0001| AN ACT | 0002| RELATING TO TAXATION; AMENDING THE NMSA 1978 TO MODIFY THE | 0003| SUPPLEMENTAL MUNICIPAL GROSS RECEIPTS TAX ACT TO EXTEND ITS OPERATION | 0004| AND PERMIT REFUNDING BONDS. | 0005| | 0006| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0007| Section 1. Section 7-19-11 NMSA 1978 (being Laws 1979, Chapter | 0008| 397, Section 2, as amended) is amended to read: | 0009| "7-19-11. DEFINITIONS.--As used in the Supplemental Municipal | 0010| Gross Receipts Tax Act: | 0011| A. "department" or "division" means the taxation and | 0012| revenue department, the secretary of taxation and revenue or any | 0013| employee of the department exercising authority lawfully delegated to | 0014| that employee by the secretary; | 0015| B. "governing body" means the city council or city | 0016| commission of a municipality; | 0017| C. "municipality" means any incorporated city, town or | 0018| village having previously qualified to impose and did impose the tax | 0019| pursuant to the provisions of the Supplemental Municipal Gross | 0020| Receipts Tax Act in effect prior to this 1997 act; | 0021| D. "person" means an individual or any other legal entity; | 0022| E. "refunding bonds" means bonds issued pursuant to the | 0023| provisions of the Supplemental Municipal Gross Receipts Tax Act to | 0024| refund supplemental municipal gross receipts tax bonds issued pursuant | 0025| to the provisions of that act; | 0001| F. "state gross receipts tax" means the gross receipts tax | 0002| imposed under the Gross Receipts and Compensating Tax Act; and | 0003| G. "supplemental municipal gross receipts tax" means the | 0004| tax authorized to be imposed under the Supplemental Municipal Gross | 0005| Receipts Tax Act." | 0006| Section 2. Section 7-19-12 NMSA 1978 (being Laws 1979, Chapter | 0007| 397, Section 3, as amended by Laws 1986, Chapter 6, Section 1 and also | 0008| by Laws 1986, Chapter 20, Section 80) is amended to read: | 0009| "7-19-12. AUTHORIZATION TO IMPOSE SUPPLEMENTAL MUNICIPAL GROSS | 0010| RECEIPTS TAX--AUTHORIZATION FOR ISSUANCE OF SUPPLEMENTAL MUNICIPAL | 0011| GROSS RECEIPTS BONDS--ELECTION REQUIRED .-- | 0012| A. The majority of the members elected to the governing | 0013| body of a municipality may enact an ordinance imposing an excise tax | 0014| on any person engaging in business in the municipality for the | 0015| privilege of engaging in business in the municipality. This tax is to | 0016| be referred to as the "supplemental municipal gross receipts tax". | 0017| The rate of the tax shall not exceed one percent of the gross receipts | 0018| of the person engaging in business and shall be imposed in one-fourth | 0019| percent increments if less than one percent. | 0020| B. The governing body of a municipality enacting an | 0021| ordinance imposing the tax authorized in Subsection A of this section | 0022| shall submit the question of imposing such tax and the question of the | 0023| issuance of supplemental municipal gross receipts bonds in an amount | 0024| not to exceed nine million dollars ($9,000,000), for which the revenue | 0025| from the supplemental municipal gross receipts tax is dedicated, to | 0001| the qualified electors of the municipality at a regular or special | 0002| election. | 0003| C. The questions referred to in Subsection B of this | 0004| section shall be submitted to a vote of the qualified electors of the | 0005| municipality as two separate ballot questions which shall be | 0006| substantially in the following form: | 0007| (1) "Shall the municipality be authorized to issue | 0008| supplemental municipal gross receipts bonds in an amount of not | 0009| exceeding ____________________ dollars for the purpose of constructing | 0010| and equipping and otherwise acquiring a municipal water supply system? | 0011| For __________ Against __________"; and | 0012| (2) "Shall the municipality impose an excise tax for | 0013| the privilege of engaging in business in the municipality which shall | 0014| be known as the "supplemental municipal gross receipts tax" and which | 0015| shall be imposed at a rate of __________ percent of the gross receipts | 0016| of the person engaging in business, the proceeds of which are | 0017| dedicated to the payment of supplemental municipal gross receipts | 0018| bonds? | 0019| For __________ Against __________". | 0020| D. Only those voters who are registered electors who reside | 0021| within the municipality shall be permitted to vote on these two | 0022| questions. The procedures for conducting the election shall be | 0023| substantially the same as the applicable provisions in Sections 3-30- | 0024| 1, 3-30-6 and 3-30-7 NMSA 1978 relating to municipal debt. | 0025| E. If at an election called pursuant to this section a | 0001| majority of the voters voting on each of the two questions vote in the | 0002| affirmative on each such question, then the ordinance imposing the | 0003| supplemental municipal gross receipts tax shall be approved. If at | 0004| such election a majority of the voters voting on such questions fail | 0005| to approve any of the questions, then the ordinance imposing the tax | 0006| shall be disapproved and the questions required to be submitted by | 0007| Subsection B of this section shall not be submitted to the voters for | 0008| a period of one year from the date of the election. | 0009| F. Any ordinance enacted under the provisions of this | 0010| section shall include an effective date of either July 1 or January 1, | 0011| whichever date occurs first after the expiration of at least five | 0012| months from the date of the election. A certified copy of any | 0013| ordinance imposing a supplemental municipal gross receipts tax shall | 0014| be mailed to the division within five days after the ordinance is | 0015| adopted by the approval by the electorate. Any ordinance repealing | 0016| the imposition of a tax under the provisions of the Supplemental | 0017| Municipal Gross Receipts Tax Act shall become effective on either July | 0018| 1 or January 1, after the expiration of at least five months from the | 0019| date the ordinance is repealed by the governing body. | 0020| G. Nothing in this section is intended to or does alter | 0021| the effectiveness or validity of any actions taken in accordance with | 0022| Subsection G of Section 80 of Chapter 20 of Laws 1986." | 0023| Section 3. Section 7-19-18 NMSA 1978 (being Laws 1979, Chapter | 0024| 397, Section 9, as amended) is amended to read: | 0025| "7-19-18. SUPPLEMENTAL MUNICIPAL GROSS RECEIPTS TAX--USE OF | 0001| PROCEEDS--RESTRICTION.-- | 0002| A. The proceeds from the supplemental municipal gross | 0003| receipts tax shall be deposited in a special improvement account of | 0004| the municipality and shall be used only for: | 0005| (1) the payment of the principal of, interest on, any | 0006| prior redemption premiums due in connection with and other expenses | 0007| related to the supplemental municipal gross receipts bonds issued | 0008| pursuant to the Supplemental Municipal Gross Receipts Tax Act; | 0009| (2) the funding of any reserves and other accounts in | 0010| connection with such bonds; | 0011| (3) refunding bonds; and | 0012| (4) to the extent not needed for those purposes, the | 0013| improvement of the municipality's water system. B. When | 0014| any issue of supplemental municipal gross receipts bonds is fully | 0015| paid, the supplemental municipal gross receipts tax shall cease to be | 0016| imposed for that issue, but may continue to be imposed for bonds | 0017| enacted and approved pursuant to Section 7-19-12 NMSA 1978 and | 0018| thereafter issued, or for refunding bonds issued pursuant to Section 4 | 0019| of this 1997 act. Any money remaining in a special improvement | 0020| account after the obligations for supplemental municipal gross | 0021| receipts bonds and refunding bonds, are fully paid may be transferred | 0022| to any other fund of the municipality." | 0023| Section 4. A new section of Chapter 7, Article 19 NMSA 1978 is | 0024| enacted to read: | 0025| "REFUNDING BONDS--AUTHORIZATION.-- | 0001| A. Any municipality may issue refunding bonds for the | 0002| purpose of refinancing, paying and discharging all or any part of | 0003| outstanding supplemental municipal gross receipts tax bonds of any one | 0004| or more or all outstanding issues: | 0005| (1) for the acceleration, deceleration or other | 0006| modification of the payment of such obligations, including without | 0007| limitation any capitalization of any interest thereon in arrears or | 0008| about to become due for any period not exceeding one year from the | 0009| date of the refunding bonds; | 0010| (2) for the purpose of reducing interest costs or | 0011| affecting other economies; | 0012| (3) for the purpose of modifying or eliminating | 0013| restrictive contractual limitations pertaining to the issuance of | 0014| additional bonds, otherwise concerning the outstanding bonds or to any | 0015| facilities relating thereto; or | 0016| (4) for any combination of such purposes. | 0017| B. The municipality may pledge irrevocably for the payment | 0018| of interest and principal on refunding bonds the appropriate pledged | 0019| revenues, which may be pledged to an original issue of bonds as | 0020| provided in the Supplemental Municipal Gross Receipts Tax Act. | 0021| Nothing in this section shall permit the pledge of the gross receipts | 0022| tax revenue to the payment of bonds that refund bonds issued under any | 0023| other provision of law. | 0024| C. Refunding bonds may be issued separately or issued in | 0025| combination in one series or more. | 0001| D. Refunding bonds issued pursuant to the Supplemental | 0002| Municipal Gross Receipts Tax Act shall be authorized by ordinance. | 0003| Any bonds that are refunded under the provisions of this section shall | 0004| be paid at maturity or on any permitted prior redemption date in the | 0005| amounts, at the time and places and, if called prior to maturity, in | 0006| accordance with any applicable notice provisions, all as provided in | 0007| the proceedings authorizing the issuance of the refunded bonds, or | 0008| otherwise appertaining thereto, except for any such bond that is | 0009| voluntarily surrendered for exchange or payment by the holder or | 0010| owner. | 0011| E. Provision shall be made for paying the bonds refunded at | 0012| the time or places provided in Subsection D of this section. The | 0013| principal amount of the refunding bonds shall not exceed, but may be | 0014| less than or be the same as the principal amount of the bonds being | 0015| refunded so long as provision is duly and sufficiently made for the | 0016| payment of the refunded bonds. | 0017| F. The proceeds of refunding bonds, including any accrued | 0018| interest and premium appertaining to the sale of refunding bonds, | 0019| shall either be immediately applied to the retirement of the bonds | 0020| being refunded or be placed in escrow in a commercial bank or trust | 0021| company that possesses and is exercising trust powers and that is a | 0022| member of the federal deposit insurance corporation, to be applied to | 0023| the payment of the principal of, interest on and any prior redemption | 0024| premium due in connection with the bonds being refunded; provided that | 0025| such refunding bond proceeds, including any accrued interest and any | 0001| premium appertaining to a sale of refunding bonds, may be applied to | 0002| the establishment and maintenance of a reserve fund and to the payment | 0003| of expenses incidental to the refunding and the issuance of the | 0004| refunding bonds, the interest on the refunding bonds and the principal | 0005| of the refunding bonds or both interest and principal as the | 0006| municipality may determine. Nothing in this section requires the | 0007| establishment of an escrow if the refunded bonds become due and | 0008| payable within one year from the date of the refunding bonds and if | 0009| the amounts necessary to retire the refunded bonds within that time | 0010| are deposited with the paying agent for the refunded bonds. Any such | 0011| escrow shall not necessarily be limited to proceeds of refunding bonds | 0012| but may include other money available for its escrow purpose. Any | 0013| proceeds in escrow pending such use may be invested or reinvested in | 0014| bills, certificates of indebtedness, notes or bonds that are direct | 0015| obligations of or the principal and interest of which obligations are | 0016| unconditionally guaranteed by the United States or in certificates of | 0017| deposit of banks that are members of the federal deposit insurance | 0018| corporation, the par value of which certificates of deposit is | 0019| collateralized by a pledge of obligations of or the payment of which | 0020| is unconditionally guaranteed by the United States, the par value of | 0021| which obligations is least seventy-five percent of the par value of | 0022| the certificates of deposit. Such proceeds and investments in escrow | 0023| together with any interest or other income to be derived from any such | 0024| investment shall be in an amount at all times sufficient as to | 0025| principal, interest, any prior redemption premium due and any charges | 0001| of the escrow agent payable therefrom to pay the bonds being refunded | 0002| as they become due at their respective maturities or due at any | 0003| designated prior redemption date in connection with which the | 0004| municipality shall exercise a prior redemption option. Any purchaser | 0005| of any refunding bond issued pursuant to the provisions of the | 0006| Supplemental Municipal Gross Receipts Tax Act is in no manner | 0007| responsible for the application of the proceeds thereof by the | 0008| municipality or any of its officers, agents or employees. | 0009| G. Refunding bonds may be sold at a public or negotiated | 0010| sale and may bear such additional terms and provisions as may be | 0011| determined by the municipality subject to limitations in the | 0012| Supplemental Municipal Gross Receipts Tax Act. The terms, provisions | 0013| and authorization of the refunding bonds are not subject to the | 0014| provisions of any other statute, provided that the Public Securities | 0015| Limitation of Action Act shall be fully applicable to the issuance of | 0016| refunding bonds. | 0017| H. The municipality shall receive from the department | 0018| of finance and administration written approval of any refunding | 0019| bonds issued pursuant to the provisions of this section." | 0020| |