SENATE BILL 6

47th legislature - STATE OF NEW MEXICO - first special session, 2005

INTRODUCED BY

John Arthur Smith

AN ACT

RELATING TO TAXATION; PROVIDING FOR A REBATE FOR A PORTION OF TAXES IMPOSED FOR THE 2005 TAXABLE YEAR; PROVIDING FOR NOTICE OF OPTIONAL DONATION OF AN ADVANCED PAYMENT OF THAT REBATE FOR NATURAL DISASTER VICTIM ASSISTANCE; CREATING AN OPTIONAL DESIGNATION FOR A PERSONAL INCOME TAX REFUND CONTRIBUTION FOR NATURAL DISASTER VICTIM ASSISTANCE; PROVIDING FOR A DISTRIBUTION; MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.

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

     Section 1. A new section of the Tax Administration Act is enacted to read:

     "[NEW MATERIAL] DISTRIBUTION--CONTRIBUTIONS FOR ASSISTANCE TO VICTIMS OF NATURAL DISASTERS.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the secretary of public safety in an amount equal to the money designated pursuant to the Income Tax Act as contributions for assistance to victims of natural disasters. The secretary of public safety shall deposit the money in a temporary suspense account for distribution to nonprofit organizations that provide assistance to victims of natural disasters in the United States."

     Section 2. A new section of the Income Tax Act is enacted to read:

     "[NEW MATERIAL] TAX REBATE--2005 TAXABLE YEAR.--

          A. Except as otherwise provided in this section, any resident who files an individual New Mexico income tax return and who is not a dependent of another individual is entitled to a tax rebate during the 2005 taxable year for a portion of state and local taxes to which the person has been subject during the 2005 taxable year, even if the resident has no income taxable pursuant to the Income Tax Act.

          B. For the purposes of this section, the total number of exemptions for which a tax rebate may be claimed or allowed is determined by adding the number of federal exemptions allowable for federal income tax purposes for each individual; provided that, in the case of a husband and wife who have filed a joint return where only one individual is a New Mexico resident, the number of exemptions shall be reduced by one.

          C. Except as otherwise provided in Subsection D of this section, the tax rebate provided for in this section is allowed for the amount shown in the following table:

Adjusted Gross       And the total number of exemptions is:

Income is:

          D. If a resident's adjusted gross income is less than or equal to zero, the resident is entitled to a rebate in the amount shown in the first row of the table appropriate for the resident's number of exemptions.

          E. Except as otherwise provided in this section, the secretary shall make an advance payment of the tax rebate provided for in this section not later than December 15, 2005 to each resident who filed a 2004 New Mexico personal income tax return. Advance payment amounts shall be based on the number of federal exemptions allowable for federal income tax purposes on the 2004 New Mexico personal income tax return of the resident for whom a rebate is allowed pursuant to this section and on the federal adjusted gross income reported by that resident on the same return. A resident who does not receive an advance payment may claim the tax rebate provided for in this section on that resident's 2005 New Mexico personal income tax return based on the federal adjusted gross income and on the number of federal exemptions allowable for federal income tax purposes reported on that return.

          F. The department shall not make an advance payment of the tax rebate provided for in this section to a person who:

                (1) was an inmate of a public institution for more than six months during the 2004 taxable year; or

                (2) was not a resident of New Mexico on the last day of the 2004 taxable year.

          G. The department shall not allow a tax rebate provided in this section to a person who claims the rebate on that person's 2005 personal income tax return, but:

                (1) was an inmate of a public institution for more than six months during the 2005 taxable year; or

                (2) was not a resident of New Mexico on the last day of the 2005 taxable year.

          H. The secretary shall mail with advance payments of the tax rebate provided for in this section a notice of the option to endorse the advanced tax rebate payment to a temporary suspense account held by the department of public safety for distribution to nonprofit organizations assisting victims of natural disasters.

          I. The notice provided for in Subsection H shall be in a form prescribed by the secretary and shall contain:

                (1) detailed instructions for endorsing an advanced rebate payment over to a temporary suspense account held by the department of public safety for natural disaster victim assistance;

                (2) the address to which an advanced rebate payment may be mailed to the department of public safety; and

                (3) instructions for mailing an advanced rebate payment to the department of public safety.

          J. The secretary may adopt regulations necessary to administer the provisions of this section.

          K. For purposes of this section, "dependent" means "dependent" as defined by Section 152 of the Internal Revenue Code, but also includes any minor child or stepchild of the resident who would be a dependent for federal income tax purposes if the public assistance contributing to the support of the child or stepchild was considered to have been contributed by the resident."

     Section 3. A new section of the Income Tax Act is enacted to read:

     "[NEW MATERIAL] OPTIONAL DESIGNATION OF TAX REFUND CONTRIBUTION--NATURAL DISASTER ASSISTANCE.--

          A. Except as otherwise provided in Subsection C of this section, an individual whose state income tax liability after application of allowable credits and tax rebates is lower than the amount of money held by the department to the credit of the individual for that taxable year may designate a portion of the income tax refund due to the individual to be contributed to nonprofit organizations that offer assistance to victims of natural disasters. In the case of a joint return, both individuals shall make such a designation.

          B. The department shall revise the state income tax form to allow the designation of such contributions in the following form:

          "Natural Disaster Victim Assistance - Check      □

          if you wish to contribute a part or all of your tax

refund to nonprofit organizations that assist victims of natural disasters. Enter

          here $_______ the amount of your contribution.".

          C. The provisions of this section do not apply to income tax refunds subject to interception under the provisions of the Tax Refund Intercept Program Act, and any designation made under the provisions of this section to such refunds is void."

     Section 4. APPROPRIATION.--Four hundred thousand dollars ($400,000) is appropriated from the general fund to the taxation and revenue department for expenditure in fiscal years 2006 and 2007 to administer the tax rebate provided for in Section 1 of this 2005 act. Any unexpended or unencumbered balance remaining at the end of fiscal year 2007 shall revert to the general fund.

     Section 5. APPLICABILITY.--

          A. The provisions of Sections 1 and 3 of this act apply to the taxable years beginning on or after January 1, 2005.

          B. The provisions of Section 2 of this act apply to the taxable year beginning on January 1, 2005 and ending on December 31, 2005.

     Section 6. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.

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