means a municipality located in a class A county with a population greater than two hundred fifty thousand according to the most recent federal decennial census;
C. "person" means a corporation, firm, other body corporate, partnership, association or individual, including an executor, administrator, trustee, receiver or other representative appointed according to law and acting in a representative capacity. "Person" does not include the United States of America; the state of New Mexico; any corporation, department, instrumentality or agency of the federal government or the state government; or any political subdivision of the state;
D. "proprietor" means a person who furnishes tourist accommodations to a renter;
E. "rent" means the consideration received by a proprietor in money, credits, property or other consideration valued in money from renters for tourist accommodations, other than:
(1) consideration received from a renter who has been a permanent resident of the tourist accommodation for a period of at least thirty consecutive days or a renter who enters into or has entered into a written agreement for rental of the tourist accommodation for a period of at least thirty consecutive days; or
(2) consideration received from a renter for a room or other unit of accommodation for which the renter has paid less than two dollars ($2.00) per day;
F. "renter" means a person to whom tourist accommodations are furnished;
G. "room" means a room or other unit of accommodation furnished by a proprietor to a renter in a tourist accommodation; and
H. "tourist accommodation" means a hotel, apartment, apartment hotel, apartment house, lodge, [lodginghouse] lodging house, rooming house, motor hotel, guest house, guest ranch, ranch resort, guest resort, mobile home, motor court, auto court, auto camp, trailer court, trailer camp, trailer park, tourist camp, cabin or other premises used for accommodation. "Tourist accommodation" does not include:
(1) accommodations at religious, charitable, educational or philanthropic institutions, including summer camps operated by such institutions;
(2) clinics, hospitals or other medical facilities;
(3) privately owned and operated convalescent homes or homes for the aged, infirm, indigent or chronically ill; or
(4) accommodations that do not have at least three rooms or other units of accommodation."
SECTION 8. Section 3-60A-13 NMSA 1978 (being Laws 1979, Chapter 391, Section 13, as amended) is amended to read:
"3-60A-13. PROPERTY EXEMPT FROM TAXES AND FROM LEVY AND SALE BY VIRTUE OF AN EXECUTION.--
A. All property of a local government, including funds, owned or held in fee simple by it for the purposes of the Metropolitan Redevelopment Code shall be exempt from levy and sale by virtue of an execution, and no execution or other judicial process shall issue against the property nor shall judgment against a local government be a charge or lien upon the property; provided, however, that the provisions of this section shall not apply to or limit the right of obligees to pursue any remedies for the enforcement of any pledge or lien given pursuant to the Redevelopment Law by a local government on its rents, fees, grants, land or revenues from projects.
B. The property of a local government acquired or held for the purposes of the Metropolitan Redevelopment Code is declared to be public property used for essential public and governmental purposes, and the property shall be exempt from property taxes or assessments of the local government, the county, the state or any political subdivision thereof; provided that the exemption shall terminate when the local government transfers its fee simple interest in the property to a purchaser that is not entitled to the exemption with respect to the property. Nothing in this subsection authorizes an exemption or deduction from the imposition of the [gross receipts and compensating] sales and use taxes [under the Gross Receipts and Compensating] pursuant to the Sales and Use Tax Act on the gross receipts from the sale of property to or the use of property by a local government or any other person in connection with a metropolitan redevelopment project created under the Metropolitan Redevelopment Code."
SECTION 9. Section 3-65-8 NMSA 1978 (being Laws 2001, Chapter 231, Section 8) is amended to read:
"3-65-8. AUTHORIZATION OF PROJECT.--
A. Pursuant to the provisions of Section 6-21-6 NMSA 1978, the legislature authorizes the authority to make a loan from the public project revolving fund to a municipality to acquire land for and to design, purchase, construct, remodel, renovate, rehabilitate, improve, equip or furnish a minor league baseball stadium on terms and conditions established by the authority.
B. Prior to receiving the loan, the governing body shall approve the loan and related documents by an ordinance to be adopted by a majority of the members of the governing body. The ordinance shall pledge the stadium surcharge receipts to make the loan payments. In addition to pledging stadium surcharge receipts for making loan payments, the ordinance shall pledge legally available [gross receipts] sales tax revenues distributed or transferred to a municipality pursuant to Section 7-1-6.4 or 7-1-6.12 NMSA 1978 in an amount satisfactory to the authority and in an amount at least sufficient to make the loan payments. No action shall be brought questioning the legality of the pledge of receipts and revenues, the ordinance, the loan, the proceedings, the stadium surcharge or any other matter concerning the loan after thirty days from the date of publication of the ordinance approving the loan and related documents and pledging stadium surcharge receipts and [gross receipts] sales tax revenues of the municipality to make the loan payments.
C. The legislature or a municipality shall not repeal, amend or otherwise modify any law or ordinance that adversely affects or impairs the stadium surcharge or any loan from the authority secured by a pledge of the stadium surcharge and [gross receipts] sales tax revenues, unless the loan has been paid in full or provisions have been made for full payment."
SECTION 10. Section 3-65-9 NMSA 1978 (being Laws 2001, Chapter 231, Section 9) is amended to read:
"3-65-9. CUMULATIVE AND COMPLETE AUTHORITY.--The Minor League Baseball Stadium Funding Act shall be deemed to provide an additional and alternative method for obtaining funding for a minor league baseball stadium, establishing the stadium surcharge and completing the acts authorized thereby and shall be regarded as supplemental and additional to powers conferred by other laws of the state, without reference to such other laws of the state, and shall constitute full authority for the exercise of powers granted herein, including but not limited to the pledging of stadium surcharge receipts and [gross receipts] sales tax revenues by the governing body to make loan payments to the authority."
SECTION 11. Section 3-66-8 NMSA 1978 (being Laws 2005, Chapter 351, Section 10) is amended to read:
"3-66-8. ISSUANCE OF BONDS.--
A. A municipality may issue revenue bonds, in accordance with the procedures set forth in Sections 3-31-3 through 3-31-7 NMSA 1978, to acquire land for and to design, purchase, construct, remodel, renovate, rehabilitate, improve, equip or furnish a municipal event center.
B. Revenue bonds issued by a municipality may be secured by event center revenues, event center surcharge receipts or [gross receipts] sales tax revenues distributed or transferred to that municipality pursuant to Section 7-1-6.4 or 7-1-6.12 NMSA 1978.
C. An action shall not be brought questioning the legality of the pledge of event center revenues, event center surcharge receipts or [gross receipts] sales tax revenues, bonds issued pursuant to the Municipal Event Center Funding Act, issuance of those bonds, an event center surcharge included in a vendor contract or any other matter concerning the bonds after thirty days from the date of publication of the ordinance authorizing issuance of the bonds and the pledging of event center receipts, event center surcharge receipts or [gross receipts] sales tax revenues of a municipality to make debt service payments.
D. The legislature or a municipality shall not repeal, amend or otherwise modify any law or ordinance that adversely affects or impairs the event center surcharge or any bonds secured by a pledge of the event center revenues, event center surcharge receipts or [gross receipts] sales tax revenues, unless the bonds have been paid in full or provisions have been made for full payment."
SECTION 12. Section 4-48B-12 NMSA 1978 (being Laws 1981, Chapter 83, Section 12, as amended) is amended to read:
"4-48B-12. TAX LEVIES AUTHORIZED.--
A. The county commissioners are authorized to impose a mill levy and collect annual assessments against the net taxable value of the property in a county to pay the cost of operating and maintaining county hospitals or to pay to contracting hospitals in accordance with a health care facilities contract and in class A counties to pay for the county's transfer to the county-supported medicaid fund pursuant to Section 27-10-4 NMSA 1978 as follows:
(1) in class A counties as defined in Section 4-44-1 NMSA 1978, the mill levy shall not exceed a rate of six dollars fifty cents ($6.50), or any lower maximum amount required by operation of the rate limitation provisions of Section 7-37-7.1 NMSA 1978 upon a mill levy imposed pursuant to this paragraph, on each one thousand dollars ($1,000) of net taxable value of property allocated to the county; however, if the county uses any portion, not to exceed one dollar fifty cents ($1.50), of the rate authorized by this paragraph to meet the requirement of Section 27-10-4 NMSA 1978, the provisions of Section 7-37-7.1 NMSA 1978 do not apply to the portion of the rate necessary to produce the revenues required, provided that the portion of the rate does not exceed one dollar fifty cents ($1.50); and
(2) in other counties, the mill levy shall not exceed four dollars twenty-five cents ($4.25), or any lower maximum amount required by operation of the rate limitation provisions of Section 7-37-7.1 NMSA 1978 upon a mill levy imposed pursuant to this paragraph, on each one thousand dollars ($1,000) of net taxable value of property allocated to the county.
B. The mill levies provided in Paragraphs (1) and (2) of Subsection A of this section shall be made at the direction of the county commissioners, but only to the extent that the county commissioners deem it necessary to operate and maintain county hospitals, to pay the amounts required in the performance of any health care facilities contracts made pursuant to the Hospital Funding Act and to provide for a class A county's transfer to the county-supported medicaid fund pursuant to Section 27-10-4 NMSA 1978.
C. In the event that the mill levy provided for in Paragraph (1) of Subsection A of this section is not authorized by the electorate or the resulting mill levy proceeds are not remitted to the entity operating the hospital within a reasonable time period, any lease for operation of the hospital between a county and a state educational institution named in Article 12, Section 11 of the constitution of New Mexico may, at the option of the state educational institution, be terminated immediately. Except as provided in Subsection D of this section, in the event that the mill levy provided for in Paragraph (1) of Subsection A of this section is authorized, an amount not less than the amount that would be produced by a mill levy at the rate of four dollars ($4.00), or any lower amount that would be required by operation of the rate limitation provisions of Section 7-37-7.1 NMSA 1978 upon this rate, on each one thousand dollars ($1,000) of net taxable value of property allocated to the county shall be provided from the proceeds of the mill levy to the state educational institution operating the hospital for hospital purposes unless the institution determines that the amount is not necessary.
D. A class A county imposing the mill levy provided for in Paragraph (1) of Subsection A of this section may enter into a mutual agreement with a state educational institution named in Article 12, Section 11 of the constitution of New Mexico operating the hospital permitting the transfer to the county-supported medicaid fund by the county pursuant to Section 27-10-4 NMSA 1978 of not to exceed the amount that would be produced by a mill levy at a rate of one dollar fifty cents ($1.50) applied to the net taxable value of property allocated to the county for the prior property tax year and also not to exceed the amount that would be produced by imposition of the county health care [gross receipts] sales tax.
E. The distribution of the mill levy authorized at the rates specified in Subsection A of this section shall be made to county and contracting hospitals as authorized in the Hospital Funding Act."
SECTION 13. Section 4-61-2 NMSA 1978 (being Laws 1982, Chapter 44, Section 2, as amended) is amended to read:
"4-61-2. DEFINITIONS.--As used in the Small Counties Assistance Act:
A. "adjustment factor" means a fraction, the numerator of which is the net taxable value of the state for the property tax year prior to the year in which the amount of small counties assistance is being determined and the denominator of which is the net taxable value for property tax year 2002; the adjustment factor shall be calculated without reference to assessed value determined pursuant to the Oil and Gas Ad Valorem Production Tax Act, assessed value determined pursuant to the Oil and Gas Production Equipment Ad Valorem Tax Act or taxable value determined pursuant to the Copper Production Ad Valorem Tax Act;
B. "ceiling valuation" means:
(1) for the 2002 property tax year, one billion four hundred million dollars ($1,400,000,000); and
(2) for each subsequent property tax year, an amount equal to the product obtained by multiplying one billion four hundred million dollars ($1,400,000,000) by the adjustment factor for the year;
C. "demographer" means the bureau of business and economic research at the university of New Mexico;
D. "inflation factor" means a fraction whose numerator is the annual implicit price deflator index for state and local government purchases of goods and services, as published in the United States department of commerce monthly publication entitled "Survey of Current Business" or any successor publication prepared by an agency of the United States and adopted by the department of finance and administration, for the calendar year one year prior to the year in which the distribution is to be made and whose denominator is the annual index for calendar year 2004; provided that, if the inflation factor is calculated to have a value less than one, it shall be deemed to have a value of one;
E. "population" means the official population shown by the most recent federal decennial census or, if there is a change in boundaries after the date of the census, "population" for each affected unit shall be the most current estimated population for that unit provided in writing by the demographer; provided that after five years from the first day of the calendar year of the most recent federal decennial census, that census shall not be used, and "population" for the period from that date until the date when the next following official final decennial census population data are available shall be the most current estimated population provided in writing by the demographer;
F. "qualifying county" means a county that has:
(1) for the property tax year in which any distribution under the Small Counties Assistance Act is made to the county, imposed a property tax rate for general county purposes pursuant to Paragraph (1) of Subsection B of Section 7-37-7 NMSA 1978 as limited by Section 7-37-7.1 NMSA 1978 of at least eight dollars eighty-five cents ($8.85) per one thousand dollars ($1,000) of net taxable value;
(2) by July 1 of the property tax year in which any distribution under the Small Counties Assistance Act is made to the county, received a written certification from the director of the property tax division of the taxation and revenue department that the county assessor of that county has implemented an acceptable program of maintaining current and correct property values for property taxation purposes as required by Section 7-36-16 NMSA 1978 or has submitted to the director an acceptable plan for the implementation of such a program;
(3) on July 1 of the year in which any distribution under the Small Counties Assistance Act is made to the county, a population of not more than forty-eight thousand;
(4) imposed county [gross receipts] sales tax increments authorized pursuant to Section 7-20E-9 NMSA 1978 totaling at least three-eighths percent and has those increments in effect on July 1 of the year in which a distribution is made; provided that this paragraph does not apply to a county if the county's valuation for property taxation purposes does not exceed the product of two hundred thirty million dollars ($230,000,000) multiplied by the adjustment factor for the year; and
(5) a total valuation for the property tax year preceding the year in which a distribution pursuant to the Small Counties Assistance Act for that county is to be made that is no greater than the ceiling valuation for that property tax year;
G. "tax rate factor" means a fraction, the numerator of which is the average rate imposed in Section 7-9-7 NMSA 1978 for the fiscal year one year prior to the fiscal year in which the distribution is to be made and the denominator of which is five percent; and
H. "total valuation" means the sum for a jurisdiction for a property tax year of the net taxable value determined pursuant to the Property Tax Code, the assessed value determined pursuant to the Oil and Gas Ad Valorem Production Tax Act, the assessed value determined pursuant to the Oil and Gas Production Equipment Ad Valorem Tax Act and the taxable value determined pursuant to the Copper Production Ad Valorem Tax Act."
SECTION 14. Section 4-61-3 NMSA 1978 (being Laws 1982, Chapter 44, Section 3, as amended) is amended to read:
"4-61-3. SMALL COUNTIES ASSISTANCE FUND--DISTRIBUTION.--
A. The "small counties assistance fund" is created within the state treasury.
B. On or before September 1, 2003 and on or before September 1 of each subsequent year, the demographer shall certify in writing to the department of finance and administration the population of the state and of each county as of June 30 of the year.
C. On or before September 15, 2003 and on or before September 15 of each subsequent year, the secretary of finance and administration shall certify to the state treasurer with respect to each qualifying county:
(1) its population as certified by the demographer;
(2) its total valuation for the preceding property tax year; and
(3) the distribution amount calculated for it.
D. The distribution amount for each qualifying county shall be determined for 2003 and each subsequent year in accordance with the following table; provided that the bracket amounts in the first two columns of the table shall be adjusted annually after 2003 by the adjustment factor. The bracket amounts in the last column shall be adjusted annually after 2005 by the inflation factor and, in 2011 and subsequent years, shall be adjusted by the tax rate factor. The department of finance and administration may round the results of the adjustments made pursuant to this subsection to the nearest one thousand dollars ($1,000).
If the county's total valuation for the preceding property tax year is:
at least: but less and the county then the distribution
than: population is: amount is:
$ 0 $100,000,000 under 1,000 $515,000
$ 0 $100,000,000 at least 1,000
but under 4,000 $370,000
$ 0 $100,000,000 at least 4,000 $285,000
$100,000,000 $230,000,000 under 12,000 $200,000
$100,000,000 $230,000,000 at least 12,000 $145,000
$230,000,000 $1,400,000,000 under 48,000 $85,000.
E. If the balance in the small counties assistance fund as of the preceding August 31 exceeds the sum of the distributions to be made to qualifying counties pursuant to the provisions of Subsection D of this section, the department of finance and administration shall increase the distribution amount for each county receiving a distribution amount pursuant to the provisions of Subsection D of this section by:
(1) fifty thousand dollars ($50,000) if the county has imposed and has in effect on July 1 of the year in which the distribution is to be made a county [gross receipts] sales tax at a rate of at least one-eighth percent; provided that the ordinance imposing the increment shall dedicate the revenue from the increment:
(a) for the purpose of operating, maintaining, constructing, purchasing, furnishing, equipping, rehabilitating, expanding or improving a judicial-correctional or a county correctional facility or the grounds of a judicial-correctional or county correctional facility, including acquiring and improving parking lots, landscaping or any combination of the foregoing;
(b) for the purpose of transporting or extraditing prisoners; or
(c) to payment of principal and interest on revenue bonds or refunding bonds issued pursuant to Section 4-62-1 NMSA 1978;
(2) twenty thousand dollars ($20,000) if the county has imposed and has in effect on July 1 of the year in which the distribution is to be made a county [gross receipts] sales tax increment of one-sixteenth percent; or
(3) seventy thousand dollars ($70,000) if the county has met the requirements of Paragraphs (1) and (2) of this subsection.
F. If the balance in the small counties assistance fund as of the preceding August 31 is less than the sum of the distributions determined pursuant to Subsection D of this section plus the distribution increases authorized pursuant to Subsection E of this section, the distribution increases pursuant to Subsection E of this section shall be proportionately reduced.
G. If the balance in the small counties assistance fund as of the preceding August 31 is less than the sum of the distributions to be made to qualifying counties, the department of finance and administration shall reduce each qualifying county's calculated distribution by a percentage computed by dividing the amount by which the fund is insufficient by the sum of all the calculated distributions and shall certify the reduced amounts as the qualifying counties' distributions.
H. Any interest accruing from the temporary investment of the small counties assistance fund shall be credited to the general fund.
I. On or before September 30, 2003 and on or before September 30 of each subsequent year, the state treasurer shall distribute to each county for whom a distribution has been certified for that year the amount certified for that county for that year. If the balance in the fund as of the preceding August 31 exceeds the sum of certified amounts distributed, the difference shall revert to the general fund.
J. If any date specified in Subsection B, C or I of this section falls on a Saturday, Sunday or legal holiday, any action required to be performed as provided in those subsections is timely if performed on the next day that is not a Saturday, Sunday or legal holiday."
SECTION 15. Section 4-62-1 NMSA 1978 (being Laws 1992, Chapter 95, Section 1, as amended by Laws 2019, Chapter 210, Section 1 and by Laws 2019, Chapter 274, Section 4) is amended to read:
"4-62-1. REVENUE BONDS--AUTHORITY TO ISSUE--PLEDGE OF REVENUES--LIMITATION ON TIME OF ISSUANCE.--
A. In addition to any other law authorizing a county to issue revenue bonds, a county may issue revenue bonds pursuant to Chapter 4, Article 62 NMSA 1978 for the purposes specified in this section.
B. [Gross receipts] Sales tax revenue bonds may be issued for any county purpose. A county may pledge irrevocably any or all of the revenue received by the county pursuant to Section 7-1-6.13 NMSA 1978 for payment of principal and interest due in connection with, and other expenses related to, [gross receipts] sales tax revenue bonds or for any area of county government services. If the revenue is pledged for payment of principal and interest as authorized by this subsection, the pledge shall require the revenues received to be deposited into a special bond fund for payment of the principal, interest and expenses. At the end of each fiscal year, money remaining in the special bond fund after the annual obligations for the bonds are fully met may be transferred to any other fund of the county. Revenues in excess of the annual principal and interest due on [gross receipts] sales tax revenue bonds secured by a pledge of [gross receipts] sales tax revenue may be accumulated in a debt service reserve account. The governing body of the county may appoint a commercial bank trust department to act as trustee of the proceeds of the tax and to administer the payment of principal of and interest on the bonds.
C. Gasoline tax revenue bonds may be issued for the acquisition of rights of way for and the construction, reconstruction, resurfacing, maintenance, repair or other improvement of county roads and bridges. A county may pledge irrevocably any or all of the county gasoline tax revenue for payment of principal and interest due in connection with, and other expenses related to, county gasoline tax revenue bonds.
D. Utility revenue bonds or joint utility revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing or otherwise improving water facilities, sewer facilities, gas facilities or electric facilities. A county may pledge irrevocably any or all of the net revenues from the operation of the utility or joint utility for which the particular utility or joint utility bonds are issued to the payment of principal and interest due in connection with, and other expenses related to, utility or joint utility revenue bonds.
E. Project revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing, improving, constructing, purchasing, furnishing, equipping or rehabilitating any revenue-producing project, including, as applicable, purchasing, otherwise acquiring or improving the ground for the project and acquiring and improving parking lots. The county may pledge irrevocably any or all of the net revenues from the operation of the revenue-producing project for which the particular project revenue bonds are issued to the payment of the interest on and principal of the project revenue bonds. The net revenues of any revenue-producing project shall not be pledged to the project revenue bonds issued for any other revenue-producing project that is clearly unrelated in nature; but nothing in this subsection prevents the pledge to any of the project revenue bonds of the revenues received from existing, future or disconnected facilities and equipment that are related to and that may constitute a part of the particular revenue-producing project. A general determination by the governing body that facilities or equipment is reasonably related to and constitutes a part of a specified revenue-producing project shall be conclusive if set forth in the proceedings authorizing the project revenue bonds.
F. Fire district revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing, improving, constructing, purchasing, furnishing, equipping and rehabilitating a fire district project, including, as applicable, purchasing, otherwise acquiring or improving the ground for the project. The county may pledge irrevocably any or all of the revenues received by the fire district from the fire protection fund as provided in the Fire Protection Fund Law and any or all of the revenues provided for the operation of the fire district project for which the particular bonds are issued to the payment of the interest on and principal of the bonds. The revenues of a fire district project shall not be pledged to the bonds issued for a fire district project that clearly is unrelated in its purpose; but nothing in this section prevents the pledge to such bonds of revenues received from existing, future or disconnected facilities and equipment that are related to and that may constitute a part of the particular fire district project. A general determination by the governing body of the county that facilities or equipment is reasonably related to and constitutes a part of a specified fire district project shall be conclusive if set forth in the proceedings authorizing the fire district revenue bonds.
G. Law enforcement protection revenue bonds may be issued for the repair and purchase of law enforcement apparatus and equipment that meet nationally recognized standards. The county may pledge irrevocably any or all of the revenues received by the county from the law enforcement protection fund distributions pursuant to the Law Enforcement Protection Fund Act to the payment of the interest on and principal of the law enforcement protection revenue bonds.
H. PILT revenue bonds may be issued by a county to repay all or part of the principal and interest of an outstanding loan owed by the county to the New Mexico finance authority. A county may pledge irrevocably all or part of PILT revenue to the payment of principal of and interest on new loans or preexisting loans provided by the New Mexico finance authority to finance a public project.
I. Except for the purpose of refunding previous revenue bond issues, no county may sell revenue bonds payable from pledged revenue after the expiration of two years from the date of the ordinance authorizing the issuance of the bonds or, for bonds to be issued and sold to the New Mexico finance authority as authorized in Subsection C of Section 4-62-4 NMSA 1978, after the expiration of two years from the date of the resolution authorizing the issuance of the bonds. However, any period of time during which a particular revenue bond issue is in litigation shall not be counted in determining the expiration date of that issue.
J. No bonds may be issued by a county, other than an H class county, a class B county as defined in Section 4-36-8 NMSA 1978 or a class A county as described in Section 4-36-10 NMSA 1978, to acquire, equip, extend, enlarge, better, repair or construct a utility unless the utility is regulated by the public regulation commission pursuant to the Public Utility Act and the issuance of the bonds is approved by the commission.
K. Any law that imposes or authorizes the imposition of a tax authorized by the County Local Option [Gross Receipts] Sales and Use Taxes Act or that affects that tax shall not be repealed or amended in such a manner as to impair outstanding revenue bonds that are issued pursuant to Chapter 4, Article 62 NMSA 1978 and that may be secured by a pledge of the tax unless the outstanding revenue bonds have been discharged in full or for which provision has been fully made."
SECTION 16. Section 4-62-1.1 NMSA 1978 (being Laws 2019, Chapter 274, Section 5) is amended to read:
"4-62-1.1. DEFINITIONS.--As used in Chapter 4, Article 62 NMSA 1978:
A. "bond" means any obligation of a county issued under Chapter 4, Article 62 NMSA 1978, whether designated as a bond, note, loan, warrant, debenture, lease-purchase agreement or other instrument evidencing an obligation of a county to make payments;
B. "gasoline tax revenue" means the revenue from that portion of the gasoline tax distributed to the county pursuant to Sections 7-1-6.9 and 7-1-6.26 NMSA 1978;
C. "gasoline tax revenue bonds" means the bonds authorized by Subsection C of Section 4-62-1 NMSA 1978;
[D. "gross receipts tax revenue" means the revenue attributable to the county gross receipts tax transferred to the county pursuant to Section 7-1-6.13 NMSA 1978 and any distribution made pursuant to Section 7-1-6.16 NMSA 1978;
E. "gross receipts tax revenue bonds" means the bonds authorized by Subsection B of Section 4-62-1 NMSA 1978;
F.] D. "PILT revenue" means revenue received by a county from the federal government as payments in lieu of taxes;
[G.] E. "pledged revenue" means the revenue, net income or net revenue authorized to be pledged to the payment of particular revenue bonds as specifically provided in Section 4-62-1 NMSA 1978;
[H.] F. "project revenues" means the net revenues of revenue-producing projects that may be pledged to project revenue bonds pursuant to Subsection E of Section 4-62-1 NMSA 1978;
[I.] G. "public project" means "public project" as defined in Subsection E of Section 6-21-3 NMSA 1978;
H. "sales tax revenue" means the revenue attributable to the county sales tax transferred to the county pursuant to Section 7-1-6.13 NMSA 1978 and any distribution made pursuant to Section 7-1-6.16 NMSA 1978;
I. "sales tax revenue bonds" means the bonds authorized by Subsection B of Section 4-62-1 NMSA 1978;
J. "utility" means a water, wastewater, sewer, gas or electric utility or joint utility servicing the public; and
K. "utility revenue bonds" or "joint utility revenue bonds" means the bonds authorized by Subsection D of Section 4-62-1 NMSA 1978."
SECTION 17. Section 4-62-4 NMSA 1978 (being Laws 1992, Chapter 95, Section 4, as amended) is amended to read:
"4-62-4. ORDINANCE AUTHORIZING REVENUE BONDS--[TWO-THIRDS] TWO-THIRDS' MAJORITY REQUIRED--RESOLUTION AUTHORIZING REVENUE BONDS TO BE ISSUED AND SOLD TO THE NEW MEXICO FINANCE AUTHORITY.--
A. At a regular or special meeting called for the purpose of issuing revenue bonds as authorized in Section 4-62-1 NMSA 1978, the governing body may adopt an ordinance that:
(1) declares the necessity for issuing revenue bonds;
(2) authorizes the issuance of revenue bonds by an affirmative vote of two-thirds of all the members of the governing body; and
(3) designates the source of the pledged revenues.
B. If a majority of a five-member governing body, but fewer than four members, votes in favor of adopting the ordinance authorizing the issuance of revenue bonds, the ordinance is adopted but shall not become effective until the question of issuing the revenue bonds is submitted to a vote of the qualified electors for their approval at a special or regular county election. If an election is necessary, the election shall be conducted in the manner provided in Section 4-49-8 NMSA 1978. Notice of the election shall be given as provided in Section 4-49-8 NMSA 1978.
C. In addition and as alternative to adopting an ordinance as required by the provisions of Subsections A and B of this section, at a regular or special meeting called for the purpose of issuing revenue bonds as authorized in Section 4-62-1 NMSA 1978, the governing body may authorize the issuance and sale, from time to time, of revenue bonds in amounts not to exceed one million dollars ($1,000,000) at any one time to the New Mexico finance authority by adoption of a resolution that:
(1) declares the necessity for issuing and selling revenue bonds to the New Mexico finance authority;
(2) authorizes the issuance and sale of revenue bonds to the New Mexico finance authority by an affirmative vote of a majority of all the members of the governing body; and
(3) designates the source of the pledged revenues.
D. At the option of the governing body, revenue bonds in an amount in excess of one million dollars ($1,000,000) may be authorized by an ordinance adopted in accordance with Subsections A and B of this section and issued and sold to the New Mexico finance authority.
[D.] E. No ordinance or resolution may be adopted under the provisions of this section that uses as pledged revenues the county [gross receipts] sales tax for a purpose that would be inconsistent with the purpose for which that county [gross receipts] sales tax revenue was dedicated. Any revenue in excess of the amount necessary to meet all annual principal and interest payments and other requirements incident to repayment of the bonds may be transferred to any other fund of the county."
SECTION 18. Section 4-62-8 NMSA 1978 (being Laws 1992, Chapter 95, Section 8, as amended) is amended to read:
"4-62-8. REFUNDING BONDS--ESCROW--DETAIL.--
A. Refunding bonds issued pursuant to Chapter 4, Article 62 NMSA 1978 shall be authorized by ordinance or by resolution if the refunding bonds are to be issued and sold to the New Mexico finance authority pursuant to Subsection C of Section 4-62-4 NMSA 1978. Any bonds that are refunded under the provisions of this section shall be paid at maturity or on any permitted prior redemption date in the amounts, at the time and places and, if called prior to maturity, in accordance with any applicable notice provisions, all as provided in the proceedings authorizing the issuance of the refunded bonds or otherwise appertaining thereto, except for any bond that is voluntarily surrendered for exchange or payment by the holder or owner.
B. Provisions shall be made for paying the bonds refunded at the time provided in Subsection A of this section. The principal amount of the refunding bonds may exceed the principal amount of the refunded bonds and may also be less than or the same as the principal amount of the bonds being refunded so long as provision is duly and sufficiently made for the payment of the refunded bonds.
C. The proceeds of refunding bonds, including any accrued interest and premium appertaining to the sale of refunding bonds, shall either be immediately applied to the retirement of the bonds being refunded or be placed in escrow in a commercial bank or trust company that possesses and is exercising trust powers and that is a member of the federal deposit insurance corporation to be applied to the payment of the principal of, interest on and any prior redemption premium due in connection with the bonds being refunded; provided that such refunding bond proceeds, including any accrued interest and any premium appertaining to a sale of refunding bonds, may be applied to the establishment and maintenance of a reserve fund and to the payment of expenses incidental to the refunding and the issuance of the refunding bonds, the interest thereon and the principal thereof or both interest and principal as the county may determine. Nothing in this section requires the establishment of an escrow if the refunded bonds become due and payable within one year from the date of the refunding bonds and if the amounts necessary to retire the refunded bonds within that time are deposited with the paying agent for the refunded bonds. Any escrow shall not be limited to proceeds of refunding bonds but may include the other money available for its purpose. Any proceeds in escrow pending such use may be invested or reinvested in bills, certificates of indebtedness, notes or bonds that are direct obligations of, or the principal and interest of which obligations are unconditionally guaranteed by, the United States or in certificates of deposit of banks that are members of the federal deposit insurance corporation, the par value of which certificates of deposit is collateralized by a pledge of obligations of, or the payment of which is unconditionally guaranteed by, the United States, the par value of which obligations is at least seventy-five percent of the par value of the certificates of deposit. Such proceeds and investments in escrow together with any interest or other income to be derived from any such investment shall be in an amount at all times sufficient as to principal, interest, any prior redemption premium due and any charges of the escrow agent payable therefrom to pay the bonds being refunded as they become due at their respective maturities or due at any designated prior redemption date in connection with which the county shall exercise a prior redemption option. Any purchaser of any refunding bond issued under Chapter 4, Article 62 NMSA 1978 is in no manner responsible for the application of the proceeds thereof by the county or of its officers, agents or employees.
D. Refunding bonds may bear such additional terms and provisions as may be determined by the county subject to the limitations in this section and Section 4-62-9 NMSA 1978 and, to the extent applicable, Sections 4-62-1 through 4-62-6 NMSA 1978 relating to original bond issues, and the refunding bonds are not subject to the provisions of any other statute except as may be incorporated by reference in Chapter 4, Article 62 NMSA 1978.
E. The county shall receive from the department of finance and administration written approval of any non-utility [gross receipts] sales tax refunding revenue bonds, gasoline tax refunding revenue bonds, fire protection refunding revenue bonds, environmental refunding revenue bonds or non-utility project refunding revenue bonds issued pursuant to the provisions of Sections 4-62-7 through 4-62-10 NMSA 1978."
SECTION 19. Section 5-10-3 NMSA 1978 (being Laws 1993, Chapter 297, Section 3, as amended by Laws 2021, Chapter 3, Section 1 and by Laws 2021, Chapter 135, Section 1) is amended to read:
"5-10-3. DEFINITIONS.--As used in the Local Economic Development Act:
A. "arts and cultural district" means a developed district of public and private uses that is created pursuant to the Arts and Cultural District Act;
B. "broadband telecommunications network facilities" means the electronics, equipment, transmission facilities, fiber-optic cables and any other item directly related to a system capable of transmission of internet protocol or other formatted data at current federal communications commission baseline speed standard, all of which will be owned and used by a provider of internet access services;
C. "cultural facility" means a facility that is owned by the state, a county, a municipality or a qualifying entity that serves the public through preserving, educating and promoting the arts and culture of a particular locale, including theaters, museums, libraries, galleries, cultural compounds, educational organizations, performing arts venues and organizations, fine arts organizations, studios and media laboratories and live-work housing facilities;
D. "department" means the economic development department;
E. "economic development project" or "project" means the project of a qualifying entity for which public support may be provided pursuant to the Local Economic Development Act;
F. "governing body" means the city council, city commission or board of trustees of a municipality or the board of county commissioners of a county;
G. "local government" means a municipality or county;
H. "municipality" means an incorporated city, town or village;
I. "new full-time economic base job" means a job:
(1) that is primarily performed in New Mexico;
(2) that is held by an employee who is hired to work an average of at least thirty-two hours per week for at least forty-eight weeks per year;
(3) that is:
(a) involved, directly or in a supervisory capacity, with the production of: 1) a service; provided that the majority of the revenue generated from the service is from sources outside the state; or 2) tangible or intangible personal property for sale; or
(b) held by an employee who is employed at a regional, national or international headquarters operation or at an operation that primarily provides services for other operations of the qualifying entity that are located outside the state; and
(4) that is not directly involved with natural resources extraction or processing, on-site services where the customer is present for the delivery of the service, retail, construction or agriculture except for value-added processing performed on agricultural products that would then be sold for wholesale or retail consumption;
J. "person" means an individual, corporation, association, partnership or other legal entity;
K. "public support" means the provision of assistance by the state to a local or regional government or the provision of direct or indirect assistance to a qualifying entity by a local or regional government for an economic development project. "Public support":
(1) includes the provision of:
(a) land, buildings or other infrastructure, by purchase, lease, grant, construction, reconstruction, improvement or other acquisition or conveyance;
(b) the placement of new broadband telecommunications network facilities; provided that the facilities shall not serve a public facility or location that already meets federal communications commission baseline speed standards;
(c) rights-of-way infrastructure, including trenching and conduit, for the placement of new broadband telecommunications network facilities;
(d) public works improvements essential to the location or expansion of a qualifying entity;
(e) payments for professional services contracts necessary for local or regional governments to implement a plan or provide public support for a project;
(f) direct loans or grants for land, buildings or infrastructure;
(g) technical assistance to cultural facilities;
(h) loan guarantees securing the cost of land, buildings or infrastructure in an amount not to exceed the revenue that may be derived from an increment of the: 1) municipal [gross receipts] sales tax imposed at a rate not to exceed one-fourth percent and dedicated by the ordinance imposing the increment for projects; or 2) county [gross receipts] sales tax imposed at a rate not to exceed one-eighth percent and dedicated by the ordinance imposing the increment for projects;
(i) grants for public works infrastructure improvements essential to the location or expansion of a qualifying entity and grants or subsidies to cultural facilities;
(j) land for a publicly held industrial park or a publicly owned cultural facility, by purchase; and
(k) the construction of a building for use by a qualifying entity; but
(2) does not include the purchase, lease, grant or other acquisition or conveyance of water rights;
L. "qualifying entity" means a corporation, limited liability company, partnership, joint venture, syndicate, association or other person that is one or a combination of two or more of the following:
(1) an industry for the manufacturing, processing or assembling of agricultural or manufactured products;
(2) a commercial enterprise for storing, warehousing, distributing or selling products of agriculture, mining or industry, but, other than as provided in Paragraph (5), (6) or (9) of this subsection, not including any enterprise for sale of goods or commodities at retail or for distribution to the public of electricity, gas, water or telephone or other services commonly classified as public utilities;
(3) a business, including a restaurant or lodging establishment, in which all or part of the activities of the business involves the supplying of services to the general public or to governmental agencies or to a specific industry or customer, but, other than as provided in Paragraph (5) or (9) of this subsection, not including businesses primarily engaged in the sale of goods or commodities at retail;
(4) an Indian nation, tribe or pueblo or a federally chartered tribal corporation;
(5) a telecommunications sales enterprise that makes the majority of its sales to persons outside New Mexico;
(6) a facility for the direct sales by growers of agricultural products, commonly known as farmers' markets;
(7) a business that is the developer of a metropolitan redevelopment project;
(8) a cultural facility; and
(9) a retail business;
M. "regional government" means any combination of municipalities and counties that enter into a joint powers agreement to provide public support for economic development projects pursuant to a plan adopted by all parties to the joint powers agreement; and
N. "retail business" means a business that is primarily engaged in the sale of goods or commodities at retail and that is located:
(1) in a municipality with a population, according to the most recent federal decennial census, of:
(a) fifteen thousand or less; or
(b) more than fifteen thousand if the economic development project is not funded or financed with state government revenues; or
(2) in an unincorporated area of a county."
SECTION 20. Section 5-10-4 NMSA 1978 (being Laws 1993, Chapter 297, Section 4, as amended) is amended to read:
"5-10-4. ECONOMIC DEVELOPMENT PROJECTS--RESTRICTIONS ON PUBLIC EXPENDITURES OR PLEDGES OF CREDIT.--
A. No local or regional government shall provide public support for economic development projects as permitted pursuant to Article 9, Section 14 of the constitution of New Mexico except as provided in the Local Economic Development Act or as otherwise permitted by law.
B. The total amount of public money expended and the value of credit pledged in the fiscal year in which that money is expended by a local government for economic development projects pursuant to Article 9, Section 14 of the constitution of New Mexico and the Local Economic Development Act shall not exceed ten percent of the annual general fund expenditures of the local government in that fiscal year. The limits of this subsection shall not apply to:
(1) the value of any land or building contributed to any project pursuant to a project participation agreement;
(2) revenue generated through the imposition of an increment of the municipal [gross receipts] sales tax at a rate not to exceed one-fourth percent and dedicated to furthering or implementing economic development plans and projects as defined in the Local Economic Development Act or projects as defined in the Statewide Economic Development Finance Act; provided that no more than the greater of fifty thousand dollars ($50,000) or ten percent of the revenue collected shall be used for promotion and administration of or professional services contracts related to the implementation of any such economic development plan adopted by the governing body;
(3) revenue generated through the imposition of an increment of the county [gross receipts] sales tax at a rate not to exceed one-eighth percent and dedicated to furthering or implementing economic development plans and projects as defined in the Local Economic Development Act or projects as defined in the Statewide Economic Development Finance Act; provided that no more than the greater of fifty thousand dollars ($50,000) or ten percent of the revenue collected shall be used for promotion and administration of or professional services contracts related to the implementation of any such economic development plan adopted by the governing body;
(4) the proceeds of a revenue bond issue to which municipal infrastructure gross receipts tax revenue is pledged;
(5) the proceeds of a revenue bond issue to which the revenue from an increment of the county [gross receipts] sales tax, imposed at a rate not to exceed one-eighth percent and dedicated by the ordinance imposing the increment to provide public support for projects, is pledged; or
(6) funds donated by private entities to be used for defraying the cost of a project.
C. A regional or local government that generates revenue for economic development projects to which the limits of Subsection B of this section do not apply shall create an economic development fund into which such revenues shall be deposited. The economic development fund and income from the economic development fund shall be deposited as provided by law. Money in the economic development fund may be expended only as provided in the Local Economic Development Act or the Statewide Economic Development Finance Act.
D. In order to expend money from an economic development fund for arts and cultural district purposes, cultural facilities or retail businesses, the governing body of a municipality or county [that has] shall have adopted a resolution pursuant to an election pursuant to this section as it was in effect prior to July 1, 2013 that approved arts and cultural districts as a qualifying purpose and cultural facilities or retail businesses as a qualifying entity and imposed a municipal or county local option infrastructure gross receipts tax for furthering or implementing economic development plans and providing public support for projects as defined in the Local Economic Development Act or projects as defined in the Statewide Economic Development Finance Act [by referendum of the majority of the voters voting on the question approving the ordinance imposing the municipal or county infrastructure gross receipts tax before July 1, 2013 shall be required to adopt a resolution. The resolution shall call for an election to approve arts and cultural districts as a qualifying purpose and cultural facilities or retail businesses as a qualifying entity before any revenue generated by the municipal or county local option gross receipts tax for furthering or implementing economic development plans and providing public support for projects as defined in the Local Economic Development Act or projects as defined in the Statewide Economic Development Finance Act can be expended from the economic development fund for arts and cultural district purposes, cultural facilities or retail businesses.
E. The governing body shall adopt a resolution calling for an election within seventy-five days of the date the ordinance is adopted on the question of approving arts and cultural districts as a qualifying purpose and cultural facilities or retail businesses as a qualifying entity eligible to utilize revenue generated by the Municipal Local Option Gross Receipts and Compensating Taxes Act or the County Local Option Gross Receipts and Compensating Taxes Act for furthering or implementing economic development plans and providing public support for projects as defined in the Local Economic Development Act or projects as defined in the Statewide Economic Development Finance Act.
F. The question shall be submitted to the voters of the municipality or county as a separate question at a regular local or county election or at a special election called for that purpose by the governing body. A special local election shall be called, conducted and canvassed as provided in the Local Election Act. A special county election shall be called, conducted and canvassed in substantially the same manner as provided by law for general elections.
G. If a majority of the voters voting on the question approves the ordinance adding arts and cultural districts and cultural facilities or retail businesses as an approved use of the local option municipal or county economic development infrastructure gross receipts tax fund, the ordinance shall become effective on July 1 or January 1, whichever date occurs first after the expiration of three months from the date of the adopted ordinance. The ordinance shall include the effective date]."
SECTION 21. Section 5-10-14 NMSA 1978 (being Laws 2020, Chapter 74, Section 1, as amended) is amended to read:
"5-10-14. LOCAL ECONOMIC DEVELOPMENT ACT FUND.--
A. The "Local Economic Development Act fund" is created in the state treasury. Income from the fund shall be credited to the fund. Money in the fund shall not revert or be transferred to any other fund at the end of a fiscal year. The department shall administer the fund, and money in the fund is appropriated to the department to pay the cost of administering the fund and for economic development projects pursuant to the Local Economic Development Act. Money in the fund shall be expended on warrants of the department of finance and administration pursuant to vouchers signed by the secretary of economic development.
B. The following may be used to provide public support for certain economic development projects of qualifying entities pursuant to Section [2 of this 2021 act] 5-10-17 NMSA 1978 and shall be separately accounted for in the fund:
(1) fifty percent of the tax revenue attributable to the state [gross receipts] sales tax and the state [compensating] use tax, as determined pursuant to Subsection A of Section [2 of this 2021 act] 5-10-17 NMSA 1978, and distributed pursuant to Subsection A of Section [5 of this 2021 act] 7-1-6.67 NMSA 1978; and
(2) that portion of the tax revenue attributable to the local option [gross receipts] sales tax and county [compensating] use tax imposed by a county and local option [gross receipts] sales tax and municipal [compensating] use tax imposed by a municipality dedicated pursuant to Subsection B of Section [2 of this 2021 act] 5-10-17 NMSA 1978 and distributed pursuant to Subsection B of Section [5 of this 2021 act] 7-1-6.67 NMSA 1978."
SECTION 22. Section 5-10-16 NMSA 1978 (being Laws 2021, Chapter 3, Section 10) is amended to read:
"5-10-16. GRANTS TO REIMBURSE RENT, LEASE OR MORTGAGE PAYMENTS FOR CERTAIN BUSINESSES.--
A. Prior to January 1, 2023, the department may transfer to the authority funds appropriated by the legislature to the department for the purpose of providing recovery grants to recovery entities pursuant to this section.
B. The department and the authority shall enter into a memorandum of understanding to develop a program for the authority to accept a transfer of funds from the department pursuant to Subsection A of this section, to provide recovery grants to recovery entities, to accept and review applications for recovery grants and to disburse recovery grants to recovery entities. The authority shall require documentation from applicants of employment levels and rent, lease and mortgage payments for taxable year 2020 and subsequent taxable years in which a recovery entity applies for a recovery grant. The authority shall prioritize funding to applicants that had the greatest decline in business revenues between comparable quarters in taxable year 2019 to taxable year 2020. The department shall provide oversight of the program and may set policies and promulgate rules in accordance with this section. The authority may designate one or more application periods and shall review applications received in each period and provide a determination to the applicant within a reasonable amount of time after review. The first application period shall accept applications no later than June 30, 2021, and the last application period shall accept applications no later than December 31, 2021; provided that an application period for funds set aside pursuant to Subsection E of this section shall accept applications no later than June 30, 2022. The authority shall prioritize funding to applicants that had the greatest decline in business revenues between comparable quarters in taxable year 2019 to taxable year 2020.
C. To receive a recovery grant, a recovery entity shall agree to:
(1) use the proceeds of the recovery grant for reimbursement of rent, lease or mortgage obligations of the recovery entity for its business locations within the state of New Mexico;
(2) provide a written certification signed by an appropriate officer of the recovery entity that certifies that:
(a) the officer understands that, pursuant to the Local Economic Development Act, the recovery grant shall be accompanied by new job creation in accordance with department rules and policies and the terms of the agreement issued by the authority to the recovery entity in advance of disbursement of the recovery grant;
(b) all documents submitted in support of the recovery grant application are true and accurate to the best of the officer's knowledge;
(c) the officer has a reasonable basis to believe that, as of the date of a recovery grant application and receipt of any recovery grant, the recovery entity does not expect to permanently cease business operations or file for bankruptcy;
(d) as of the date of a recovery grant application and of receipt of a recovery grant, the recovery entity is current on all obligations pursuant to the Income Tax Act, the Corporate Income and Franchise Tax Act, the Withholding Tax Act, the [Gross Receipts and Compensating] Sales and Use Tax Act and the Unemployment Compensation Law applicable to the recovery entity's business operations; and
(e) all recovery grant proceeds will be used for the purpose of payment of rent, lease or mortgage payments of the recovery entity pursuant to the Local Economic Development Act;
(3) provide documentation to the authority demonstrating a decline in business revenues between taxable years 2019 and 2020;
(4) upon request, provide the department and the authority with information relevant to the reporting requirements of the department and the authority pursuant to Subsection H of this section; and
(5) submit an application to the authority for a recovery grant pursuant to rules established by the authority, but no later than June 30, 2022.
D. Up to one hundred thousand dollars ($100,000) in a recovery grant may be provided to each recovery entity in quarterly payments in an amount of up to twenty-five percent of the total amount of the recovery grant awarded to the recovery entity. The department shall promulgate rules to determine the amount of a recovery grant; provided that, for each quarterly payment a recovery entity may be awarded a specified amount for each job created depending on the wages provided and the relative decline in business revenues for taxable year 2020, not to exceed a total of twenty-five thousand dollars ($25,000) per quarter. To remain eligible for additional quarterly payments, a recovery entity shall provide documentation to the department and to the authority demonstrating the following:
(1) the recovery entity remains active and open and can demonstrate a net increase in the number of full-time-equivalent employees relative to the immediately preceding quarter, as submitted quarterly to the workforce solutions department from the date of application to the date of receipt of a recovery grant payment;
(2) the recovery entity is current on state and local tax obligations; and
(3) the recovery entity paid rent, lease or mortgage obligations of the recovery entity for its business locations within the state of New Mexico from the date of application to the present request for a subsequent quarterly payment that exceeds all payments to the recovery entity to date pursuant to this section.
E. If, on the effective date of this section, there remains in effect a public health order that requires businesses to remain closed, the department and the authority shall set aside a portion of the funds available for recovery grants until such time as the public health order ceases to be in effect or is changed to permit all businesses subject to the public health order to be open. The portion set aside shall be estimated, at the discretion of the department and the authority, to represent the number of recovery entities and employees impacted by the public health order, but in no case shall exceed twenty percent of the total funds appropriated pursuant to Laws 2021, Chapter 3, Section 11 [of this 2021 act].
F. If a recovery entity loses eligibility in a quarter, the authority shall set aside funds for the recovery entity to access should the recovery entity become eligible again in a succeeding quarter.
G. Information obtained by the department and the authority regarding individual recovery entity grant applicants shall be confidential and not subject to inspection pursuant to the Inspection of Public Records Act; provided that nothing in this section shall prevent the department and the authority from disclosing broad demographic information and information relating to the total amount of recovery grants made, the total outstanding balance of recovery grants made and the names of the recovery entities that received recovery grants.
H. The department and the authority shall submit an annual report in each year of 2021 through 2023 to the legislature, the legislative finance committee, the New Mexico finance authority oversight committee, the revenue stabilization and tax policy committee and the interim legislative committee concerning economic and rural development. The report shall provide information regarding recovery grants made pursuant to this section. The report shall include:
(1) the total dollar value of recovery grants made to date, along with breakouts of disbursements by quarterly payment number;
(2) the number of recovery entities assisted, in total and by county;
(3) the total number of new jobs created and the total number of employees currently employed by recovery entities that received grants;
(4) the total projected annual payroll for the jobs created;
(5) the total number of recovery grant applications;
(6) the number of recovery entities, if any, that received initial payments but were determined to be ineligible for additional quarterly payments; and
(7) an overview of the industries and types of business entities represented by recovery entities that received recovery grants.
I. As used in this section:
(1) "authority" means the New Mexico finance authority;
(2) "recovery entity" means a corporation, limited liability company, partnership, joint venture, syndicate, association or other person that:
(a) is a business operating in New Mexico with one or more employees but with fewer than seventy-five people employed at any of the business's business locations;
(b) is current on all state or local tax obligations; and
(c) experienced a decline in business revenue between one or more comparable quarters in taxable years 2019 and 2020, as determined by the economic development department and the authority based on documentation provided by the business;
(3) "recovery grant" means a grant disbursed to a recovery entity by the authority from funds provided by the department for the purpose of reimbursement of rent, lease or mortgage payments of the recovery entity pursuant to the Local Economic Development Act; and
(4) "taxable year" means "taxable year" as that term is used in the Income Tax Act or the Corporate Income and Franchise Tax Act, as applicable to a recovery entity."
SECTION 23. Section 5-10-17 NMSA 1978 (being Laws 2021 (1st S.S.), Chapter 2, Section 2) is amended to read:
"5-10-17. [GROSS RECEIPTS] SALES TAX AND [COMPENSATING] USE TAX REVENUE AS PUBLIC SUPPORT FOR CERTAIN PROJECTS.--
A. A qualifying entity that meets the following requirements may receive public support for the qualifying entity's economic development project from funds in the Local Economic Development Act fund pursuant to Subsection B of Section 5-10-14 NMSA 1978 in an amount equal to fifty percent of the net receipts attributable to the state [gross receipts] sales tax and state [compensating] use tax imposed on the expenses related to the construction of the qualifying entity's project, as determined by the department, related to the economic development project and the amount dedicated pursuant to Subsection B of this section; provided that the public support shall be provided for a period of no more than ten years, beginning on the date the applicable project participation agreement with the qualifying entity is executed:
(1) the qualifying entity signs a project participation agreement with the governing body of each local government that has jurisdiction of the area in which the qualifying entity's economic development project is located and the local government has passed an ordinance dedicating local government [gross receipts] sales tax revenue pursuant to Subsection B of this section;
(2) the qualifying entity signs a project participation agreement with the department; provided that the department shall not sign the agreement unless the applicable local governments have signed a project participation agreement pursuant to Paragraph (1) of this subsection; and provided further that the project participation agreement shall provide that if, at the end of the ten-year period, the economic development project fails to meet the three-hundred-fifty-million-dollar ($350,000,000) requirement pursuant to Paragraph (3) of this subsection, the department shall seek to recover some or all of the public support provided to the qualifying entity and shall transfer any amount recovered to the general fund and to the contributing local government based on each entity's pro rata share of public support to the economic development project;
(3) the economic development project has a reasonable expectation to incur, within ten years of the date the project participation agreement with the local government and the department is executed, at least three hundred fifty million dollars ($350,000,000) in expenses related to the construction and infrastructure of the project in the state;
(4) the qualifying entity and the economic development project meet all other requirements to receive public support pursuant to the Local Economic Development Act; and
(5) prior to the end of each month, the qualifying entity submits the appropriate documents, including tax documents of the qualifying entity and its contractors submitted to the taxation and revenue department, to the department and to the local governments with which the qualifying entity signed a project participation agreement, on forms and in a manner determined by the department, of the taxable expenses related to the construction of the economic development project for the previous month.
B. A local government may dedicate, by ordinance, fifty percent of the tax revenue attributable to the [gross receipts] sales and [compensating] use taxes imposed by the local government on the qualifying entity's receipts for expenses related to the construction of the economic development project to the Local Economic Development Act fund for the purposes provided in Subsection B of Section 5-10-14 NMSA 1978.
C. Within thirty days after execution of a project participation agreement with a qualifying entity, the department shall issue a report to the department of finance and administration and the legislative finance committee that shall identify the qualifying entity intended to receive public support pursuant to this section, the estimated expenses related to the construction of the qualifying entity's project as determined by the department, the location of the project, the amount of public support pledged by the department and each local government for the project pursuant to this section and the amount of any other public support pledged for the project pursuant to the Local Economic Development Act.
D. As soon as practicable, the taxation and revenue department shall implement a rate type to identify [gross receipts] sales and [compensating] use taxes reported and paid to the taxation and revenue department for expenses related to the construction of an economic development project. Once implemented, all such [gross receipts] sales and [compensating] use taxes shall be reported and paid with that rate type.
E. If the taxation and revenue department has not implemented the rate type provided in Subsection D of this section, and if the requirements of Subsection A of this section have been met, the economic development department and the local governments that signed a project participation agreement with the qualifying entity shall:
(1) review the documents submitted by a qualifying entity pursuant to Paragraph (5) of Subsection A of this section;
(2) estimate the amount equal to fifty percent of the tax revenue attributable to the [gross receipts] sales tax and [compensating] use tax imposed on the taxable expenses related to the construction of the economic development project appropriate to:
(a) the local government's [gross receipts] sales and [compensating] use taxes if a local government; and
(b) the state [gross receipts] sales and [compensating] use taxes if the department;
(3) if a local government, on the first business day of each month, submit the estimated amount and the supporting documents to the department; and
(4) if the department, on or before the twenty-fifth day of December, March, June and September, provide the estimates and any supporting documentation to the taxation and revenue department, on forms and in a manner determined by that department.
F. The taxation and revenue department shall review the amounts estimated pursuant to Subsection E of this section for accuracy and computation, make any necessary corrections or adjustments and make a final determination of the amounts to be distributed from the relevant tax revenue pursuant to Section [5 of this 2021 act] 7-1-6.67 NMSA 1978."
SECTION 24. Section 5-15-3 NMSA 1978 (being Laws 2006, Chapter 75, Section 3, as amended by Laws 2019, Chapter 212, Section 199 and also by Laws 2019, Chapter 275, Section 1) is amended to read:
"5-15-3. DEFINITIONS.--As used in the Tax Increment for Development Act:
[A. "base gross receipts taxes" means:
(1) the total amount of gross receipts taxes collected within a tax increment development district, as estimated by the governing body that adopted a resolution to form that district, in consultation with the taxation and revenue department, in the calendar year preceding the formation of the tax increment development district or, when an area is added to an existing district, the amount of gross receipts taxes collected in the calendar year preceding the effective date of the modification of the tax increment development plan and designated by the governing body to be available as part of the gross receipts tax increment; and
(2) any amount of gross receipts taxes that would have been collected in such year if any applicable additional gross receipts taxes imposed after that year had been imposed in that year;
B.] A. "base property taxes" means:
(1) the portion of property taxes produced by the total of all property tax levied at the rate fixed each year by each governing body levying a property tax on the assessed value of taxable property within the tax increment development area last certified for the year ending immediately prior to the year in which a tax increment development plan is approved for the tax increment development area, or, when an area is added to an existing tax increment development area, "base property taxes" means that portion of property taxes produced by the total of all property tax levied at the rate fixed each year by each governing body levying a property tax upon the assessed value of taxable property within the tax increment development area on the date of the modification of the tax increment development plan and designated by the governing body to be available as part of the property tax increment; and
(2) any amount of property taxes that would have been collected in such year if any applicable additional property taxes imposed after that year had been imposed in that year;
B. "base sales taxes" means:
(1) the total amount of sales taxes collected within a tax increment development district, as estimated by the governing body that adopted a resolution to form that district, in consultation with the taxation and revenue department, in the calendar year preceding the formation of the tax increment development district or, when an area is added to an existing district, the amount of sales taxes collected in the calendar year preceding the effective date of the modification of the tax increment development plan and designated by the governing body to be available as part of the sales tax increment; and
(2) any amount of sales taxes that would have been collected in such year if any applicable additional sales taxes imposed after that year had been imposed in that year;
C. "county option [gross receipts] sales taxes" means [gross receipts] sales taxes imposed by counties pursuant to the County Local Option [Gross Receipts] Sales and Use Taxes Act and designated by the governing body of the county to be available as part of the [gross receipts] sales tax increment;
D. "district" means a tax increment development district;
E. "district board" means a board formed in accordance with the provisions of the Tax Increment for Development Act to govern a tax increment development district;
F. "enhanced services" means public services provided by a municipality or county within the district at a higher level or to a greater degree than otherwise available to the land located in the district from the municipality or county, including such services as public safety, fire protection, street or sidewalk cleaning or landscape maintenance in public areas; provided that "enhanced services" does not include the basic operation and maintenance related to infrastructure improvements financed by the district pursuant to the Tax Increment for Development Act;
G. "governing body" means the city council or city commission of a city, the board of trustees or council of a town or village or the board of county commissioners of a county;
[H. "gross receipts tax increment" means the gross receipts taxes collected within a tax increment development district in excess of the base gross receipts taxes collected in the district;
I. "gross receipts tax increment bonds" means bonds issued by a district in accordance with the Tax Increment for Development Act, the pledged revenue for which is a gross receipts tax increment;
J.] H. "local government" means a municipality or county;
[K.] I. "municipal option [gross receipts] sales taxes" means those [gross receipts] sales taxes imposed by municipalities pursuant to the Municipal Local Option [Gross Receipts] Sales and Use Taxes Act and designated by the governing body of the municipality to be available as part of the [gross receipts] sales tax increment;
[L.] J. "municipality" means an incorporated city, town or village;
[M.] K. "new full-time economic base job" means a job:
(1) that is primarily performed in New Mexico;
(2) that is held by an employee who is hired to work an average of at least thirty-two hours per week for at least forty-eight weeks per year;
(3) that is:
(a) involved, directly or in a supervisory capacity, with the production of: 1) a service; provided that the majority of the revenue generated from the service is from sources outside the state; or 2) tangible or intangible personal property for sale; or
(b) held by an employee that is employed at a regional, national or international headquarters operation or at an operation that primarily provides services for other operations of the qualifying entity that are located outside the state; and
(4) that is not directly involved with natural resources extraction or processing, on-site services where the customer is present for the delivery of the service, retail, construction or agriculture except for value-added processing performed on agricultural products that would then be sold for wholesale or retail consumption;
[N.] L. "owner" means a person owning real property within the boundaries of a district;
[O.] M. "person" means an individual, corporation, association, partnership, limited liability company or other legal entity;
[P.] N. "project" means a tax increment development project;
[Q.] O. "property tax increment" means all property tax collected on real property within the designated tax increment development area that is in excess of the base property tax until termination of the district and distributed to the district in the same manner as distributions are made under the provisions of the Tax Administration Act;
[R.] P. "property tax increment bonds" means bonds issued by a district in accordance with the Tax Increment for Development Act, the pledged revenue for which is a property tax increment;
[S.] Q. "public improvements" means on-site improvements and off-site improvements that directly or indirectly benefit a tax increment development district or facilitate development within a tax increment development area and that are dedicated to the governing body in which the district lies. "Public improvements" includes:
(1) sanitary sewage systems, including collection, transport, treatment, dispersal, effluent use and discharge;
(2) drainage and flood control systems, including collection, transport, storage, treatment, dispersal, effluent use and discharge;
(3) water systems for domestic, commercial, office, hotel or motel, industrial, irrigation, municipal or fire protection purposes, including production, collection, storage, treatment, transport, delivery, connection and dispersal;
(4) highways, streets, roadways, bridges, crossing structures and parking facilities, including all areas for vehicular use for travel, ingress, egress and parking;
(5) trails and areas for pedestrian, equestrian, bicycle or other non-motor vehicle use for travel, ingress, egress and parking;
(6) pedestrian and transit facilities, parks, recreational facilities and open space areas for the use of members of the public for entertainment, assembly and recreation;
(7) landscaping, including earthworks, structures, plants, trees and related water delivery systems;
(8) public buildings, public safety facilities and fire protection and police facilities;
(9) electrical generation, transmission and distribution facilities;
(10) natural gas distribution facilities;
(11) lighting systems;
(12) cable or other telecommunications lines and related equipment;
(13) traffic control systems and devices, including signals, controls, markings and signage;
(14) school sites and facilities with the consent of the governing board of the public school district for which the facility is to be acquired, constructed or renovated;
(15) library and other public educational or cultural facilities;
(16) equipment, vehicles, furnishings and other personal property related to the items listed in this subsection;
(17) inspection, construction management, planning and program management and other professional services costs incidental to the project;
(18) workforce housing; and
(19) any other improvement that the governing body determines to be for the use or benefit of the public;
R. "sales tax increment" means the sales taxes collected within a tax increment development district in excess of the base sales taxes collected in the district;
S. "sales tax increment bonds" means bonds issued by a district in accordance with the Tax Increment for Development Act, the pledged revenue for which is a sales tax increment;
T. "state [gross receipts] sales tax" means the [gross receipts] sales tax imposed pursuant to the [Gross Receipts and Compensating] Sales and Use Tax Act, but does not include that portion distributed to municipalities pursuant to Sections 7-1-6.4 and 7-1-6.46 NMSA 1978 or to counties pursuant to Section 7-1-6.47 NMSA 1978;
U. "sustainable development" means land development that achieves sustainable economic and social goals in ways that can be supported for the long term by conserving resources, protecting the environment and ensuring human health and welfare using mixed-use, pedestrian-oriented, multimodal land use planning;
V. "tax increment development area" means the land included within the boundaries of a tax increment development district;
W. "tax increment development district" means a district formed for the purposes of carrying out tax increment development projects;
X. "tax increment development plan" means a plan for the undertaking of a tax increment development project;
Y. "tax increment development project" means activities undertaken within a tax increment development area to enhance the sustainability of the local, regional or statewide economy; to support the creation of jobs, schools and workforce housing; and to generate tax revenue for the provision of public improvements and may include:
(1) acquisition of land within a designated tax increment development area or a portion of that tax increment development area;
(2) demolition and removal of buildings and improvements and installation, construction or reconstruction of streets, utilities, parks, playgrounds and improvements necessary to carry out the objectives of the Tax Increment for Development Act;
(3) installation, construction or reconstruction of streets, water utilities, sewer utilities, parks, playgrounds and other public improvements necessary to carry out the objectives of the Tax Increment for Development Act;
(4) disposition of property acquired or held by a tax increment development district as part of the undertaking of a tax increment development project at the fair market value of such property for uses in accordance with the Tax Increment for Development Act;
(5) payments for professional services contracts necessary to implement a tax increment development plan or project;
(6) borrowing to purchase land, buildings or infrastructure in an amount not to exceed the revenue stream that may be derived from the [gross receipts] sales tax increment or the property tax increment estimated to be received by a tax increment development district; and
(7) grants for public improvements essential to the location or expansion of a business;
Z. "taxing entity" means the governing body of a political subdivision of the state, the [gross receipts] sales tax increment or property tax increment of which may be used for a tax increment development project; and
AA. "workforce housing" means decent, safe and sanitary dwellings, apartments, single-family dwellings or other living accommodations that are affordable for persons or families earning less than eighty percent of the median income within the county in which the tax increment development project is located; provided that an owner-occupied housing unit is affordable to a household if the expected sales price is reasonably anticipated to result in monthly housing costs that do not exceed thirty-three percent of the household's gross monthly income; provided that:
(1) determination of mortgage amounts and payments is to be based on down payment rates and interest rates generally available to lower- and moderate-income households; and
(2) a renter-occupied housing unit is affordable to a household if the unit's monthly housing costs, including rent and basic utility and energy costs, do not exceed thirty-three percent of the household's gross monthly income."
SECTION 25. Section 5-15-4 NMSA 1978 (being Laws 2006, Chapter 75, Section 4, as amended) is amended to read:
"5-15-4. RESOLUTION FOR FORMATION OF A DISTRICT.--
A. A tax increment development plan may be approved by the governing body of the municipality or county within which tax increment development projects are proposed. Upon filing with the clerk of the governing body of an approved tax increment development plan and upon receipt of a petition bearing the signatures of the owners of at least fifty percent of the real property located within a proposed tax increment development area, the governing body may adopt a resolution declaring its intent to form a tax increment development district. Prior to the formation of a district, the owner or developer of the real property located within an area proposed to be designated as a tax increment development area may enter into an agreement with the governing body concerning the improvement of specific property within the district, and that agreement may be used to establish obligations of the owner or developer and the governing body concerning the zoning, subdivision, improvement, impact fees, financial responsibilities and other matters relating to the development, improvement and use of real property within the district.
B. A governing body may adopt a resolution on its own motion upon its finding that a need exists for the formation of a district.
C. The resolution to form a district shall include:
(1) the area or areas to be included within the boundaries of the district;
(2) the purposes for which the district is to be formed;
(3) a statement that a tax increment development plan is on file with the clerk of the governing body and that the plan includes a map depicting the boundaries of the tax increment development area and the real property proposed to be included in the area;
(4) the rate of any proposed property tax levy;
(5) identification of [gross receipts] sales tax increment and property tax increment financing mechanisms proposed;
(6) identification of [gross receipts] sales tax increments and property tax increments proposed to secure proposed [gross receipts] sales tax increment bonds or property tax increment bonds;
(7) requirement of a public hearing for the formation of the district and notice of the hearing;
(8) a statement that formation of a district may result in the use of [gross receipts] sales tax increments or property tax increments to pay the costs of construction of public improvements made by the district; and
(9) a reference to the Tax Increment for Development Act.
D. A resolution may direct that, prior to holding a hearing on formation of a district, petitioners for the formation of a district prepare a study of the feasibility, the financing and the estimated costs of improvements, services and benefits to result from the formation of the proposed district. The governing body may require those petitioners to deposit with the clerk or treasurer of the governing body an amount equal to the estimated costs of conducting the study and other estimated formation costs. The deposit shall be reimbursed from the proceeds from the sale of bonds issued by the tax increment development district if the district is formed and if [gross receipts] sales tax increment bonds or property tax increment bonds are issued by that district pursuant to the Tax Increment for Development Act.
E. A resolution adopted pursuant to this section shall direct that a public hearing on formation of the district be scheduled and that notice of the hearing be mailed and published.
F. A governing body of the municipality or county within which tax increment development projects are proposed that adopts a resolution to form a district shall notify the secretary of taxation and revenue, the secretary of finance and administration and the director of the legislative finance committee of the governing body's action within ten days following the date on which the resolution was adopted. A copy of the adopted resolution shall be included in the notice sent pursuant to this subsection. All resolution materials, including fiscal and economic studies, shall also be available electronically to the public."
SECTION 26. Section 5-15-5 NMSA 1978 (being Laws 2006, Chapter 75, Section 5) is amended to read:
"5-15-5. CONTENTS OF TAX INCREMENT DEVELOPMENT PLAN.--A tax increment development plan shall include:
A. a map depicting the geographical boundaries of the area proposed for inclusion within the tax increment development area;
B. the estimated time necessary to complete the tax increment development project;
C. a description and the estimated cost of all public improvements proposed for the tax increment development project;
D. whether it is proposed to use [gross receipts] sales tax increment bonds or property tax increment bonds or both to finance all or part of the public improvements;
E. the estimated annual [gross receipts] sales tax increment to be generated by the tax increment development project and the portion of that [gross receipts] sales tax increment to be allocated during the time necessary to complete the payment of the tax increment development project;
F. the estimated annual property tax increment to be generated by the tax increment development project and the portion of that property tax increment to be allocated during the time necessary to complete the payment of the tax increment development project;
G. the general proposed land uses for the tax increment development project;
H. the number and types of jobs expected to be created by the tax increment development project;
I. the amount and characteristics of workforce housing expected to be created by the tax increment development project;
J. the location and characteristics of public school facilities expected to be created, improved, rehabilitated or constructed by the tax increment development project;
K. a description of innovative planning techniques, including mixed-use transit-oriented development, traditional neighborhood design or sustainable development techniques, that are deemed by the governing body to be beneficial and that will be incorporated into the tax increment development project; and
L. the amount and type of private investment in each tax increment development project."
SECTION 27. Section 5-15-12 NMSA 1978 (being Laws 2006, Chapter 75, Section 12) is amended to read:
"5-15-12. DISTRICT POWERS--LIMITATIONS.--
A. In addition to other express or implied authority granted by law, a district shall have the power to:
(1) enter into contracts or expend money for any public purpose with respect to the district;
(2) enter into agreements with a municipality, county or other local government entity in connection with real property located within the district;
(3) enter into an intergovernmental agreement in accordance with the Joint Powers Agreements Act for the planning, design, inspection, ownership, control, maintenance, operation or repair of public infrastructure or the provision of enhanced services by the municipality or county in which the district lies or for any other purpose authorized by the Tax Increment for Development Act;
(4) sell, lease or otherwise dispose of district property if the sale, lease or conveyance is not a violation of the terms of any contract or bond covenant of the district;
(5) reimburse a municipality or county in which the tax increment development district is located for providing services within the tax increment development area;
(6) operate, maintain and repair public infrastructure until dedicated to the governing body;
(7) employ staff, counsel, advisors and consultants;
(8) reimburse a municipality or county in which the district is located for staff and consultant services and support facilities supplied by the municipality or county;
(9) accept gifts or grants and incur and repay loans for a public purpose;
(10) enter into an agreement with an owner concerning the advance of money by an owner for a public purpose or the granting of real property by the owner for a public purpose;
(11) levy property taxes in accordance with election requirements of the Tax Increment for Development Act for a public purpose on real property located in the district;
(12) pay the financial, legal and administrative costs of the district;
(13) enter into contracts, agreements and trust indentures to obtain credit enhancement or liquidity support for its bonds and process the issuance, registration, transfer and payment of its bonds and the disbursement and investment of proceeds of the bonds in accordance with the provisions for investment of funds by municipal treasurers;
(14) borrow money within the limits of the Tax Increment for Development Act to fund the construction, operation and maintenance of public improvements until dedicated to the governing body or for any other lawful public purposes related to the purposes of the Tax Increment for Development Act; and
(15) use public easements and rights of way in or across public property, roadways, highways, streets or other thoroughfares and other public easements and rights of way of the district, municipality or county.
B. Notwithstanding the provisions of the Procurement Code or local procurement requirements that may otherwise be applicable to the municipality or county in which the district is located, the district board may enter into contracts to carry out any of the tax increment development district's authorized powers, including the planning, design, engineering, financing, construction and acquisition of public improvements for the district, with a contractor, an owner or other person or entity, on such terms and with such persons as the district board determines to be appropriate.
C. A district shall not have the power of eminent domain for any purpose.
D. A casino shall not be located in a district, and a district shall not use the proceeds of property tax increment bonds or [gross receipts] sales tax increment bonds to finance public improvements for a casino."
SECTION 28. Section 5-15-15 NMSA 1978 (being Laws 2006, Chapter 75, Section 15, as amended by Laws 2019, Chapter 274, Section 8 and by Laws 2019, Chapter 275, Section 2) is amended to read:
"5-15-15. TAX INCREMENT FINANCING--[GROSS RECEIPTS] SALES TAX INCREMENT TO SECURE BONDS.--
A. A tax increment development plan, as originally approved or as later modified, may contain a provision that [gross receipts] sales tax increments collected within the tax increment development area after the effective date of approval of the tax increment development plan may be dedicated for the purpose of securing [gross receipts] sales tax increment bonds pursuant to the Tax Increment for Development Act.
B. A municipality may dedicate a portion of [a gross receipts tax increment from] any of the following [taxes] to pay the principal of, the interest on and any premium due in connection with the bonds of, loans or advances to, or any indebtedness incurred by, whether funded, refunded, assumed or otherwise, the authority for financing or refinancing, in whole or in part, a tax increment development project within the tax increment development area:
(1) an increment of a municipal option [gross receipts] sales tax that is dedicated by the ordinance imposing the increment to the tax increment development project; and
(2) an amount distributed to municipalities pursuant to Sections 7-1-6.4 and 7-1-6.46 NMSA 1978.
C. A county may dedicate a portion of [a gross receipts tax increment from] any of the following [taxes] to pay the principal of, the interest on and any premium due in connection with the bonds of, loans or advances to or any indebtedness incurred by, whether funded, refunded, assumed or otherwise, the district for financing or refinancing, in whole or in part, a tax increment development project within the tax increment development area:
(1) an increment of a county option [gross receipts] sales tax that is dedicated by the ordinance imposing the increment to the tax increment development project; and
(2) the amount distributed to counties pursuant to Section 7-1-6.47 NMSA 1978.
D. Subject to the provisions of Subsection G of this section, the state board of finance may dedicate a [gross receipts] sales tax increment attributable to the state [gross receipts] sales tax to pay the financing and refinancing costs, the principal of, the interest on and any premium due in connection with [gross receipts] sales tax increment bonds issued to finance a tax increment development project within the tax increment development area; provided that:
(1) beginning July 1, 2029 the increment from the state [gross receipts] sales tax is no more than the average of:
(a) the increment from municipal option [gross receipts] sales taxes dedicated by resolution by the municipality, if the district is located in a municipality; and
(b) the increment from county option [gross receipts] sales taxes dedicated by resolution by the county;
(2) the state board of finance has adopted a resolution dedicating an increment attributable to the state [gross receipts] sales tax for the purpose of securing [gross receipts] sales tax increment bonds pursuant to Subsection G of this section; and
(3) the dedication shall be conditioned on the [gross receipts] sales tax increment bonds being issued no later than four years after the state board of finance has adopted the resolution dedicating the increment.
E. The [gross receipts] sales tax increment generated by the imposition of municipal or county option [gross receipts] sales taxes specified by statute for particular purposes may nonetheless be dedicated for the purposes of the Tax Increment for Development Act if intent to do so is set forth in the tax increment development plan approved by the governing body, if the purpose for which the increment is intended to be used is consistent with the purposes set forth in the statute authorizing the municipal or county option [gross receipts] sales tax.
F. An imposition of a [gross receipts] sales tax increment attributable to a [gross receipts] sales tax by a taxing entity may be dedicated for the purpose of securing [gross receipts] sales tax increment bonds with the agreement of the taxing entity, evidenced by a resolution adopted by a majority vote of that taxing entity. A taxing entity shall not agree to dedicate for the purposes of securing [gross receipts] sales tax increment bonds more than seventy-five percent of its [gross receipts] sales tax increment attributable to [gross receipts] sales taxes by the taxing entity. A resolution of the taxing entity to dedicate a [gross receipts] sales tax increment or to increase the dedication of a [gross receipts] sales tax increment shall become effective only on January 1 or July 1 of the calendar year.
G. The state board of finance shall condition a dedication of a [gross receipts] sales tax increment attributable to the state [gross receipts] sales tax on the approval required pursuant to Section 5-15-21 NMSA 1978 and that the initial [gross receipts] sales tax increment bonds issuance secured by a portion of the [gross receipts] sales tax increment attributable to the state [gross receipts] sales tax shall be issued no later than four years after the state board of finance has adopted the resolution making the dedication. Subject to the limitations provided in Subsection D of this section, the state board of finance shall not agree to dedicate more than seventy-five percent of the [gross receipts] sales tax increment attributable to the state [gross receipts] sales tax within the district. The resolution of the state board of finance shall become effective on January 1 or July 1 of the calendar year following the notification period pursuant to Section 5-15-27 NMSA 1978 and shall find that:
(1) the state board of finance has reviewed the request for the use of the state [gross receipts] sales tax;
(2) based upon review by the state board of finance of the applicable tax increment development plan, the dedication by the state board of finance of a portion of the [gross receipts] sales tax increment within the district for use in meeting the required goals of the tax increment plan is reasonable and in the best interest of the state; and
(3) based upon the review by the state board of finance, the use of the state [gross receipts] sales tax is likely to stimulate the creation of jobs, economic opportunities and general revenue for the state through the addition of new businesses to the state and the expansion of existing businesses within the state; provided that, when reviewing the applicable tax increment development plan to create jobs and economic opportunities, the state board of finance shall prioritize in its consideration net, new full-time economic base jobs that would not have occurred on a similar scale and time line but for the use of the state [gross receipts] sales tax increment. The benefit to be evaluated is the marginal benefit of the speed-up in time or the incremental change in job creation above expected normal growth and shall exclude retail jobs, call center jobs and service jobs where the customer is typically on site.
H. The governing body of the jurisdiction in which a tax increment development district has been established shall timely notify the assessor of the county in which the district has been established, the taxation and revenue department and the local government division of the department of finance and administration when:
(1) a tax increment development plan has been approved that contains a provision for the allocation of a [gross receipts] sales tax increment;
(2) any outstanding bonds of the district have been paid off; and
(3) the purposes of the district have otherwise been achieved."
SECTION 29. Section 5-15-15.1 NMSA 1978 (being Laws 2019, Chapter 275, Section 3) is amended to read:
"5-15-15.1. FILING FEE FOR EVALUATING USE OF STATE [GROSS RECEIPTS] SALES TAX INCREMENT.--Prior to approval of a dedication of a [gross receipts] sales tax increment attributable to the state [gross receipts] sales tax by the state board of finance pursuant to Section 5-15-15 NMSA 1978, a tax increment development district shall submit a filing fee to the state board of finance to pay the reasonable costs, as determined by the department of finance and administration, of evaluating the tax increment development plan and the district's requested use of a state [gross receipts] sales tax increment."
SECTION 30. Section 5-15-16 NMSA 1978 (being Laws 2006, Chapter 75, Section 16, as amended) is amended to read:
"5-15-16. BONDING AUTHORITY--[GROSS RECEIPTS] SALES TAX INCREMENT.--
A. A district may issue [gross receipts] sales tax increment revenue bonds, the pledged revenue for which is a [gross receipts] sales tax increment dedicated in accordance with the provisions of the Tax Increment for Development Act, for any one or more of the purposes authorized by that act.
B. A district may pledge irrevocably the revenue from a [gross receipts] sales tax increment received by the district to the payment of the interest on and principal of the [gross receipts] sales tax increment bonds for any of the purposes authorized in the Tax Increment for Development Act. A law that imposes or authorizes the imposition of a municipal or county [gross receipts] sales tax or that affects the municipal or county [gross receipts] sales tax shall not be repealed, amended or otherwise directly or indirectly modified in any manner to adversely impair any outstanding [gross receipts] sales tax increment bonds that may be secured by a pledge of any municipal or county option [gross receipts] sales tax increment, unless those outstanding bonds have been discharged in full or provision has been fully made for those bonds.
C. Revenues in excess of the annual principal and interest due on [gross receipts] sales tax increment bonds secured by a pledge of [gross receipts] sales tax increment revenue may be accumulated in a debt service reserve account. The district may appoint a commercial bank trust department to act as paying agent or trustee of the [gross receipts] sales tax increment revenue and to administer the payment of principal of and interest on the bonds.
D. Except as otherwise provided in the Tax Increment for Development Act, [gross receipts] sales tax increment bonds:
(1) may have interest, principal value or any part thereof payable at intervals or at maturity as may be determined by the governing body;
(2) may be subject to a prior redemption at the district's option at a time and upon terms and conditions, with or without the payment of a premium, as determined by the district board;
(3) may mature at any time not exceeding twenty-five years after the date of issuance;
(4) may be serial in form and maturity, may consist of one bond payable at one time or in installments or may be in another form determined by the district board;
(5) shall be sold for cash at, above or below par and at a price that results in a net effective interest rate that does not exceed the maximum permitted by the Public Securities Act and the Public Securities Short-Term Interest Rate Act; and
(6) may be sold at public or negotiated sale.
E. At a regular or special meeting, the district board may adopt a resolution that:
(1) declares the necessity for issuing [gross receipts] sales tax increment bonds;
(2) authorizes the issuance of [gross receipts] sales tax increment bonds by an affirmative vote of a majority of all the members of the district board; and
(3) designates the sources of [gross receipts] sales increments thereof to be pledged to the repayment of the [gross receipts] sales tax increment bonds."
SECTION 31. Section 5-15-20 NMSA 1978 (being Laws 2006, Chapter 75, Section 20, as amended) is amended to read:
"5-15-20. GENERAL BONDING AUTHORITY OF A TAX INCREMENT DEVELOPMENT DISTRICT--OTHER LIMITATIONS.--
A. A district board shall not issue bonds against [gross receipts] sales tax increments attributable to:
(1) the state [gross receipts] sales tax without:
(a) the state board of finance adopting a resolution dedicating a [gross receipts] sales tax increment attributable to the state [gross receipts] sales tax for the purpose of securing the [gross receipts] sales tax increment bonds pursuant to Subsection G of Section 5-15-15 NMSA 1978; and
(b) the approval required by Section 5-15-21 NMSA 1978; and
(2) a [gross receipts] sales tax imposed by a taxing entity without the agreement of the taxing entity as evidenced by a resolution adopted pursuant to Subsection B or C of Section 5-15-15 NMSA 1978.
B. Except as otherwise provided in this section, a district board shall not issue bonds against either [gross receipts] sales tax increments or property tax increments without the express written authorization of the department of finance and administration, as evidenced by a letter signed by the secretary of finance and administration. A district formed and approved by a class A county or by a municipality within a class A county if the municipality has a population of more than sixty-five thousand persons, according to the most recent federal decennial census, is not required to obtain express written authorization of the department of finance and administration for the issuance of [gross receipts] sales tax increment bonds or property tax increment bonds.
C. Prior to the issuance of indebtedness evidenced by the [gross receipts] sales tax increment bonds or property tax increment bonds issued by a district pursuant to the Tax Increment for Development Act, the property owners within the district shall contribute a minimum of twenty percent of the initial public infrastructure costs, which may be reimbursed with proceeds of [gross receipts] sales tax increment or property tax increment bonds; unless the project to be financed with [gross receipts] sales tax increment bonds or property tax increment bonds is a metropolitan redevelopment project pursuant to the Metropolitan Redevelopment Code.
D. The amount of indebtedness evidenced by the [gross receipts] sales tax increment bonds or property tax increment bonds issued pursuant to the Tax Increment for Development Act shall not exceed the estimated cost of the public improvements plus all costs connected with the public infrastructure purposes and the issuance and sale of bonds, including, without limitation, formation costs, credit enhancement and liquidity support fees and costs.
E. The indebtedness evidenced by the [gross receipts] sales tax increment bonds or property tax increment bonds shall not affect the general obligation bonding capacity of the municipality or county in which the tax increment development district is located.
F. The indebtedness evidenced by the [gross receipts] sales tax increment bonds or property tax increment bonds shall be payable only from the special funds into which are deposited the [gross receipts] sales tax increments and property tax increments as set forth in the Tax Increment for Development Act.
G. Bonds issued by a tax increment development district shall not be a general obligation of the state, the county or the municipality in which the tax increment development district is located and shall not pledge the full faith and credit of the state, the county or the municipality in which the tax increment development district is located."
SECTION 32. Section 5-15-21 NMSA 1978 (being Laws 2006, Chapter 75, Section 21, as amended) is amended to read:
"5-15-21. APPROVAL REQUIRED FOR ISSUANCE OF BONDS AGAINST STATE [GROSS RECEIPTS] SALES TAX INCREMENTS.--
A. In addition to all other requirements of the Tax Increment for Development Act, prior to a district board issuing bonds that are issued in whole or in part against a [gross receipts] sales tax increment attributable to the state [gross receipts] sales tax within a district and before a distribution attributable to the state [gross receipts] sales tax is made pursuant to Section 7-1-6.54 NMSA 1978, the New Mexico finance authority shall review the proposed issuance of the bonds and determine that the proceeds of the bonds will be used for a tax increment development project in accordance with the district's tax increment development plan and present the proposed issuance of the bonds to the legislature for approval.
B. The issuance of the bonds and the maximum amount of bonds to be issued shall be specifically authorized by law."
SECTION 33. Section 5-15-23 NMSA 1978 (being Laws 2006, Chapter 75, Section 23) is amended to read:
"5-15-23. PROTECTION FROM IMPAIRMENT.--If the provisions set forth in the Tax Increment for Development Act impair the ability of a municipality, county or other public body to meet its principal or interest payment obligations for revenue bonds or general obligation bonds outstanding prior to the effective date of the Tax Increment for Development Act that are secured by the pledge of all or part of the municipality, county or other public body's revenue [gross receipts] from sales tax or property tax, then the amount otherwise payable to the district pursuant to the Tax Increment for Development Act shall be paid instead to the municipality, county or public body in an amount sufficient to meet any required payment."
SECTION 34. Section 5-15-24 NMSA 1978 (being Laws 2006, Chapter 75, Section 24) is amended to read:
"5-15-24. TAX INCREMENT ACCOUNTING PROCEDURES.--A district board shall separately account for all revenues and indebtedness based on [gross receipts] sales tax increments and property tax increments. The district board shall individually account for all [gross receipts] sales tax increments."
SECTION 35. Section 5-15-25.1 NMSA 1978 (being Laws 2014, Chapter 11, Section 1) is amended to read:
"5-15-25.1. BASE YEAR REVISION--RESOLUTION--COMMENT PERIOD--SUBMISSION OF MATERIALS.--
A. A district may revise the base year that the district uses to determine its [gross receipts] sales tax increment. To initiate the process of revising its base year, a district board shall:
(1) adopt a resolution declaring that intent; and
(2) forward copies of the adopted resolution to the secretary of taxation and revenue, the secretary of finance and administration, the developer and the local governments that have dedicated a tax increment to the district.
B. The taxation and revenue department, the department of finance and administration, the developer and the local governments that have dedicated a tax increment to the district may submit written comments to the district with copies sent to the state board of finance for fifteen days after receiving a copy of a district board's resolution indicating the board's intent to revise the base year used to determine the district's [gross receipts] sales tax increment.
C. No more than forty-five days after adopting the resolution declaring the intent to revise the base year that the district uses to determine its [gross receipts] sales tax increment, the district board shall submit to the state board of finance and send copies to the developer and any local government that has dedicated a tax increment to the district:
(1) a copy of the resolution;
(2) all comments on the matter that the district received from the taxation and revenue department, the department of finance and administration, the developer and the local governments that have dedicated a tax increment to the district; and
(3) any other related documentation.
D. As used in this section, "developer" means the owner or developer who has entered into an agreement pursuant to Subsection A of Section 5-15-4 NMSA 1978 with the governing body that formed the district or the owner's or developer's successors or assigns."
SECTION 36. Section 5-15-25.2 NMSA 1978 (being Laws 2014, Chapter 11, Section 2) is amended to read:
"5-15-25.2. BASE YEAR REVISION--APPROVAL.--
A. The state board of finance may approve the revision of the base year used to determine a district's [gross receipts] sales tax increment:
(1) once during the lifetime of the district;
(2) if the revised year is a calendar year that is completed;
(3) if no [gross receipts] sales tax increment bonds attributable to the district have been issued;
(4) if there is no unresolved objection to the revision by the developer or by a local government that has dedicated a tax increment to the district; and
(5) upon a finding that the revision is reasonable and in the best interest of the state.
B. If the state board of finance approves the revision of the base year used to determine a district's [gross receipts] sales tax increment, the state board of finance shall notify the district, the secretary of taxation and revenue, the developer and the local governments that have dedicated a tax increment to the district.
C. As used in this section, "developer" means the owner or developer who has entered into an agreement pursuant to Subsection A of Section 5-15-4 NMSA 1978 with the governing body that formed the district or the owner's or developer's successors or assigns."
SECTION 37. Section 5-15-25.3 NMSA 1978 (being Laws 2014, Chapter 11, Section 3) is amended to read:
"5-15-25.3. BASE YEAR REVISION--EFFECT.--
A. Upon notice of the approval of a revision of the base year used to determine a district's [gross receipts] sales tax increment, the district shall:
(1) return to the taxation and revenue department any [gross receipts] sales tax increment credited to the period between the time that the revenue collection began and the end of the revised base year and distributed to the district;
(2) update the district tax increment development plan to reflect the revision; and
(3) file with the clerk of the governing body that formed the district the revised tax increment development plan.
B. Upon receipt of the revenue identified in Paragraph (1) of Subsection A of this section, the taxation and revenue department shall remit to the taxing entities that have dedicated a [gross receipts] sales tax increment to the district an amount of that revenue in proportion to the amount of [gross receipts] sales tax increment attributable to their dedication."
SECTION 38. Section 5-15-27 NMSA 1978 (being Laws 2006, Chapter 75, Section 27, as amended) is amended to read:
"5-15-27. DEDICATION OF [GROSS RECEIPTS] SALES TAX INCREMENT--NOTICE TO TAXATION AND REVENUE DEPARTMENT.--
A. If the state board of finance or a taxing entity approves a dedication or increase in the dedication of a [gross receipts] sales tax increment to a district, the state board of finance or the taxing entity shall notify the taxation and revenue department of that approval at least one hundred twenty days before the effective date of the dedication or increase in the dedication; provided that the effective date of the dedication by the state board of finance is on or after the date the bonds are approved by the legislature pursuant to Section 5-15-21 NMSA 1978.
B. In regard to a dedication of a [gross receipts] sales tax increment attributable to the state [gross receipts] sales tax, if the approval required pursuant to Section 5-15-21 NMSA 1978 has not occurred when the notice pursuant to Subsection A of this section is made, the state board of finance shall include in the notice that legislative approval is needed prior to a distribution pursuant to Section 7-1-6.54 NMSA 1978 attributable to the state [gross receipts] sales tax can be made. Upon approval pursuant to Section 5-15-21 NMSA 1978, the state board of finance shall notify the department of the approval."
SECTION 39. Section 5-15-29 NMSA 1978 (being Laws 2019, Chapter 275, Section 8) is amended to read:
"5-15-29. REPORT REQUIRED.--On September 1 of each year, the district board of a district that receives a distribution of a [gross receipts] sales tax increment attributable to the state [gross receipts] sales tax shall submit a report to the state board of finance and the legislative finance committee that includes the estimated capital investment in the district, the estimated total net new jobs and new full-time economic base jobs created in the district and the total revenues distributed to the district in each previous fiscal year."
SECTION 40. Section 5-16-3 NMSA 1978 (being Laws 2006, Chapter 15, Section 3) is amended to read:
"5-16-3. DEFINITIONS.--As used in the Regional Spaceport District Act:
A. "authority" means the spaceport authority created pursuant to the Spaceport Development Act;
B. "board" means the board of directors of a district;
C. "bond" means a revenue bond issued by the authority on behalf of a district;
D. "combination" means two or more governmental units that exercise joint authority;
E. "district" means a regional spaceport district that is a political subdivision of the state created pursuant to the Regional Spaceport District Act;
F. "governmental unit" means the state, a county or a municipality of the state or an Indian nation, tribe or pueblo located within the boundaries of the state;
G. "project" means any land, building or other improvements acquired as part of a spaceport or associated with a spaceport or to aid commerce in connection with a spaceport and all real and personal property deemed necessary in connection with the spaceport;
H. "revenues" means municipal regional spaceport [gross receipts] sales tax revenues and county regional spaceport [gross receipts] sales tax revenues; and
I. "spaceport" means any facility in New Mexico at which space vehicles may be launched or landed, including all facilities and support infrastructure related to launch, landing or payload processing."
SECTION 41. Section 5-16-13 NMSA 1978 (being Laws 2006, Chapter 15, Section 13) is amended to read:
"5-16-13. USE OF REVENUE BY GOVERNMENTAL UNITS.--[Each governmental unit that is a county or municipality and is a member of a combination shall have enacted a municipal regional spaceport gross receipts tax or a county regional spaceport gross receipts tax prior to December 31, 2008.] At least seventy-five percent of the municipal regional spaceport [gross receipts] sales tax or county regional spaceport [gross receipts] sales tax revenues received by each governmental unit must be used by the district for the financing, planning, designing, engineering and construction of a regional spaceport. No more than twenty-five percent of the municipal regional spaceport [gross receipts] sales tax or county regional spaceport [gross receipts] sales tax revenues may be used by the governmental unit enacting the tax for spaceport-related projects as approved by resolution of the governmental unit."
SECTION 42. Section 6-14-2 NMSA 1978 (being Laws 1970, Chapter 10, Section 2, as amended) is amended to read:
"6-14-2. DEFINITIONS.--As used in the Public Securities Act:
A. "net effective interest rate" means the interest rate of public securities, compounded semiannually, necessary to discount the scheduled debt service payments of principal and interest to the date of the public securities and to the price paid to the public body for the public securities, excluding any interest accrued to the date of delivery and based upon a year with the same number of days as the number of days for which interest is computed on the public securities;
B. "public body" means this state or any department, board, agency or instrumentality of the state, any county, city, town, village, school district, other district, educational institution or any other governmental agency or political subdivision of the state; and
C. "public securities" means any bonds, notes, warrants or other obligations now or hereafter authorized to be issued by any public body pursuant to the provisions of any general or special law enacted by the legislature, but does not include bonds, notes, warrants or other obligations issued pursuant to:
(1) the Industrial Revenue Bond Act;
(2) the County Improvement District Act;
(3) Sections 3-33-1 through 3-33-43 NMSA 1978;
(4) the Pollution Control Revenue Bond Act;
(5) the County Pollution Control Revenue Bond Act;
(6) the County Industrial Revenue Bond Act;
(7) the Metropolitan Redevelopment Code;
(8) the Supplemental Municipal [Gross Receipts] Sales Tax Act;
(9) the Hospital Equipment Loan Act; or
(10) the New Mexico Finance Authority Act."
SECTION 43. Section 6-21-6.1 NMSA 1978 (being Laws 1994, Chapter 145, Section 2, as amended) is amended to read:
"6-21-6.1. PUBLIC PROJECT REVOLVING FUND--APPROPRIATIONS TO OTHER FUNDS.--
A. At the end of each fiscal year, after all debt service charges, replenishment of reserves and administrative costs on all outstanding bonds, notes or other obligations payable from the public project revolving fund are satisfied, an aggregate amount not to exceed thirty-five percent of the governmental [gross receipts] sales tax proceeds distributed to the public project revolving fund in the preceding fiscal year less all debt service charges and administrative costs of the authority paid in the preceding fiscal year on bonds issued pursuant to this section may be appropriated by the legislature from the public project revolving fund to:
(1) the following funds for local infrastructure financing:
(a) the wastewater facility construction loan fund for purposes of the Wastewater Facility Construction Loan Act;
(b) the rural infrastructure revolving loan fund for purposes of the Rural Infrastructure Act;
(c) the solid waste facility grant fund for purposes of the Solid Waste Act;
(d) the drinking water state revolving loan fund for purposes of the Drinking Water State Revolving Loan Fund Act;
(e) the water and wastewater project grant fund for purposes specified in the New Mexico Finance Authority Act; or
(f) the local government planning fund for purposes specified in the New Mexico Finance Authority Act; or
(2) the cultural affairs facilities infrastructure fund.
B. The authority and the department of finance and administration in coordination with the New Mexico finance authority oversight committee may recommend annually to each regular session of the legislature amounts to be appropriated to the funds listed in Subsection A of this section."
SECTION 44. Section 6-21C-5 NMSA 1978 (being Laws 2001, Chapter 199, Section 5, as amended) is amended to read:
"6-21C-5. STATE BUILDING BONDING FUND CREATED--MONEY IN THE FUND PLEDGED.--
A. The "state building bonding fund" is created as a special fund within the New Mexico finance authority. The fund shall be administered by the New Mexico finance authority as a special account. The fund shall consist of money appropriated and transferred to the fund and [gross receipts] sales tax revenues distributed to the fund by law. Earnings of the fund shall be credited to the fund. Balances in the fund at the end of any fiscal year shall remain in the fund, except as provided in this section.
B. Money in the state building bonding fund is pledged for the payment of principal and interest on all building bonds issued pursuant to the State Building Bonding Act. Money in the fund is appropriated:
(1) to the New Mexico finance authority for the purpose of paying debt service, including redemption premiums, on the building bonds and the expenses incurred in the issuance, payment and administration of the bonds; and
(2) if specifically authorized in the law authorizing the acquisition of a building, to the facilities management division of the general services department for expenditures for required maintenance and repairs of that building but only if the authority determines that money in the fund is sufficient to meet the requirements of Paragraph (1) of this subsection.
C. On the last day of January and July of each year, the New Mexico finance authority shall estimate the amount needed to make debt service and other payments during the next twelve months from the state building bonding fund on the building bonds issued pursuant to the State Building Bonding Act plus the amount that may be needed for any required reserves and, if specifically authorized in the law authorizing the acquisition of a building, the amount that may be needed for required maintenance and repairs of that building. The New Mexico finance authority shall transfer to the general fund any balance in the state building bonding fund above the estimated amounts.
D. Any balance remaining in the state building bonding fund shall be transferred to the general fund upon certification by the New Mexico finance authority that:
(1) the director of the facilities management division of the general services department and the New Mexico finance authority have agreed that the building bonds issued pursuant to the State Building Bonding Act have been retired, that no additional obligations of the state building bonding fund exist and that no additional expenditures from the fund are necessary; or
(2) a court of jurisdiction has ruled that the building bonds have been retired, that no additional obligations of the state building bonding fund exist and that no additional expenditures from the fund are necessary.
E. The building bonds issued pursuant to the State Building Bonding Act shall be payable solely from the state building bonding fund or, with the approval of the bondholders, such other special funds as may be provided by law and do not create an obligation or indebtedness of the state within the meaning of any constitutional provision. No breach of any contractual obligation incurred pursuant to that act shall impose a pecuniary liability or a charge upon the general credit or taxing power of the state, and the bonds are not general obligations for which the state's full faith and credit is pledged.
F. The state does hereby pledge that the state building bonding fund shall be used only for the purposes specified in this section and pledged first to pay the debt service on the building bonds issued pursuant to the State Building Bonding Act. The state further pledges that any law authorizing the distribution of taxes or other revenues to the state building bonding fund or authorizing expenditures from the fund shall not be amended or repealed or otherwise modified so as to impair the bonds to which the state building bonding fund is dedicated as provided in this section."
SECTION 45. Section 6-21D-5 NMSA 1978 (being Laws 2005, Chapter 176, Section 5) is amended to read:
"6-21D-5. ENERGY EFFICIENCY AND RENEWABLE ENERGY BONDING FUND--PLEDGE OF MONEY IN THE FUND.--
A. The "energy efficiency and renewable energy bonding fund" is created as a special fund within the authority. The fund shall be administered by the authority as a special account. The fund shall consist of [gross receipts] sales tax revenues distributed to the fund by law, money transferred to the fund pursuant to the provisions of the Energy Efficiency and Renewable Energy Bonding Act and other transfers and appropriations made to the fund. Earnings of the fund shall be credited to the fund. Any unexpended or unencumbered balance in the energy efficiency and renewable energy bonding fund shall revert to the general fund at the end of a fiscal year.
B. Money in the fund shall be pledged irrevocably by the authority for the payment of principal and interest on all bonds issued pursuant to the Energy Efficiency and Renewable Energy Bonding Act. Money in the fund is appropriated to the authority for the purpose of paying debt service, including redemption premiums, on the bonds and the expenses incurred in the issuance, payment and administration of the bonds.
C. On the last day of January and July of each year, the authority shall estimate the amount needed to make debt service payments on the bonds issued pursuant to the Energy Efficiency and Renewable Energy Bonding Act plus the amount that may be needed for any required reserves, administrative expenses or the obligations coming due during the next twelve months from the fund. Amounts that revert to the general fund from the energy efficiency and renewable energy bonding fund may be appropriated by the legislature to the department for the purposes of carrying out the provisions of the Energy Efficiency and Renewable Energy Bonding Act.
D. Upon payment or defeasance of all principal, interest and other expenses or obligations related to the bonds, the authority shall certify to the public education department, the department of finance and administration and the secretary of taxation and revenue that all obligations for the bonds issued pursuant to the Energy Efficiency and Renewable Energy Bonding Act have been discharged and shall direct that distributions cease to the fund pursuant to that act and the Tax Administration Act.
E. The bonds issued pursuant to the Energy Efficiency and Renewable Energy Bonding Act shall be payable solely from the fund or such other special funds as may be provided by law and do not create an obligation or indebtedness of the state within the meaning of any constitutional provision. A breach of any contractual obligation incurred pursuant to that act shall not impose a pecuniary liability or a charge upon the general credit or taxing power of the state, and the bonds are not general obligations for which the state's full faith and credit is pledged.
F. The state does hereby pledge that the fund shall be used only for the purposes specified in this section and pledged first to pay the debt service on the bonds issued pursuant to the Energy Efficiency and Renewable Energy Bonding Act. The state further pledges that any law authorizing the distribution of taxes or other revenues to the fund or authorizing expenditures from the fund shall not be amended or repealed or otherwise modified so as to impair the bonds to which the fund is dedicated as provided in this section."
SECTION 46. Section 6-23-8 NMSA 1978 (being Laws 1993, Chapter 231, Section 8, as amended) is amended to read:
"6-23-8. MUNICIPALITIES--USE OF CERTAIN REVENUES AUTHORIZED.--Upon adoption of an ordinance or resolution by an affirmative vote of a majority of the members of the governing body at any regular or special meeting of the governing body called for this purpose, a municipality may pledge utility cost savings, conservation-related cost savings or any or all revenues not otherwise pledged or obligated from [gross receipts] sales taxes received by the municipality pursuant to [Section] Sections 7-1-6.4 [NMSA 1978] and [Section] 7-1-6.12 NMSA 1978 for payments pursuant to a guaranteed utility savings contract with a qualified provider and any installment payment contract or lease-purchase agreement pursuant to that guaranteed utility savings contract. The ordinance or resolution shall declare the necessity for the guaranteed utility savings contract and related contracts or agreements and shall designate the source of the pledged revenues. Any revenues pledged for such contract payments shall be deposited in a special fund, and the municipality shall not use any other revenues to make such payments. At the end of each fiscal year, any money remaining in the special fund after payment obligations are met may be transferred to any other fund of the municipality."
SECTION 47. Section 6-23-9 NMSA 1978 (being Laws 1993, Chapter 231, Section 9, as amended) is amended to read:
"6-23-9. COUNTIES--USE OF CERTAIN REVENUES
AUTHORIZED.--Upon adoption of an ordinance or resolution by an affirmative vote of a majority of the members of the board of county commissioners at any regular or special meeting of the board called for this purpose, a county may pledge utility cost savings, conservation-related cost savings or any or all of the revenue not otherwise pledged or obligated from the [first one-eighth of one percent increment and of one-half of the revenue from the third one-eighth of one percent increment of the] county [gross receipts] sales tax transferred to the county pursuant to Section 7-1-6.13 NMSA 1978 and any or all of the revenue from the distribution related to [the first one-eighth of one percent increment made pursuant to] Section 7-1-6.16 NMSA 1978 for the purpose of making payments pursuant to a guaranteed utility savings contract with a qualified provider or any installment payment contract or lease-purchase agreement pursuant to that guaranteed utility savings contract. The ordinance or resolution shall declare the necessity for the guaranteed utility savings contract and related contracts or agreements and shall designate the source of the pledged revenues. Any revenues pledged for such contract payments shall be deposited in a special fund and the county shall not use any other county or state revenue to make such payments. At the end of each fiscal year, any money remaining in the special fund after the payment obligations are met may be transferred to any other fund of the county."
SECTION 48. Section 6-25-7 NMSA 1978 (being Laws 2003, Chapter 349, Section 7, as amended) is amended to read:
"6-25-7. PROJECT REVENUE BONDS.--
A. The authority may issue project revenue bonds on behalf of an eligible entity to provide funds for a project. Project revenue bonds issued pursuant to the Statewide Economic Development Finance Act shall not be a general obligation of the authority or the state within the meaning of any provision of the constitution of New Mexico and shall never give rise to a pecuniary liability of the authority or the state or a charge against the general credit or taxing powers of the state. Project revenue bonds shall be payable from the revenue derived from a project being financed by the bonds and from other revenues pledged by an eligible entity and may be secured in such manner as provided in the Statewide Economic Development Finance Act and as determined by the authority. Project revenue bonds may be executed and delivered at any time, may be in such form and denominations, may be payable in installments and at times not exceeding thirty years from their date of delivery, may bear or accrete interest at a rate or rates and may contain such provisions not inconsistent with the Statewide Economic Development Finance Act, all as provided in the resolution and proceedings of the authority authorizing issuance of the bonds. Project revenue bonds issued by the authority pursuant to the Statewide Economic Development Finance Act may be sold at public or private sale in such manner and from time to time as may be determined by the authority, and the authority may pay all expenses that the authority may determine necessary in connection with the authorization, sale and issuance of the bonds. All project revenue bonds issued pursuant to the Statewide Economic Development Finance Act shall be negotiable.
B. The principal of and interest on project revenue bonds issued pursuant to the Statewide Economic Development Finance Act shall be secured by a pledge of the revenues of the project being financed with the proceeds of the bonds, may be secured by a mortgage of all or a part of the project being financed or other collateral pledged by an eligible entity and may be secured by the lease of such project, which collateral and lease may be assigned, in whole or in part, by the department to the authority or to third parties to carry out the purposes of the Statewide Economic Development Finance Act. The resolution of the authority pursuant to which the project revenue bonds are authorized to be issued or any such mortgage may contain any agreement and provisions customarily contained in instruments securing bonds, including provisions respecting the fixing and collection of all revenues from any project to which the resolution or mortgage pertains, the terms to be incorporated in the lease of the project, the maintenance and insurance of the project, the creation and maintenance of special funds from the revenues of the project and the rights and remedies available in event of default to the bondholders or to the trustee under a mortgage, all as determined by the authority or the department and as shall not be in conflict with the Statewide Economic Development Finance Act; provided, however, that, in making any such agreements or provisions, the authority and the department may not obligate themselves except with respect to the project and application of the revenues from the project, and except as expressly permitted by the Statewide Economic Development Finance Act, and shall not have the power to incur a pecuniary liability or a charge or to pledge the general credit or taxing power of the state. The resolution authorizing the issuance of project revenue bonds may provide procedures and remedies in the event of default in payment of the principal of or interest on the bonds or in the performance of any agreement. No breach of any such agreement shall impose any pecuniary liability upon the authority, the department or the state or any charge against the general credit or taxing powers of the state.
C. The authority may arrange for such other guarantees, insurance or other credit enhancements or additional security provided by an eligible entity as determined by the authority for the project revenue bonds and may provide for the payment of the costs from the proceeds of the bonds or may require payment of the costs by the eligible entity on whose behalf the bonds are issued.
D. Project revenue bonds issued to finance a project may also be secured by pledging a portion of the qualifying municipal or county [gross receipts] sales tax revenues by the municipality or county in which the project is located, as permitted by the Local Economic Development Act.
E. The project revenue bonds and the income from the bonds, all mortgages or other instruments executed as security for the bonds, all lease agreements made pursuant to the provisions of the Statewide Economic Development Finance Act and revenue derived from any sale or lease of a project shall be exempt from all taxation by the state or any political subdivision of the state. The authority may issue project revenue bonds the interest on which is exempt from taxation under federal law.
F. In any calendar year, no more than fifteen percent of the state ceiling allocated pursuant to the Private Activity Bond Act may be used for projects financed pursuant to the Statewide Economic Development Finance Act."
SECTION 49. Section 7-1-2 NMSA 1978 (being Laws 1965, Chapter 248, Section 2, as amended) is amended to read:
"7-1-2. APPLICABILITY.--The Tax Administration Act applies to and governs:
A. the administration and enforcement of the following taxes or tax acts as they now exist or may hereafter be amended:
(1) Income Tax Act;
(2) Withholding Tax Act;
(3) Oil and Gas Proceeds and Pass-Through Entity Withholding Tax Act;
(4) [Gross Receipts and Compensating] Sales and Use Tax Act, Interstate Telecommunications [Gross Receipts] Sales Tax Act and Leased Vehicle [Gross Receipts] Sales Tax Act;
(5) Liquor Excise Tax Act;
(6) Local Liquor Excise Tax Act;
(7) any municipal local option [gross receipts] sales tax or municipal [compensating] use tax;
(8) any county local option [gross receipts] sales tax or county [compensating] use tax;
(9) Special Fuels Supplier Tax Act;
(10) Gasoline Tax Act;
(11) petroleum products loading fee, which fee shall be considered a tax for the purpose of the Tax Administration Act;
(12) Alternative Fuel Tax Act;
(13) Cigarette Tax Act;
(14) Estate Tax Act;
(15) Railroad Car Company Tax Act;
(16) Investment Credit Act, rural job tax credit, Laboratory Partnership with Small Business Tax Credit Act, Technology Jobs and Research and Development Tax Credit Act, Film Production Tax Credit Act, Affordable Housing Tax Credit Act and high-wage jobs tax credit;
(17) Corporate Income and Franchise Tax Act;
(18) Uniform Division of Income for Tax Purposes Act;
(19) Multistate Tax Compact;
(20) Tobacco Products Tax Act;
(21) the telecommunications relay service surcharge imposed by Section 63-9F-11 NMSA 1978, which surcharge shall be considered a tax for the purposes of the Tax Administration Act;
(22) the Insurance Premium Tax Act;
(23) the Health Care Quality Surcharge Act; and
(24) the Cannabis Tax Act;
B. the administration and enforcement of the following taxes, surtaxes, advanced payments or tax acts as they now exist or may hereafter be amended:
(1) Resources Excise Tax Act;
(2) Severance Tax Act;
(3) any severance surtax;
(4) Oil and Gas Severance Tax Act;
(5) Oil and Gas Conservation Tax Act;
(6) Oil and Gas Emergency School Tax Act;
(7) Oil and Gas Ad Valorem Production Tax Act;
(8) Natural Gas Processors Tax Act;
(9) Oil and Gas Production Equipment Ad Valorem Tax Act;
(10) Copper Production Ad Valorem Tax Act;
(11) any advance payment required to be made by any act specified in this subsection, which advance payment shall be considered a tax for the purposes of the Tax Administration Act;
(12) Enhanced Oil Recovery Act;
(13) Natural Gas and Crude Oil Production Incentive Act; and
(14) intergovernmental production tax credit and intergovernmental production equipment tax credit;
C. the administration and enforcement of the following taxes, surcharges, fees or acts as they now exist or may hereafter be amended:
(1) Weight Distance Tax Act;
(2) the workers' compensation fee authorized by Section 52-5-19 NMSA 1978, which fee shall be considered a tax for purposes of the Tax Administration Act;
(3) Uniform Unclaimed Property Act (1995);
(4) 911 emergency surcharge and the network and database surcharge, which surcharges shall be considered taxes for purposes of the Tax Administration Act;
(5) the solid waste assessment fee authorized by the Solid Waste Act, which fee shall be considered a tax for purposes of the Tax Administration Act;
(6) the water conservation fee imposed by Section 74-1-13 NMSA 1978, which fee shall be considered a tax for the purposes of the Tax Administration Act; and
(7) the gaming tax imposed pursuant to the Gaming Control Act; and
D. the administration and enforcement of all other laws, with respect to which the department is charged with responsibilities pursuant to the Tax Administration Act, but only to the extent that the other laws do not conflict with the Tax Administration Act."
SECTION 50. Section 7-1-3 NMSA 1978 (being Laws 1965, Chapter 248, Section 3, as amended by Laws 2019, Chapter 270, Section 2 and by Laws 2019, Chapter 274, Section 10) is amended to read:
"7-1-3. DEFINITIONS.--Unless the context clearly indicates a different meaning, the definitions of words and phrases as they are stated in this section are to be used, and whenever in the Tax Administration Act these words and phrases appear, the singular includes the plural and the plural includes the singular:
A. "automated clearinghouse transaction" means an electronic credit or debit transmitted through an automated clearinghouse payable to the state treasurer and deposited with the fiscal agent of New Mexico;
B. "business location" means the location where a taxpayer's gross receipts and deductions are required to be reported pursuant to Section 7-1-14 NMSA 1978;
C. "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;
D. "electronic payment" means a payment made by automated clearinghouse deposit, any funds wire transfer system or a credit card, debit card or electronic cash transaction through the internet;
E. "employee of the department" means any employee of the department, including the secretary, or any person acting as agent or authorized to represent or perform services for the department in any capacity with respect to any law made subject to administration and enforcement under the provisions of the Tax Administration Act;
F. "financial institution" means any state or federally chartered, federally insured depository institution;
G. "hearing officer" means a person who has been designated by the chief hearing officer to serve as a hearing officer and who is:
(1) the chief hearing officer;
(2) an employee of the administrative hearings office; or
(3) a contractor of the administrative hearings office;
H. "Internal Revenue Code" means the Internal Revenue Code of 1986, as that code may be amended or its sections renumbered;
I. "levy" means the lawful power, hereby invested in the secretary, to take into possession or to require the present or future surrender to the secretary or the secretary's delegate of any property or rights to property belonging to a delinquent taxpayer;
J. "local option [gross receipts] sales tax" means a tax authorized to be imposed by a county or municipality upon a taxpayer's gross receipts, as that term is defined in the [Gross Receipts and Compensating] Sales and Use Tax Act, and required to be collected by the department at the same time and in the same manner as the [gross receipts] sales tax;
K. "managed audit" means a review and analysis conducted by a taxpayer under an agreement with the department to determine the taxpayer's compliance with a tax administered pursuant to the Tax Administration Act and the presentation of the results to the department for assessment of tax found to be due;
L. "net receipts" means the total amount of money paid by taxpayers to the department in a month pursuant to a tax or tax act less any refunds disbursed in that month with respect to that tax or tax act;
M. "overpayment" means an amount paid, pursuant to any law subject to administration and enforcement under the provisions of the Tax Administration Act, by a person to the department or withheld from the person in excess of tax due from the person to the state at the time of the payment or at the time the amount withheld is credited against tax due;
N. "paid" includes the term "paid over";
O. "pay" includes the term "pay over";
P. "payment" includes the term "payment over";
Q. "person" means any individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, limited liability company, limited liability partnership, joint venture, syndicate, other association or gas, water or electric utility owned or operated by a county or municipality; "person" also means, to the extent permitted by law, a federal, state or other governmental unit or subdivision, or an agency, department or instrumentality thereof; and "person", as used in Sections 7-1-72 through 7-1-74 NMSA 1978, also includes an officer or employee of a corporation, a member or employee of a partnership or any individual who, as such, is under a duty to perform any act in respect of which a violation occurs;
R. "property" means property or rights to property;
S. "property or rights to property" means any tangible property, real or personal, or any intangible property of a taxpayer;
T. "return" means any tax or information return, application or form, declaration of estimated tax or claim for refund, including any amendments or supplements to the return, required or permitted pursuant to a law subject to administration and enforcement pursuant to the Tax Administration Act and filed with the secretary or the secretary's delegate by or on behalf of any person;
U. "return information" means a taxpayer's name, address, government-issued identification number and other identifying information; any information contained in or derived from a taxpayer's return; any information with respect to any actual or possible administrative or legal action by an employee of the department concerning a taxpayer's return, such as audits, managed audits, denial of credits or refunds, assessments of tax, penalty or interest, protests of assessments or denial of refunds or credits, levies or liens; or any other information with respect to a taxpayer's return or tax liability that was not obtained from public sources or that was created by an employee of the department; but "return information" does not include statistical data or other information that cannot be associated with or directly or indirectly identify a particular taxpayer;
V. "secretary" means the secretary of taxation and revenue and, except for purposes of Subsection B of Section 7-1-4 NMSA 1978, also includes the deputy secretary or a division director or deputy division director delegated by the secretary;
W. "secretary or the secretary's delegate" means the secretary or any employee of the department exercising authority lawfully delegated to that employee by the secretary;
X. "security" means money, property or rights to property or a surety bond;
Y. "state" means any state of the United States, the District of Columbia, the commonwealth of Puerto Rico and any territory or possession of the United States;
Z. "tax" means the total amount of each tax imposed and required to be paid, withheld and paid or collected and paid under provision of any law made subject to administration and enforcement according to the provisions of the Tax Administration Act, including the amount of any interest or civil penalty relating thereto; "tax" also means any amount of any abatement of tax made or any credit, rebate or refund paid or credited by the department under any law subject to administration and enforcement under the provisions of the Tax Administration Act to any person contrary to law, including the amount of any interest or civil penalty relating thereto;
AA. "tax return preparer" means a person who prepares for others for compensation or who employs one or more persons to prepare for others for compensation any return of income tax, a substantial portion of any return of income tax, any claim for refund with respect to income tax or a substantial portion of any claim for refund with respect to income tax; provided that a person shall not be a "tax return preparer" merely because such person:
(1) furnishes typing, reproducing or other mechanical assistance;
(2) is an employee who prepares an income tax return or claim for refund with respect to an income tax return of the employer, or of an officer or employee of the employer, by whom the person is regularly and continuously employed; or
(3) prepares as a trustee or other fiduciary an income tax return or claim for refund with respect to income tax for any person; and
BB. "taxpayer" means a person liable for payment of any tax; a person responsible for withholding and payment or for collection and payment of any tax; a person to whom an assessment has been made, if the assessment remains unabated or the amount thereof has not been paid; or a person who entered into a special agreement pursuant to Section 7-1-21.1 NMSA 1978 to assume the liability of [gross receipts] sales tax or governmental [gross receipts] sales tax of another person and the special agreement was approved by the secretary pursuant to the Tax Administration Act."
SECTION 51. Section 7-1-6.2 NMSA 1978 (being Laws 1983, Chapter 211, Section 7, as amended) is amended to read:
"7-1-6.2. DISTRIBUTION--SMALL CITIES ASSISTANCE FUND.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the small cities assistance fund in an amount equal to fifteen percent of the net receipts attributable to the [compensating] use tax."
SECTION 52. Section 7-1-6.4 NMSA 1978 (being Laws 1983, Chapter 211, Section 9, as amended) is amended to read:
"7-1-6.4. DISTRIBUTION--MUNICIPALITY FROM [GROSS RECEIPTS] SALES TAX.--
A. Except as provided in Subsection B of this section, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the product of the quotient of one and two hundred twenty-five thousandths percent divided by the tax rate imposed by Section 7-9-4 NMSA 1978 multiplied by the net receipts, except net receipts attributable to a nonprofit hospital licensed by the department of health, for the month attributable to the [gross receipts] sales tax from business locations:
(1) within that municipality;
(2) on land owned by the state, commonly known as the "state fairgrounds", within the exterior boundaries of that municipality;
(3) outside the boundaries of any municipality on land owned by that municipality; and
(4) on an Indian reservation or pueblo grant in an area that is contiguous to that municipality and in which the municipality performs services pursuant to a contract between the municipality and the Indian tribe or Indian pueblo if:
(a) the contract describes an area in which the municipality is required to perform services and requires the municipality to perform services that are substantially the same as the services the municipality performs for itself; and
(b) the governing body of the municipality has submitted a copy of the contract to the secretary.
B. If the reduction made by Laws 1991, Chapter 9, Section 9 to the distribution under this section impairs the ability of a municipality to meet its principal or interest payment obligations for revenue bonds outstanding prior to July 1, 1991 that are secured by the pledge of all or part of the municipality's revenue from the distribution made under this section, then the amount distributed pursuant to this section to that municipality shall be increased by an amount sufficient to meet any required payment, provided that the distribution amount does not exceed the amount that would have been due that municipality under this section as it was in effect on June 30, 1992.
C. A distribution pursuant to this section may be adjusted for a distribution made to a tax increment development district with respect to a portion of a [gross receipts] sales tax increment dedicated by a municipality pursuant to the Tax Increment for Development Act.
D. As used in this section, "nonprofit hospital" means a hospital that has been granted exemption from federal income tax by the United States commissioner of internal revenue as an organization described in Section 501(c)(3) of the Internal Revenue Code."
SECTION 53. Section 7-1-6.5 NMSA 1978 (being Laws 1983, Chapter 211, Section 10 and Laws 1983, Chapter 214, Section 6, as amended) is amended to read:
"7-1-6.5. DISTRIBUTION--SMALL COUNTIES ASSISTANCE FUND.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the small counties assistance fund in an amount equal to ten percent of the net receipts attributable to the [compensating] use tax."
SECTION 54. Section 7-1-6.7 NMSA 1978 (being Laws 1994, Chapter 5, Section 2, as amended) is amended to read:
"7-1-6.7. DISTRIBUTIONS--STATE AVIATION FUND.--
A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the state aviation fund in an amount equal to four and seventy-nine hundredths percent of the taxable gross receipts attributable to the sale of fuel specially prepared and sold for use in turboprop or jet-type engines as determined by the department.
B. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the state aviation fund in an amount equal to twenty-six hundredths percent of gasoline taxes, exclusive of penalties and interest, collected pursuant to the Gasoline Tax Act.
C. From July 1, 2013 through June 30, 2031, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the state aviation fund in an amount equal to forty-six thousandths percent of the net receipts attributable to the [gross receipts] sales tax distributable to the general fund.
D. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the state aviation fund from the net receipts attributable to the [gross receipts] sales tax distributable to the general fund in an amount equal to:
(1) eighty thousand dollars ($80,000) monthly from July 1, 2007 through June 30, 2008;
(2) one hundred sixty-seven thousand dollars ($167,000) monthly from July 1, 2008 through June 30, 2009; and
(3) two hundred fifty thousand dollars ($250,000) monthly after July 1, 2009."
SECTION 55. Section 7-1-6.12 NMSA 1978 (being Laws 1983, Chapter 211, Section 17, as amended) is amended to read:
"7-1-6.12. TRANSFER--REVENUES FROM MUNICIPAL LOCAL OPTION [GROSS RECEIPTS] SALES AND [COMPENSATING] USE TAXES.--
A. A transfer pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each municipality for which the department is collecting a local option [gross receipts] sales tax and municipal [compensating] use tax imposed by that municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the net receipts attributable to the local option [gross receipts] sales tax and municipal [compensating] use tax imposed by that municipality, less any deduction for administrative cost determined and made by the department pursuant to the provisions of the act authorizing imposition by that municipality of the local option [gross receipts] sales tax and municipal [compensating] use tax and any additional administrative fee withheld pursuant to Section 7-1-6.41 NMSA 1978.
B. A transfer pursuant to this section may be adjusted for a distribution made to a tax increment development district with respect to a portion of a [gross receipts] sales tax increment dedicated by a municipality pursuant to the Tax Increment for Development Act.
C. A transfer pursuant to this section shall be adjusted for a distribution made to the Local Economic Development Act fund pursuant to Section [5 of this 2021 act] 7-1-6.67 NMSA 1978 and with respect to the amount dedicated by a municipality pursuant to Subsection B of Section [2 of this 2021 act] 5-10-17 NMSA 1978."
SECTION 56. Section 7-1-6.13 NMSA 1978 (being Laws 1983, Chapter 211, Section 18, as amended) is amended to read:
"7-1-6.13. TRANSFER--REVENUES FROM COUNTY LOCAL OPTION [GROSS RECEIPTS] SALES AND [COMPENSATING] USE TAXES.--
A. A transfer pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each county for which the department is collecting a local option [gross receipts] sales tax and county [compensating] use tax imposed by that county in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the net receipts attributable to the local option [gross receipts] sales tax and county [compensating] use tax imposed by that county, less any deduction for administrative cost determined and made by the department pursuant to the provisions of the act authorizing imposition by that county of the local option [gross receipts] sales tax and county [compensating] use tax and any additional administrative fee withheld pursuant to Section 7-1-6.41 NMSA 1978.
B. A transfer pursuant to this section may be adjusted for a distribution made to a tax increment development district with respect to a portion of a [gross receipts] sales tax increment dedicated by a county pursuant to the Tax Increment for Development Act.
C. A transfer pursuant to this section shall be adjusted for a distribution made to the Local Economic Development Act fund pursuant to Section [5 of this 2021 act] 7-1-6.67 NMSA 1978 and with respect to the amount dedicated by a county pursuant to Subsection B of Section [2 of this 2021 act] 5-10-17 NMSA 1978."
SECTION 57. Section 7-1-6.15 NMSA 1978 (being Laws 1983, Chapter 211, Section 20, as amended) is amended to read:
"7-1-6.15. ADJUSTMENTS OF DISTRIBUTIONS OR TRANSFERS TO MUNICIPALITIES OR COUNTIES.--
A. The provisions of this section apply to:
(1) any distribution to a municipality pursuant to Section 7-1-6.4, 7-1-6.36 or 7-1-6.46 NMSA 1978;
(2) any transfer to a municipality with respect to any local option [gross receipts] sales tax imposed by that municipality;
(3) any transfer to a county with respect to any local option [gross receipts] sales tax imposed by that county;
(4) any distribution to a county pursuant to Section 7-1-6.16 or 7-1-6.47 NMSA 1978;
(5) any distribution to a municipality or a county of gasoline taxes pursuant to Section 7-1-6.9 NMSA 1978;
(6) any transfer to a county with respect to any tax imposed in accordance with the Local Liquor Excise Tax Act;
(7) any distribution to a county from the county government road fund pursuant to Section 7-1-6.26 NMSA 1978;
(8) any distribution to a municipality of gasoline taxes pursuant to Section 7-1-6.27 NMSA 1978;
[(9) any distribution to a municipality of compensating taxes pursuant to Section 7-1-6.55 NMSA 1978]; and
[(10)] (9) any distribution to a municipality or a county of cannabis excise taxes pursuant to the Cannabis Tax Act.
B. Before making a distribution or transfer specified in Subsection A of this section to a municipality or county for the month, amounts comprising the net receipts shall be segregated into two mutually exclusive categories. One category shall be for amounts relating to the current month, and the other category shall be for amounts relating to prior periods. The total of each category for a municipality or county shall be reported each month to that municipality or county. If the total of the amounts relating to prior periods is less than zero and its absolute value exceeds the greater of one hundred dollars ($100) or an amount equal to twenty percent of the average distribution or transfer amount for that municipality or county, then the following procedures shall be carried out:
(1) all negative amounts relating to any period prior to the three calendar years preceding the year of the current month, net of any positive amounts in that same time period for the same taxpayers to which the negative amounts pertain, shall be excluded from the total relating to prior periods. Except as provided in Paragraph (2) of this subsection, the net receipts to be distributed or transferred to the municipality or county shall be adjusted to equal the amount for the current month plus the revised total for prior periods; and
(2) if the revised total for prior periods determined pursuant to Paragraph (1) of this subsection is negative and its absolute value exceeds the greater of one hundred dollars ($100) or an amount equal to twenty percent of the average distribution or transfer amount for that municipality or county, the revised total for prior periods shall be excluded from the distribution or transfers and the net receipts to be distributed or transferred to the municipality or county shall be equal to the amount for the current month.
C. The department shall recover from a municipality or county the amount excluded by Paragraph (2) of Subsection B of this section. This amount may be referred to as the "recoverable amount".
D. Prior to or concurrently with the distribution or transfer to the municipality or county of the adjusted net receipts, the department shall notify the municipality or county whose distribution or transfer has been adjusted pursuant to Paragraph (2) of Subsection B of this section:
(1) that the department has made such an adjustment, that the department has determined that a specified amount is recoverable from the municipality or county and that the department intends to recover that amount from future distributions or transfers to the municipality or county;
(2) that the municipality or county has ninety days from the date notice is made to enter into a mutually agreeable repayment agreement with the department;
(3) that if the municipality or county takes no action within the ninety-day period, the department will recover the amount from the next six distributions or transfers following the expiration of the ninety days; and
(4) that the municipality or county may inspect, pursuant to Section 7-1-8.9 NMSA 1978, an application for a claim for refund that gave rise to the recoverable amount, exclusive of any amended returns that may be attached to the application.
E. No earlier than ninety days from the date notice pursuant to Subsection D of this section is given, the department shall begin recovering the recoverable amount from a municipality or county as follows:
(1) the department may collect the recoverable amount by:
(a) decreasing distributions or transfers to the municipality or county in accordance with a repayment agreement entered into with the municipality or county; or
(b) except as provided in Paragraphs (2) and (3) of this subsection, if the municipality or county fails to act within the ninety days, decreasing the amount of the next six distributions or transfers to the municipality or county following expiration of the ninety-day period in increments as nearly equal as practicable and sufficient to recover the amount;
(2) if, pursuant to Subsection B of this section, the secretary determines that the recoverable amount is more than fifty percent of the average distribution or transfer of net receipts for that municipality or county, the secretary:
(a) shall recover only up to fifty percent of the average distribution or transfer of net receipts for that municipality or county; and
(b) may, in the secretary's discretion, waive recovery of any portion of the recoverable amount, subject to approval by the state board of finance; and
(3) if, after application of a refund claim, audit adjustment, correction of a mistake by the department or other adjustment of a prior period, but prior to any recovery of the department pursuant to this section, the total net receipts of a municipality or county for the twelve-month period beginning with the current month are reduced or are projected to be reduced to less than fifty percent of the average distribution or transfer of net receipts, the secretary may waive recovery of any portion of the recoverable amount, subject to approval by the state board of finance.
F. No later than ninety days from the date notice pursuant to Subsection D of this section is given, the department shall provide the municipality or county adequate opportunity to review an application for a claim for refund that gave rise to the recoverable amount, exclusive of any amended returns that may be attached to the application, pursuant to Section 7-1-8.9 NMSA 1978.
G. On or before September 1 of each year beginning in 2016, the secretary shall report to the state board of finance and the legislative finance committee the total recoverable amount waived pursuant to Subparagraph (b) of Paragraph (2) and Paragraph (3) of Subsection E of this section for each municipality and county in the prior fiscal year.
H. The secretary is authorized to decrease a distribution or transfer to a municipality or county upon being directed to do so by the secretary of finance and administration pursuant to the State Aid Intercept Act or to redirect a distribution or transfer to the New Mexico finance authority pursuant to an ordinance or a resolution passed by the county or municipality and a written agreement of the municipality or county and the New Mexico finance authority. Upon direction to decrease a distribution or transfer or notice to redirect a distribution or transfer to a municipality or county, the secretary shall decrease or redirect the next designated distribution or transfer, and succeeding distributions or transfers as necessary, by the amount of the state distributions intercept authorized by the secretary of finance and administration pursuant to the State Aid Intercept Act or by the amount of the state distribution intercept authorized pursuant to an ordinance or a resolution passed by the county or municipality and a written agreement with the New Mexico finance authority. The secretary shall transfer the state distributions intercept amount to the municipal or county treasurer or other person designated by the secretary of finance and administration or to the New Mexico finance authority pursuant to written agreement to pay the debt service to avoid default on qualified local revenue bonds or meet other local revenue bond, loan or other debt obligations of the municipality or county to the New Mexico finance authority. A decrease to or redirection of a distribution or transfer pursuant to this subsection that arose:
(1) prior to an adjustment of a distribution or transfer of net receipts creating a recoverable amount owed to the department takes precedence over any collection of any recoverable amount pursuant to Paragraph (2) of Subsection B of this section, which may be made only from the net amount of the distribution or transfer remaining after application of the decrease or redirection pursuant to this subsection; and
(2) after an adjustment of a distribution or transfer of net receipts creating a recoverable amount owed to the department shall be subordinate to any collection of any recoverable amount pursuant to Paragraph (2) of Subsection B of this section.
I. Upon the direction of the secretary of finance and administration pursuant to Section 9-6-5.2 NMSA 1978, the secretary shall temporarily withhold the balance of a distribution to a municipality or county, net of any decrease or redirected amount pursuant to Subsection H of this section and any recoverable amount pursuant to Paragraph (2) of Subsection B of this section, that has failed to submit an audit report required by the Audit Act or a financial report required by Subsection F of Section 6-6-2 NMSA 1978. The amount to be withheld, the source of the withheld distribution and the number of months that the distribution is to be withheld shall be as directed by the secretary of finance and administration. A distribution withheld pursuant to this subsection shall remain in the tax administration suspense fund until distributed to the municipality or county and shall not be distributed to the general fund. An amount withheld pursuant to this subsection shall be distributed to the municipality or county upon direction of the secretary of finance and administration.
J. As used in this section:
(1) "amounts relating to the current month" means any amounts included in the net receipts of the current month that represent payment of tax due for the current month, correction of amounts processed in the current month that relate to the current month or that otherwise relate to obligations due for the current month;
(2) "amounts relating to prior periods" means any amounts processed during the current month that adjust amounts processed in a period or periods prior to the current month regardless of whether the adjustment is a correction of a department error or due to the filing of amended returns, payment of department-issued assessments, filing or approval of claims for refund, audit adjustments or other cause;
(3) "average distribution or transfer amount" means the following amounts; provided that a distribution or transfer that is negative shall not be used in calculating the amounts:
(a) the annual average of the total amount distributed or transferred to a municipality or county in each of the three twelve-month periods preceding the current month;
(b) if a distribution or transfer to a municipality or county has been made for less than three years, the total amount distributed or transferred in the year preceding the current month; or
(c) if a municipality or county has not received distributions or transfers of net receipts for twelve or more months, the monthly average of net receipts distributed or transferred to the municipality or county preceding the current month multiplied by twelve;
(4) "current month" means the month for which the distribution or transfer is being prepared; and
(5) "repayment agreement" means an agreement between the department and a municipality or county under which the municipality or county agrees to allow the department to recover an amount determined pursuant to Paragraph (2) of Subsection B of this section by decreasing distributions or transfers to the municipality or county for one or more months beginning with the distribution or transfer to be made with respect to a designated month. No interest shall be charged."
SECTION 58. Section 7-1-6.16 NMSA 1978 (being Laws 1983, Chapter 213, Section 27, as amended) is amended to read:
"7-1-6.16. COUNTY EQUALIZATION DISTRIBUTION.--
A. Beginning on September 15, 1989 and on September 15 of each year thereafter, the department shall distribute to any county that has imposed or continued in effect during the state's preceding fiscal year a county [gross receipts] sales tax pursuant to Section 7-20E-9 NMSA 1978 an amount equal to:
(1) the product of a fraction, the numerator of which is the county's population and the denominator of which is the state's population, multiplied by the annual sum for the county; less
(2) the net receipts received by the department during the report year, including any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, attributable to the county [gross receipts] sales tax at a rate of one-eighth percent; provided that for any month in the report year, if no county [gross receipts] sales tax was in effect in the county in the previous month, the net receipts, for the purposes of this section, for that county for that month shall be zero.
B. If the amount determined by the calculation in Subsection A of this section is zero or a negative number for a county, no distribution shall be made to that county.
C. As used in this section:
(1) "annual sum" means for each county the sum of the monthly amounts for those months in the report year that follow a month in which the county had in effect a county [gross receipts] sales tax;
(2) "monthly amount" means an amount equal to the product of:
(a) the net receipts received by the department in the month attributable to the state [gross receipts] sales tax plus five percent of the total amount of deductions claimed pursuant to Section 7-9-92 NMSA 1978 for the month plus five percent of the total amount of deductions claimed pursuant to Section 7-9-93 NMSA 1978 for the month; and
(b) a fraction, the numerator of which is one-eighth percent and the denominator of which is the tax rate imposed by Section 7-9-4 NMSA 1978 in effect on the last day of the previous month;
(3) "population" means the most recent official census or estimate determined by the United States census bureau for the unit or, if neither is available, the most current estimated population for the unit provided in writing by the bureau of business and economic research at the university of New Mexico; and
(4) "report year" means the twelve-month period ending on the July 31 immediately preceding the date upon which a distribution pursuant to this section is required to be made."
SECTION 59. Section 7-1-6.36 NMSA 1978 (being Laws 1992, Chapter 50, Section 13 and also Laws 1992, Chapter 67, Section 13) is amended to read:
"7-1-6.36. DISTRIBUTION--INTERSTATE TELECOMMUNICATIONS [GROSS RECEIPTS] SALES TAX.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the product of the quotient of one and thirty-five hundredths percent divided by the tax rate imposed by the Interstate Telecommunications [Gross Receipts] Sales Tax Act times the net receipts for the month attributable to the interstate telecommunications [gross receipts] sales tax from business locations:
A. within that municipality;
B. on land owned by the state, commonly known as the "state fairgrounds", within the exterior boundaries of that municipality;
C. outside the boundaries of any municipality on land owned by that municipality; and
D. on an Indian reservation or pueblo grant in an area that is contiguous to that municipality and in which the municipality performs services pursuant to a contract between the municipality and the Indian tribe or Indian pueblo if:
(1) the contract describes an area in which the municipality is required to perform services and requires the municipality to perform services that are substantially the same as the services the municipality performs for itself; and
(2) the governing body of the municipality has submitted a copy of the contract to the secretary."
SECTION 60. Section 7-1-6.38 NMSA 1978 (being Laws 1994, Chapter 145, Section 1, as amended) is amended to read:
"7-1-6.38. DISTRIBUTION--GOVERNMENTAL [GROSS RECEIPTS] SALES TAX.--
A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made in amounts equal to the following percentages of the net receipts attributable to the governmental [gross receipts] sales tax, less the net receipts attributable to a hospital licensed by the department of health:
(1) seventy-five percent to the public project revolving fund administered by the New Mexico finance authority;
(2) twenty-four percent to the energy, minerals and natural resources department; provided that forty-one and two-thirds percent of the distribution is appropriated to the energy, minerals and natural resources department to implement the provisions of the New Mexico Youth Conservation Corps Act and fifty-eight and one-third percent of the distribution is appropriated to the energy, minerals and natural resources department for state park and recreation area capital improvements, including the costs of planning, engineering, design, construction, renovation, repair, equipment and furnishings; and
(3) one percent to the cultural affairs department for capital improvements at state museums and monuments administered by the cultural affairs department.
B. The state pledges to and agrees with the holders of any bonds or notes issued by the New Mexico finance authority or by the energy, minerals and natural resources department and payable from the net receipts attributable to the governmental [gross receipts] sales tax distributed to the New Mexico finance authority or the energy, minerals and natural resources department pursuant to this section that the state will not limit, reduce or alter the distribution of the net receipts attributable to the governmental [gross receipts] sales tax to the New Mexico finance authority or the energy, minerals and natural resources department or limit, reduce or alter the rate of imposition of the governmental [gross receipts] sales tax until the bonds or notes together with the interest thereon are fully met and discharged. The New Mexico finance authority and the energy, minerals and natural resources department are authorized to include this pledge and agreement of the state in any agreement with the holders of the bonds or notes."
SECTION 61. Section 7-1-6.42 NMSA 1978 (being Laws 2001, Chapter 199, Section 12, as amended) is amended to read:
"7-1-6.42. DISTRIBUTION--STATE BUILDING BONDING FUND-- [GROSS RECEIPTS] SALES TAX.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the state building bonding fund in the amount of six hundred eighty thousand dollars ($680,000) from the net receipts attributable to the [gross receipts] sales tax [imposed by the Gross Receipts and Compensating Tax Act]. The distribution shall be made:
A. after the required distribution pursuant to Section 7-1-6.4 NMSA 1978;
B. contemporaneously with other distributions of net receipts attributable to the [gross receipts] sales tax for payment of debt service on outstanding bonds or to a fund dedicated for that purpose; and
C. prior to any other distribution of net receipts attributable to the [gross receipts] sales tax."
SECTION 62. Section 7-1-6.46 NMSA 1978 (being Laws 2004, Chapter 116, Section 1, as amended) is amended to read:
"7-1-6.46. DISTRIBUTION TO MUNICIPALITIES--OFFSET FOR FOOD DEDUCTION AND HEALTH CARE PRACTITIONER SERVICES DEDUCTION.--
A. For a municipality that did not have in effect on June 30, 2019 a municipal hold harmless gross receipts tax through an ordinance and that has a population of less than ten thousand according to the most recent federal decennial census, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the applicable maximum distribution for the municipality.
B. For a municipality that did not have in effect on June 30, 2019 a municipal hold harmless gross receipts tax through an ordinance and has a population of at least ten thousand according to the most recent federal decennial census, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the following percentages of the applicable maximum distribution for the municipality:
(1) for a municipality that has a municipal poverty level two percentage points or more above the state poverty level, eighty percent;
(2) for a municipality that has a poverty level of less than two percentage points above or below the state poverty level, fifty percent; and
(3) for a municipality that has a poverty level two percentage points or more below the state poverty level:
(a) on or after July 1, 2022 and prior to July 1, 2023, forty-nine percent;
(b) on or after July 1, 2023 and prior to July 1, 2024, forty-two percent;
(c) on or after July 1, 2024 and prior to July 1, 2025, thirty-five percent; and
(d) on or after July 1, 2025, thirty percent.
C. For a municipality not described in Subsection A or B of this section, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the applicable maximum distribution for the municipality multiplied by the following percentages:
(1) on or after July 1, 2022 and prior to July 1, 2023, forty-nine percent;
(2) on or after July 1, 2023 and prior to July 1, 2024, forty-two percent;
(3) on or after July 1, 2024 and prior to July 1, 2025, thirty-five percent;
(4) on or after July 1, 2025 and prior to July 1, 2026, twenty-eight percent;
(5) on or after July 1, 2026 and prior to July 1, 2027, twenty-one percent;
(6) on or after July 1, 2027 and prior to July 1, 2028, fourteen percent;
(7) on or after July 1, 2028 and prior to July 1, 2029, seven percent; and
(8) on and after July 1, 2029, zero percent.
D. A distribution pursuant to this section is in lieu of revenue that would have been received by the municipality but for the deductions provided by Sections 7-9-92 and 7-9-93 NMSA 1978. The distribution shall be considered [gross receipts] sales tax revenue and shall be used by the municipality in the same manner as [gross receipts] sales tax revenue, including payment of [gross receipts] sales tax revenue bonds.
E. If the changes made by [this 2022 act] Laws 2022, Chapter 47, Section 1 to the distributions made pursuant to this section impair the ability of a municipality to meet its principal or interest payment obligations for revenue bonds that are outstanding prior to July 1, 2022 and that are secured by the pledge of all or part of the municipality's revenue from the distribution made pursuant to this section, then the amount distributed pursuant to this section to that municipality shall be increased by an amount sufficient to meet the required payment; provided that the total amount distributed to that municipality pursuant to this section does not exceed the amount that would have been due that municipality pursuant to this section as it was in effect on June 30, 2022.
F. For the purposes of this section:
(1) "business locations attributable to the municipality" means business locations:
(a) within the municipality;
(b) on land owned by the state, commonly known as the "state fairgrounds", within the exterior boundaries of the municipality;
(c) outside the boundaries of the municipality on land owned by the municipality; and
(d) on an Indian reservation or pueblo grant in an area that is contiguous to the municipality and in which the municipality performs services pursuant to a contract between the municipality and the Indian tribe or Indian pueblo if: 1) the contract describes an area in which the municipality is required to perform services and requires the municipality to perform services that are substantially the same as the services the municipality performs for itself; and 2) the governing body of the municipality has submitted a copy of the contract to the secretary;
(2) "maximum distribution" means:
(a) for a municipality that did not have in effect on June 30, 2019 a municipal hold harmless gross receipts tax, the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the month by taxpayers from business locations attributable to the municipality multiplied by the sum of the combined rate of all municipal local option [gross receipts] sales taxes in effect in the municipality for the month plus one and two hundred twenty-five thousandths percent; and
(b) for a municipality not described in Subparagraph (a) of this paragraph, the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the month by taxpayers from business locations attributable to the municipality multiplied by the sum of the combined rate of all municipal local option gross receipts taxes in effect in the municipality on January 1, 2007 plus one and two hundred twenty-five thousandths percent; and
(3) "poverty level" means the percentage of persons in poverty, according to the most recent five-year American community survey, as published by the United States census bureau. For the purposes of determining the poverty level of a municipality, "poverty level" means the percentage of persons in poverty in a municipality, according to the most recent five-year American community survey, as published by the United States census bureau, that includes adequate data to make a determination as to the poverty level of the municipality.
G. A distribution pursuant to this section may be adjusted for a distribution made to a tax increment development district with respect to a portion of a [gross receipts] sales tax increment dedicated by a municipality pursuant to the Tax Increment for Development Act."
SECTION 63. Section 7-1-6.47 NMSA 1978 (being Laws 2004, Chapter 116, Section 2, as amended) is amended to read:
"7-1-6.47. DISTRIBUTION TO COUNTIES--OFFSET FOR FOOD DEDUCTION AND HEALTH CARE PRACTITIONER SERVICES DEDUCTION.--
A. For a county that did not have in effect on June 30, 2019 a county hold harmless gross receipts tax through an ordinance and that has a population of less than forty-eight thousand according to the most recent federal decennial census, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the county in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the applicable maximum distribution for the county.
B. For a county not described in Subsection A of this section, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the county in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the applicable maximum distribution multiplied by the following percentages:
(1) on or after July 1, 2021 and prior to July 1, 2022, fifty-six percent;
(2) on or after July 1, 2022 and prior to July 1, 2023, forty-nine percent;
(3) on or after July 1, 2023 and prior to July 1, 2024, forty-two percent;
(4) on or after July 1, 2024 and prior to July 1, 2025, thirty-five percent;
(5) on or after July 1, 2025 and prior to July 1, 2026, twenty-eight percent;
(6) on or after July 1, 2026 and prior to July 1, 2027, twenty-one percent;
(7) on or after July 1, 2027 and prior to July 1, 2028, fourteen percent;
(8) on or after July 1, 2028 and prior to July 1, 2029, seven percent; and
(9) on and after July 1, 2029, zero percent.
C. A distribution pursuant to this section is in lieu of revenue that would have been received by the county but for the deductions provided by Sections 7-9-92 and 7-9-93 NMSA 1978. The distribution shall be considered [gross receipts] sales tax revenue and shall be used by the county in the same manner as [gross receipts] sales tax revenue, including payment of [gross receipts] sales tax revenue bonds.
D. If the changes made by [this 2022 act] Laws 2022, Chapter 47, Section 2 to the distributions made pursuant to this section impair the ability of a county to meet its principal or interest payment obligations for revenue bonds that are outstanding prior to July 1, 2022 and that are secured by the pledge of all or part of the county's revenue from the distribution made pursuant to this section, then the amount distributed pursuant to this section to that county shall be increased by an amount sufficient to meet the required payment; provided that the total amount distributed to that county pursuant to this section does not exceed the amount that would have been due that county pursuant to this section as it was in effect on June 30, 2022.
E. A distribution pursuant to this section may be adjusted for a distribution made to a tax increment development district with respect to a portion of a [gross receipts] sales tax increment dedicated by a county pursuant to the Tax Increment for Development Act.
F. For the purposes of this section, "maximum distribution" means:
(1) for a county that did not have in effect on June 30, 2019 a county hold harmless gross receipts tax and that has a population of less than forty-eight thousand according to the most recent federal decennial census, the sum of:
(a) the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the month by taxpayers from business locations within a municipality in the county multiplied by the combined rate of all county local option [gross receipts] sales taxes in effect for the month that are imposed throughout the county; and
(b) the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the month by taxpayers from business locations in the county but not within a municipality multiplied by the combined rate of all county local option [gross receipts] sales taxes in effect for the month that are imposed in the county area not within a municipality; and
(2) for a county not described in Paragraph (1) of this subsection, the sum of:
(a) the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the month by taxpayers from business locations within a municipality in the county multiplied by the combined rate of all county local option gross receipts taxes in effect on January 1, 2007 that are imposed throughout the county; and
(b) the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the month by taxpayers from business locations in the county but not within a municipality multiplied by the combined rate of all county local option gross receipts taxes in effect on January 1, 2007 that are imposed in the county area not within a municipality."
SECTION 64. Section 7-1-6.52 NMSA 1978 (being Laws 2005, Chapter 104, Section 1) is amended to read:
"7-1-6.52. DISTRIBUTION ADJUSTMENT--TAX ADMINISTRATION SUSPENSE FUND--CREDIT FOR CERTAIN SALES OF SERVICES FOR RESALE.--Distributions from the tax administration suspense fund to the general fund of revenue attributable to the [gross receipts] sales tax or to the governmental [gross receipts] sales tax shall be adjusted for credits issued pursuant to the [Gross Receipts and Compensating] Sales and Use Tax Act for receipts from the sale of services for resale."
SECTION 65. Section 7-1-6.53 NMSA 1978 (being Laws 2005, Chapter 176, Section 11) is amended to read:
"7-1-6.53. DISTRIBUTION--ENERGY EFFICIENCY AND RENEWABLE ENERGY BONDING FUND--[GROSS RECEIPTS] SALES TAX.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the energy efficiency and renewable energy bonding fund from the net receipts attributable to the [gross receipts] sales tax imposed by the [Gross Receipts and Compensating] Sales and Use Tax Act in an amount necessary to make the required bond debt service payments pursuant to the Energy Efficiency and Renewable Energy Bonding Act as determined by the New Mexico finance authority. The distribution shall be made:
A. after the required distribution pursuant to Section 7-1-6.4 NMSA 1978;
B. contemporaneously with other distributions of net receipts attributable to the [gross receipts] sales tax for payment of debt service on outstanding bonds or to a fund dedicated for that purpose; and
C. prior to any other distribution of net receipts attributable to the [gross receipts] sales tax."
SECTION 66. Section 7-1-6.54 NMSA 1978 (being Laws 2006, Chapter 75, Section 29, as amended) is amended to read:
"7-1-6.54. DISTRIBUTIONS--TAX INCREMENT DEVELOPMENT DISTRICTS.--A distribution for a tax increment development district shall be made by the department to a special fund of the district, in accordance with a notice that is filed pursuant to Section 5-15-27 NMSA 1978 with respect to a dedication of a [gross receipts] sales tax increment, to a special fund of the tax increment development district."
SECTION 67. Section 7-1-6.67 NMSA 1978 (being Laws 2021 (1st S.S.), Chapter 2, Section 5) is amended to read:
"7-1-6.67. DISTRIBUTION--LOCAL ECONOMIC DEVELOPMENT ACT FUND.--
A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the Local Economic Development Act fund equal to the following amounts of the following taxes imposed and paid on the expenses related to the construction of the qualifying entity's economic development project, as determined pursuant to Section [2 of this 2021 act] 5-10-17 NMSA 1978:
(1) fifty percent of the net receipts attributable to state [gross receipts] sales tax and the state [compensating] use tax; and
(2) fifty percent of the net receipts attributable to the local option [gross receipts] sales tax and county [compensating] use tax imposed by a county and local option [gross receipts] sales tax and municipal [compensating] use tax imposed by a municipality.
B. As used in this section:
(1) "economic development project" means "economic development project" as used in the Local Economic Development Act; and
(2) "qualifying entity" means "qualifying entity" as used in the Local Economic Development Act."
SECTION 68. Section 7-1-6.70 NMSA 1978 (being Laws 2022, Chapter 32, Section 1) is amended to read:
"7-1-6.70. DISTRIBUTION--LAND GRANT-MERCED ASSISTANCE FUND.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the land grant-merced assistance fund in an amount equal to five-hundredths percent of the net receipts attributable to the [gross receipts] sales tax after distributions have been made pursuant to Sections 7-1-6.46 and 7-1-6.47 NMSA 1978."
SECTION 69. Section 7-1-8.8 NMSA 1978 (being Laws 2019, Chapter 87, Section 2, as amended) is amended to read:
"7-1-8.8. INFORMATION THAT MAY BE REVEALED TO OTHER STATE AND LEGISLATIVE AGENCIES.--An employee of the department may reveal confidential return information to the following agencies; provided that a person who receives the information on behalf of the agency shall be subject to the penalties in Section 7-1-76 NMSA 1978 if the person fails to maintain the confidentiality required:
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:
(1) 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;
(2) return information needed for reports required to be made to the federal government concerning the use of federal funds for low-income working families;
(3) return information of low-income taxpayers for the limited purpose of outreach to those taxpayers; provided that the human services department shall pay the department for expenses incurred by the department to derive the information requested by the human services department if the information requested is not readily available in reports for which the department's information systems are programmed;
(4) return information required to administer the Health Care Quality Surcharge Act; and
(5) return information in accordance with the provisions of the Easy Enrollment Act;
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] sales 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;
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;
M. the New Mexico finance authority, information with respect to the amount of municipal and county [gross receipts] sales taxes collected by municipalities and counties pursuant to any local option municipal or county [gross receipts] sales taxes imposed, and information with respect to the amount of governmental [gross receipts] sales taxes paid by every agency, institution, instrumentality or political subdivision of the state pursuant to Section 7-9-4.3 NMSA 1978;
N. the superintendent of insurance, return information with respect to the premium tax and the health insurance premium surtax;
O. the secretary of finance and administration or the secretary's designee, return information concerning a credit pursuant to the Film Production Tax Credit Act;
P. the secretary of economic development or the secretary's designee, return information concerning a credit pursuant to the Film Production Tax Credit Act;
Q. the secretary of public safety or the secretary's designee, return information concerning the Weight Distance Tax Act;
R. the secretary of transportation or the secretary's designee, return information concerning the Weight Distance Tax Act;
S. the secretary of energy, minerals and natural resources or the secretary's designee, return information concerning tax credits or deductions for which eligibility is certified or otherwise determined by the secretary or the secretary's designee; and
T. the secretary of environment or the secretary's designee, return information concerning tax credits for which eligibility is certified or otherwise determined by the secretary or the secretary's designee."
SECTION 70. Section 7-1-8.9 NMSA 1978 (being Laws 2009, Chapter 243, Section 11, as amended by Laws 2015, Chapter 89, Section 2 and by Laws 2015, Chapter 100, Section 2) is amended to read:
"7-1-8.9. INFORMATION THAT MAY BE REVEALED TO LOCAL GOVERNMENTS AND THEIR AGENCIES.--
A. An employee of the department may reveal to:
(1) the officials or employees of a municipality of this state authorized in a written request by the municipality for a period specified in the request within the twelve months preceding the request; provided that the municipality receiving the information has entered into a written agreement with the department that the information shall be used for tax purposes only and specifying that the municipality is subject to the confidentiality provisions of Section 7-1-8 NMSA 1978 and the penalty provisions of Section 7-1-76 NMSA 1978:
(a) the names, taxpayer identification numbers and addresses of registered [gross receipts] sales taxpayers reporting gross receipts for that municipality [under the Gross Receipts and Compensating] pursuant to the Sales and Use Tax Act or a local option [gross receipts] sales tax imposed by that municipality. The department may also reveal the information described in this subparagraph quarterly or upon such other periodic basis as the secretary and the municipality may agree in writing;
(b) a range of taxable gross receipts of registered gross receipts paid by taxpayers from business locations attributable to that municipality [under the Gross Receipts and Compensating] pursuant to the Sales and Use Tax Act or a local option [gross receipts] sales tax imposed by that municipality; provided that authorization from the federal internal revenue service to reveal such information has been received. The department may also reveal the information described in this subparagraph quarterly or upon such other periodic basis as the secretary and the municipality may agree in writing; and
(c) information indicating whether persons shown on a list of businesses located within that municipality furnished by the municipality have reported gross receipts to the department but have not reported gross receipts for that municipality [under the Gross Receipts and Compensating] pursuant to the Sales and Use Tax Act or a local option [gross receipts] sales tax imposed by that municipality;
(2) the officials or employees of a county of this state authorized in a written request by the county for a period specified in the request within the twelve months preceding the request; provided that the county receiving the information has entered into a written agreement with the department that the information shall be used for tax purposes only and specifying that the county is subject to the confidentiality provisions of Section 7-1-8 NMSA 1978 and the penalty provisions of Section 7-1-76 NMSA 1978:
(a) the names, taxpayer identification numbers and addresses of registered [gross receipts] sales taxpayers reporting gross receipts either for that county in the case of a local option [gross receipts] sales tax imposed on a countywide basis or only for the areas of that county outside of any incorporated municipalities within that county in the case of a county local option [gross receipts] sales tax imposed only in areas of the county outside of any incorporated municipalities. The department may also reveal the information described in this subparagraph quarterly or upon such other periodic basis as the secretary and the county may agree in writing;
(b) a range of taxable gross receipts of registered gross receipts paid by taxpayers from business locations attributable either to that county in the case of a local option [gross receipts] sales tax imposed on a countywide basis or only to the areas of that county outside of any incorporated municipalities within that county in the case of a county local option [gross receipts] sales tax imposed only in areas of the county outside of any incorporated municipalities; provided that authorization from the federal internal revenue service to reveal such information has been received. The department may also reveal the information described in this subparagraph quarterly or upon such other periodic basis as the secretary and the county may agree in writing;
(c) in the case of a local option [gross receipts] sales tax imposed by a county on a countywide basis, information indicating whether persons shown on a list of businesses located within the county furnished by the county have reported gross receipts to the department but have not reported gross receipts for that county [under the Gross Receipts and Compensating] pursuant to the Sales and Use Tax Act or a local option [gross receipts] sales tax imposed by that county on a countywide basis; and
(d) in the case of a local option [gross receipts] sales tax imposed by a county only on persons engaging in business in that area of the county outside of incorporated municipalities, information indicating whether persons on a list of businesses located in that county outside of the incorporated municipalities but within that county furnished by the county have reported gross receipts to the department but have not reported gross receipts for that county outside of the incorporated municipalities within that county [under the Gross Receipts and Compensating] pursuant to the Sales and Use Tax Act or a local option [gross receipts] sales tax imposed by the county only on persons engaging in business in that county outside of the incorporated municipalities; and
(3) officials or employees of a municipality or county of this state, authorized in a written request of the municipality or county, for purposes of inspection, the records of the department pertaining to an increase or decrease to a distribution or transfer made pursuant to Section 7-1-6.15 NMSA 1978 for the purpose of reviewing the basis for the increase or decrease; provided that the municipality or county receiving the information has entered into a written agreement with the department that the information shall be used for tax purposes only and specifying that the municipality or county is subject to the confidentiality provisions of Section 7-1-8 NMSA 1978 and the penalty provisions of Section 7-1-76 NMSA 1978. The authorized officials or employees may only reveal the information provided in this paragraph to another authorized official or employee, to an employee of the department, or a district court, an appellate court or a federal court in a proceeding relating to a disputed distribution and in which both the state and the municipality or county are parties.
B. The department may require that a municipal or county official or employee satisfactorily complete appropriate training on protecting confidential information prior to receiving the information pursuant to Subsection A of this section."
SECTION 71. Section 7-1-8.11 NMSA 1978 (being Laws 2017, Chapter 63, Section 20) is amended to read:
"7-1-8.11. INFORMATION THAT MAY BE REVEALED TO A WATER AND SANITATION DISTRICT.--
A. An employee of the department may reveal to the officials and employees of a water and sanitation district of this state that has in effect a water and sanitation [gross receipts] sales tax imposed by the water and sanitation district upon its request for a period specified by that water and sanitation district within the twelve months preceding the request for the information by those officials and employees:
(1) the names, taxpayer identification numbers and addresses of registered [gross receipts] taxpayers reporting gross receipts for that water and sanitation district; the department may also release the information described in this paragraph quarterly or upon any other periodic basis to which the secretary and the district agree; and
(2) information indicating whether the persons shown on a list of businesses within the water and sanitation district have reported gross receipts to the department but have not reported gross receipts for that water and sanitation district.
B. The officials and employees of water and sanitation districts receiving information as provided in this section shall be subject to the confidentiality provisions of Section 7-1-8 NMSA 1978 and the penalty provisions of Section 7-1-76 NMSA 1978."
SECTION 72. Section 7-1-10 NMSA 1978 (being Laws 1965, Chapter 248, Section 15, as amended) is amended to read:
"7-1-10. RECORDS REQUIRED BY STATUTE--TAXPAYER
RECORDS--ACCOUNTING METHODS--REPORTING METHODS--INFORMATION RETURNS.--
A. Every person required by the provisions of any statute administered by the department to keep records and documents and every taxpayer shall maintain books of account or other records in a manner that will permit the accurate computation of state taxes or provide information required by the statute under which the person is required to keep records.
B. Methods of accounting shall be consistent for the same business. A taxpayer engaged in more than one business may use a different method of accounting for each business.
C. Prior to changing the method of accounting in keeping books and records for tax purposes, a taxpayer shall first secure the consent of the secretary or the secretary's delegate. If consent is not secured, the department upon audit may require the taxpayer to compute the amount of tax due on the basis of the accounting method earlier used.
D. Prior to changing the method of reporting taxes, other than for changes required by law, a taxpayer shall first secure the consent of the secretary or the secretary's delegate. Consent shall be granted or withheld pursuant to the provisions of Section 7-4-19 NMSA 1978. If consent is not secured, the secretary or the secretary's delegate upon audit may require the taxpayer to compute the amount of tax due on the basis of the reporting method earlier used.
E. Upon the written application of a taxpayer and at the sole discretion of the secretary or the secretary's delegate, the secretary or the secretary's delegate may enter into an agreement with a taxpayer allowing the taxpayer to report values, gross receipts, deductions or the value of property on an estimated basis for [gross receipts and compensating] sales tax, use tax, oil and gas severance tax, oil and gas conservation tax, oil and gas emergency school tax and oil and gas ad valorem production tax purposes for a limited period of time not to exceed four years. As used in this section, "estimated basis" means a methodology that is reasonably expected to approximate the tax that will be due over the period of the agreement using summary rather than detail data or alternate valuation applications or methods, provided that:
(1) nothing in this section shall be construed to require the secretary or the secretary's delegate to enter into such an agreement; and
(2) the agreement must:
(a) specify the receipts, deductions or values to be reported on an estimated basis and the methodology to be followed by the taxpayer in making the estimates;
(b) state the term of the agreement and the procedures for terminating the agreement prior to its expiration;
(c) be signed by the taxpayer or the taxpayer's representative and the secretary or the secretary's delegate; and
(d) contain a declaration by the taxpayer or the taxpayer's representative that all statements of fact made by the taxpayer or the taxpayer's representative in the taxpayer's application and the agreement are true and correct as to every material matter.
F. The secretary may, by regulation, require any person doing business in the state to submit to the department information reports that are considered reasonable and necessary for the administration of any provision of law to which the Tax Administration Act applies."
SECTION 73. Section 7-1-11 NMSA 1978 (being Laws 1965, Chapter 248, Section 16, as amended) is amended to read:
"7-1-11. INSPECTION OF BOOKS OF TAXPAYERS--EXCEPTION FOR MARKETPLACE PROVIDERS AND MARKETPLACE SELLERS--CREDENTIALS.--
A. To determine the correct amount of tax due, the department shall cause the records and books of account of taxpayers to be inspected or audited at such times as the department deems necessary for the effective execution of the department's responsibilities.
B. The department shall audit a marketplace provider, but not a marketplace seller, with respect to gross receipts from transactions facilitated by a marketplace provider and for which the marketplace seller may claim a deduction pursuant to Section [36 of this 2019 act] 7-9-117 NMSA 1978, unless an audit of the marketplace seller is necessary to determine the correct amount of tax due, including examining the marketplace seller:
(1) to determine compliance with Section [36 of this 2019 act] 7-9-117 NMSA 1978;
(2) to determine if the marketplace provider should be relieved of liability pursuant to Subsection C of Section 7-9-5 NMSA 1978; or
(3) to enforce any other provision of the Tax Administration Act.
C. Auditors and other officials of the department designated by the secretary are authorized to request and require the production for examination of the records and books of account of a taxpayer. Auditors and officials of the department designated by the secretary shall be furnished with credentials identifying them as such, which they shall display to any taxpayer whose books are sought to be examined.
D. Taxpayers shall upon request make their records and books of account available for inspection at reasonable hours to the secretary or the secretary's delegate who presents proper identification to the taxpayer.
E. If the taxpayer's records and books of account do not exist or are insufficient to determine the taxpayer's tax liability, if any, the department may use any reasonable method of estimating the tax liability, including using information about similar persons, businesses or industries to estimate the taxpayer's liability.
F. The secretary or the secretary's delegate shall develop and maintain written audit policies and procedures for all audit programs in which the department routinely conducts field audits of taxpayers, including policies and procedures concerning audit notification, scheduling, records that may be examined, analysis that may be done, sampling procedures, gathering information or evidence from third parties, policies concerning the rights of taxpayers under audit and related matters. Department audit policies and procedures shall be made available to a person who requests them, at a reasonable charge to defray the cost of preparing and distributing those policies and procedures.
G. Nothing in this section shall be construed to require the department to provide the following:
(1) information that is confidential pursuant to Section 7-1-8 NMSA 1978; or
(2) methods, techniques and analysis used to select taxpayers for audit, including the use of:
(a) data analytics;
(b) data mining;
(c) a scoring model;
(d) internal controls; and
(e) metadata used to detect fraud and noncompliance.
H. For purposes of this section:
(1) "data analytics" means the science of examining data with the purpose of drawing conclusions about the information;
(2) "data mining" means the process of analyzing data from different perspectives and summarizing it into useful information by collecting data into data sets for the purpose of discovering patterns;
(3) "scoring model" means a predictive model that can predict the chance of occurring of a fact and its occurrence;
(4) "methods, techniques and analysis" means a systematic way to accomplish a tactic, qualitative or quantitative component of research and the use of a specific method;
(5) "internal controls" means a process of assuring achievement of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting and compliance with laws, regulations and policies;
(6) "marketplace provider" means a "marketplace provider", as that term is used in the [Gross Receipts and Compensating] Sales and Use Tax Act;
(7) "marketplace seller" means a "marketplace seller", as that term is used in the [Gross Receipts and Compensating] Sales and Use Tax Act; and
(8) "metadata" means data that provides information about other data."
SECTION 74. Section 7-1-13.1 NMSA 1978 (being Laws 1988, Chapter 99, Section 3, as amended) is amended to read:
"7-1-13.1. METHOD OF PAYMENT OF CERTAIN TAXES DUE.--
A. Payment of the taxes, including any applicable penalties and interest, described in Paragraph (1), (2), (3) or (4) of this subsection shall be made on or before the date due in accordance with Subsection B of this section if the taxpayer's average tax payment for the group of taxes during the preceding calendar year equaled or exceeded twenty-five thousand dollars ($25,000):
(1) Group 1: all taxes due under the Withholding Tax Act, the [Gross Receipts and Compensating] Sales and Use Tax Act, local option [gross receipts] sales and use tax acts, the Interstate Telecommunications [Gross Receipts] Sales Tax Act and the Leased Vehicle [Gross Receipts] Sales Tax Act;
(2) Group 2: all taxes due under the Oil and Gas Severance Tax Act, the Oil and Gas Conservation Tax Act, the Oil and Gas Emergency School Tax Act and the Oil and Gas Ad Valorem Production Tax Act;
(3) Group 3: the tax due under the Natural Gas Processors Tax Act; or
(4) Group 4: all taxes and fees due under the Gasoline Tax Act, the Special Fuels Supplier Tax Act and the Petroleum Products Loading Fee Act.
For taxpayers who have more than one identification number issued by the department, the average tax payment shall be computed by combining the amounts paid under the several identification numbers.
B. Taxpayers who are required to make payment in accordance with the provisions of this section shall make payment by one or more of the following means on or before the due date so that funds are immediately available to the state on or before the due date:
(1) electronic payment; provided that a result of the payment is that funds are immediately available to the state of New Mexico on or before the due date;
(2) currency of the United States;
(3) check drawn on and payable at any New Mexico financial institution provided that the check is received by the department at the place and time required by the department at least one banking day prior to the due date; or
(4) check drawn on and payable at any domestic non-New Mexico financial institution provided that the check is received by the department at the time and place required by the department at least two banking days prior to the due date.
C. If the taxes required to be paid under this section are not paid in accordance with Subsection B of this section, the payment is not timely and is subject to the provisions of Sections 7-1-67 and 7-1-69 NMSA 1978.
D. For the purposes of this section, "average tax payment" means the total amount of taxes paid with respect to a group of taxes listed under Subsection A of this section during a calendar year divided by the number of months in that calendar year containing a due date on which the taxpayer was required to pay one or more taxes in the group."
SECTION 75. Section 7-1-14 NMSA 1978 (being Laws 2020, Chapter 80, Section 1) is amended to read:
"7-1-14. BUSINESS LOCATION INSTRUCTIONS FOR PURPOSES OF REPORTING GROSS RECEIPTS AND USE--LOCATION-CODE DATABASE AND LOCATION-RATE DATABASE.--
A. For purposes of the [Gross Receipts and Compensating] Sales and Use Tax Act, Interstate Telecommunications [Gross Receipts] Sales Tax Act, Leased Vehicle [Gross Receipts] Sales Tax Act and any act authorizing the imposition of a local option [gross receipts] sales or [compensating] use tax, a person that has gross receipts and a person using property or services in New Mexico in a taxable manner shall report the gross receipts to the proper business location as provided in this section.
B. The business location for gross receipts from the sale, lease or granting of a license to use real property located in New Mexico, and any related deductions, shall be the location of the property.
C. The business location for gross receipts from the sale or license of tangible personal property, and any related deductions, shall be at the following locations:
(1) if the property is received by the purchaser at the New Mexico business location of the seller, the location of the seller;
(2) if the property is not received by the purchaser at a business location of the seller, the location indicated by instructions for delivery to the purchaser, or the purchaser's donee, when known to the seller;
(3) if Paragraphs (1) and (2) of this subsection do not apply, the location indicated by an address for the purchaser available from the business records of the seller that are maintained in the ordinary course of business; provided that use of the address does not constitute bad faith;
(4) if Paragraphs (1) through (3) of this subsection do not apply, the location for the purchaser obtained during consummation of the sale, including the address of a purchaser's payment instrument, if no other address is available; provided that use of this address does not constitute bad faith; or
(5) if Paragraphs (1) through (4) of this subsection do not apply, including a circumstance in which the seller is without sufficient information to apply those standards, the location from which the property was shipped or transmitted.
D. The business location for gross receipts from the lease of tangible personal property, including vehicles, other transportation equipment and other mobile tangible personal property, and any related deductions, shall be the location of primary use of the property, as indicated by the address for the property provided by the lessee that is available to the lessor from the lessor's records maintained in the ordinary course of business; provided that use of this address does not constitute bad faith. The primary business location shall not be altered by intermittent use at different locations, such as use of business property that accompanies employees on business trips and service calls.
E. The business location for gross receipts from the sale, lease or license of franchises, and any related deductions, shall be where the franchise is used.
F. The business location for gross receipts from the performance or sale of the following services, and any related deductions, shall be at the following locations:
(1) for professional services performed in New Mexico, other than construction-related services, or performed outside New Mexico when the product of the service is initially used in New Mexico, the location of the performer of the service or seller of the product of the service, as appropriate;
(2) for construction services and construction-related services performed for a construction project in New Mexico, the location of the construction site;
(3) for services with respect to the selling of real estate located in New Mexico, the location of the real estate;
(4) for transportation of persons or property in, into or from New Mexico, the location where the person or property enters the vehicle; and
(5) for services other than those described in Paragraphs (1) through (4) of this subsection, the location where the product of the service is delivered.
G. Except as provided in Subsection H of this section, uses of property or services subject to the [compensating] use tax shall be reported at the business location at which gross receipts would have been required to be reported had the transaction been subject to the [gross receipts] sales tax.
H. If a person subject to the [compensating] use tax can demonstrate that the first use upon which [compensating] use tax is imposed occurred at a time and place different from the time and place of the purchase, then [compensating] use tax shall be reported at the business location of the first use.
I. The secretary shall designate codes to identify the business locations for a person's gross receipts, or use for purchases subject to the [compensating] use tax, and deductions related to those receipts or that use shall be reported.
J. The secretary shall develop a location-code database that provides the business location codes designated pursuant to Subsection I of this section. The secretary shall also develop and provide to taxpayers a location-rate database that sets out the tax rates applicable to business locations within the state, by address, and sellers who properly rely on this database shall not be liable for any additional tax due to the use of an incorrect rate.
K. As used in this section:
(1) "business location" means the code designated by the department to identify business locations and required to be used to report the gross receipts, or use for purchases subject to the [compensating] use tax, and deductions related to those receipts or that use;
(2) "gross receipts" means, as applicable, "gross receipts" as used in the [Gross Receipts and Compensating] Sales and Use Tax Act and the Leased Vehicle [Gross Receipts] Sales Tax Act and "interstate telecommunications gross receipts" in the Interstate Telecommunications [Gross Receipts] Sales Tax Act;
(3) "in-person service" means a service physically provided in person by the service provider, where the customer or the customer's real or tangible personal property upon which the service is performed is in the same location as the service provider at the time the service is performed; and
(4) "professional service" means a service, other than an in-person service, that requires either an advanced degree from an accredited post-secondary educational institution or a license from the state to perform."
SECTION 76. Section 7-1-15 NMSA 1978 (being Laws 1969, Chapter 31, Section 1, as amended) is amended to read:
"7-1-15. SECRETARY MAY SET TAX REPORTING AND PAYMENT INTERVALS.--The secretary may, pursuant to regulation, allow taxpayers with an anticipated tax liability of less than two hundred dollars ($200) a month to report and pay taxes at intervals which the secretary may specify. However, unless specifically permitted by law, an interval shall not exceed six months. The secretary may also allow direct marketers who have entered into an agreement with the department to collect and remit [compensating] use tax to report and pay on a quarterly or semi-annual basis."
SECTION 77. Section 7-1-15.2 NMSA 1978 (being Laws 1998, Chapter 105, Section 1) is amended to read:
"7-1-15.2. AGREEMENTS--COLLECTION OF [COMPENSATING] USE TAX.--The department may enter into agreements with direct marketers for purposes of enforcing collection of the [compensating] use tax."
SECTION 78. Section 7-1-21.1 NMSA 1978 (being Laws 2013, Chapter 87, Section 1) is amended to read:
"7-1-21.1. SPECIAL AGREEMENTS--ALTERNATIVE [GROSS RECEIPTS] SALES TAXPAYER.--
A. To allow the payment of [gross receipts] sales tax by a person who is not the liable taxpayer, the secretary may approve a request by a person to assume the liability for [gross receipts] sales tax or governmental [gross receipts] sales tax owed by another provided that the person requesting approval agrees to assume the rights and responsibilities as taxpayer pursuant to the Tax Administration Act for:
(1) an agreement to collect and pay over taxes for persons in a business relationship, which is an agreement that may be entered into by persons who wish to remit [gross receipts] sales tax on behalf of another person with whom the taxpayer has a business relationship;
(2) an agreement to collect and pay over taxes for a direct sales company:
(a) which agreement may be entered into by a direct sales company that has distributors of tangible personal property in New Mexico; and
(b) in which the direct sales company agrees to pay the [gross receipts] sales tax liability of the distributor at the same time the company remits its own [gross receipts] sales tax; and
(3) a manufacturer's agreement to pay [gross receipts] sales tax or governmental [gross receipts] sales tax on behalf of a utility company, which agreement:
(a) allows a person engaged in manufacturing in New Mexico to pay [gross receipts] sales tax or governmental [gross receipts] sales tax on behalf of a utility company on receipts from sales of utilities that are: 1) not consumed in the manufacturing process; or 2) not otherwise deductible; and
(b) is only applicable to transactions between a manufacturer and a utility company that are associated with the [gross receipts] sales tax deduction pursuant to Subsection B of Section 7-9-46 NMSA 1978.
B. To enter into the agreements authorized in this section, a person shall complete a form prescribed by the secretary and provide any additional information or documentation required by department rules or instructions that will assist in the approval of agreements listed in Subsection A of this section.
C. Once approved, an agreement shall be effective only for the period of time specified in each agreement. Any person entering into an agreement to pay tax on behalf of another person shall fulfill all of the requirements set out in the agreement. Failure to fulfill all of the requirements set out in the agreement may result in the revocation of the agreement by the department. An approved agreement may only be revoked prior to expiration by written notification to all persons who are party to the agreement and shall be applied beginning on the first day of a month that occurs at least one month following the date on which the agreement is revoked.
D. A person approved by the secretary to pay the [gross receipts] sales tax or governmental [gross receipts] sales tax pursuant to Subsection A of this section shall be deemed to be the taxpayer with respect to that tax pursuant to the Tax Administration Act with respect to all rights and responsibilities related to that tax, except that:
(1) the person shall not be entitled to take any credit against the tax for which the person has assumed liability pursuant to this section; and
(2) the person shall not claim a refund of tax on the basis that the person is not statutorily liable to pay the tax.
E. The department shall relieve from liability and hold harmless from the payment of a tax assumed by another person pursuant to an agreement approved pursuant to this section a taxpayer that would otherwise be liable for that tax."
SECTION 79. Section 7-1-29 NMSA 1978 (being Laws 1965, Chapter 248, Section 31, as amended) is amended to read:
"7-1-29. AUTHORITY TO MAKE REFUNDS OR CREDITS.--
A. In response to a claim for refund, credit or rebate made as provided in Section 7-1-26 NMSA 1978, but before a court acquires jurisdiction of the matter, the secretary or the secretary's delegate may authorize payment to a person in the amount of the credit or rebate claimed or refund an overpayment of tax determined by the secretary or the secretary's delegate to have been erroneously made by the person, together with allowable interest. A payment of a credit rebate claimed or a refund of tax and interest erroneously paid amounting to twenty thousand dollars ($20,000) or more shall be made with the prior approval of the attorney general, except that the secretary or the secretary's delegate may make refunds with respect to the Oil and Gas Severance Tax Act, the Oil and Gas Conservation Tax Act, the Oil and Gas Emergency School Tax Act, the Oil and Gas Ad Valorem Production Tax Act, the Natural Gas Processors Tax Act or the Oil and Gas Production Equipment Ad Valorem Tax Act, Section 7-13-17 NMSA 1978 and the Cigarette Tax Act without the prior approval of the attorney general regardless of the amount.
B. Pursuant to the final order of the district court, the court of appeals, the supreme court of New Mexico or a federal court, from which order, appeal or review is not successfully taken, adjudging that a person has properly claimed a credit, rebate or a refund of overpaid tax, the secretary shall authorize the payment to the person of the amount thereof. After a court acquires jurisdiction but before it issues a final order, the secretary may authorize payment of a credit, rebate or refund pursuant to a closing agreement pursuant to Section 7-1-20 NMSA 1978.
C. In the discretion of the secretary, any amount of credit or rebate to be paid or tax to be refunded may be offset against any amount of tax for which the person due to receive the credit, rebate payment or refund is liable. The secretary or the secretary's delegate shall give notice to the taxpayer that the credit, rebate payment or refund will be made in this manner, and the taxpayer shall be entitled to interest pursuant to Section 7-1-68 NMSA 1978 until the tax liability is credited with the credit, rebate or refund amount.
D. In an audit by the department or a managed audit covering multiple reporting periods in which both underpayments and overpayments of a tax have been made in different reporting periods, the department shall credit the tax overpayments against the underpayments; provided that the taxpayer files a claim for refund of the overpayments. An overpayment shall be applied as a credit first to the earliest underpayment and then to succeeding underpayments. An underpayment of tax to which an overpayment is credited pursuant to this section shall be deemed paid in the period in which the overpayment was made or the period to which the overpayment was credited against an underpayment, whichever is later. If the overpayments credited pursuant to this section exceed the underpayments of a tax, the amount of the net overpayment for the periods covered in the audit shall be refunded to the taxpayer.
E. When a taxpayer makes a payment identified to a particular return or assessment, and the department determines that the payment exceeds the amount due pursuant to that return or assessment, the secretary may apply the excess to the taxpayer's other liabilities pursuant to the tax acts to which the return or assessment applies, without requiring the taxpayer to file a claim for a refund. The liability to which an overpayment is applied pursuant to this section shall be deemed paid in the period in which the overpayment was made or the period to which the overpayment was applied, whichever is later.
F. If the department determines, upon review of an original or amended income tax return, corporate income and franchise tax return, estate tax return, special fuels excise tax return or oil and gas tax return, that there has been an overpayment of tax for the taxable period to which the return or amended return relates in excess of the amount due to be refunded to the taxpayer pursuant to the provisions of Subsection K of Section 7-1-26 NMSA 1978, the department may refund that excess amount to the taxpayer without requiring the taxpayer to file a refund claim.
G. Records of refunds and credits made in excess of ten thousand dollars ($10,000) shall be available for inspection by the public. The department shall keep such records for a minimum of three years from the date of the refund or credit.
H. In response to a timely refund claim pursuant to Section 7-1-26 NMSA 1978 and notwithstanding any other provision of the Tax Administration Act, the secretary or the secretary's delegate may refund or credit a portion of an assessment of tax paid, including applicable penalties and interest representing the amount of tax previously paid by another person on behalf of the taxpayer on the same transaction; provided that the requirements of equitable recoupment are met. For purposes of this subsection, the refund claim may be filed by the taxpayer to whom the assessment was issued or by another person who claims to have previously paid the tax on behalf of the taxpayer. Prior to granting the refund or credit, the secretary may require a waiver of all rights to claim a refund or credit of the tax previously paid by another person paying a tax on behalf of the taxpayer.
I. If, as a result of an audit by the department or a managed audit, a person is determined to owe [gross receipts] sales tax on receipts from the sale of property or services, the department may credit against the amount owed an amount of [compensating] use tax paid by the purchaser if the person can demonstrate that the purchaser timely paid the [compensating] use tax on the same property or services. The credit provided by this subsection shall not be denied solely because the purchaser cannot timely file for a refund of the [compensating] use tax paid and, if the credit is to be granted, the department shall require, for the purpose of granting the credit, that the purchaser give up any right to claim a refund of that tax."
SECTION 80. Section 7-1-55 NMSA 1978 (being Laws 1975, Chapter 251, Section 3, as amended) is amended to read:
"7-1-55. CONTRACTOR'S BOND FOR GROSS RECEIPTS--TAX--PENALTY.--
A. A person engaged in the construction business who does not have a principal place of business in New Mexico and who enters into a prime construction contract to be performed in this state shall, at the time such contract is entered into, furnish the secretary or the secretary's delegate with a surety bond, or other acceptable security, in a sum equivalent to the gross receipts to be paid under the contract multiplied by the sum of the applicable rate of the [gross receipts] sales tax imposed by Section 7-9-4 NMSA 1978 plus the applicable rate or rates of tax imposed pursuant to local option [gross receipts] sales taxes to secure payment of the tax imposed on the gross receipts from the contract and shall obtain a certificate from the secretary or the secretary's delegate that the requirements of this subsection have been met.
B. If the total sum to be paid under the contract is changed by ten percent or more subsequent to the date the surety bond or other acceptable security is furnished to the secretary or the secretary's delegate, such person shall increase or decrease, as the case may be, the amount of the bond or security within fourteen days after the change.
C. If a person fails to comply with Subsection A or B of this section, the secretary or the secretary's delegate:
(1) may demand of the person by certified mail or in person that the person comply. Upon the failure of the person to comply within ten days of the date of the mailing of such demand, the secretary may institute a proceeding to enjoin the person from doing business as provided in Section 7-1-53 NMSA 1978; or
(2) may, when a serious and immediate risk exists that an amount of tax due or reasonably expected to become due from the person on gross receipts from a prime construction contract will not be paid, request the person to comply with Subsections A and B of this section, and, upon failure immediately to comply, the secretary may, without further notice of any kind, apply to any district court of the state for an injunction as provided in Section 7-1-53 NMSA 1978.
D. Subsections A, B and C of this section shall not apply if the total gross receipts to be paid under the construction contract, including any change in such amount, are less than fifty thousand dollars ($50,000).
E. As used in this section, "construction" shall have the meaning set forth in Section 7-9-3.4 NMSA 1978 and "engaging in business" shall have the meaning set forth in Section 7-9-3.3 NMSA 1978.
F. A municipality or other political subdivision of the state or any agency of the state shall not issue a building or other construction permit to any person subject to the requirements of Subsection A of this section without first having been furnished by the construction contractor with the certificate from the secretary or the secretary's delegate specified in Subsection A of this section. Any person who issues any such permit before receiving the certificate shall be deemed guilty of a misdemeanor and, upon conviction, be fined not less than fifty dollars ($50.00) nor more than one hundred dollars ($100) for each offense."
SECTION 81. Section 7-1-69.2 NMSA 1978 (being Laws 2016 (2nd S.S.), Chapter 3, Section 3) is amended to read:
"7-1-69.2. CIVIL PENALTY FOR FAILURE TO CORRECTLY FILE CERTAIN DEDUCTIONS.--In the case of a taxpayer that deducts gross receipts pursuant to Section 7-9-92 or 7-9-93 NMSA 1978 instead of deducting or exempting gross receipts pursuant to another applicable provision of the [Gross Receipts and Compensating] Sales and Use Tax Act as required by those sections, there shall be assessed a penalty on the taxpayer in an amount equal to twenty percent of the value of the hold harmless distribution resulting from the incorrect deduction."
SECTION 82. Section 7-2-18.25 NMSA 1978 (being Laws 2009, Chapter 279, Section 1) is amended to read:
"7-2-18.25. ADVANCED ENERGY INCOME TAX CREDIT.--
A. The tax credit that may be claimed pursuant to this section may be referred to as the "advanced energy income tax credit".
B. A taxpayer who holds an interest in a qualified generating facility located in New Mexico and who files an individual New Mexico income tax return may claim an advanced energy income tax credit in an amount equal to six percent of the eligible generation plant costs of a qualified generating facility, subject to the limitations imposed in this section. The tax credit claimed shall be verified and approved by the department.
C. An entity that holds an interest in a qualified generating facility may request a certificate of eligibility from the department of environment to enable the requester to apply for an advanced energy income tax credit. The department of environment:
(1) shall determine if the facility is a qualified generating facility;
(2) shall require that the requester provide the department of environment with the information necessary to assess whether the requester's facility meets the criteria to be a qualified generating facility;
(3) shall issue a certificate to the requester stating that the facility is or is not a qualified generating facility within one hundred eighty days after receiving all information necessary to make a determination;
(4) shall:
(a) issue a schedule of fees in which no fee exceeds one hundred fifty thousand dollars ($150,000); and
(b) deposit fees collected pursuant to this paragraph in the state air quality permit fund created pursuant to Section 74-2-15 NMSA 1978; and
(5) shall report annually to the appropriate interim legislative committee information that will allow the legislative committee to analyze the effectiveness of the advanced energy tax credits, including the identity of qualified generating facilities, the energy production means used, the amount of emissions identified in this section reduced and removed by those qualified generating facilities and whether any requests for certificates of eligibility could not be approved due to program limits.
D. A taxpayer who holds an interest in a qualified generating facility may be allocated the right to claim the advanced energy income tax credit without regard to the taxpayer's relative interest in the qualified generating facility if:
(1) the business entity making the allocation provides notice of the allocation and the taxpayer's interest in the qualified generating facility to the department on forms prescribed by the department;
(2) allocations to the taxpayer and all other taxpayers allocated a right to claim the advanced energy tax credit shall not exceed one hundred percent of the advanced energy tax credit allowed for the qualified generating facility; and
(3) the taxpayer and all other taxpayers allocated a right to claim the advanced energy tax credits collectively own at least a five percent interest in the qualified generating facility.
E. To claim the advanced energy income tax credit, a taxpayer shall submit with the taxpayer's New Mexico income tax return a certificate of eligibility from the department of environment stating that the taxpayer may be eligible for advanced energy tax credits. The taxation and revenue department shall provide credit claims forms. A credit claim form shall accompany any return in which the taxpayer wishes to apply for an approved credit, and the claim shall specify the amount of credit intended to apply to each return. The taxation and revenue department shall determine the amount of advanced energy income tax credit for which the taxpayer may apply.
F. Upon receipt of the notice of an allocation of the right to claim all or a portion of the advanced energy income tax credit, the department shall verify the allocation due to the recipient.
G. [A husband and wife] Married individuals who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the advanced energy income tax credit that would have been allowed on a joint return.
H. The total amount of all advanced energy tax credits claimed shall not exceed the total amount determined by the department to be allowable pursuant to this section, the Corporate Income and Franchise Tax Act and Section 7-9G-2 NMSA 1978.
I. Any balance of the advanced energy income tax credit that the taxpayer is approved to claim may be claimed by the taxpayer as an advanced energy combined reporting tax credit allowed pursuant to Section 7-9G-2 NMSA 1978. If the advanced energy income tax credit exceeds the amount of the taxpayer's tax liabilities pursuant to the Income Tax Act and Section 7-9G-2 NMSA 1978 in the taxable year in which it is claimed, the balance of the unpaid credit may be carried forward for ten years and claimed as an advanced energy income tax credit or an advanced energy combined reporting tax credit. The advanced energy income tax credit is not refundable.
J. A taxpayer claiming the advanced energy income tax credit pursuant to this section is ineligible for credits pursuant to the Investment Credit Act or any other credit that may be taken pursuant to the Income Tax Act or credits that may be taken against the [gross receipts] sales tax, [compensating] use tax or withholding tax for the same expenditures.
K. The aggregate amount of all advanced energy tax credits that may be claimed with respect to a qualified generating facility shall not exceed sixty million dollars ($60,000,000).
L. As used in this section:
(1) "advanced energy tax credit" means the advanced energy income tax credit, the advanced energy corporate income tax credit and the advanced energy combined reporting tax credit;
(2) "coal-based electric generating facility" means a new or repowered generating facility and an associated coal gasification facility, if any, that uses coal to generate electricity and that meets the following specifications:
(a) emits the lesser of: 1) what is achievable with the best available control technology; or 2) thirty-five thousandths pound per million British thermal units of sulfur dioxide, twenty-five thousandths pound per million British thermal units of oxides of nitrogen and one hundredth pound per million British thermal units of total particulates in the flue gas;
(b) removes the greater of: 1) what is achievable with the best available control technology; or 2) ninety percent of the mercury from the input fuel;
(c) captures and sequesters or controls carbon dioxide emissions so that by the later of January 1, 2017 or eighteen months after the commercial operation date of the coal-based electric generating facility, no more than one thousand one hundred pounds per megawatt-hour of carbon dioxide is emitted into the atmosphere;
(d) all infrastructure required for sequestration is in place by the later of January 1, 2017 or eighteen months after the commercial operation date of the coal-based electric generating facility;
(e) includes methods and procedures to monitor the disposition of the carbon dioxide captured and sequestered from the coal-based electric generating facility; and
(f) does not exceed a name-plate capacity of seven hundred net megawatts;
(3) "eligible generation plant costs" means expenditures for the development and construction of a qualified generating facility, including permitting; site characterization and assessment; engineering; design; carbon dioxide capture, treatment, compression, transportation and sequestration; site and equipment acquisition; and fuel supply development used directly and exclusively in a qualified generating facility;
(4) "entity" means an individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, limited liability company, limited liability partnership, joint venture, syndicate or other association or a gas, water or electric utility owned or operated by a county or municipality;
(5) "geothermal electric generating facility" means a facility with a name-plate capacity of one megawatt or more that uses geothermal energy to generate electricity, including a facility that captures and provides geothermal energy to a preexisting electric generating facility using other fuels in part;
(6) "interest in a qualified generating facility" means title to a qualified generating facility; a leasehold interest in a qualified generating facility; an ownership interest in a business or entity that is taxed for federal income tax purposes as a partnership that holds title to or a leasehold interest in a qualified generating facility; or an ownership interest, through one or more intermediate entities that are each taxed for federal income tax purposes as a partnership, in a business that holds title to or a leasehold interest in a qualified generating facility;
(7) "name-plate capacity" means the maximum rated output of the facility measured as alternating current or the equivalent direct current measurement;
(8) "qualified generating facility" means a facility that begins construction not later than December 31, 2015 and is:
(a) a solar thermal electric generating facility that begins construction on or after July 1, 2007 and that may include an associated renewable energy storage facility;
(b) a solar photovoltaic electric generating facility that begins construction on or after July 1, 2009 and that may include an associated renewable energy storage facility;
(c) a geothermal electric generating facility that begins construction on or after July 1, 2009;
(d) a recycled energy project if that facility begins construction on or after July 1, 2007; or
(e) a new or repowered coal-based electric generating facility and an associated coal gasification facility;
(9) "recycled energy" means energy produced by a generation unit with a name-plate capacity of not more than fifteen megawatts that converts the otherwise lost energy from the exhaust stacks or pipes to electricity without combustion of additional fossil fuel;
(10) "sequester" means to store, or chemically convert, carbon dioxide in a manner that prevents its release into the atmosphere and may include the use of geologic formations and enhanced oil, coalbed methane or natural gas recovery techniques;
(11) "solar photovoltaic electric generating facility" means an electric generating facility with a name-plate capacity of one megawatt or more that uses solar photovoltaic energy to generate electricity; and
(12) "solar thermal generating facility" means an electric generating facility with a name-plate capacity of one megawatt or more that uses solar thermal energy to generate electricity, including a facility that captures and provides solar energy to a preexisting electric generating facility using other fuels in part."
SECTION 83. Section 7-2A-25 NMSA 1978 (being Laws 2009, Chapter 279, Section 2) is amended to read:
"7-2A-25. ADVANCED ENERGY CORPORATE INCOME TAX CREDIT.--
A. The tax credit that may be claimed pursuant to this section may be referred to as the "advanced energy corporate income tax credit".
B. A taxpayer that holds an interest in a qualified generating facility located in New Mexico and that files a New Mexico corporate income tax return may claim an advanced energy corporate income tax credit in an amount equal to six percent of the eligible generation plant costs of a qualified generating facility, subject to the limitations imposed in this section. The tax credit claimed shall be verified and approved by the department.
C. An entity that holds an interest in a qualified generating facility may request a certificate of eligibility from the department of environment to enable the requester to apply for an advanced energy corporate income tax credit. The department of environment:
(1) shall determine if the facility is a qualified generating facility;
(2) shall require that the requester provide the department of environment with the information necessary to assess whether the requester's facility meets the criteria to be a qualified generating facility;
(3) shall issue a certificate to the requester stating that the facility is or is not a qualified generating facility within one hundred eighty days after receiving all information necessary to make a determination;
(4) shall:
(a) issue a schedule of fees in which no fee exceeds one hundred fifty thousand dollars ($150,000); and
(b) deposit fees collected pursuant to this paragraph in the state air quality permit fund created pursuant to Section 74-2-15 NMSA 1978; and
(5) shall report annually to the appropriate interim legislative committee information that will allow the legislative committee to analyze the effectiveness of the advanced energy tax credits, including the identity of qualified generating facilities, the energy production means used, the amount of emissions identified in this section reduced and removed by those qualified generating facilities and whether any requests for certificates of eligibility could not be approved due to program limits.
D. A taxpayer that holds an interest in a qualified generating facility may be allocated the right to claim the advanced energy corporate income tax credit without regard to the taxpayer's relative interest in the qualified generating facility if:
(1) the business entity making the allocation provides notice of the allocation and the taxpayer's interest in the qualified generating facility to the department on forms prescribed by the department;
(2) allocations to the taxpayer and all other taxpayers allocated a right to claim the advanced energy tax credit shall not exceed one hundred percent of the advanced energy tax credit allowed for the qualified generating facility; and
(3) the taxpayer and all other taxpayers allocated a right to claim the advanced energy tax credits collectively own at least a five percent interest in the qualified generating facility.
E. Upon receipt of the notice of an allocation of the right to claim all or a portion of the advanced energy corporate income tax credit, the department shall verify the allocation due to the recipient.
F. To claim the advanced energy corporate income tax credit, a taxpayer shall submit with the taxpayer's New Mexico corporate income tax return a certificate of eligibility from the department of environment stating that the taxpayer may be eligible for advanced energy tax credits. The taxation and revenue department shall provide credit claim forms. A credit claim form shall accompany any return in which the taxpayer wishes to apply for an approved credit, and the claim shall specify the amount of credit intended to apply to each return. The taxation and revenue department shall determine the amount of advanced energy corporate income tax credit for which the taxpayer may apply.
G. The total amount of all advanced energy tax credits claimed shall not exceed the total amount determined by the department to be allowable pursuant to this section, the Income Tax Act and Section 7-9G-2 NMSA 1978.
H. Any balance of the advanced energy corporate income tax credit that the taxpayer is approved to claim may be claimed by the taxpayer as an advanced energy combined reporting tax credit allowed pursuant to Section 7-9G-2 NMSA 1978. If the advanced energy corporate income tax credit exceeds the amount of the taxpayer's tax liabilities pursuant to the Corporate Income and Franchise Tax Act and Section 7-9G-2 NMSA 1978 in the taxable year in which it is claimed, the balance of the unpaid credit may be carried forward for ten years and claimed as an advanced energy corporate income tax credit or an advanced energy combined reporting tax credit. The advanced energy corporate income tax credit is not refundable.
I. A taxpayer claiming the advanced energy corporate income tax credit pursuant to this section is ineligible for credits pursuant to the Investment Credit Act or any other credit that may be taken pursuant to the Corporate Income and Franchise Tax Act or credits that may be taken against the [gross receipts] sales tax, [compensating] use tax or withholding tax for the same expenditures.
J. The aggregate amount of all advanced energy tax credits that may be claimed with respect to a qualified generating facility shall not exceed sixty million dollars ($60,000,000).
K. As used in this section:
(1) "advanced energy tax credit" means the advanced energy income tax credit, the advanced energy corporate income tax credit and the advanced energy combined reporting tax credit;
(2) "coal-based electric generating facility" means a new or repowered generating facility and an associated coal gasification facility, if any, that uses coal to generate electricity and that meets the following specifications:
(a) emits the lesser of: 1) what is achievable with the best available control technology; or 2) thirty-five thousandths pound per million British thermal units of sulfur dioxide, twenty-five thousandths pound per million British thermal units of oxides of nitrogen and one hundredth pound per million British thermal units of total particulates in the flue gas;
(b) removes the greater of: 1) what is achievable with the best available control technology; or 2) ninety percent of the mercury from the input fuel;
(c) captures and sequesters or controls carbon dioxide emissions so that by the later of January 1, 2017 or eighteen months after the commercial operation date of the coal-based electric generating facility, no more than one thousand one hundred pounds per megawatt-hour of carbon dioxide is emitted into the atmosphere;
(d) all infrastructure required for sequestration is in place by the later of January 1, 2017 or eighteen months after the commercial operation date of the coal-based electric generating facility;
(e) includes methods and procedures to monitor the disposition of the carbon dioxide captured and sequestered from the coal-based electric generating facility; and
(f) does not exceed a name-plate capacity of seven hundred net megawatts;
(3) "eligible generation plant costs" means expenditures for the development and construction of a qualified generating facility, including permitting; site characterization and assessment; engineering; design; carbon dioxide capture, treatment, compression, transportation and sequestration; site and equipment acquisition; and fuel supply development used directly and exclusively in a qualified generating facility;
(4) "entity" means an individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, limited liability company, limited liability partnership, joint venture, syndicate or other association or a gas, water or electric utility owned or operated by a county or municipality;
(5) "geothermal electric generating facility" means a facility with a name-plate capacity of one megawatt or more that uses geothermal energy to generate electricity, including a facility that captures and provides geothermal energy to a preexisting electric generating facility using other fuels in part;
(6) "interest in a qualified generating facility" means title to a qualified generating facility; a leasehold interest in a qualified generating facility; an ownership interest in a business or entity that is taxed for federal income tax purposes as a partnership that holds title to or a leasehold interest in a qualified generating facility; or an ownership interest, through one or more intermediate entities that are each taxed for federal income tax purposes as a partnership, in a business that holds title to or a leasehold interest in a qualified generating facility;
(7) "name-plate capacity" means the maximum rated output of the facility measured as alternating current or the equivalent direct current measurement;
(8) "qualified generating facility" means a facility that begins construction not later than
December 31, 2015 and is:
(a) a solar thermal electric generating facility that begins construction on or after
July 1, 2007 and that may include an associated renewable energy storage facility;
(b) a solar photovoltaic electric generating facility that begins construction on or after
July 1, 2009 and that may include an associated renewable energy storage facility;
(c) a geothermal electric generating facility that begins construction on or after July 1, 2009;
(d) a recycled energy project if that facility begins construction on or after July 1, 2007; or
(e) a new or repowered coal-based electric generating facility and an associated coal gasification facility;
(9) "recycled energy" means energy produced by a generation unit with a name-plate capacity of not more than fifteen megawatts that converts the otherwise lost energy from the exhaust stacks or pipes to electricity without combustion of additional fossil fuel;
(10) "sequester" means to store, or chemically convert, carbon dioxide in a manner that prevents its release into the atmosphere and may include the use of geologic formations and enhanced oil, coalbed methane or natural gas recovery techniques;
(11) "solar photovoltaic electric generating facility" means an electric generating facility with a name-plate capacity of one megawatt or more that uses solar photovoltaic energy to generate electricity; and
(12) "solar thermal electric generating facility" means an electric generating facility with a
name-plate capacity of one megawatt or more that uses solar thermal energy to generate electricity, including a facility that captures and provides solar energy to a preexisting electric generating facility using other fuels in part."
SECTION 84. Section 7-2E-1.1 NMSA 1978 (being Laws 2007, Chapter 172, Section 2, as amended) is amended to read:
"7-2E-1.1. TAX CREDIT--RURAL JOB TAX CREDIT.--
A. The tax credit created by this section may be referred to as the "rural job tax credit". Every eligible employer may apply for, and the taxation and revenue department may approve, a tax credit for each qualifying job the employer creates. The maximum tax credit amount with respect to each qualifying job is equal to:
(1) twenty-five percent of the first sixteen thousand dollars ($16,000) in wages paid for the qualifying job if the job is performed or based at a location in a tier one area; or
(2) twelve and one-half percent of the first sixteen thousand dollars ($16,000) in wages paid if the qualifying job is performed or based at a location in a tier two area.
B. The purpose of the rural job tax credit is to encourage businesses to start new businesses or expand existing businesses in rural areas of the state.
C. The amount of the rural job tax credit shall be six and one-fourth percent of the first sixteen thousand dollars ($16,000) in wages paid for the qualifying job in a qualifying period. The rural job tax credit may be claimed for each qualifying job for a maximum of:
(1) four qualifying periods for each qualifying job performed or based at a location in a tier one area; and
(2) two qualifying periods for each qualifying job performed or based at a location in a tier two area.
D. With respect to each qualifying job for which an eligible employer seeks the rural job tax credit, the employer shall certify:
(1) the amount of wages paid to each eligible employee during each qualifying period;
(2) the number of weeks during the qualifying period the position was occupied;
(3) whether the qualifying job was in a tier one or tier two area;
(4) whether the application pertains to the first, second, third or fourth qualifying period, depending on whether the taxpayer is in a tier one or tier two area;
(5) the total number of employees employed by the employer at the job location on the day prior to the qualifying period and on the last day of the qualifying period;
(6) whether the eligible employer is receiving or is eligible to receive development training program assistance pursuant to Section 21-19-7 NMSA 1978; and
(7) whether the eligible employer has ceased business operations at any of its business locations in New Mexico.
E. The economic development department shall determine which employers are eligible employers and shall report the listing of eligible businesses to the taxation and revenue department in a manner and at times the departments shall agree upon.
F. To receive a rural job tax credit with respect to any qualifying period, an eligible employer shall apply to the taxation and revenue department once per calendar year on forms and in the manner the department may prescribe. The annual application shall include a certification made pursuant to Subsection D of this section and contain all qualifying periods that closed during the calendar year for which the application is made. Any qualifying period that did not close in the calendar year for which the application is made shall be denied by the department. The application for a calendar year shall be filed no later than December 31 of the following calendar year. If a taxpayer fails to file the annual application within the time limits provided in this section, the department shall deny the application. If all the requirements of this section have been complied with, the taxation and revenue department shall issue to the applicant a document granting a tax credit for the appropriate qualifying period. The tax credit document shall be numbered for identification and declare its date of issuance and the amount of rural job tax credit allowed for the respective jobs created. The tax credit documents may be sold, exchanged or otherwise transferred and may be carried forward for a period of three years from the date of issuance. The parties to such a transaction to sell, exchange or transfer a rural job tax credit document shall notify the department of the transaction within ten days of the sale, exchange or transfer.
G. The holder of the tax credit document may claim all or a portion of the rural job tax credit granted by the document against the holder's modified combined tax liability, personal income tax liability or corporate income tax liability. Any balance of rural job tax credit granted by the document may be carried forward for up to three years from the date of issuance of the tax credit document. No amount of rural job tax credit may be applied against a [gross receipts] sales tax or [compensating] use tax imposed by a municipality or county.
H. Notwithstanding the provisions of Section 7-1-8 NMSA 1978, the taxation and revenue department may disclose to any person the balance of rural job tax credit remaining on any tax credit document and the balance of credit remaining on that document for any period.
I. The secretary of economic development, the secretary of taxation and revenue and the secretary of workforce solutions or their designees shall annually evaluate the effectiveness of the rural job tax credit in stimulating economic development in the rural areas of New Mexico and make a joint report of their findings to each session of the legislature so long as the rural job tax credit is in effect.
J. A qualifying job shall not be eligible for a rural job tax credit pursuant to this section if:
(1) the job is created due to a business merger, acquisition or other change in organization;
(2) the eligible employee was terminated from employment in New Mexico by another employer involved in the merger, acquisition or other change in organization; or
(3) the job is performed by:
(a) the person who performed the job or its functional equivalent prior to the business merger, acquisition or other change in organization; or
(b) a person replacing the person who performed the job or its functional equivalent prior to the business merger, acquisition or other change in organization.
K. Notwithstanding Subsection J of this section, a qualifying job that was created by another employer and for which the rural job tax credit application was received by the taxation and revenue department prior to July 1, 2013 and is under review or has been approved shall remain eligible for the rural job tax credit for the balance of the qualifying periods for which the job qualifies by the new employer that results from a business merger, acquisition or other change in the organization.
L. A job shall not be eligible for a rural job tax credit pursuant to this section if the job is created due to an eligible employer entering into a contract or becoming a subcontractor to a contract with a governmental entity that replaces one or more entities performing functionally equivalent services for the governmental entity in New Mexico unless the job is a qualifying job that was not being performed by an employee of the replaced entity.
M. As used in this section:
(1) "dependent" means "dependent" as defined in 26 U.S.C. 152(a), as that section may be amended or renumbered;
(2) "eligible employee" means any individual other than an individual who:
(a) is a dependent of the employer;
(b) if the employer is an estate or trust, is a grantor, beneficiary or fiduciary of the estate or trust or is a dependent of a grantor, beneficiary or fiduciary of the estate or trust;
(c) if the employer is a corporation, is a dependent of an individual who owns, directly or indirectly, more than fifty percent in value of the outstanding stock of the corporation;
(d) if the employer is an entity other than a corporation, estate or trust, is a dependent of an individual who owns, directly or indirectly, more than fifty percent of the capital and profits interests in the entity; or
(e) is working or has worked as an employee or as an independent contractor for an entity that, directly or indirectly, owns stock in a corporation of the eligible employer or other interest of the eligible employer that represents fifty percent or more of the total voting power of that entity or has a value equal to fifty percent or more of the capital and profits interests in the entity;
(3) "eligible employer" means an employer who is eligible for in-plant training assistance pursuant to Section 21-19-7 NMSA 1978;
(4) "metropolitan statistical area" means a metropolitan statistical area in New Mexico as determined by the United States census bureau [of the census];
(5) "modified combined tax liability" means the total liability for the reporting period for the [gross receipts] sales tax imposed by Section 7-9-4 NMSA 1978 together with any tax collected at the same time and in the same manner as [that gross receipts] the sales tax, such as the [compensating] use tax, the withholding tax, the interstate telecommunications [gross receipts] sales tax, the surcharges imposed by Section 63-9D-5 NMSA 1978 and the surcharge imposed by Section 63-9F-11 NMSA 1978, minus the amount of any credit other than the rural job tax credit applied against any or all of these taxes or surcharges; but "modified combined tax liability" excludes all amounts collected with respect to a [gross receipts] sales tax or [compensating] use tax imposed by a municipality or county;
(6) "new job" means a job that is occupied by an employee who has not been employed in New Mexico by the eligible employer in the three years prior to the date of hire;
(7) "qualifying job" means a new job that was created after July 1, 2000 and that was not created due to a change in organizational structure established by the employer that is occupied by an eligible employee for at least forty-four weeks of a qualifying period;
(8) "qualifying period" means the period of twelve months beginning on the day an eligible employee begins working in a qualifying job or the period of twelve months beginning on the anniversary of the day an eligible employee began working in a qualifying job;
(9) "rural area" means any part of the state other than:
(a) an H class county;
(b) the state fairgrounds;
(c) an incorporated municipality within a metropolitan statistical area if the municipality's population is thirty thousand or more according to the most recent federal decennial census; and
(d) any area within ten miles of the exterior boundaries of a municipality described in Subparagraph (c) of this paragraph;
(10) "tier one area" means:
(a) any municipality within the rural area if the municipality's population according to the most recent federal decennial census is fifteen thousand or less; or
(b) any part of the rural area that is not within the exterior boundaries of a municipality;
(11) "tier two area" means any municipality within the rural area if the municipality's population according to the most recent federal decennial census is more than fifteen thousand; and
(12) "wages" means all compensation paid by an eligible employer to an eligible employee through the employer's payroll system, including those wages the employee elects to defer or redirect, such as the employee's contribution to 401(k) or cafeteria plan programs, but not including benefits or the employer's share of payroll taxes."
SECTION 85. Section 7-2F-1 NMSA 1978 (being Laws 2002, Chapter 36, Section 1, as amended) is amended to read:
"7-2F-1. FILM PRODUCTION TAX CREDIT--FILM PRODUCTION COMPANIES THAT COMMENCE PRINCIPAL PHOTOGRAPHY PRIOR TO JANUARY 1, 2016.--
A. The tax credit created by this section may be referred to as the "film production tax credit".
B. Except as otherwise provided in this section, an eligible film production company may apply for, and the taxation and revenue department may allow, subject to the limitation in this section, a tax credit in an amount equal to twenty-five percent of:
(1) direct production expenditures made in New Mexico that:
(a) are directly attributable to the production in New Mexico of a film or commercial audiovisual product;
(b) are subject to taxation by the state of New Mexico;
(c) exclude direct production expenditures for which another taxpayer claims the film production tax credit; and
(d) do not exceed the usual and customary cost of the goods or services acquired when purchased by unrelated parties. The secretary of taxation and revenue may determine the value of the goods or services for purposes of this section when the buyer and seller are affiliated persons or the sale or purchase is not an arm's length transaction; and
(2) postproduction expenditures made in New Mexico that:
(a) are directly attributable to the production of a commercial film or audiovisual product;
(b) are for services performed in New Mexico;
(c) are subject to taxation by the state of New Mexico;
(d) exclude postproduction expenditures for which another taxpayer claims the film production tax credit; and
(e) do not exceed the usual and customary cost of the goods or services acquired when purchased by unrelated parties. The secretary of taxation and revenue may determine the value of the goods or services for purposes of this section when the buyer and seller are affiliated persons or the sale or purchase is not an arm's length transaction.
C. In addition to the percentage applied pursuant to Subsection B of this section, another five percent shall be applied in calculating the amount of the film production tax credit to direct production expenditures:
(1) on a standalone pilot intended for series television in New Mexico or on series television productions intended for commercial distribution with an order for at least six episodes in a single season; provided that the New Mexico budget for each of those six episodes is fifty thousand dollars ($50,000) or more; or
(2) on a production with a total New Mexico budget of the following amounts; provided that the expenditures are directly attributable and paid to a New Mexico resident who is hired as industry crew, or who is hired as a producer, writer or director working directly with the physical production and has filed a New Mexico income tax return as a resident in the two previous taxable years:
(a) not more than thirty million dollars ($30,000,000) that shoots at least ten principal photography days in New Mexico at a qualified production facility; provided that a film production company in principal photography on or after April 10, 2015 shall: 1) shoot at least seven of those days at a sound stage that is a qualified production facility and the remaining number of required days, if any, at a standing set that is a qualified production facility; and 2) for each of the ten days, include industry crew working on the premises of those facilities for a minimum of eight hours within a twenty-four-hour period; or
(b) thirty million dollars ($30,000,000) or more that shoots at least fifteen principal photography days in New Mexico at a qualified production facility; provided that a film production company in principal photography on or after April 10, 2015 shall: 1) shoot at least ten of those days at a sound stage that is a qualified production facility and the remaining number of required days, if any, at a standing set that is a qualified production facility; and 2) for each day of the fifteen days, include industry crew working on the premises of the facility for a minimum of eight hours within a twenty-four-hour period.
D. With respect to expenditures attributable to a production for which the film production company receives a tax credit pursuant to the federal new markets tax credit program, the percentage to be applied in calculating the film production tax credit is twenty percent.
E. A claim for film production tax credits shall be filed as part of a return filed pursuant to the Income Tax Act or the Corporate Income and Franchise Tax Act. The date a credit claim is received by the taxation and revenue department shall determine the order that a credit claim is authorized for payment by the department.
F. Except as otherwise provided in this section and [Section 10 of this 2019 act] Laws 2019, Chapter 87, Section 10, credit claims authorized for payment pursuant to the Film Production Tax Credit Act shall be paid pursuant to provisions of the Tax Administration Act to the taxpayer as follows:
(1) a credit claim amount of less than two million dollars ($2,000,000) per taxable year shall be paid immediately upon authorization for payment of the credit claim;
(2) a credit claim amount of two million dollars ($2,000,000) or more but less than five million dollars ($5,000,000) per taxable year shall be divided into two equal payments, with the first payment to be made immediately upon authorization of the payment of the credit claim and the second payment to be made twelve months following the date of the first payment; and
(3) a credit claim amount of five million dollars ($5,000,000) or more per taxable year shall be divided into three equal payments, with the first payment to be made immediately upon authorization of payment of the credit claim, the second payment to be made twelve months following the date of the first payment and the third payment to be made twenty-four months following the date of the first payment.
G. For a fiscal year in which the amount of total credit claims authorized for payment is less than the aggregate amount of credit claims that may be authorized for payment pursuant to Section 7-2F-12 NMSA 1978, the next scheduled payments for credit claims authorized for payment pursuant to Subsection F of this section shall be accelerated for payment for that fiscal year and shall be paid to a taxpayer pursuant to the Tax Administration Act and in the order in which outstanding payments are scheduled in the queue established pursuant to Section 7-2F-12 NMSA 1978; provided that the total credit claims authorized for payment shall not exceed the aggregate amount of credit claims that may be authorized for payment pursuant to this section. If a partial payment is made pursuant to this subsection, the difference owed shall retain its original position in the queue.
H. Any amount of a credit claim that is carried forward pursuant to Subsection F of this section shall be subject to the limit on the aggregate amount of credit claims that may be authorized for payment pursuant to Section 7-2F-12 NMSA 1978.
I. A credit claim shall only be considered received by the taxation and revenue department if the credit claim is made on a complete return filed after the close of the taxable year. All direct production expenditures and postproduction expenditures incurred during the taxable year by a film production company shall be submitted as part of the same income tax return and paid pursuant to this section. A credit claim shall not be divided and submitted with multiple returns or in multiple years.
J. For purposes of determining the payment of credit claims pursuant to this section, the secretary of taxation and revenue may require that credit claims of affiliated persons be combined into one claim if necessary to accurately reflect closely integrated activities of affiliated persons.
K. The film production tax credit shall not be claimed with respect to direct production expenditures or postproduction expenditures for which the film production company has delivered a nontaxable transaction certificate pursuant to Section 7-9-86 NMSA 1978.
L. A production for which the film production tax credit is claimed pursuant to Paragraph (1) of Subsection B of this section shall contain an acknowledgment to the state of New Mexico in the end screen credits that the production was filmed in New Mexico, and a state logo provided by the division shall be included and embedded in the end screen credits of long-form narrative film productions and television episodes, unless otherwise agreed upon in writing by the film production company and the division.
M. To be eligible for the film production tax credit, a film production company shall submit to the division information required by the division to demonstrate conformity with the requirements of the Film Production Tax Credit Act, including detailed information on each direct production expenditure and each postproduction expenditure. A film production company shall make reasonable efforts, as determined by the division, to contract with a specialized vendor that provides goods and services, inventory or services directly related to that vendor's ordinary course of business. A film production company shall provide to the division a projection of the film production tax credit claim the film production company plans to submit in the fiscal year. In addition, the film production company shall agree in writing:
(1) to pay all obligations the film production company has incurred in New Mexico;
(2) to post a notice at completion of principal photography on the website of the division that:
(a) contains production company information, including the name of the production, the address of the production company and contact information that includes a working phone number, fax number and email address for both the local production office and the permanent production office to notify the public of the need to file creditor claims against the film production company; and
(b) remains posted on the website until all financial obligations incurred in the state by the film production company have been paid;
(3) that outstanding obligations are not waived should a creditor fail to file;
(4) to delay filing of a claim for the film production tax credit until the division delivers written notification to the taxation and revenue department that the film production company has fulfilled all requirements for the credit; and
(5) to submit a completed application for the film production tax credit and supporting documentation to the division within one year of making the final expenditures in New Mexico that were incurred for the registered project and that are included in the credit claim.
N. The division shall determine the eligibility of the company and shall report this information to the taxation and revenue department in a manner and at times the economic development department and the taxation and revenue department shall agree upon. The division shall also post on its website all information provided by the film production company that does not reveal revenue, income or other information that may jeopardize the confidentiality of income tax returns, including that the division shall report quarterly the projected amount of credit claims for the fiscal year.
O. To provide guidance to film production companies regarding the amount of credit capacity remaining in the fiscal year, the taxation and revenue department shall post monthly on that department's website the aggregate amount of credits claimed and processed for the fiscal year.
P. To receive a film production tax credit, a film production company shall apply to the taxation and revenue department on forms and in the manner the department may prescribe. The application shall include a certification of the amount of direct production expenditures or postproduction expenditures made in New Mexico with respect to the film production for which the film production company is seeking the film production tax credit; provided that for the film production tax credit, the application shall be submitted within one year of the date of the last direct production expenditure in New Mexico or the last postproduction expenditure in New Mexico. If the amount of the requested tax credit exceeds five million dollars ($5,000,000), the application shall also include the results of an audit, conducted by a certified public accountant licensed to practice in New Mexico, verifying that the expenditures have been made in compliance with the requirements of this section. If the requirements of this section have been complied with, the taxation and revenue department shall approve the film production tax credit and issue a document granting the tax credit.
Q. The film production company may apply all or a portion of the film production tax credit granted against personal income tax liability or corporate income tax liability. If the amount of the film production tax credit claimed exceeds the film production company's tax liability for the taxable year in which the credit is being claimed, the excess shall be refunded.
R. That amount of a film production tax credit for total payments as applied to direct production expenditures for the services of performing artists shall not exceed five million dollars ($5,000,000) for services rendered by nonresident performing artists and featured resident principal performing artists in a production. This limitation shall not apply to the services of background artists and resident performing artists who are not cast in industry standard featured principal performer roles.
S. As used in this section, "direct production expenditure" means a transaction that is subject to taxation in New Mexico:
(1) including an expenditure for:
(a) payment of wages, fringe benefits or fees for talent, management or labor to a person who is a New Mexico resident;
(b) payment for wages and per diem for a performing artist who is not a New Mexico resident and who is directly employed by the film production company; provided that the film production company deducts and remits, or causes to be deducted and remitted, income tax from the first day of services rendered in New Mexico at the maximum rate pursuant to the Withholding Tax Act;
(c) payment to a personal services business for the services of a performing artist if: 1) the personal services business pays [gross receipts] sales tax in New Mexico on the portion of those payments qualifying for the tax credit; and 2) the film production company deducts and remits, or causes to be deducted and remitted, income tax at the maximum rate in New Mexico pursuant to Subsection H of Section 7-3A-3 NMSA 1978 on the portion of those payments qualifying for the tax credit paid to a personal services business where the performing artist is a full or part owner of that business or subcontracts with a personal services business where the performing artist is a full or part owner of that business; and
(d) any of the following provided by a vendor: 1) the story and scenario to be used for a film; 2) set construction and operations, wardrobe, accessories and related services; 3) photography, sound synchronization, lighting and related services; 4) editing and related services; 5) rental of facilities and equipment; 6) leasing of vehicles, not including the chartering of aircraft for out-of-state transportation; however, New Mexico-based chartered aircraft for in-state transportation directly attributable to the production shall be considered a direct production expenditure; provided that only the first one hundred dollars ($100) of the daily expense of leasing a vehicle for passenger transportation on roadways in the state may be claimed as a direct production expenditure; 7) food or lodging; provided that only the first one hundred fifty dollars ($150) of lodging per individual per day is eligible to be claimed as a direct production expenditure; 8) commercial airfare if purchased through a New Mexico-based travel agency or travel company for travel to and from New Mexico or within New Mexico that is directly attributable to the production; 9) insurance coverage and bonding if purchased through a New Mexico-based insurance agent, broker or bonding agent; 10) services for an external audit upon submission of an application for a film production tax credit by an accounting firm that submits the application pursuant to this section; and 11) other direct costs of producing a film in accordance with generally accepted entertainment industry practice; and
(2) does not include an expenditure for:
(a) a gift with a value greater than twenty-five dollars ($25.00);
(b) artwork or jewelry, except that a work of art or a piece of jewelry may be a direct production expenditure if: 1) it is used in the film production; and 2) the expenditure is less than two thousand five hundred dollars ($2,500);
(c) entertainment, amusement or recreation;
(d) subcontracted goods or services provided by a vendor when subcontractors are not subject to state taxation, such as equipment and locations provided by the military, government and religious organizations; or
(e) a service provided by a person who is not a New Mexico resident and employed in an industry crew position, excluding a performing artist, where it is the standard entertainment industry practice for the film production company to employ a person for that industry crew position, except when the person who is not a New Mexico resident is hired or subcontracted by a vendor; and when the film production company, as determined by the division and when applicable in consultation with industry, provides: 1) reasonable efforts to hire resident crew; and 2) financial or promotional contributions toward education or workforce development efforts in New Mexico, including at least one of the following: a payment to a New Mexico public education institution that administers at least one industry-recognized film or multimedia program, as determined by the division, in an amount equal to two and one-half percent of payments made to nonresidents in approved positions employed by the vendor; promotion of the New Mexico film industry by directors, actors or executive producers affiliated with the production company's project through social media that is managed by the state; radio interviews facilitated by the division; enhanced screen credit acknowledgments; or related events that are facilitated, conducted or sponsored by the division.
T. As used in this section, "film production company" means a person that produces one or more films or any part of a film and that commences principal photography prior to January 1, 2016.
U. As used in this section, "vendor" means a person who sells or leases goods or services that are related to standard industry craft inventory, who has a physical presence in New Mexico and is subject to [gross receipts] sales tax pursuant to the [Gross Receipts and Compensating] Sales and Use Tax Act and income tax pursuant to the Income Tax Act or corporate income tax pursuant to the Corporate Income and Franchise Tax Act but excludes a personal services business and services provided by nonresidents hired or subcontracted if the tasks and responsibilities are associated with:
(1) the standard industry job position of:
(a) a director;
(b) a writer;
(c) a producer;
(d) an associate producer;
(e) a co-producer;
(f) an executive producer;
(g) a production supervisor;
(h) a director of photography;
(i) a motion picture driver whose sole responsibility is driving;
(j) a production or personal assistant;
(k) a designer;
(l) a still photographer; or
(m) a carpenter and utility technician at an entry level; and
(2) nonstandard industry job positions and personal support services."
SECTION 86. Section 7-2F-2 NMSA 1978 (being Laws 2003, Chapter 127, Section 2, as amended) is amended to read:
"7-2F-2. DEFINITIONS.--As used in the Film Production Tax Credit Act:
A. "affiliated person" means a person who directly or indirectly owns or controls, is owned or controlled by or is under common ownership or control with another person through ownership of voting securities or other ownership interests representing a majority of the total voting power of the entity;
B. "background artist" means a person who is not a performing artist but is a person of atmospheric business whose work includes atmospheric noise, normal actions, gestures and facial expressions of that person's assignment; or a person of atmospheric business whose work includes special abilities that are not stunts; or a substitute for another actor, whether photographed as a double or acting as a stand-in;
C. "below-the-line crew" means a person in a position that is off-camera and who provides technical services during the physical production of a film. "Below-the-line crew" does not include a person who is a writer, director, producer or background artist or performing artist for the film;
D. "commercial audiovisual product" means a film or a video game intended for commercial exploitation;
E. "direct production expenditure" means a transaction that is subject to taxation in New Mexico and is certified pursuant to Subsection A of Section 7-2F-12 NMSA 1978:
(1) including an expenditure for:
(a) payment of wages, fringe benefits or fees for talent, management or labor to a person who is a New Mexico resident;
(b) payment for standard industry craft inventory when provided by a below-the-line crew that is a New Mexico resident in addition to its below-the-line crew services;
(c) payment for wages and per diem for a performing artist who is not a New Mexico resident and who is directly employed by the film production company; provided that the film production company deducts and remits, or causes to be deducted and remitted, income tax from the first day of services rendered in New Mexico at the maximum rate pursuant to the Withholding Tax Act;
(d) payment to a personal services business for the services of a performing artist if: 1) the personal services business pays [gross receipts] sales tax in New Mexico on the portion of those payments qualifying for the tax credit; and 2) the film production company deducts and remits, or causes to be deducted and remitted, income tax at the maximum rate in New Mexico pursuant to Subsection H of Section 7-3A-3 NMSA 1978 on the portion of those payments qualifying for the tax credit paid to a personal services business where the performing artist is a full or part owner of that business or subcontracts with a personal services business where the performing artist is a full or part owner of that business; and
(e) any of the following provided by a vendor: 1) the story and scenario to be used for a film; 2) set construction and operations, wardrobe, accessories and related services; 3) photography, sound synchronization, lighting and related services; 4) editing and related services; 5) rental of facilities and equipment; 6) the first one hundred fifty dollars ($150) of the daily expense of leasing of vehicles, not including the chartering of aircraft for out-of- state transportation; however, New Mexico-based chartered aircraft for in-state transportation directly attributable to the production shall be considered a direct production expenditure; 7) food; 8) the first three hundred dollars ($300) of lodging per individual, per day; 9) commercial airfare if purchased through a New Mexico-based travel agency or travel company for travel to and from New Mexico or within New Mexico that is directly attributable to the production; 10) insurance coverage and bonding if purchased through a New Mexico-based insurance agent, broker or bonding agent; 11) subcontracted goods and services from businesses; provided that the ordinary course of business of the vendor procuring the goods and services from the subcontractor directly relates to standard film industry goods and services; and 12) other direct costs of producing a film in accordance with generally accepted entertainment industry practice; and
(2) does not include an expenditure for:
(a) a gift with a value greater than one hundred dollars ($100);
(b) artwork or jewelry, except that a work of art or a piece of jewelry may be a direct production expenditure if: 1) it is used in the film production; and 2) the expenditure is less than two thousand five hundred dollars ($2,500);
(c) entertainment, amusement or recreation;
(d) subcontracted goods or services provided by a vendor when the subcontractors providing those goods or services to the vendor are not subject to state taxation, such as equipment and locations provided by the military, government and organizations that demonstrate to the taxation and revenue department that they have been granted exemption from the federal income tax by the United States commissioner of internal revenue as organizations described in Section 501(c)(3) of the United States Internal Revenue Code of 1986, as amended or renumbered;
(e) subcontracted services provided by a vendor when the subcontracted services are provided by a person who is below-the-line crew and is not a New Mexico resident;
(f) hidden or other indirect service fees, costs, commissions or other remuneration received by third parties and that are not directly paid by the film production company or expressly enumerated on a film production company's filing to claim a new film production tax credit;
(g) wages for a person who is not a
New Mexico resident and who falsely claims to be a New Mexico resident. The wages of such person shall not be considered an eligible expense for two years from the date in which the person is determined by the taxation and revenue department as having made a false claim, regardless of whether the person becomes a New Mexico resident within that time frame; or
(h) which the film production company receives funding pursuant to Section 21-19-7.1 NMSA 1978;
F. "division" means the New Mexico film division of the economic development department;
G. "federal new markets tax credit program" means the tax credit program codified as Section 45D of the United States Internal Revenue Code of 1986, as amended;
H. "film" means a single medium or multimedia program, including television programs but excluding advertising messages other than national or regional advertising messages intended for exhibition, that:
(1) is fixed on film, a digital medium, videotape, computer disc, laser disc or other similar delivery medium;
(2) can be viewed or reproduced;
(3) is not intended to and does not violate a provision of Chapter 30, Article 37 NMSA 1978; and
(4) is intended for reasonable commercial exploitation for the delivery medium used;
I. "film production company" means a person that produces one or more films or commercial audiovisual products or any part of a film or commercial audiovisual product;
J. "fiscal year" means the state fiscal year beginning on July 1;
K. "New Mexico resident" means an individual who is domiciled in this state during any part of the taxable year or an individual who is physically present in this state for one hundred eighty-five days or more during the taxable year; but any individual, other than someone who was physically present in the state for one hundred eighty-five days or more during the taxable year and who, on or before the last day of the taxable year, changed the individual's place of abode to a place without this state with the bona fide intention of continuing actually to abide permanently without this state is not a resident for the purposes of the Film Production Tax Credit Act for periods after that change of abode;
L. "performing artist" means an actor, on-camera stuntperson, puppeteer, pilot who is a stuntperson or actor, specialty foreground performer or narrator; and who speaks a line of dialogue, is identified with the product or reacts to narration as assigned. "Performing artist" does not include a background artist;
M. "personal services business" means a business organization, with or without physical presence, that receives payments pursuant to the Film Production Tax Credit Act for the services of a performing artist;
N. "physical presence" means a physical address in New Mexico from which a vendor conducts business, stores inventory or otherwise creates, assembles or offers for sale the product purchased or leased by a film production company and the vendor or an employee of the vendor is a resident;
O. "postproduction expenditure" means an expenditure, certified pursuant to Subsection A of Section 7-2F-12 NMSA 1978, for editing, Foley recording, automatic dialogue replacement, sound editing, special effects, including computer-generated imagery or other effects, scoring and music editing, beginning and end credits, negative cutting, soundtrack production, dubbing, subtitling or addition of sound or visual effects; but not including an expenditure for advertising, marketing, distribution or expense payments;
P. "principal photography" means the production of a film during which the main visual elements are created;
Q. "qualified production facility" means a building, or complex of buildings, building improvements and associated back-lot facilities in which films are or are intended to be regularly produced and that contain at least one:
(1) sound stage with contiguous floor space of at least seven thousand square feet and a ceiling height of no less than eighteen feet; or
(2) standing set that includes at least one interior, and at least five exteriors, built or re-purposed for film production use on a continual basis and is located on at least fifty acres of contiguous space designated for film production use; and
R. "vendor" means a person who sells or leases goods or services that are related to standard industry craft inventory, who has a physical presence in New Mexico and is subject to [gross receipts] the sales tax pursuant to the [Gross Receipts and Compensating] Sales and Use Tax Act or income tax pursuant to the Income Tax Act or corporate income tax pursuant to the Corporate Income and Franchise Tax Act but excludes a personal services business and services provided by nonresidents hired or subcontracted if the tasks and responsibilities are associated with the standard industry job position of director, writer or producer."
SECTION 87. Section 7-2F-2.1 NMSA 1978 (being Laws 2015, Chapter 143, Section 4, as amended) is amended to read:
"7-2F-2.1. ADDITIONAL DEFINITIONS.--As used in Sections 7-2F-6 through 7-2F-12 NMSA 1978:
A. "direct production expenditure":
(1) except as provided in Paragraph (2) of this subsection, means a transaction that is subject to taxation in New Mexico, including:
(a) payment of wages, fringe benefits or fees for talent, management or labor to a person who is a New Mexico resident;
(b) payment for standard industry craft inventory when provided by a resident industry crew in addition to its industry crew services;
(c) payment for wages and per diem for a performing artist who is not a New Mexico resident and who is directly employed by a film production company; provided that the film production company deducts and remits, or causes to be deducted and remitted, income tax from the first day of services rendered in New Mexico at the maximum rate pursuant to the Withholding Tax Act;
(d) payment to a personal services business on the wages and per diem paid to a performing artist of the personal services business if: 1) the personal services business pays [gross receipts] sales tax in New Mexico on the portion of those payments qualifying for the tax credit; and 2) the film production company deducts and remits, or causes to be deducted and remitted, income tax at the maximum rate in New Mexico pursuant to Subsection H of Section 7-3A-3 NMSA 1978 on the portion of those payments qualifying for the tax credit paid to a personal services business where the performing artist is a full or part owner of that business or subcontracts with a personal services business where the performing artist is a full or part owner of that business; and
(e) any of the following provided by a vendor: 1) the story and scenario to be used for a film; 2) set construction and operations, wardrobe, accessories and related services; 3) photography, sound synchronization, lighting and related services; 4) editing and related services; 5) rental of facilities and equipment; 6) leasing of vehicles, not including the chartering of aircraft for out-of-state transportation; however, New Mexico-based chartered aircraft for in-state transportation directly attributable to the production shall be considered a direct production expenditure; provided that only the first one hundred dollars ($100) of the daily expense of leasing a vehicle for passenger transportation on roadways in the state may be claimed as a direct production expenditure; 7) food or lodging; provided that only the first one hundred fifty dollars ($150) of lodging per individual per day is eligible to be claimed as a direct production expenditure; 8) commercial airfare if purchased through a New Mexico-based travel agency or travel company for travel to and from New Mexico or within New Mexico that is directly attributable to the production; 9) insurance coverage and bonding if purchased through a New Mexico-based insurance agent, broker or bonding agent; 10) services for an external audit upon submission of an application for a film production tax credit by an accounting firm that submits the application pursuant to Subsection I of Section 7-2F-6 NMSA 1978; and 11) other direct costs of producing a film in accordance with generally accepted entertainment industry practice; and
(2) does not include an expenditure for:
(a) a gift with a value greater than twenty-five dollars ($25.00);
(b) artwork or jewelry, except that a work of art or a piece of jewelry may be a direct production expenditure if: 1) it is used in the film production; and 2) the expenditure is less than two thousand five hundred dollars ($2,500);
(c) entertainment, amusement or recreation; or
(d) subcontracted goods or services provided by a vendor when subcontractors are not subject to state taxation, such as equipment and locations provided by the military, government and religious organizations;
B. "film production company" means a person that produces one or more films or any part of a film and that commences principal photography on or after January 1, 2016; and
C. "vendor" means a person who sells or leases goods or services that are related to standard industry craft inventory, who has a physical presence in New Mexico and is subject to [gross receipts] the sales tax pursuant to the [Gross Receipts and Compensating] Sales and Use Tax Act and income tax pursuant to the Income Tax Act or corporate income tax pursuant to the Corporate Income and Franchise Tax Act but excludes a personal services business."
SECTION 88. Section 7-2F-4 NMSA 1978 (being Laws 2011, Chapter 165, Section 5, as amended) is amended to read:
"7-2F-4. REPORTING--ACCOUNTABILITY.--
A. The economic development department shall:
(1) collect data to be used in an econometric tool that objectively assesses the effectiveness of the credits provided by the Film Production Tax Credit Act;
(2) track the direct expenditures for the credits;
(3) with the support and assistance of the legislative finance committee staff and the taxation and revenue department, review and assess the analysis developed in Paragraph (1) of this subsection and create a report for presentation to the revenue stabilization and tax policy committee and the legislative finance committee that provides an objective assessment of the effectiveness of the credits; and
(4) report annually to the revenue stabilization and tax policy committee and the legislative finance committee on aggregate approved tax credits made pursuant to the Film Production Tax Credit Act and the past performance of and current outlook for the Film Production Tax Credit Act, including:
(a) the aggregate amount of credits paid subject to the aggregate amount allowed pursuant to Subsection B of Section 7-2F-12 NMSA 1978 in the prior fiscal year and the current amount of claims in the queue pursuant to Subsection C of Section 7-2F-12 NMSA 1978;
(b) the aggregate amount of approved credits paid in the prior fiscal year for expenditures by certain film production companies that are not subject to the aggregate amount of claims allowed pursuant to Section 7-2F-12 NMSA 1978;
(c) the number of applicants receiving the additional credit for television pilots and series pursuant to Section 7-2F-7 NMSA 1978;
(d) the number of applicants receiving the additional amount for expenditures made in certain areas of the state pursuant to Section [8 of this 2019 act] 7-2F-14 NMSA 1978;
(e) the aggregate amount of direct production expenditures and post production expenditures in New Mexico during the prior fiscal year, shown by county;
(f) the total number and wages of
New Mexico residents employed by film production companies in the prior fiscal year; and
(g) any other relevant information, as determined by the division.
B. The division shall develop a form on which the taxpayer claiming a credit pursuant to the Film Production Tax Credit Act shall submit a report to accompany the taxpayer's application for that credit.
C. With respect to the production on which the application for a credit is based, the film production company shall report to the division at a minimum the following information:
(1) the total aggregate wages of the members of the New Mexico resident crew;
(2) the number of New Mexico residents employed;
(3) the total amount of [gross receipts] sales taxes paid;
(4) the total number of hours worked by New Mexico residents;
(5) the total expenditures made in New Mexico that do not qualify for the credit;
(6) the aggregate wages paid to the members of the nonresident crew while working in New Mexico;
(7) the aggregate amount of direct production expenditures and postproduction expenditures in New Mexico in the prior fiscal year, shown by county; and
(8) other information deemed necessary by the division and economic development department to determine the effectiveness of the credit.
D. For purposes of assessing the effectiveness of a credit, the inability of the economic development department to aggregate data due to sample size shall not relieve the department of the requirement to report all relevant data to the legislature. The division shall provide notice to a film production company applying for a credit that information provided to the division may be revealed by the department in reports to the legislature."
SECTION 89. Section 7-5A-3 NMSA 1978 (being Laws 2005, Chapter 225, Section 3) is amended to read:
"7-5A-3. DEFINITIONS.--As used in the Streamlined Sales and Use Tax Administration Act:
A. "agreement" means the streamlined sales and use tax agreement;
B. "certified automated system" means software certified jointly by member states to:
(1) calculate the sales tax imposed by each jurisdiction on a transaction;
(2) determine the amount of tax to remit to the appropriate state; and
(3) maintain a record of the transaction;
C. "certified service provider" means an agent that performs all of the sales tax functions of a seller and that is certified jointly by member states to perform all of the sales tax functions of the seller;
D. "member state" means a state of the United States that enters into the agreement with another state and the District of Columbia if it enters into the agreement with another state;
E. "person" means an individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation and any other legal entity;
F. "sales tax" means the [gross receipts] sales tax levied pursuant to the [Gross Receipts and Compensating] Sales and Use Tax Act or a tax imposed by a state on the sale of goods or services;
G. "seller" means a person making sales, leases and rentals of personal property and services; and
H. "use tax" means the [compensating] use tax levied pursuant to the [Gross Receipts and Compensating] Sales and Use Tax Act."
SECTION 90. Section 7-9-1 NMSA 1978 (being Laws 1966, Chapter 47, Section 1, as amended) is amended to read:
"7-9-1. SHORT TITLE.--Chapter 7, Article 9 NMSA 1978 may be cited as the "[Gross Receipts and Compensating] Sales and Use Tax Act"."
SECTION 91. Section 7-9-2 NMSA 1978 (being Laws 1966, Chapter 47, Section 2) is amended to read:
"7-9-2. PURPOSE.--The purpose of the [Gross Receipts and Compensating] Sales and Use Tax Act is to provide revenue for public purposes by levying a tax on the privilege of engaging in certain activities within New Mexico and to protect New Mexico [businessmen] businesses from the unfair competition that would otherwise result from the importation into the state of property without payment of a similar tax."
SECTION 92. Section 7-9-3 NMSA 1978 (being Laws 1978, Chapter 46, Section 1, as amended) is amended to read:
"7-9-3. DEFINITIONS.--As used in the [Gross Receipts and Compensating] Sales and Use Tax Act:
A. "buying" or "selling" means a transfer of property for consideration or the performance of service for consideration;
B. "department" means the taxation and revenue department, the secretary of taxation and revenue or an employee of the department exercising authority lawfully delegated to that employee by the secretary;
C. "digital good" means a digital product delivered electronically, including software, music, photography, video, reading material, an application and a ringtone;
D. "disclosed agency" means an agent receiving money on behalf of a principal if the agent or the agent's principal disclosed the agency relationship to a third party from which the agent receives money, or if the third party otherwise has actual knowledge that the agent receives money on behalf of the principal;
E. "financial corporation" means a savings and loan association or an incorporated savings and loan company, trust company, mortgage banking company, consumer finance company or other financial corporation;
F. "initial use" or "initially used" means the first employment for the intended purpose and does not include the following activities:
(1) observation of tests conducted by the performer of services;
(2) participation in progress reviews, briefings, consultations and conferences conducted by the performer of services;
(3) review of preliminary drafts, drawings and other materials prepared by the performer of services;
(4) inspection of preliminary prototypes developed by the performer of services; or
(5) similar activities;
G. "lease" or "leasing" means an arrangement whereby, for a consideration, the owner of property grants another person the exclusive right to possess and use the property for a definite term;
H. "licensing" or "license" means an arrangement whereby, for a consideration, the owner of property grants another person a revocable, non-exclusive right to use the property;
I. "local option [gross receipts] sales tax" means a tax authorized to be imposed by a county or municipality upon a taxpayer's gross receipts and required to be collected by the department at the same time and in the same manner as the [gross receipts] sales tax;
J. "manufactured home" means a movable or portable housing structure for human occupancy that exceeds either a width of eight feet or a length of forty feet constructed to be towed on its own chassis and designed to be installed with or without a permanent foundation;
K. "manufacturing" means combining or processing components or materials to increase their value for sale in the ordinary course of business, but does not include construction services; farming; electric power generation; processing of natural resources, including hydrocarbons; or the processing or preparation of meals for immediate consumption;
L. "manufacturing service" means the service of combining or processing components or materials owned by another, but does not include construction services; farming; electric power generation; processing of natural resources, including hydrocarbons; or the processing or preparation of meals for immediate consumption;
M. "marketplace provider" means a person who facilitates the sale, lease or license of tangible personal property or services or licenses for use of real property on a marketplace seller's behalf, or on the marketplace provider's own behalf, by:
(1) listing or advertising the sale, lease or license, by any means, whether physical or electronic, including by catalog, internet website or television or radio broadcast; and
(2) either directly or indirectly, through agreements or arrangements with third parties collecting payment from the customer and transmitting that payment to the seller, regardless of whether the marketplace provider receives compensation or other consideration in exchange for the marketplace provider's services;
N. "marketplace seller" means a person who sells, leases or licenses tangible personal property or services or who licenses the use of real property through a marketplace provider;
O. "person" means:
(1) an individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, limited liability company, limited liability partnership, joint venture, syndicate or other entity, including any gas, water or electric utility owned or operated by a county, municipality or other political subdivision of the state; or
(2) a national, federal, state, Indian or other governmental unit or subdivision, or an agency, department or instrumentality of any of the foregoing;
P. "property" means:
(1) real property;
(2) tangible personal property, including electricity and manufactured homes;
(3) licenses, including licenses of digital goods, but not including the licenses of copyrights, trademarks or patents; and
(4) franchises;
Q. "research and development services" means an activity engaged in for other persons for consideration, for one or more of the following purposes:
(1) advancing basic knowledge in a recognized field of natural science;
(2) advancing technology in a field of technical endeavor;
(3) developing a new or improved product, process or system with new or improved function, performance, reliability or quality, whether or not the new or improved product, process or system is offered for sale, lease or other transfer;
(4) developing new uses or applications for an existing product, process or system, whether or not the new use or application is offered as the rationale for purchase, lease or other transfer of the product, process or system;
(5) developing analytical or survey activities incorporating technology review, application, trade-off study, modeling, simulation, conceptual design or similar activities, whether or not offered for sale, lease or other transfer; or
(6) designing and developing prototypes or integrating systems incorporating the advances, developments or improvements included in Paragraphs (1) through (5) of this subsection;
R. "secretary" means the secretary of taxation and revenue or the secretary's delegate;
S. "service" means all activities engaged in for other persons for a consideration, which activities involve predominantly the performance of a service as distinguished from selling or leasing property. "Service" includes activities performed by a person for its members or shareholders. In determining what is a service, the intended use, principal objective or ultimate objective of the contracting parties shall not be controlling. "Service" includes construction activities and all tangible personal property that will become an ingredient or component part of a construction project. That tangible personal property retains its character as tangible personal property until it is installed as an ingredient or component part of a construction project in New Mexico. Sales of tangible personal property that will become an ingredient or component part of a construction project to persons engaged in the construction business are sales of tangible personal property; and
T. "use" or "using" includes use, consumption or storage other than storage for subsequent sale in the ordinary course of business or for use solely outside this state."
SECTION 93. Section 7-9-3.2 NMSA 1978 (being Laws 1991, Chapter 8, Section 1, as amended) is amended to read:
"7-9-3.2. ADDITIONAL DEFINITION.--
A. As used in the [Gross Receipts and Compensating] Sales and Use Tax Act, "governmental gross receipts" means receipts of the state or an agency, institution, instrumentality or political subdivision from:
(1) the sale of tangible personal property other than water from facilities open to the general public;
(2) the performance of or admissions to recreational, athletic or entertainment services or events in facilities open to the general public;
(3) refuse collection or refuse disposal or both;
(4) sewage services;
(5) the sale of water by a utility owned or operated by a county, municipality or other political subdivision of the state;
(6) the renting of parking, docking or tie-down spaces or the granting of permission to park vehicles, tie down aircraft or dock boats;
(7) the sale of tangible personal property handled on consignment when sold from facilities open to the general public; and
(8) a hospital licensed by the department of health.
B. "Governmental gross receipts" excludes receipts of the state or an agency, institution, instrumentality or political subdivision from:
(1) cash discounts taken and allowed;
(2) governmental [gross receipts] sales tax payable on transactions reportable for the period; and
(3) any type of time-price differential.
C. As used in this section, "facilities open to the general public" does not include point of sale registers or electronic devices at a bookstore owned or operated by a public post-secondary educational institution when the registers or devices are utilized in the sale of textbooks or other materials required for courses at the institution to a student enrolled at the institution who displays a valid student identification card."
SECTION 94. Section 7-9-3.3 NMSA 1978 (being Laws 2003, Chapter 272, Section 4, as amended) is amended to read:
"7-9-3.3. DEFINITION--ENGAGING IN BUSINESS.--As used in the [Gross Receipts and Compensating] Sales and Use Tax Act, "engaging in business" means carrying on or causing to be carried on any activity with the purpose of direct or indirect benefit. For a person who lacks physical presence in this state, including a marketplace provider, "engaging in business" means having, in the previous calendar year, total taxable gross receipts from sales, leases and licenses of tangible personal property, sales of licenses and sales of services and licenses for use of real property sourced to this state pursuant to Section 7-1-14 NMSA 1978, of at least one hundred thousand dollars ($100,000)."
SECTION 95. Section 7-9-3.4 NMSA 1978 (being Laws 2003, Chapter 272, Section 5, as amended) is amended to read:
"7-9-3.4. DEFINITIONS--CONSTRUCTION, CONSTRUCTION MATERIALS AND CONSTRUCTION-RELATED SERVICES.--As used in the [Gross Receipts and Compensating] Sales and Use Tax Act:
A. "construction" means:
(1) the building, altering, repairing or demolishing in the ordinary course of business any:
(a) road, highway, bridge, parking area or related project;
(b) building, stadium or other structure;
(c) airport, subway or similar facility;
(d) park, trail, athletic field, golf course or similar facility;
(e) dam, reservoir, canal, ditch or similar facility;
(f) sewerage or water treatment facility, power generating plant, pump station, natural gas compressing station, gas processing plant, coal gasification plant, refinery, distillery or similar facility;
(g) sewerage, water, gas or other pipeline;
(h) transmission line;
(i) radio, television or other tower;
(j) water, oil or other storage tank;
(k) shaft, tunnel or other mining appurtenance;
(l) microwave station or similar facility;
(m) retaining wall, wall, fence, gate or similar structure; or
(n) similar work;
(2) the leveling or clearing of land;
(3) the excavating of earth;
(4) the drilling of wells of any type, including seismograph shot holes or core drilling; or
(5) similar work;
B. "construction material" means tangible personal property that becomes or is intended to become an ingredient or component part of a construction project, but "construction material" does not include a replacement fixture when the replacement is not construction or a replacement part for a fixture; and
C. "construction-related service" means a service directly contracted for or billed to a specific construction project, including design, architecture, drafting, surveying, engineering, environmental and structural testing, security, sanitation and services required to comply with governmental construction-related rules. "Construction-related service" does not include general business services, such as legal or accounting services, equipment maintenance or real estate sales commissions."
SECTION 96. Section 7-9-3.5 NMSA 1978 (being Laws 2003, Chapter 272, Section 3, as amended) is amended to read:
"7-9-3.5. DEFINITION--GROSS RECEIPTS.--
A. As used in the [Gross Receipts and Compensating] Sales and Use Tax Act:
(1) "gross receipts" means the total amount of money or the value of other consideration received from selling property in New Mexico, from leasing or licensing property employed in New Mexico, from granting a right to use a franchise employed in New Mexico, from selling services performed outside New Mexico, the product of which is initially used in New Mexico, or from performing services in New Mexico. In an exchange in which the money or other consideration received does not represent the value of the property or service exchanged, "gross receipts" means the reasonable value of the property or service exchanged;
(2) "gross receipts" includes:
(a) any receipts from sales of tangible personal property handled on consignment;
(b) the total commissions or fees derived from the business of buying, selling or promoting the purchase, sale or lease, as an agent or broker on a commission or fee basis, of any property, service, stock, bond or security;
(c) amounts paid by members of any cooperative association or similar organization for sales or leases of personal property or performance of services by such organization;
(d) amounts received from transmitting messages or conversations by persons providing telephone or telegraph services;
(e) amounts received by a New Mexico florist from the sale of flowers, plants or other products that are customarily sold by florists where the sale is made pursuant to orders placed with the New Mexico florist that are filled and delivered outside New Mexico by an out-of-state florist;
(f) the receipts of a home service provider from providing mobile telecommunications services to customers whose place of primary use is in New Mexico if: 1) the mobile telecommunications services originate and terminate in the same state, regardless of where the services originate, terminate or pass through; and 2) the charges for mobile telecommunications services are billed by or for a customer's home service provider and are deemed provided by the home service provider. For the purposes of this section, "home service provider", "mobile telecommunications services", "customer" and "place of primary use" have the meanings given in the federal Mobile Telecommunications Sourcing Act; and
(g) receipts collected by a marketplace provider engaging in business in the state from sales, leases and licenses of tangible personal property, sales of licenses and sales of services or licenses for use of real property that are sourced to this state and are facilitated by the marketplace provider on behalf of marketplace sellers, regardless of whether the marketplace sellers are engaging in business in the state; and
(3) "gross receipts" excludes:
(a) cash discounts allowed and taken;
(b) New Mexico [gross receipts] sales tax, governmental [gross receipts] sales tax and leased vehicle [gross receipts] sales tax payable on transactions for the reporting period;
(c) taxes imposed pursuant to the provisions of any local option [gross receipts] sales tax that is payable on transactions for the reporting period;
(d) any gross receipts or sales taxes imposed by an Indian nation, tribe or pueblo; provided that the tax is approved, if approval is required by federal law or regulation, by the secretary of the interior of the United States; and provided further that the gross receipts or sales tax imposed by the Indian nation, tribe or pueblo provides a reciprocal exclusion for gross receipts, sales or gross receipts-based excise taxes imposed by the state or its political subdivisions;
(e) any type of time-price differential;
(f) amounts received solely on behalf of another in a disclosed agency capacity; and
(g) amounts received by a New Mexico florist from the sale of flowers, plants or other products that are customarily sold by florists where the sale is made pursuant to orders placed with an out-of-state florist for filling and delivery in New Mexico by a New Mexico florist.
B. When the sale of property or service is made under any type of charge, conditional or time-sales contract or the leasing of property is made under a leasing contract, the seller or lessor may elect to treat all receipts, excluding any type of time-price differential, under such contracts as gross receipts as and when the payments are actually received. If the seller or lessor transfers the seller's or lessor's interest in any such contract to a third person, the seller or lessor shall pay the [gross receipts] sales tax upon the full sale or leasing contract amount, excluding any type of time-price differential."
SECTION 97. Section 7-9-4 NMSA 1978 (being Laws 1966, Chapter 47, Section 4, as amended) is amended to read:
"7-9-4. IMPOSITION AND RATE OF TAX--DENOMINATION AS "[GROSS RECEIPTS] SALES TAX".--
A. For the privilege of engaging in business, an excise tax equal to the following percentages of gross receipts is imposed on any person engaging in business in New Mexico:
(1) prior to July 1, 2023, five percent; and
(2) beginning July 1, 2023, four and seven-eighths percent, except as provided in Subsection C of this section.
B. The tax imposed by this section shall be referred to as the "[gross receipts] sales tax".
C. If, for any single fiscal year occurring after fiscal year 2025 and prior to fiscal year 2030, [gross receipts] sales tax revenues are less than ninety-five percent of the [gross receipts] sales tax revenues for the previous fiscal year, as determined by the secretary of finance and administration, the rate of the [gross receipts] sales tax shall be five and one-eighth percent beginning on the July 1 following the determination made by the secretary of finance and administration.
D. On or before February 1 of each year, until the rate of the [gross receipts] sales tax is adjusted to five and one-eighth percent pursuant to Subsection C of this section, the secretary of finance and administration shall make a determination for the purposes of Subsection C of this section. If the rate of tax is adjusted pursuant to that subsection, the secretary shall certify to the secretary of taxation and revenue that the rate of the [gross receipts] sales tax shall be five and one-eighth percent, effective on the following July 1.
E. As used in this section, "[gross receipts] sales tax revenues" means the net receipts attributable to the [gross receipts] sales tax and distributed to the general fund."
SECTION 98. Section 7-9-4.3 NMSA 1978 (being Laws 1991, Chapter 8, Section 2, as amended) is amended to read:
"7-9-4.3. IMPOSITION AND RATE OF TAX--DENOMINATION AS "GOVERNMENTAL [GROSS RECEIPTS] SALES TAX".--For the privilege of engaging in certain activities by governments, there is imposed on every agency, institution, instrumentality or political subdivision of the state, except any school district and an entity licensed by the department of health, other than a hospital, that is principally engaged in providing health care services, an excise tax of five percent of governmental gross receipts. The tax imposed by this section shall be referred to as the "governmental [gross receipts] sales tax"."
SECTION 99. Section 7-9-5 NMSA 1978 (being Laws 1966, Chapter 47, Section 5, as amended) is amended to read:
"7-9-5. PRESUMPTION OF TAXABILITY.--
A. To prevent evasion of the [gross receipts] sales tax and to aid in its administration, it is presumed that all receipts of a person engaging in business are subject to the [gross receipts] sales tax. A person engaged solely in transactions specifically exempt under the provisions of the [Gross Receipts and Compensating] Sales and Use Tax Act shall not be required to register or file a return under that act.
B. If receipts from nontaxable charges for mobile telecommunications services are aggregated with and not separately stated from taxable charges for mobile telecommunications services, the charges for nontaxable mobile telecommunications services shall be subject to [gross receipts] sales tax unless the home service provider can reasonably identify nontaxable charges in its books and records that are kept in the regular course of business. For the purposes of this subsection, "charges for mobile telecommunications services", "home service provider" and "mobile telecommunications services" have the meanings given in the federal Mobile Telecommunications Sourcing Act.
C. A marketplace provider engaging in business in this state is not liable for amounts of [gross receipts] sales tax collected incorrectly due to the marketplace provider reasonably relying on erroneous information provided by the seller."
SECTION 100. Section 7-9-6 NMSA 1978 (being Laws 1966, Chapter 47, Section 6, as amended) is amended to read:
"7-9-6. SEPARATELY STATING THE [GROSS RECEIPTS] SALES TAX.--
A. Taxpayers subject to the [Gross Receipts and Compensating] Sales and Use Tax Act, when billing a customer, shall separately state the amount of tax associated with the transaction or provide a statement affirmatively indicating that the [gross receipts] sales tax is included in the amount billed.
B. When the [gross receipts] sales tax is stated separately on the books of the seller or lessor, and if the total amount of tax that is stated separately on transactions reportable within one reporting period is in excess of the amount of [gross receipts] sales tax otherwise payable on the transactions on which the tax was stated separately, the excess amount of tax stated on the transactions within that reporting period shall be included in gross receipts."
SECTION 101. Section 7-9-7 NMSA 1978 (being Laws 1966, Chapter 47, Section 7, as amended) is amended to read:
"7-9-7. IMPOSITION AND RATE OF TAX--DENOMINATION AS "[COMPENSATING] USE TAX".--
A. For the privilege of making taxable use of tangible personal property in New Mexico, there is imposed on the person using the property an excise tax equal to five percent prior to July 1, 2023 and four and seven-eighths percent beginning July 1, 2023, except as provided in Subsection G of this section, of the value of tangible property that was:
(1) manufactured by the person using the property in the state; or
(2) acquired in a transaction for which the seller's receipts were not subject to the [gross receipts] sales tax.
B. For the purpose of Subsection A of this section, value of tangible personal property shall be the adjusted basis of the property for federal income tax purposes determined as of the time of acquisition or introduction into this state or of conversion of the property to taxable use, whichever is later. If no adjusted basis for federal income tax purposes is established for the property, a reasonable value of the property shall be used.
C. For the privilege of making taxable use of a license or franchise in New Mexico, there is imposed on the person using the license or franchise an excise tax equal to the rate provided in Subsection A or G of this section, as applicable, against the value of the license or franchise in its use in this state. The department by rule, ruling or instruction shall fairly apportion, where appropriate, the value of a license or franchise to its value in use in New Mexico. The tax shall apply only to the value of a license or franchise used in New Mexico where the license or franchise was acquired in a transaction the receipts from which were not subject to the [gross receipts] sales tax.
D. For the privilege of making taxable use of services in New Mexico, there is imposed on the person using the services an excise tax equal to the rate provided in Subsection A or G of this section, as applicable, against the value of the services at the time the services were performed or the product of the service was acquired. For use of services to be a taxable use pursuant to this subsection, the services shall have been acquired in a transaction the receipts from which were not subject to the [gross receipts] sales tax.
E. For purposes of this section, receipts are not subject to the [gross receipts] sales tax if the person responsible for the [gross receipts] sales tax on those receipts lacked nexus in New Mexico or the receipts were exempt or allowed to be deducted pursuant to the [Gross Receipts and Compensating] Sales and Use Tax Act.
F. The tax imposed by this section shall be referred to as the "[compensating] use tax".
G. If the [gross receipts] sales tax is increased to five and one-eighth percent pursuant to Subsection C of Section 7-9-4 NMSA 1978, the rate of the [compensating] use tax shall be five and one-eighth percent.
H. As used in this section, "taxable use" means use by a person who acquires tangible personal property, a license, a franchise or a service, and the use of which would not have qualified for an exemption or deduction pursuant to the [Gross Receipts and Compensating] Sales and Use Tax Act."
SECTION 102. Section 7-9-8 NMSA 1978 (being Laws 1966, Chapter 47, Section 8, as amended) is amended to read:
"7-9-8. PRESUMPTION OF TAXABILITY AND VALUE.--
A. To prevent evasion of the [compensating] use tax and the duty to collect it, it is presumed that property bought or sold by any person for delivery into this state is bought or sold for a taxable use in this state.
B. In determining the amount of [compensating] use tax due on the use of property, it is presumed, in the absence of preponderant evidence of another value, that the value means the total amount of money or the reasonable value of other consideration paid for property exclusive of any type of time-price differential. However, in an exchange in which the amount of money paid does not represent the value of the property or property and service purchased, the [compensating] use tax shall be imposed on the reasonable value of the property or property and service purchased.
C. In determining the amount of [compensating] use tax due on the use of a service, it is presumed, in the absence of preponderant evidence of another value, that the value means the total amount of money or the reasonable value of other consideration paid for the service exclusive of any type of time-price differential. However, in an exchange in which the amount paid does not represent the value of the service purchased, the [compensating] use tax shall be imposed on the reasonable value of the service purchased."
SECTION 103. Section 7-9-9 NMSA 1978 (being Laws 1966, Chapter 47, Section 9, as amended) is amended to read:
"7-9-9. LIABILITY OF USER FOR PAYMENT OF [COMPENSATING] USE TAX.--Any person in New Mexico using property on the value of which [compensating] use tax is payable but has not been paid is liable to the state for payment of the [compensating] use tax, but this liability is discharged if the buyer has paid the [compensating] use tax to the seller for payment over to the department."
SECTION 104. Section 7-9-10 NMSA 1978 (being Laws 1966, Chapter 47, Section 10, as amended) is amended to read:
"7-9-10. AGENTS FOR COLLECTION OF [COMPENSATING] USE TAX--DUTIES.--
A. Every person carrying on or causing to be carried on any activity within this state attempting to exploit New Mexico's markets who sells property or sells property and service for use in this state and who is not subject to the [gross receipts] sales tax on receipts from these sales shall collect the [compensating] use tax from the buyer and pay the tax collected to the department. "Activity", for the purposes of this section, includes but is not limited to engaging in any of the following in New Mexico: maintaining an office or other place of business; soliciting orders through employees or independent contractors; soliciting orders through advertisements placed in newspapers or magazines published in New Mexico or advertisements broadcast by New Mexico radio or television stations; soliciting orders through programs broadcast by New Mexico radio or television stations or transmitted by cable systems in New Mexico; and canvassing, demonstrating, collecting money, warehousing or storing merchandise or delivering or distributing products as a consequence of an advertising or other sales program directed at potential customers. "Activity", for the purposes of this section, does not include having a [world wide web site] website as a third-party provider on a computer physically located in New Mexico but owned by another nonaffiliated person, and "activity" does not include using a nonaffiliated third-party call center to accept and process telephone or electronic orders of tangible personal property or licenses primarily from non-New Mexico buyers, which orders are forwarded to a location outside New Mexico for filling, or to provide services primarily to non-New Mexico customers.
B. To ensure orderly and efficient collection of the public revenue, if any application of this section is held invalid, the section's application to other situations or persons shall not be affected."
SECTION 105. Section 7-9-11 NMSA 1978 (being Laws 1966, Chapter 47, Section 11, as amended) is amended to read:
"7-9-11. DATE PAYMENT DUE.--The taxes imposed by the [Gross Receipts and Compensating] Sales and Use Tax Act are to be paid on or before the twenty-fifth day of the month following the month in which the taxable event occurs."
SECTION 106. Section 7-9-12 NMSA 1978 (being Laws 1969, Chapter 144, Section 5, as amended) is amended to read:
"7-9-12. EXEMPTIONS.--Exemptions from either the [gross receipts] sales tax or the [compensating] use tax are not exemptions from both taxes unless explicitly stated otherwise by law."
SECTION 107. Section 7-9-13 NMSA 1978 (being Laws 1969, Chapter 144, Section 6, as amended) is amended to read:
"7-9-13. EXEMPTION--[GROSS RECEIPTS] SALES TAX--GOVERNMENTAL AGENCIES.--
A. Except as otherwise provided in this section, exempted from the [gross receipts] sales tax are receipts of:
(1) the United States or any agency, department or instrumentality thereof;
(2) the state of New Mexico or any political subdivision thereof;
(3) any Indian nation, tribe or pueblo from activities or transactions occurring on its sovereign territory; or
(4) any foreign nation or agency, instrumentality or political subdivision thereof, but only when required by a treaty in force to which the United States is a party.
B. Receipts from the sale of gas or electricity by a utility owned or operated by a county, municipality or other political subdivision of a state are not exempted from the [gross receipts] sales tax.
C. Receipts from the operation of a cable television system owned or operated by a municipality are not exempted from the [gross receipts] sales tax."
SECTION 108. Section 7-9-13.1 NMSA 1978 (being Laws 1989, Chapter 262, Section 4, as amended) is amended to read:
"7-9-13.1. EXEMPTION--[GROSS RECEIPTS] SALES TAX--CERTAIN SERVICES.--
A. Exempted from the [gross receipts] sales tax are the receipts from selling research and development services performed outside New Mexico the product of which is initially used in New Mexico and that are sold:
(1) between affiliated corporations;
(2) to the United States by persons, other than organizations described in Subsection A of Section 7-9-29 NMSA 1978, who are prime contractors operating facilities in New Mexico designated as national laboratories by act of congress; or
(3) to persons, other than organizations described in Subsection A of Section 7-9-29 NMSA 1978, who are prime contractors operating facilities in New Mexico designated as national laboratories by act of congress.
B. An "affiliated corporation" means a corporation that directly or indirectly, through one or more intermediaries controls, is controlled by or is under common control with the subject corporation. "Control" means ownership of stock in a corporation that represents at least eighty percent of the total voting power of that corporation and has a stated or par value equal to at least eighty percent of the total stated or par value of the stock of that corporation."
SECTION 109. Section 7-9-13.2 NMSA 1978 (being Laws 1992, Chapter 100, Section 3, as amended) is amended to read:
"7-9-13.2. EXEMPTION--GOVERNMENTAL [GROSS RECEIPTS] SALES TAX--RECEIPTS SUBJECT TO CERTAIN OTHER TAXES.--Exempted from the governmental [gross receipts] sales tax are receipts from transactions involving tangible personal property or services on which receipts or transactions the [gross receipts] sales tax, [compensating] use tax, motor vehicle excise tax, gasoline tax, [special fuel tax] special fuel excise tax, oil and gas emergency school tax, resources tax, processors tax, service tax or the excise tax imposed under Section 66-12-6.1 NMSA 1978 is imposed."
SECTION 110. Section 7-9-13.3 NMSA 1978 (being Laws 2001, Chapter 231, Section 12) is amended to read:
"7-9-13.3. EXEMPTION--[GROSS RECEIPTS] SALES TAX AND GOVERNMENTAL [GROSS RECEIPTS] SALES TAX--STADIUM SURCHARGE.--Exempted from the [gross receipts] sales tax and from the governmental [gross receipts] sales tax are the receipts from selling tickets, parking, souvenirs, concessions, programs, advertising, merchandise, corporate suites or boxes, broadcast revenues and all other products, services or activities sold at, related to or occurring at a minor league baseball stadium on which a stadium surcharge is imposed pursuant to the Minor League Baseball Stadium Funding Act."
SECTION 111. Section 7-9-13.4 NMSA 1978 (being Laws 2002, Chapter 20, Section 1) is amended to read:
"7-9-13.4. EXEMPTION--[GROSS RECEIPTS] SALES TAX--SALE OF TEXTBOOKS FROM CERTAIN BOOKSTORES TO ENROLLED STUDENTS.--Exempted from the [gross receipts] sales tax are the receipts from the sale of textbooks and other materials that are required for courses at a public post-secondary educational institution if the sale is by a bookstore located on the campus of the institution and operated pursuant to a contractual agreement with that institution and the sale is to a student enrolled at the institution who displays a valid student identification card."
SECTION 112. Section 7-9-13.5 NMSA 1978 (being Laws 2005, Chapter 351, Section 2) is amended to read:
"7-9-13.5. EXEMPTION--[GROSS RECEIPTS] SALES TAX AND GOVERNMENTAL [GROSS RECEIPTS] SALES TAX--EVENT CENTER SURCHARGE.--Exempted from the [gross receipts] sales tax and from the governmental [gross receipts] sales tax are the receipts from selling tickets, parking, souvenirs, concessions, programs, advertising, merchandise, corporate suites or boxes, broadcast revenues and all other products or services sold at or related to a municipal event center or related to activities occurring at the event center on which an event center surcharge is imposed pursuant to the Municipal Event Center Funding Act."
SECTION 113. Section 7-9-14 NMSA 1978 (being Laws 1969, Chapter 144, Section 7, as amended) is amended to read:
"7-9-14. EXEMPTION--[COMPENSATING] USE TAX--GOVERNMENTAL AGENCIES--INDIANS.--
A. Except as otherwise provided in this subsection, there is exempted from the [compensating] use tax the use of property by the United States or the state of New Mexico or any governmental unit or subdivision, agency, department or instrumentality thereof. The exemption provided by this subsection does not apply to:
(1) the use of property that is or will be incorporated into a metropolitan redevelopment project under the Metropolitan Redevelopment Code; or
(2) the use of construction material.
B. Exempted from the [compensating] use tax is the use of property by any Indian nation, tribe or pueblo or any governmental unit, subdivision, agency, department or instrumentality thereof on Indian reservations or pueblo grants."
SECTION 114. Section 7-9-15 NMSA 1978 (being Laws 1970, Chapter 12, Section 1, as amended) is amended to read:
"7-9-15. EXEMPTION--[COMPENSATING] USE TAX--CERTAIN ORGANIZATIONS.--Exempted from the [compensating] use tax is the use of property by organizations that demonstrate to the department that they have been granted exemption from the federal income tax by the United States commissioner of internal revenue as organizations described in Section 501(c)(3) of the United States Internal Revenue Code of 1954, as amended or renumbered, in the conduct of functions described in Section 501(c)(3). The use of property as an ingredient or component part of a construction project is not a use in the conduct of functions described in Section 501(c)(3). This section does not apply to the use of property in an unrelated trade or business as defined in Section 513 of the United States Internal Revenue Code of 1954, as amended or renumbered."
SECTION 115. Section 7-9-16 NMSA 1978 (being Laws 1969, Chapter 144, Section 9, as amended) is amended to read:
"7-9-16. EXEMPTION--[GROSS RECEIPTS] SALES TAX--CERTAIN NONPROFIT FACILITIES.--Exempted from the [gross receipts] sales tax are the receipts of nonprofit entities from the operation of facilities designed and used for providing accommodations for retired elderly persons."
SECTION 116. Section 7-9-17 NMSA 1978 (being Laws 1969, Chapter 144, Section 10) is amended to read:
"7-9-17. EXEMPTION--[GROSS RECEIPTS] SALES TAX--WAGES.--Exempted from the [gross receipts] sales tax are the receipts of employees from wages, salaries, commissions or from any other form of remuneration for personal services."
SECTION 117. Section 7-9-18 NMSA 1978 (being Laws 1969, Chapter 144, Section 11, as amended) is amended to read:
"7-9-18. EXEMPTION--[GROSS RECEIPTS] SALES TAX AND GOVERNMENTAL [GROSS RECEIPTS] SALES TAX--AGRICULTURAL PRODUCTS.--
A. Exempted from the [gross receipts] sales tax and from the governmental [gross receipts] sales tax are the receipts from selling livestock and receipts of growers, producers, trappers or nonprofit marketing associations from selling livestock, live poultry, unprocessed agricultural products, hides or pelts. Persons engaged in the business of buying and selling wool or mohair or of buying and selling livestock on their own account are producers for the purposes of this section.
B. Receipts from selling dairy products at retail are not exempted from the [gross receipts] sales tax.
C. As used in this section, "livestock" means all domestic or domesticated animals that are used or raised on a farm or ranch, including the carcasses thereof, and also includes horses, asses, mules, cattle, sheep, goats, swine, bison, poultry, ostriches, emus, rheas, camelids and farmed cervidae upon any land in New Mexico; provided that for the purposes of Chapter 77, Article 9 NMSA 1978, "animals" or "livestock" have the meaning defined in that article. "Animals" or "livestock" does not include canine or feline animals. For the purpose of the rules governing meat inspection, wild animals, poultry and birds used for human consumption shall also be included within the meaning of "animals" or "livestock"."
SECTION 118. Section 7-9-18.1 NMSA 1978 (being Laws 1987, Chapter 264, Section 13 and Laws 1987, Chapter 304, Section 1) is amended to read:
"7-9-18.1. EXEMPTION--[GROSS RECEIPTS] SALES TAX--FOOD STAMPS.--Exempted from the [gross receipts] sales tax are the receipts of a taxpayer who is approved for participation in the food stamp program authorized by U.S.C. Title 7, Chapter 51, as that chapter may be amended or renumbered, from the lawful acceptance and deposit with a financial institution of food stamps issued by the United States department of agriculture pursuant to the food stamp program."
SECTION 119. Section 7-9-19 NMSA 1978 (being Laws 1969, Chapter 144, Section 12, as amended) is amended to read:
"7-9-19. EXEMPTION--[GROSS RECEIPTS] SALES TAX-- LIVESTOCK FEEDING.--
A. Exempted from the [gross receipts] sales tax are the receipts of any person derived from feeding or pasturing livestock.
B. Receipts derived from penning or handling livestock prior to sale are receipts derived from feeding livestock for the purposes of this section.
C. Receipts derived from training livestock are receipts derived from feeding livestock for the purposes of this section."
SECTION 120. Section 7-9-20 NMSA 1978 (being Laws 1988, Chapter 82, Section 1) is amended to read:
"7-9-20. EXEMPTION--[GROSS RECEIPTS] SALES TAX--CERTAIN RECEIPTS OF HOMEOWNERS ASSOCIATIONS.--Exempted from the [gross receipts] sales tax are those receipts of homeowners associations defined in Section 528(c)(1) (A thru D), (2), (3) and (4) (A, B and D) of the Internal Revenue Code, as amended, which are received as membership fees, dues or assessments from members who are owners of residential units, residences or residential lots, except for owners of time-share interests, for payment of taxes, insurance, utility expenses, management and improvement, maintenance or rehabilitation of those common areas, elements or facilities appurtenant thereto which are for the sole use of the owners and their guests."
SECTION 121. Section 7-9-22 NMSA 1978 (being Laws 1969, Chapter 144, Section 15, as amended) is amended to read:
"7-9-22. EXEMPTION--[GROSS RECEIPTS] SALES TAX--VEHICLES.--Exempted from the [gross receipts] sales tax are the receipts from selling vehicles on which a tax is imposed by the Motor Vehicle Excise Tax Act, vehicles subject to registration under Section 66-3-16 NMSA 1978 and vehicles exempt from the motor vehicle excise tax pursuant to Subsection F of Section 7-14-6 NMSA 1978."
SECTION 122. Section 7-9-22.1 NMSA 1978 (being Laws 1987, Chapter 247, Section 1) is amended to read:
"7-9-22.1. EXEMPTION--[GROSS RECEIPTS] SALES TAX--BOATS.--Exempted from the [gross receipts] sales tax are the receipts from selling boats on which a tax is imposed by Section 66-12-6.1 NMSA 1978."
SECTION 123. Section 7-9-23 NMSA 1978 (being Laws 1969, Chapter 144, Section 16, as amended) is amended to read:
"7-9-23. EXEMPTION--[COMPENSATING] USE TAX--VEHICLES.--Exempted from the [compensating] use tax [is] are the use of vehicles on which the tax imposed by the Motor Vehicle Excise Tax Act has been paid, the use of vehicles subject to registration under Section 66-3-16 NMSA 1978 and the use of vehicles exempt from the motor vehicle excise tax pursuant to Subsection F of Section 7-14-6 NMSA 1978."
SECTION 124. Section 7-9-23.1 NMSA 1978 (being Laws 1987, Chapter 247, Section 2) is amended to read:
"7-9-23.1. EXEMPTION--[COMPENSATING] USE TAX--BOATS.--Exempted from the [compensating] use tax is the use of boats on which the tax imposed by Section 66-12-6.1 NMSA 1978 has been paid."
SECTION 125. Section 7-9-24 NMSA 1978 (being Laws 1969, Chapter 144, Section 17, as amended) is amended to read:
"7-9-24. EXEMPTION--[GROSS RECEIPTS] SALES TAX--INSURANCE COMPANIES.--Exempted from the [gross receipts] sales tax are the receipts of insurance companies or any agent thereof from premiums and any consideration received by a property bondsman, as that person is defined in Section 59A-51-2 NMSA 1978, as security or surety for a bail bond in connection with a judicial proceeding."
SECTION 126. Section 7-9-25 NMSA 1978 (being Laws 1969, Chapter 144, Section 18) is amended to read:
"7-9-25. EXEMPTION--[GROSS RECEIPTS] SALES TAX--DIVIDENDS AND INTEREST.--Exempted from the [gross receipts] sales tax are the receipts received as interest on money loaned or deposited, receipts received as dividends or interest from stocks, bonds or securities or receipts from the sale of stocks, bonds or securities."
SECTION 127. Section 7-9-26 NMSA 1978 (being Laws 1969, Chapter 144, Section 19, as amended) is amended to read:
"7-9-26. EXEMPTION--[GROSS RECEIPTS] SALES AND [COMPENSATING] USE TAX--FUEL.--Exempted from the [gross receipts] sales tax and [compensating] the use tax are the receipts from selling and the use of gasoline, special fuel or alternative fuel on which the tax imposed by Section 7-13-3, [7-16-3 or] 7-16A-3 or 7-16B-4 NMSA 1978 [or the Alternative Fuel Tax Act] has been paid and not refunded."
SECTION 128. Section 7-9-26.1 NMSA 1978 (being Laws 2003, Chapter 62, Section 1) is amended to read:
"7-9-26.1. EXEMPTION--[GROSS RECEIPTS] SALES TAX AND [COMPENSATING] USE TAX--FUEL FOR SPACE VEHICLES.--
A. Exempted from the [gross receipts] sales tax are the receipts from selling fuel, oxidizer or a substance that combines fuel and oxidizer to propel space vehicles or to operate space vehicle launchers.
B. Exempted from the [compensating] use tax is the use of fuel, oxidizer or a substance that combines fuel and oxidizer to propel space vehicles or to operate space vehicle launchers."
SECTION 129. Section 7-9-27 NMSA 1978 (being Laws 1969, Chapter 144, Section 20) is amended to read:
"7-9-27. EXEMPTION--[COMPENSATING] USE TAX--PERSONAL EFFECTS.--Exempted from the [compensating] use tax is the use by an individual of personal or household effects brought into the state in connection with the establishment by [him] the individual of an initial residence in this state and the use of property brought into the state by a nonresident for [his] the nonresident's own nonbusiness use while temporarily within this state."
SECTION 130. Section 7-9-28 NMSA 1978 (being Laws 1969, Chapter 144, Section 21) is amended to read:
"7-9-28. EXEMPTION--[GROSS RECEIPTS] SALES TAX--OCCASIONAL SALE OF PROPERTY OR SERVICES.--Exempted from the [gross receipts] sales tax are the receipts from the isolated or occasional sale of or leasing of property or a service by a person who is neither regularly engaged nor [holding himself out] making any representation as being as engaged in the business of selling or leasing the same or similar property or service."
SECTION 131. Section 7-9-29 NMSA 1978 (being Laws 1970, Chapter 12, Section 3, as amended by Laws 2019, Chapter 44, Section 1 and by Laws 2019, Chapter 270, Section 33) is amended to read:
"7-9-29. EXEMPTION--[GROSS RECEIPTS] SALES TAX--CERTAIN ORGANIZATIONS--EXCEPTIONS.--
A. Exempted from the [gross receipts] sales tax are the receipts of organizations that demonstrate to the department that they have been granted exemption from the federal income tax by the United States commissioner of internal revenue as organizations described in Section 501(c)(3) of the United States Internal Revenue Code of 1986, as that section may be amended or renumbered [except for receipts of a hospital licensed by the department of health].
B. Exempted from the [gross receipts] sales tax are the receipts from carrying on chamber of commerce, visitor bureau and convention bureau functions of organizations that demonstrate to the department that they have been granted exemption from the federal income tax by the United States commissioner of internal revenue as organizations described in Section 501(c)(6) of the United States Internal Revenue Code of 1986, as that section may be amended or renumbered.
C. This section does not apply to:
(1) receipts derived from an unrelated trade or business as defined in Section 513 of the United States Internal Revenue Code of 1986, as that section may be amended or renumbered;
(2) receipts of a prime contractor that are derived from operating a facility in New Mexico designated as a national laboratory by an act of congress; [or]
(3) receipts of a prime contractor that are derived from operating a research facility in New Mexico that is owned by the state; or
(4) receipts of a hospital licensed by the department of health."
SECTION 132. Section 7-9-30 NMSA 1978 (being Laws 1969, Chapter 144, Section 23, as amended) is amended to read:
"7-9-30. EXEMPTION--[COMPENSATING] USE TAX--RAILROAD EQUIPMENT, AIRCRAFT AND SPACE VEHICLES.--
A. Exempted from the [compensating] use tax is the use of railroad locomotives, trailers, containers, tenders or cars procured or bought for use in railroad transportation.
B. Exempted from the [compensating] use tax is the use of commercial aircraft bought or leased primarily for use in the transportation of passengers or property for hire in interstate commerce.
C. Exempted from the [compensating] use tax is the use of space vehicles for transportation of persons or property in, to or from space."
SECTION 133. Section 7-9-31 NMSA 1978 (being Laws 1969, Chapter 144, Section 24) is amended to read:
"7-9-31. EXEMPTION--[GROSS RECEIPTS AND COMPENSATING] SALES TAX AND USE TAX--RESALE ACTIVITIES OF AN ARMED FORCES INSTRUMENTALITY.--Exempted from the [gross receipts] sales tax and [compensating] the use tax are the receipts from selling tangible personal property and the use of property by any instrumentality of the armed forces of the United States engaged in resale activities."
SECTION 134. Section 7-9-32 NMSA 1978 (being Laws 1969, Chapter 144, Section 25) is amended to read:
"7-9-32. EXEMPTION--[GROSS RECEIPTS] SALES TAX--OIL AND GAS OR MINERAL INTERESTS.--Exempted from the [gross receipts] sales tax are the receipts from the sale of or leasing of oil, natural gas or mineral interests."
SECTION 135. Section 7-9-33 NMSA 1978 (being Laws 1969, Chapter 144, Section 26, as amended) is amended to read:
"7-9-33. EXEMPTION--[GROSS RECEIPTS] SALES TAX--PRODUCTS SUBJECT TO OIL AND GAS EMERGENCY SCHOOL TAX ACT.--
A. Exempted from the [gross receipts] sales tax are receipts from the sale of products the severance of which is subject to the tax imposed by the Oil and Gas Emergency School Tax Act, except that receipts from the sale of products other than for subsequent resale in the ordinary course of business, for consumption outside the state or for use as an ingredient or component part of a manufactured product are subject to the [Gross Receipts and Compensating] Sales and Use Tax Act as well as to the Oil and Gas Emergency School Tax Act.
B. No [gross receipts] sales tax or [compensating] use tax pursuant to the [Gross Receipts and Compensating] Sales and Use Tax Act shall apply to storing crude oil, natural gas or liquid hydrocarbons, individually or any combination, or to the use of such products for fuel in the operation of a "production unit" as defined by the Oil and Gas Emergency School Tax Act."
SECTION 136. Section 7-9-34 NMSA 1978 (being Laws 1969, Chapter 144, Section 27, as amended) is amended to read:
"7-9-34. EXEMPTION--[GROSS RECEIPTS] SALES TAX--REFINERS AND PERSONS SUBJECT TO NATURAL GAS PROCESSORS TAX ACT.--
A. Exempted from the [gross receipts] sales tax are receipts from the sale or processing of products the processing of which is subject to the privilege tax imposed by the Natural Gas Processors Tax Act, except that receipts from the sale of products other than for subsequent resale in the ordinary course of business, for consumption outside the state or for use as an ingredient or component part of a manufactured product are subject to the [Gross Receipts and Compensating] Sales and Use Tax Act as well as to the Natural Gas Processors Tax Act.
B. No [gross receipts] sales tax or [compensating] use tax pursuant to the [Gross Receipts and Compensating] Sales and Use Tax Act shall apply to receipts from storing or using crude oil, natural gas or liquid hydrocarbons, individually or any combination, when stored or used in New Mexico by a "processor", as defined by the Natural Gas Processors Tax Act, or by a person engaged in the business of refining oil, natural gas or liquid hydrocarbons who stores or uses the crude oil, natural gas or liquid hydrocarbons in the regular course of [his] the person's refining business."
SECTION 137. Section 7-9-35 NMSA 1978 (being Laws 1969, Chapter 144, Section 28, as amended) is amended to read:
"7-9-35. EXEMPTION--[GROSS RECEIPTS] SALES TAX--NATURAL RESOURCES SUBJECT TO RESOURCES EXCISE TAX ACT.--Exempted from the [gross receipts] sales tax are receipts from the sale or processing of natural resources the severance or processing of which are subject to the taxes imposed by the Resources Excise Tax Act, except as otherwise provided in Section 7-25-8 NMSA 1978."
SECTION 138. Section 7-9-36 NMSA 1978 (being Laws 1969, Chapter 144, Section 29) is amended to read:
"7-9-36. EXEMPTION--[GROSS RECEIPTS] SALES TAX--OIL AND GAS CONSUMED IN THE PIPELINE TRANSPORTATION OF OIL AND GAS PRODUCTS.--Exempted from the [gross receipts] sales tax are receipts from the sale of oil, natural gas, liquid hydrocarbon or any combination thereof consumed as fuel in the pipeline transportation of such products."
SECTION 139. Section 7-9-37 NMSA 1978 (being Laws 1969, Chapter 144, Section 30) is amended to read:
"7-9-37. EXEMPTION--[COMPENSATING] USE TAX--USE OF OIL AND GAS IN THE PIPELINE TRANSPORTATION OF OIL AND GAS PRODUCTS.--Exempted from the [compensating] use tax is the use of oil, natural gas, liquid hydrocarbon or any combination thereof as fuel in the pipeline transportation of such products."
SECTION 140. Section 7-9-38 NMSA 1978 (being Laws 1969, Chapter 144, Section 31, as amended) is amended to read:
"7-9-38. EXEMPTION--[COMPENSATING] USE TAX--USE OF ELECTRICITY IN THE PRODUCTION, CONVERSION AND TRANSMISSION OF ELECTRICITY.--Exempted from the [compensating] use tax is electricity used in the production and transmission of electricity, including transmission using voltage source conversion technology."
SECTION 141. Section 7-9-38.1 NMSA 1978 (being Laws 1992, Chapter 50, Section 12 and also Laws 1992, Chapter 67, Section 12, as amended) is amended to read:
"7-9-38.1. EXEMPTION--[GROSS RECEIPTS] SALES TAX--INTERSTATE TELECOMMUNICATIONS SERVICES.--Exempted from the [gross receipts] sales tax are receipts from the sale or provision of interstate telecommunications services subject to the Interstate Telecommunications [Gross Receipts] Sales Tax Act."
SECTION 142. Section 7-9-38.2 NMSA 1978 (being Laws 2002, Chapter 18, Section 2) is amended to read:
"7-9-38.2. EXEMPTION--[GROSS RECEIPTS] SALES TAX--SALE OF CERTAIN TELECOMMUNICATIONS SERVICES.--Exempted from the [gross receipts] sales tax are receipts of a home service provider from providing mobile telecommunications services to persons whose place of primary use is outside New Mexico, regardless of where the mobile telecommunications services originate, terminate or pass through. For the purposes of this section, "home service provider", "mobile telecommunications services" and "place of primary use" have the meanings given in the federal Mobile Telecommunications Sourcing Act."
SECTION 143. Section 7-9-39 NMSA 1978 (being Laws 1969, Chapter 144, Section 32, as amended) is amended to read:
"7-9-39. EXEMPTION--[GROSS RECEIPTS] SALES TAX--FEES FROM SOCIAL ORGANIZATIONS.--
A. Exempted from the [gross receipts] sales tax are the receipts from dues and registration fees of nonprofit social, fraternal, political, trade, labor or professional organizations and business leagues.
B. For the purposes of this section:
(1) "dues" means amounts that a member of an organization pays at recurring intervals to retain membership in an organization where such amounts are used for the general maintenance and upkeep of the organization; and
(2) "registration fees" means amounts paid by persons to attend a specific event sponsored by an organization to defray the cost of the event."
SECTION 144. Section 7-9-40 NMSA 1978 (being Laws 1970, Chapter 60, Section 2, as amended) is amended to read:
"7-9-40. EXEMPTION--[GROSS RECEIPTS] SALES TAX--PURSES AND JOCKEY REMUNERATION AT NEW MEXICO RACETRACKS--RECEIPTS FROM GROSS AMOUNTS WAGERED.--
A. Exempted from the [gross receipts] sales tax are the receipts of horsemen, jockeys and trainers from race purses at New Mexico horse racetracks subject to the jurisdiction of the state racing commission.
B. Exempted from the [gross receipts] sales tax are the receipts of a racetrack from the commissions and other amounts authorized by Section [60-1-10] 60-1A-19 NMSA 1978 to be retained by a racetrack conducting horse races under the authority of a license from the state racing commission."
SECTION 145. Section 7-9-41 NMSA 1978 (being Laws 1972, Chapter 61, Section 2) is amended to read:
"7-9-41. EXEMPTION--[GROSS RECEIPTS] SALES TAX--RELIGIOUS ACTIVITIES.--Exempted from the [gross receipts] sales tax are the receipts of a minister of a religious organization, which organization has been granted an exemption from federal income tax by the United States commissioner of internal revenue as an organization described in Section 501(c)(3) of the United States Internal Revenue Code of [1954] 1986, as that section may be amended or renumbered, from religious services provided by the minister to an individual recipient of the service."
SECTION 146. Section 7-9-41.1 NMSA 1978 (being Laws 2007, Chapter 117, Section 1) is amended to read:
"7-9-41.1. EXEMPTION--[GROSS RECEIPTS] SALES TAX AND GOVERNMENTAL [GROSS RECEIPTS] SALES TAX--ATHLETIC FACILITY SURCHARGE.--Exempted from the [gross receipts] sales tax and from the governmental [gross receipts] sales tax are the receipts of a university from an athletic facility surcharge imposed pursuant to the University Athletic Facility Funding Act."
SECTION 147. Section 7-9-41.3 NMSA 1978 (being Laws 2007, Chapter 45, Section 13 and Laws 2007, Chapter 237, Section 1) is amended to read:
"7-9-41.3. EXEMPTION--SALES TAX--RECEIPTS FROM SALES BY DISABLED STREET VENDORS.--
A. Exempt from payment of the [gross receipts] sales tax are receipts from the sale of goods by a disabled street vendor.
B. As used in this section:
(1) "disabled" means to be blind or permanently disabled with medical improvement not expected pursuant to 42 USCA 421 for purposes of the federal Social Security Act or to have a permanent total disability pursuant to the Workers' Compensation Act; and
(2) "street vendor" means a person licensed by a local government to sell items of tangible personal property by newly setting up a sales site daily or selling the items from a moveable cart, tray, blanket or other device."
SECTION 148. Section 7-9-41.4 NMSA 1978 (being Laws 2009, Chapter 62, Section 1) is amended to read:
"7-9-41.4. EXEMPTION--OFFICIATING AT NEW MEXICO ACTIVITIES ASSOCIATION-SANCTIONED SCHOOL EVENTS.--Exempted from the [gross receipts] sales tax are the receipts from refereeing, umpiring, scoring or other officiating at school events sanctioned by the New Mexico activities association."
SECTION 149. Section 7-9-41.5 NMSA 1978 (being Laws 2019, Chapter 270, Section 34) is amended to read:
"7-9-41.5. EXEMPTION--NONPROFIT HOSPITALS FROM LOCAL OPTION [GROSS RECEIPTS] SALES TAXES.--
A. Exempted from any local option [gross receipts] sales tax, but not the state [gross receipts] sales tax, are receipts of a nonprofit hospital licensed by the department of health.
B. As used in this section, "nonprofit hospital" means a hospital that has been granted exemption from federal income tax by the United States commissioner of internal revenue as an organization described in Section 501(c)(3) of the Internal Revenue Code."
SECTION 150. Section 7-9-41.6 NMSA 1978 (being Laws 2020 (1st S.S.), Chapter 4, Section 3) is amended to read:
"7-9-41.6. EXEMPTION--[GROSS RECEIPTS] SALES TAX-- CERTAIN HEALTH CARE PROVIDERS FROM FEDERAL CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT PAYMENTS.--Exempted from the [gross receipts] sales tax are receipts of health care providers, other than hospitals licensed by the department of health, from payments by the United States department of health and human services from the federal public health and social services emergency fund to providers eligible to receive the payments pursuant to the federal Coronavirus Aid, Relief, and Economic Security Act."
SECTION 151. Section 7-9-43 NMSA 1978 (being Laws 1966, Chapter 47, Section 13, as amended) is amended to read:
"7-9-43. NONTAXABLE TRANSACTION CERTIFICATES AND OTHER EVIDENCE REQUIRED TO ENTITLE PERSONS TO DEDUCTIONS.--
A. Except as provided in Subsection B of this section, a person may establish entitlement to a deduction from gross receipts allowed pursuant to the [Gross Receipts and Compensating] Sales and Use Tax Act by obtaining a properly executed nontaxable transaction certificate from the purchaser. Nontaxable transaction certificates shall contain the information and be in a form prescribed by the department. The department by [regulation] rule may deem to be nontaxable transaction certificates documents issued by other states or the multistate tax commission to taxpayers not required to be registered in New Mexico. Only buyers or lessees who have a registration number or have applied for a registration number and have not been refused one under Subsection C of Section 7-1-12 NMSA 1978 shall execute nontaxable transaction certificates issued by the department. If the seller or lessor has been given an identification number for tax purposes by the department, the seller or lessor shall disclose that identification number to the buyer or lessee prior to or upon acceptance of a nontaxable transaction certificate.
B. Except as provided in Subsection C of this section, a person who does not comply with Subsection A of this section may establish entitlement to a deduction from gross receipts by presenting alternative evidence that demonstrates the facts necessary to support entitlement to the deduction, but the burden of proof is on that person. Alternative evidence includes:
(1) invoices or contracts that identify the nature of the transaction;
(2) documentation as to the purchaser's use or disposition of the property or service;
(3) a statement from the purchaser indicating that the purchaser sold or intends to resell the property or service purchased from the seller, either by itself or in combination with other property or services, in the ordinary course of business. The statement from the purchaser shall include:
(a) the seller's name;
(b) the date of the invoice or date of the transaction;
(c) the invoice number or a copy of the invoice;
(d) a copy of the purchase order, if available;
(e) the amount of purchase; and
(f) a description of the property or service purchased or leased; or
(4) any other evidence that demonstrates the facts necessary to establish entitlement to the deduction.
C. Subsection B of this section does not apply to sellers of electricity or fuels that are parties to an agreement with the department pursuant to Section 7-1-21.1 NMSA 1978 regarding the deduction pursuant to Subsection B of Section 7-9-46 NMSA 1978.
D. When a person accepts in good faith a properly executed nontaxable transaction certificate from the purchaser, the properly executed nontaxable transaction certificate shall be conclusive evidence that the proceeds from the transaction are deductible from the person's gross receipts.
E. To exercise the privilege of executing appropriate nontaxable transaction certificates, a buyer or lessee shall apply to the department for permission to execute nontaxable transaction certificates, except with respect to documents issued by other states or the multistate tax commission that the department has deemed to be nontaxable transaction certificates.
F. If a person has accepted in good faith a properly executed nontaxable transaction certificate, but the purchaser has not employed the property or service purchased in the nontaxable manner or has provided materially false or inaccurate information on the nontaxable transaction certificate, the purchaser shall be liable for an amount equal to any tax, penalty and interest that the seller would have been required to pay if the seller had not complied with Subsection A of this section.
G. Any person who knowingly or willfully provides false or inaccurate information on a nontaxable transaction certificate or as alternative evidence provided in support of a claim for a deduction may be subject to prosecution under Sections 7-1-72 and 7-1-73 NMSA 1978."
SECTION 152. Section 7-9-43.1 NMSA 1978 (being Laws 1981, Chapter 333, Section 1, as amended) is amended to read:
"7-9-43.1. NONTAXABLE TRANSACTION CERTIFICATES NOT REQUIRED BY LIQUOR WHOLESALERS.--Notwithstanding the provisions of Section 7-9-43 NMSA 1978, a liquor wholesaler licensed as a wholesaler by the superintendent of regulation and licensing pursuant to the Liquor Control Act is not required to obtain a nontaxable transaction certificate from a person issued a retailer's, dispenser's, restaurant, public service or governmental license by the superintendent of regulation and licensing pursuant to the Liquor Control Act for the purpose of taking deductions under the [Gross Receipts and Compensating] Sales and Use Tax Act."
SECTION 153. Section 7-9-45 NMSA 1978 (being Laws 1969, Chapter 144, Section 35, as amended) is amended to read:
"7-9-45. DEDUCTIONS.--
A. Receipts may only be deducted once from gross receipts or governmental gross receipts when computing the [gross receipts] sales tax or governmental [gross receipts] sales tax due.
B. The same receipts shall not be both exempt from the [gross receipts] sales tax and deducted from gross receipts.
C. The same receipts shall not be both exempt from the governmental [gross receipts] sales tax and deducted from governmental gross receipts."
SECTION 154. Section 7-9-46 NMSA 1978 (being Laws 1969, Chapter 144, Section 36, as amended by Laws 2021, Chapter 65, Section 13 and by Laws 2021, Chapter 66, Section 2) is amended to read:
"7-9-46. DEDUCTION--[GROSS RECEIPTS] SALES TAX-- GOVERNMENTAL [GROSS RECEIPTS] SALES TAX--SALES TO MANUFACTURERS AND MANUFACTURING SERVICE PROVIDERS.--
A. Receipts from selling tangible personal property may be deducted from gross receipts or from governmental gross receipts if the sale is made to a person engaged in the business of manufacturing who delivers a nontaxable transaction certificate to the seller or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978. The buyer [delivering the nontaxable transaction certificate] must incorporate the tangible personal property as an ingredient or component part of the product that the buyer is in the business of manufacturing.
B. Receipts from selling a manufacturing consumable to a manufacturer or a manufacturing service provider may be deducted from gross receipts or from governmental gross receipts if the buyer delivers a nontaxable transaction certificate to the seller or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978; provided that if the seller is a seller of electricity or fuel and is a party to an agreement with the department pursuant to Section 7-1-21.1 NMSA 1978, a nontaxable transaction certificate shall be required.
C. Receipts from selling or leasing qualified equipment may be deducted from gross receipts if the sale is made to, or the lease is entered into with, a person engaged in the business of manufacturing or a manufacturing service provider who delivers a nontaxable transaction certificate to the seller or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978; provided that a manufacturer or manufacturing service provider delivering a nontaxable transaction certificate or alternative evidence with respect to the qualified equipment shall not claim an investment credit pursuant to the Investment Credit Act for that same equipment.
D. The purpose of the deductions provided in this section is to encourage manufacturing businesses to locate in New Mexico and to reduce the tax burden, including reducing pyramiding, on the tangible personal property that is consumed in the manufacturing process and that is purchased by manufacturing businesses in New Mexico.
E. The department shall annually report to the revenue stabilization and tax policy committee the aggregate amount of deductions taken pursuant to this section, the number of taxpayers claiming each of the deductions and any other information that is necessary to determine that the deductions are performing the purposes for which they are enacted.
F. A taxpayer deducting gross receipts pursuant to this section shall report the amount deducted separately for each deduction provided in this section and attribute the amount of the deduction to the appropriate authorization provided in this section in a manner required by the department that facilitates the evaluation by the legislature of the benefit to the state of these deductions.
G. As used in this section:
(1) "manufacturing consumable" means tangible personal property, other than qualified equipment or an ingredient or component part of a manufactured product, that is incorporated into, destroyed, depleted or transformed in the process of manufacturing a product, including electricity, fuels, water, manufacturing aids and supplies, chemicals, gases and other tangibles used to manufacture a product;
(2) "manufacturing operation" means a plant operated by a manufacturer or manufacturing service provider that employs personnel to perform production tasks to produce goods, in conjunction with machinery and equipment; and
(3) "qualified equipment" means machinery, equipment and tools, including component, repair, replacement and spare parts thereof, that are used directly in the manufacturing process of a manufacturing operation. "Qualified equipment" includes computer hardware and software used directly in the manufacturing process of a manufacturing operation but excludes any motor vehicle that is required to be registered in this state pursuant to the Motor Vehicle Code."
SECTION 155. Section 7-9-46.1 NMSA 1978 (being Laws 2022, Chapter 47, Section 14) is amended to read:
"7-9-46.1. DEDUCTION--[GROSS RECEIPTS] SALES TAX--GOVERNMENTAL [GROSS RECEIPTS] SALES TAX--SALES OF SERVICES TO MANUFACTURERS.--
A. Receipts from selling professional services may be deducted from gross receipts or from governmental gross receipts if the sale is made to a person engaged in the business of manufacturing who delivers a nontaxable transaction certificate to the seller or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978. The professional services shall be related to the product that the buyer is in the business of manufacturing.
B. The purpose of the deductions provided in this section is to encourage manufacturing businesses to locate in New Mexico and to reduce the tax burden, including reducing pyramiding, on the professional services that are purchased by manufacturing businesses in New Mexico.
C. A taxpayer allowed a deduction pursuant to this section shall report the amount of the deduction separately in a manner required by the department.
D. The department shall compile an annual report on the deduction provided by this section that shall include the number of taxpayers that claimed the deduction, the aggregate amount of deductions claimed and any other information necessary to evaluate the effectiveness of the deduction. The department shall compile and present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the deduction and whether the deduction is performing the purpose for which it was created.
E. As used in this section:
(1) "accounting services" means the systematic and comprehensive recording of financial transactions pertaining to a business entity and the process of summarizing, analyzing and reporting these transactions to oversight agencies or tax collection entities, including certified public auditing, attest services and preparing financial statements, bookkeeping, tax return preparation, advice and consulting and, where applicable, representing taxpayers before tax collection agencies. "Accounting services" does not include, except as provided with respect to financial management services, investment advice, wealth management advice or consulting or any tax return preparation, advice, counseling or representation for individuals, regardless of whether those individuals are owners of pass-through entities, such as partnerships, limited liability companies or S corporations;
(2) "architectural services" means services related to the art and science of designing and building structures for human habitation or use and includes planning, providing preliminary studies, designs, specifications and working drawings and providing for general administration of construction contracts;
(3) "engineering services" means consultation, the production of a creative work, investigation, evaluation, planning and design, the performance of studies and reviewing planning documents when performed by, or under the supervision of, a licensed engineer, including the design, development and testing of mechanical, electrical, hydraulic, chemical, pneumatic or thermal machinery or equipment, industrial or commercial work systems or processes and military equipment. "Engineering services" does not include medical or medical laboratory services, any engineering performed in connection with a construction service or the design and installation of computer or computer network infrastructure;
(4) "information technology services" means separately stated services for installing and maintaining a business's computers and computer network, including performing computer network design; installing, repairing, maintaining or restoring computer networks, hardware or software; and performing custom software programming or making custom modifications to existing software programming. "Information technology services" does not include:
(a) software maintenance and update agreements, unless made in conjunction with custom programming;
(b) computers, servers, chilling equipment and pre-programmed software;
(c) data processing services or the processing or storage of information to compile and produce records of transactions for retrieval or use, including data entry, data retrieval, data searches and information compilation; or
(d) access to telecommunications or internet;
(5) "legal services" means services performed by a licensed attorney or under the supervision of a licensed attorney for a client, regardless of the attorney's form of business entity or whether the services are prepaid, including legal representation before courts or administrative agencies; drafting legal documents, such as contracts or patent applications; legal research; advising and counseling; arbitration; mediation; and notary public and other ancillary legal services performed for a client in conjunction with and under the supervision of a licensed attorney. "Legal services" does not include lobbying or government relations services, title insurance agent services, licensing or selling legal software or legal document templates, insurance investigation services or any legal representation involving financial crimes or tax evasion in New Mexico; and
(6) "professional services" means accounting services, architectural services, engineering services, information technology services and legal services."
SECTION 156. Section 7-9-47 NMSA 1978 (being Laws 1969, Chapter 144, Section 37, as amended) is amended to read:
"7-9-47. DEDUCTION--[GROSS RECEIPTS] SALES TAX--GOVERNMENTAL [GROSS RECEIPTS] SALES TAX--SALE OF TANGIBLE PERSONAL PROPERTY OR LICENSES FOR RESALE.--Receipts from selling tangible personal property or licenses may be deducted from gross receipts or from governmental gross receipts if the sale is made to a person who delivers a nontaxable transaction certificate to the seller or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978. The buyer must resell the tangible personal property or license either by itself or in combination with other tangible personal property or licenses in the ordinary course of business."
SECTION 157. Section 7-9-48 NMSA 1978 (being Laws 1969, Chapter 144, Section 38, as amended) is amended to read:
"7-9-48. DEDUCTION--[GROSS RECEIPTS] SALES TAX--GOVERNMENTAL [GROSS RECEIPTS] SALES TAX--SALE OF A SERVICE FOR RESALE.--Receipts from selling a service for resale may be deducted from gross receipts or from governmental gross receipts if the sale is made to a person who delivers a nontaxable transaction certificate to the seller or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978. The buyer must resell the service in the ordinary course of business and the resale must be subject to the [gross receipts] sales tax or governmental [gross receipts] sales tax."
SECTION 158. Section 7-9-49 NMSA 1978 (being Laws 1969, Chapter 144, Section 39, as amended) is amended to read:
"7-9-49. DEDUCTION--[GROSS RECEIPTS] SALES TAX--SALE OF TANGIBLE PERSONAL PROPERTY AND LICENSES FOR LEASING.--
A. Except as otherwise provided by Subsection B of this section, receipts from selling tangible personal property and licenses may be deducted from gross receipts if the sale is made to a person who delivers a nontaxable transaction certificate to the seller or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978. The buyer shall be engaged in a business that derives a substantial portion of its receipts from leasing or selling tangible personal property or licenses of the type sold. The buyer may not utilize the tangible personal property or license in any manner other than holding it for lease or sale or leasing or selling it either by itself or in combination with other tangible personal property or licenses in the ordinary course of business.
B. The deduction provided by this section shall not apply to receipts from selling:
(1) furniture or appliances, the receipts from the rental or lease of which are deductible under Subsection C of Section 7-9-53 NMSA 1978;
(2) coin-operated machines; or
(3) manufactured homes."
SECTION 159. Section 7-9-50 NMSA 1978 (being Laws 1969, Chapter 144, Section 40, as amended) is amended to read:
"7-9-50. DEDUCTION--[GROSS RECEIPTS] SALES TAX--LEASE FOR SUBSEQUENT LEASE.--
A. Except as provided otherwise in Subsection B of this section, receipts from leasing tangible personal property or licenses may be deducted from gross receipts if the lease is made to a lessee who delivers a nontaxable transaction certificate to the lessor or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978. The lessee may not use the tangible personal property or license in any manner other than for subsequent lease in the ordinary course of business.
B. The deduction provided by this section does not apply to receipts from leasing:
(1) furniture or appliances, the receipts from the rental or lease of which are deductible under Subsection C of Section 7-9-53 NMSA 1978;
(2) coin-operated machines; or
(3) manufactured homes."
SECTION 160. Section 7-9-51 NMSA 1978 (being Laws 1969, Chapter 144, Section 41, as amended) is amended to read:
"7-9-51. DEDUCTION--[GROSS RECEIPTS] SALES TAX--SALE OF CONSTRUCTION MATERIAL TO PERSONS ENGAGED IN THE CONSTRUCTION BUSINESS.--
A. Receipts from selling construction material may be deducted from gross receipts if the sale is made to a person engaged in the construction business who delivers a nontaxable transaction certificate to the seller or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978.
B. The buyer must incorporate the construction material as:
(1) an ingredient or component part of a construction project that is subject to the [gross receipts] sales tax upon its completion or upon the completion of the overall construction project of which it is a part;
(2) an ingredient or component part of a construction project that is subject to the [gross receipts] sales tax upon the sale in the ordinary course of business of the real property upon which it was constructed; or
(3) an ingredient or component part of a construction project that is located on the tribal territory of an Indian nation, tribe or pueblo."
SECTION 161. Section 7-9-52 NMSA 1978 (being Laws 1969, Chapter 144, Section 42, as amended) is amended to read:
"7-9-52. DEDUCTION--[GROSS RECEIPTS] SALES TAX--SALE OF CONSTRUCTION SERVICES AND CONSTRUCTION-RELATED SERVICES TO PERSONS ENGAGED IN THE CONSTRUCTION BUSINESS.--
A. Receipts from selling a construction service or a construction-related service may be deducted from gross receipts if the sale is made to a person engaged in the construction business who delivers a nontaxable transaction certificate to the person performing the construction service or a construction-related service or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978.
B. The buyer shall have the construction services or construction-related services directly contracted for or billed to:
(1) a construction project that is subject to the [gross receipts] sales tax upon its completion or upon the completion of the overall construction project of which it is a part;
(2) a construction project that is subject to the [gross receipts] sales tax upon the sale in the ordinary course of business of the real property upon which it was constructed; or
(3) a construction project that is located on the tribal territory of an Indian nation, tribe or pueblo."
SECTION 162. Section 7-9-52.1 NMSA 1978 (being Laws 2012, Chapter 5, Section 6, as amended) is amended to read:
"7-9-52.1. DEDUCTION--[GROSS RECEIPTS] SALES TAX--LEASE OF CONSTRUCTION EQUIPMENT TO PERSONS ENGAGED IN THE CONSTRUCTION BUSINESS.--
A. Receipts from leasing construction equipment may be deducted from gross receipts if the construction equipment is leased to a person engaged in the construction business who delivers a nontaxable transaction certificate to the person leasing the construction equipment or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978.
B. The lessee shall only use the construction equipment at the construction location of:
(1) a construction project that is subject to the [gross receipts] sales tax upon its completion or upon the completion of the overall construction project of which it is a part;
(2) a construction project that is subject to the [gross receipts] sales tax upon the sale in the ordinary course of business of the real property upon which it was constructed; or
(3) a construction project that is located on the tribal territory of an Indian nation, tribe or pueblo.
C. As used in this section, "construction equipment" means equipment used on a construction project, including trash containers, portable toilets, scaffolding and temporary fencing."
SECTION 163. Section 7-9-53 NMSA 1978 (being Laws 1969, Chapter 144, Section 43, as amended) is amended to read:
"7-9-53. DEDUCTION--[GROSS RECEIPTS] SALES TAX--SALE OR LEASE OF REAL PROPERTY AND LEASE OF MANUFACTURED HOMES.--
A. Receipts from the sale or lease of real property and from the lease of a manufactured home as provided in Subsection B of this section, other than receipts from the sale or lease of oil, natural gas or mineral interests exempted by Section 7-9-32 NMSA 1978, may be deducted from gross receipts. However, that portion of the receipts from the sale of real property [which] that is attributable to improvements constructed on the real property by the seller in the ordinary course of [his] the seller's construction business may not be deducted from gross receipts.
B. Receipts from the rental of a manufactured home for a period of at least one month may be deducted from gross receipts. Receipts received by hotels, motels, rooming houses, campgrounds, guest ranches, trailer parks or similar facilities, except receipts received by trailer parks from the rental of a space for a manufactured home or recreational vehicle for a period of at least one month, from lodgers, guests, roomers or occupants are not receipts from leasing real property for the purposes of this section.
C. Receipts attributable to the inclusion of furniture or appliances furnished as part of a leased or rented dwelling house, manufactured home or apartment by the landlord or lessor may be deducted from gross receipts."
SECTION 164. Section 7-9-54 NMSA 1978 (being Laws 1969, Chapter 144, Section 44, as amended) is amended to read:
"7-9-54. DEDUCTION--[GROSS RECEIPTS] SALES TAX--GOVERNMENTAL [GROSS RECEIPTS] SALES TAX--SALES TO GOVERNMENTAL AGENCIES.--
A. Receipts from selling tangible personal property to the United States or New Mexico or a governmental unit, subdivision, agency, department or instrumentality thereof may be deducted from gross receipts or from governmental gross receipts. Unless contrary to federal law, the deduction provided by this subsection does not apply to:
(1) receipts from selling metalliferous mineral ore;
(2) receipts from selling tangible personal property that is or will be incorporated into a metropolitan redevelopment project created under the Metropolitan Redevelopment Code;
(3) receipts from selling construction material, excluding tangible personal property, whether removable or non-removable, that is or would be classified for depreciation purposes as three-year property, five-year property, seven-year property or ten-year property, including indirect costs related to the asset basis, by Section 168 of the Internal Revenue Code of 1986, as that section may be amended or renumbered; or
(4) that portion of the receipts from performing a "service" that reflects the value of tangible personal property utilized or produced in performance of such service.
B. Receipts from selling tangible personal property for any purpose to an Indian tribe, nation or pueblo or a governmental unit, subdivision, agency, department or instrumentality thereof for use on Indian reservations or pueblo grants may be deducted from gross receipts or from governmental gross receipts.
C. When a seller, in good faith, deducts receipts for tangible personal property sold to the state or a governmental unit, subdivision, agency, department or instrumentality thereof, after receiving written assurances from the buyer's representative that the property sold is not construction material, the department shall not assert in a later assessment or audit of the seller that the receipts are not deductible pursuant to Paragraph (3) of Subsection A of this section."
SECTION 165. Section 7-9-54.1 NMSA 1978 (being Laws 1992, Chapter 40, Section 1, as amended) is amended to read:
"7-9-54.1. DEDUCTION--[GROSS RECEIPTS FROM] SALES TAX-- SALE OF AEROSPACE SERVICES TO CERTAIN ORGANIZATIONS.--
A. Receipts from performing or selling an aerospace service for resale may be deducted from gross receipts if the sale is made to a buyer who delivers a nontaxable transaction certificate or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978. The buyer shall separately state the value of the aerospace service purchased in the buyer's charge for the aerospace service on its subsequent sale to an organization or, if the buyer is an organization, on the organization's subsequent sale to the United States, and the subsequent sale shall be in the ordinary course of business of selling aerospace services to an organization or to the United States.
B. As used in this section:
(1) "aerospace services" means research and development services sold to or for resale to an organization for resale by the organization to the United States air force; and
(2) "organization" means an organization described in Subsection A of Section 7-9-29 NMSA 1978 other than a prime contractor operating facilities in New Mexico designated as a national laboratory by act of congress."
SECTION 166. Section 7-9-54.2 NMSA 1978 (being Laws 1995, Chapter 183, Section 2, as amended) is amended to read:
"7-9-54.2. [GROSS RECEIPTS] DEDUCTION--SALES TAX--SPACEPORT OPERATION--SPACE OPERATIONS--LAUNCHING, OPERATING AND RECOVERING SPACE VEHICLES OR PAYLOADS--PAYLOAD SERVICES--OPERATIONALLY RESPONSIVE SPACE PROGRAM SERVICES.--
A. Receipts from launching, operating or recovering space vehicles or payloads in New Mexico may be deducted from gross receipts.
B. Receipts from preparing a payload in New Mexico are deductible from gross receipts.
C. Receipts from operating a spaceport in New Mexico are deductible from gross receipts.
D. Receipts from the provision of research, development, testing and evaluation services for the United States air force operationally responsive space program may be deducted from gross receipts.
E. As used in this section:
(1) "operationally responsive space program" means a program authorized pursuant to 10 U.S.C. 2273a;
(2) "payload" means a system, subsystem or other mechanical structure or material to be conveyed into space that is designed, constructed or intended to perform a function in space;
(3) "space" means any location beyond altitudes of sixty thousand feet above the earth's mean sea level;
(4) "space operations" means the process of commanding and controlling payloads in space; and
(5) "spaceport" means an installation and related facilities used for the launching, landing, operating, recovering, servicing and monitoring of vehicles capable of entering or returning from space.
F. Receipts from the sale of tangible personal property that will become an ingredient or component part of a construction project or from performing construction services may not be deducted under this section."
SECTION 167. Section 7-9-54.3 NMSA 1978 (being Laws 2002, Chapter 37, Section 8, as amended by Laws 2010, Chapter 77, Section 2 and by Laws 2010, Chapter 78, Section 2) is amended to read:
"7-9-54.3. DEDUCTION--[GROSS RECEIPTS] SALES TAX--WIND AND SOLAR GENERATION EQUIPMENT--SALES TO GOVERNMENTS.--
A. Receipts from selling wind generation
equipment or solar generation equipment to a government for the purpose of installing a wind or solar electric generation facility may be deducted from gross receipts.
B. The deduction allowed pursuant to this section shall not be claimed for receipts from an expenditure for which a taxpayer claims a credit pursuant to Section 7-2-18.25, 7-2A-25 or 7-9G-2 NMSA 1978.
C. As used in this section:
(1) "government" means the United States or the state or a governmental unit or a subdivision, agency, department or instrumentality of the federal government or the state;
(2) "related equipment" means transformers, circuit breakers and switching and metering equipment used to connect a wind or solar electric generation plant to the electric grid;
(3) "solar generation equipment" means solar thermal energy collection, concentration and heat transfer and conversion equipment; solar tracking hardware and software; photovoltaic panels and inverters; support structures; turbines and associated electrical generating equipment used to generate electricity from solar thermal energy; and related equipment; and
(4) "wind generation equipment" means wind generation turbines, blades, nacelles, rotors and supporting structures used to generate electricity from wind and related equipment."
SECTION 168. Section 7-9-54.4 NMSA 1978 (being Laws 2003, Chapter 62, Section 4) is amended to read:
"7-9-54.4. DEDUCTION--[COMPENSATING] USE TAX--SPACE-RELATED TEST ARTICLES.--
A. The value of space-related test articles used in New Mexico exclusively for research or testing, placing on public display after research or testing or storage for future research, testing or public display may be deducted in computing [compensating] use tax due. This subsection does not apply to any other use of a space-related test article.
B. The value of equipment and materials used in New Mexico for research or testing, or for supporting the research or testing of, space-related test articles or for storage of such equipment or materials for research or testing, or supporting the research and testing of, space-related test articles may be deducted in computing [compensating] use tax due. This subsection does not apply to any other use of such equipment and materials.
C. As used in this section, a "space-related test article" is a material or device intended to be used primarily in research or testing to determine properties and qualities of the material or properties, qualities or functioning of a device or technology when the principal use of the material, device or technology is intended to be in space or as part of, or associated with, a space vehicle."
SECTION 169. Section 7-9-54.5 NMSA 1978 (being Laws 2004, Chapter 16, Section 3) is amended to read:
"7-9-54.5. DEDUCTION--[COMPENSATING] USE TAX--TEST ARTICLES.--
A. The value of test articles upon which research or testing is conducted in New Mexico pursuant to a contract with the United States department of defense may be deducted in computing the [compensating] use tax due.
B. As used in this section, "test article" means a material or device upon which research or testing is conducted to determine the properties and qualities of the material or the properties, qualities or functioning of the device or a technology used with the device.
C. The deduction provided by this section does not apply to the value of property purchased by a prime contractor operating a facility designated as a national laboratory by an act of congress."
SECTION 170. Section 7-9-55 NMSA 1978 (being Laws 1969, Chapter 144, Section 45, as amended) is amended to read:
"7-9-55. DEDUCTION--[GROSS RECEIPTS] SALES TAX--GOVERNMENTAL GROSS RECEIPTS [TAX]--TRANSACTION IN INTERSTATE COMMERCE.--
A. Receipts from transactions in interstate commerce may be deducted from gross receipts to the extent that the imposition of the [gross receipts] sales tax would be unlawful under the United States constitution.
B. Receipts from transactions in interstate commerce may be deducted from governmental gross receipts.
C. Receipts from transmitting messages or conversations by radio other than from one point in this state to another point in this state and receipts from the sale of radio or television broadcast time when the advertising message is supplied by or on behalf of a national or regional seller or advertiser not having its principal place of business in or being incorporated under the laws of this state may be deducted from gross receipts. Commissions of advertising agencies from performing services in this state may not be deducted from gross receipts under this section."
SECTION 171. Section 7-9-56 NMSA 1978 (being Laws 1994, Chapter 112, Section 2) is amended to read:
"7-9-56. DEDUCTION--[GROSS RECEIPTS] SALES TAX--INTRASTATE TRANSPORTATION AND SERVICES IN INTERSTATE COMMERCE.--
A. Receipts from transporting persons or property from one point to another in this state may be deducted from gross receipts when such persons or property, including any special or extra service reasonably necessary in connection therewith, is being transported in interstate or foreign commerce under a single contract.
B. Receipts from handling, storage, drayage or packing of property or any other accessorial services on property, which property has moved or will move in interstate or foreign commerce, when such services are performed by a local agent for a carrier or by a carrier and when such services are performed under a single contract in relation to transportation services, may be deducted from gross receipts.
C. Receipts from providing telephone or telegraph services in this state that will be used by other persons in providing telephone or telegraph services to the final user may be deducted from gross receipts."
SECTION 172. Section 7-9-56.1 NMSA 1978 (being Laws 1998, Chapter 92, Section 1, as amended) is amended to read:
"7-9-56.1. DEDUCTION--[GROSS RECEIPTS] SALES TAX--INTERNET SERVICES.--On and after July 1, 1998, receipts from providing leased telephone lines, telecommunications services, internet services, internet access services or computer programming that will be used by other persons in providing internet access and related services to the final user may be deducted from gross receipts if the sale is made to a person who is subject to the [gross receipts] sales tax or the interstate telecommunications [gross receipts] sales tax."
SECTION 173. Section 7-9-56.2 NMSA 1978 (being Laws 1998, Chapter 92, Section 2) is amended to read:
"7-9-56.2. DEDUCTION--[GROSS RECEIPTS] SALES TAX--HOSTING [WORLD WIDE WEB SITES] WEBSITES.--Receipts from hosting [world wide web sites] websites may be deducted from gross receipts. For purposes of this section, "hosting" means storing information on computers attached to the internet."
SECTION 174. Section 7-9-56.3 NMSA 1978 (being Laws 2003, Chapter 232, Section 1, as amended) is amended to read:
"7-9-56.3. DEDUCTION--[GROSS RECEIPTS] SALES TAX--TRADE-SUPPORT COMPANY IN A BORDER ZONE.--
A. The receipts of a trade-support company may be deducted from gross receipts if:
(1) the trade-support company first locates in New Mexico within twenty miles of a port of entry on New Mexico's border with Mexico on or after July 1, 2003 but before July 1, 2013 or on or after January 1, 2016 but before January 1, 2021;
(2) the receipts are received by the company within a five-year period beginning on the date the trade-support company locates in New Mexico and the receipts are derived from its business activities and operations at its border zone location; and
(3) the trade-support company employs at least two employees in New Mexico.
B. A taxpayer allowed a deduction pursuant to this section shall report the amount of the deduction separately in a manner required by the department.
C. The department shall compile an annual report on the deduction created pursuant to this section that shall include the number of taxpayers approved by the department to receive the deduction, the aggregate amount of deductions approved and any other information necessary to evaluate the effectiveness of the deduction. Beginning in 2016 and every four years thereafter that the deduction is in effect, the department shall compile and present the annual reports to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the deduction.
D. As used in this section:
(1) "dependent" means "dependent" as defined in 26 U.S.C. 152(a), as that section may be amended or renumbered;
(2) "employee" means an individual, other than an individual who:
(a) is a dependent of the employer;
(b) if the employer is an estate or trust, is a grantor, beneficiary or fiduciary of the estate or trust or is a dependent of a grantor, beneficiary or fiduciary of the estate or trust;
(c) if the employer is a corporation, is a dependent of an individual who owns, directly or indirectly, more than fifty percent in value of the outstanding stock of the corporation; or
(d) if the employer is an entity other than a corporation, estate or trust, is a dependent of an individual who owns, directly or indirectly, more than fifty percent of the capital and profits interests in the entity;
(3) "port of entry" means an international port of entry in New Mexico at which customs services are provided by United States customs and border protection; and
(4) "trade-support company" means a customs brokerage firm or a freight forwarder."
SECTION 175. Section 7-9-57 NMSA 1978 (being Laws 1969, Chapter 144, Section 47, as amended) is amended to read:
"7-9-57. DEDUCTION--[GROSS RECEIPTS] SALES TAX--SALE OF CERTAIN SERVICES TO AN OUT-OF-STATE BUYER.--
A. Receipts from performing a service may be deducted from gross receipts if the sale of the service is made to an out-of-state buyer who delivers to the seller either an appropriate nontaxable transaction certificate or other evidence acceptable to the secretary unless the buyer of the service or any of the buyer's employees or agents makes initial use of the product of the service in New Mexico or takes delivery of the product of the service in New Mexico.
B. Receipts from performing a service that initially qualified for the deduction provided in this section but that no longer meets the criteria set forth in Subsection A of this section shall be deductible for the period prior to the disqualification."
SECTION 176. Section 7-9-57.2 NMSA 1978 (being Laws 2002, Chapter 10, Section 1) is amended to read:
"7-9-57.2. DEDUCTION--[GROSS RECEIPTS] SALES TAX--SALE OF SOFTWARE DEVELOPMENT SERVICES.--
A. To stimulate new business development, the receipts of an eligible software development company from the sale of software development services that are performed in a qualified area may be deducted from gross receipts.
B. As used in this section:
(1) "eligible software development company" means a taxpayer who is not a successor in business of another taxpayer; [and] whose primary business in New Mexico is established after the effective date of this section and is providing software development services; and who had no business location in New Mexico other than in a qualified area during the period for which a deduction under this section is sought;
(2) "qualified area" means the state of New Mexico except for an incorporated municipality with a population of more than fifty thousand according to the most recent federal decennial census; and
(3) "software development services" means custom software design and development and [web site] website design and development but does not include software implementation or support services."
SECTION 177. Section 7-9-58 NMSA 1978 (being Laws 1969, Chapter 144, Section 48, as amended) is amended to read:
"7-9-58. DEDUCTION--[GROSS RECEIPTS] SALES TAX--FEED--
FERTILIZERS.--
A. Receipts from selling feed [for livestock], including the baling wire or twine used to contain the feed, for livestock, fish raised for human consumption, poultry or animals raised for their hides or pelts and receipts from selling seeds, roots, bulbs, plants, soil conditioners, fertilizers, insecticides, germicides, insects used to control populations of other insects, fungicides or weedicides or water for irrigation purposes may be deducted from gross receipts if the sale is made to a person who states in writing that [he] the person is regularly engaged in the business of farming, ranching or raising animals for their hides or pelts.
B. Receipts of auctioneers from selling livestock or other agricultural products at auction may also be deducted from gross receipts."
SECTION 178. Section 7-9-59 NMSA 1978 (being Laws 1969, Chapter 144, Section 49, as amended) is amended to read:
"7-9-59. DEDUCTION--[GROSS RECEIPTS] SALES TAX-- WAREHOUSING, THRESHING, HARVESTING, GROWING, CULTIVATING AND PROCESSING AGRICULTURAL PRODUCTS--TESTING OR TRANSPORTING MILK.--
A. Receipts from warehousing grain or other agricultural products may be deducted from gross receipts.
B. Receipts from threshing, cleaning, growing, cultivating or harvesting agricultural products, including the ginning of cotton, may be deducted from gross receipts.
C. Receipts from testing or transporting milk for the producer or nonprofit marketing association from the farm to a milk processing or dairy product manufacturing plant may be deducted from gross receipts.
D. Receipts from processing for growers, producers or nonprofit marketing associations of agricultural products raised for food and fiber, including livestock, may be deducted from gross receipts."
SECTION 179. Section 7-9-60 NMSA 1978 (being Laws 1970, Chapter 12, Section 4, as amended) is amended to read:
"7-9-60. DEDUCTION--[GROSS RECEIPTS] SALES TAX--GOVERNMENTAL [GROSS RECEIPTS] SALES TAX--SALES TO CERTAIN ORGANIZATIONS.--
A. Except as provided otherwise in Subsection B of this section, receipts from selling tangible personal property to 501(c)(3) organizations may be deducted from gross receipts or from governmental gross receipts if the sale is made to an organization that delivers a nontaxable transaction certificate to the seller or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978. The buyer shall employ the tangible personal property in the conduct of functions described in Section 501(c)(3) and shall not employ the tangible personal property in the conduct of an unrelated trade or business as defined in Section 513 of the United States Internal Revenue Code of 1986, as amended or renumbered.
B. The deduction provided by this section does not apply to receipts from selling construction material, excluding tangible personal property, whether removable or non-removable, that is or would be classified for depreciation purposes as three-year property, five-year property, seven-year property or ten-year property, including indirect costs related to the asset basis, by Section 168 of the Internal Revenue Code of 1986, as that section may be amended or renumbered, or from selling metalliferous mineral ore; except that receipts from selling construction material or from selling metalliferous mineral ore to a 501(c)(3) organization that is organized for the purpose of providing homeownership opportunities to low-income families may be deducted from gross receipts. Receipts may be deducted under this subsection only if the buyer delivers a nontaxable transaction certificate to the seller or provides alternative evidence pursuant to Section 7-9-43 NMSA 1978. The buyer shall use the property in the conduct of functions described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, and shall not employ the tangible personal property in the conduct of an unrelated trade or business, as defined in Section 513 of that code.
C. For the purposes of this section, "501(c)(3) organization" means an organization that has been granted exemption from the federal income tax by the United States commissioner of internal revenue as an organization described in Section 501(c)(3) of the United States Internal Revenue Code of 1986, as amended or renumbered."
SECTION 180. Section 7-9-61.1 NMSA 1978 (being Laws 1981, Chapter 37, Section 52) is amended to read:
"7-9-61.1. DEDUCTION--[GROSS RECEIPTS] SALES TAX--CERTAIN RECEIPTS.--Receipts from charges made in connection with the origination, making or assumption of a loan or from charges made for handling loan payments may be deducted from gross receipts."
SECTION 181. Section 7-9-62 NMSA 1978 (being Laws 1969, Chapter 144, Section 52, as amended) is amended to read:
"7-9-62. DEDUCTION--[GROSS RECEIPTS] SALES TAX--AGRICULTURAL IMPLEMENTS--AIRCRAFT MANUFACTURERS--VEHICLES THAT ARE NOT REQUIRED TO BE REGISTERED--AIRCRAFT PARTS AND MAINTENANCE SERVICES--REPORTING REQUIREMENTS.--
A. Except for receipts deductible under Subsection B of this section, fifty percent of the receipts from selling agricultural implements, farm tractors, aircraft or vehicles that are not required to be registered under the Motor Vehicle Code may be deducted from gross receipts; provided that, with respect to agricultural implements, the sale is made to a person who states in writing that the person is regularly engaged in the business of farming or ranching. Any deduction allowed under Section 7-9-71 NMSA 1978 must be taken before the deduction allowed by this subsection is computed.
B. Receipts of an aircraft manufacturer or affiliate from selling aircraft or from selling aircraft flight support, pilot training or maintenance training services may be deducted from gross receipts. Any deduction allowed under Section 7-9-71 NMSA 1978 must be taken before the deduction allowed by this subsection is computed.
C. Receipts from selling aircraft parts or maintenance services for aircraft or aircraft parts may be deducted from gross receipts. Any deduction allowed under Section 7-9-71 NMSA 1978 must be taken before the deduction allowed by this subsection is computed.
D. A taxpayer allowed a deduction pursuant to this section shall report the amount of the deduction separately in a manner required by the department.
E. The department shall compile an annual report on the deductions provided by this section that shall include the number of taxpayers approved by the department to receive the deductions, the aggregate amount of deductions approved and any other information necessary to evaluate the effectiveness of the deductions. Beginning in 2019 and every five years thereafter that the deductions are in effect, the department shall compile and present the annual reports to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the deductions.
F. As used in this section:
(1) "affiliate" means a business entity that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with the aircraft manufacturer;
(2) "agricultural implement" means a tool, utensil or instrument that is depreciable for federal income tax purposes and that is:
(a) designed to irrigate agricultural crops above ground or below ground at the place where the crop is grown; or
(b) designed primarily for use with a source of motive power, such as a tractor, in planting, growing, cultivating, harvesting or processing agricultural crops at the place where the crop is grown; in raising poultry or livestock; or in obtaining or processing food or fiber, such as eggs, milk, wool or mohair, from living poultry or livestock at the place where the poultry or livestock are kept for this purpose;
(3) "aircraft manufacturer" means a business entity that in the ordinary course of business designs and builds private or commercial aircraft certified by the federal aviation administration;
(4) "business entity" means a corporation, limited liability company, partnership, limited partnership, limited liability partnership or real estate investment trust, but does not mean an individual or a joint venture;
(5) "control" means equity ownership in a business entity that:
(a) represents at least fifty percent of the total voting power of that business entity; and
(b) has a value equal to at least fifty percent of the total equity of that business entity; and
(6) "flight support" means providing navigation data, charts, weather information, online maintenance records and other aircraft or flight-related information and the software needed to access the information."
SECTION 182. Section 7-9-62.1 NMSA 1978 (being Laws 2000 (2nd S.S.), Chapter 4, Section 2, as amended) is amended to read:
"7-9-62.1. DEDUCTION--[GROSS RECEIPTS] SALES TAX--AIRCRAFT SALES AND SERVICES--REPORTING REQUIREMENTS.--
A. Receipts from the sale of or from maintaining, refurbishing, remodeling or otherwise modifying a commercial or military carrier over ten thousand pounds gross landing weight may be deducted from gross receipts.
B. A taxpayer allowed a deduction pursuant to this section shall report the amount of the deduction separately in a manner required by the department.
C. The department shall compile an annual report on the deduction provided by this section that shall include the number of taxpayers approved by the department to receive the deduction, the aggregate amount of deductions approved and any other information necessary to evaluate the effectiveness of the deduction. Beginning in 2019 and every five years thereafter that the deduction is in effect, the department shall compile and present the annual reports to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the deduction."
SECTION 183. Section 7-9-63 NMSA 1978 (being Laws 1969, Chapter 144, Section 53) is amended to read:
"7-9-63. DEDUCTION--[GROSS RECEIPTS] SALES TAX--PUBLICATION SALES.--Receipts from publishing newspapers or magazines, except from selling advertising space, may be deducted from gross receipts.
Receipts from selling magazines at retail may not be deducted from gross receipts."
SECTION 184. Section 7-9-64 NMSA 1978 (being Laws 1969, Chapter 144, Section 54) is amended to read:
"7-9-64. DEDUCTION--[GROSS RECEIPTS] SALES TAX--NEWSPAPER SALES.--Receipts from selling newspapers, except from selling advertising space, may be deducted from gross receipts."
SECTION 185. Section 7-9-65 NMSA 1978 (being Laws 1969, Chapter 144, Section 56, as amended) is amended to read:
"7-9-65. DEDUCTION--[GROSS RECEIPTS] SALES TAX--CHEMICALS AND REAGENTS.--Receipts from selling chemicals or reagents to any mining, milling or oil company for use in processing ores or oil in a mill, smelter or refinery or in acidizing oil wells, and receipts from selling chemicals or reagents in lots in excess of eighteen tons to any hard-rock mining or milling company for use in any combination of extracting, leaching, milling, smelting, refining or processing ore at a mine site, may be deducted from gross receipts. Receipts from selling explosives, blasting powder or dynamite may not be deducted from gross receipts."
SECTION 186. Section 7-9-66 NMSA 1978 (being Laws 1969, Chapter 144, Section 57, as amended) is amended to read:
"7-9-66. DEDUCTION--[GROSS RECEIPTS] SALES TAX--COMMISSIONS.--
A. Receipts derived from commissions on sales of tangible personal property [which] that are not subject to the [gross receipts] sales tax may be deducted from gross receipts.
B. Receipts of the owner of a dealer store derived from commissions received for performing the service of selling from the owner's dealer store a principal's tangible personal property may be deducted from gross receipts.
C. As used in this section, "dealer store" means a merchandise facility open to the public that is owned and operated by a person who contracts with a principal to act as an agent for the sale from that facility of merchandise owned by the principal."
SECTION 187. Section 7-9-66.1 NMSA 1978 (being Laws 1984, Chapter 129, Section 2, as amended) is amended to read:
"7-9-66.1. DEDUCTION--[GROSS RECEIPTS] SALES TAX--CERTAIN REAL ESTATE TRANSACTIONS.--
A. Receipts from real estate commissions on that portion of the transaction subject to [gross receipts] sales tax pursuant to Subsection A of Section 7-9-53 NMSA 1978 may be deducted from gross receipts if the person claiming the deduction submits to the department evidence that the secretary finds substantiates the deduction.
B. For the purposes of this section, "commissions on that portion of the transaction subject to [gross receipts] sales tax" means that portion of the commission that bears the same relationship to the total commission as the amount of the transaction subject to [gross receipts] sales tax does to the total purchase price."
SECTION 188. Section 7-9-67 NMSA 1978 (being Laws 1969, Chapter 144, Section 58, as amended) is amended to read:
"7-9-67. DEDUCTION--[GROSS RECEIPTS] SALES TAX--GOVERNMENTAL [GROSS RECEIPTS] SALES TAX--REFUNDS--UNCOLLECTIBLE DEBTS.--
A. Refunds and allowances made to buyers or amounts written off the books as an uncollectible debt by a person reporting [gross receipts] sales tax on an accrual basis may be deducted from gross receipts. If debts reported uncollectible are subsequently collected, such receipts shall be included in gross receipts in the month of collection.
B. Refunds and allowances made to buyers or amounts written off the books as an uncollectible debt by a person reporting governmental [gross receipts] sales tax on an accrual basis may be deducted from governmental gross receipts. If debts reported uncollectible are subsequently collected, such receipts shall be included in governmental gross receipts in the month of collection."
SECTION 189. Section 7-9-68 NMSA 1978 (being Laws 1969, Chapter 144, Section 60) is amended to read:
"7-9-68. DEDUCTION--[GROSS RECEIPTS] SALES TAX--WARRANTY OBLIGATIONS.--Receipts of a dealer from furnishing goods or services to the purchaser of tangible personal property to fulfill a warranty obligation of the manufacturer of the property may be deducted from gross receipts."
SECTION 190. Section 7-9-69 NMSA 1978 (being Laws 1969, Chapter 144, Section 61, as amended) is amended to read:
"7-9-69. DEDUCTION--[GROSS RECEIPTS] SALES TAX--ADMINISTRATIVE AND ACCOUNTING SERVICES.--
A. Receipts of a business entity for administrative, managerial, accounting and customer services performed by it for an affiliate upon a nonprofit or cost basis and receipts of a business entity from an affiliate for the joint use or sharing of office machines and facilities upon a nonprofit or cost basis may be deducted from gross receipts.
B. For the purposes of this section:
(1) "affiliate" means a business entity that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with another business entity;
(2) "business entity" means a corporation, limited liability company, partnership, limited partnership, limited liability partnership or real estate investment trust, but does not mean an individual or a joint venture; and
(3) "control" means equity ownership in a business entity that:
(a) represents at least fifty percent of the total voting power of that business entity; or
(b) has a value equal to at least fifty percent of the total equity of that business entity."
SECTION 191. Section 7-9-70 NMSA 1978 (being Laws 1969, Chapter 144, Section 62) is amended to read:
"7-9-70. DEDUCTION--[GROSS RECEIPTS] SALES TAX--RENTAL OR LEASE OF VEHICLES USED IN INTERSTATE COMMERCE.--Receipts from the rental or leasing of vehicles used in the transportation of passengers or property for hire in interstate commerce under the regulations or authorization of any agency of the United States may be deducted."
SECTION 192. Section 7-9-71 NMSA 1978 (being Laws 1969, Chapter 144, Section 63, as amended) is amended to read:
"7-9-71. DEDUCTION--[GROSS RECEIPTS] SALES TAX--TRADE-IN ALLOWANCE.--That portion of the receipts of a sell