0001|                        SENATE BILL 615
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0002|     42ND LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION,
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0003|     1996
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0004|                         INTRODUCED BY
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0005|                        MANNY M. ARAGON
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0006|     
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0007|                                
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0008|     
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0009|     
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0010|     
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0011|                             AN ACT
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0012|     RELATING TO TAXATION; REMOVING CERTAIN GROSS RECEIPTS TAX
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0013|     EXEMPTIONS FOR NONPROFIT ORGANIZATIONS PRINCIPALLY ENGAGED IN
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0014|     SCIENTIFIC RESEARCH AND PROVIDING A TEMPORARY GROSS RECEIPTS TAX
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0015|     DEDUCTION FOR THOSE ORGANIZATIONS; PROVIDING A GROSS RECEIPTS
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0016|     TAX CREDIT FOR THE AMOUNT OF COMMUNITY AND ECONOMIC DEVELOPMENT
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0017|     SERVICES AND EXPENDITURES OF NONPROFIT SCIENTIFIC RESEARCH
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0018|     ORGANIZATIONS; AUTHORIZING CREATION OF LOCAL COMMUNITY
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0019|     DEVELOPMENT BOARDS; AMENDING, REPEALING AND ENACTING SECTIONS OF
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0020|     THE NMSA 1978.
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0021|     
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0022|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0023|       Section 1.  [<u>NEW MATERIAL</u>]  COMMUNITY DEVELOPMENT BOARDS
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0024|     AUTHORIZED--POWERS AND DUTIES.--
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0025|            A.  The governing body of a municipality or county in
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0001|     or near which a nonprofit scientific research organization
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0002|     eligible for a gross receipts tax credit pursuant to Section
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0003|     7-9-88 NMSA 1978 is located may enact an ordinance establishing
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0004|     a community development board to provide opportunities for
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0005|     nonprofit scientific research organizations to serve the
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0006|     community and surrounding region in which they are located.  No
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0007|     more than one community development board may be created for any
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0008|     one geographic area, but any number of municipalities, counties,
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0009|     school districts and community and economic development
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0010|     organizations in the locality or region may join with the
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0011|     municipality or county in developing and organizing the
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0012|     community development board.
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0013|            B.  Any ordinance establishing a community 
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0014|     development board shall determine the board membership and
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0015|     geographic area served by the board and provide for development
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0016|     of a local or regional community and economic development plan. 
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0017|     In establishing a community development board, the founding
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0018|     members shall provide for a broad representation from the
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0019|     governing bodies of political subdivisions, businesses and
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0020|     industries, community and economic development organizations,
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0021|     Indian tribes and pueblos and the public in the area served by
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0022|     the board.
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0023|            C.  A community development board shall:
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0024|                 (1)  develop a community and economic
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0025|     development plan for the locality or region that is served by
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0001|     the board;
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0002|                 (2)  determine services, programs and
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0003|     expenditures pursuant to that community and economic development
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0004|     plan that may be provided or made by a nonprofit scientific
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0005|     research organization and that are eligible for a tax credit
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0006|     pursuant to Section 7-9-88 NMSA 1978;
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0007|                 (3)  assist nonprofit scientific research
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0008|     organizations in providing services and making expenditures for
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0009|     programs and purposes that meet the requirements and priorities
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0010|     of the board's community and economic development plan and
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0011|     certify which services and expenditures are eligible community
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0012|     and economic development services and expenditures for purposes
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0013|     of the tax credit pursuant to Section 7-9-88 NMSA 1978; and
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0014|                 (4)  carry out any other tasks or activities 
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0015|     that promote community and economic development in the locality
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0016|     or region served by the board and that provide nonprofit
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0017|     scientific research organizations an opportunity to be of
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0018|     service to the community and region in which they are located.
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0019|            D.  As used in this section, "nonprofit scientific
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0020|     research organization" means an organization principally engaged
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0021|     in scientific research that has been granted exemption from the
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0022|     federal income tax by the United States commissioner of internal
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0023|     revenue as an organization described in Section 501(c)(3) of the
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0024|     United States Internal Revenue Code of 1986, as amended.
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0025|       Section 2.  Section 7-9-15 NMSA 1978 (being Laws 1970,
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0001|     Chapter 12, Section 1, as amended) is amended to read:
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0002|       "7-9-15.  EXEMPTION--COMPENSATING TAX--CERTAIN
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0003|     ORGANIZATIONS.--Exempted from the compensating tax is the use of
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0004|     property by organizations, <u>other than organizations that are
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<u></u>0005| <u>    principally engaged in scientific research</u>, that demonstrate to
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0006|     the department that they have been granted exemption from the
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0007|     federal income tax by the United States commissioner of internal
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0008|     revenue as organizations described in Section 501(c)(3) of the
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0009|     United States Internal Revenue Code of <s>[1954]</s> <u>1986</u>, as
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0010|     amended <s>[or renumbered]</s>, in the conduct of functions described
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0011|     in Section 501(c)(3).  The use of property as an ingredient or
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0012|     component part of a construction project is not a use in the
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0013|     conduct of functions described in Section 501(c)(3).  This
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0014|     section does not apply to the use of property in an unrelated
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0015|     trade or business as defined in Section 513 of the United States
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0016|     Internal Revenue Code of <s>[1954]</s> <u>1986</u>, as amended <s>[or
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<s></s>0017| <s>    renumbered]</s>."
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0018|       Section 3.  Section 7-9-29 NMSA 1978 (being Laws 1970,
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0019|     Chapter 12, Section 3, as amended) is amended to read:
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0020|       "7-9-29.  EXEMPTION--GROSS RECEIPTS TAX--CERTAIN
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0021|     ORGANIZATIONS.--
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0022|            A.  Exempted from the gross receipts tax are the
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0023|     receipts of organizations, <u>other than organizations that are
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<u></u>0024| <u>    principally engaged in scientific research</u>, that demonstrate to
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0025|     the department that they have been granted exemption from the
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0001|     federal income tax by the United States commissioner of internal
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0002|     revenue as organizations described in Section 501(c)(3) of the
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0003|     United States Internal Revenue Code of <s>[1954]</s> <u>1986</u>, as
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0004|     amended <s>[or renumbered]</s>.
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0005|            B.  Exempted from the gross receipts tax are the
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0006|     receipts from carrying on chamber of commerce, visitor bureau
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0007|     and convention bureau functions of organizations that
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0008|     demonstrate to the department that they have been granted
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0009|     exemption from the federal income tax by the United States
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0010|     commissioner of internal revenue as organizations described in
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0011|     Section 501(c)(6) of the United States Internal Revenue Code of
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0012|     <s>[1954]</s> <u>1986</u>, as amended <s>[or renumbered]</s>.
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0013|            C.  This section does not apply to receipts derived
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0014|     from an unrelated trade or business as defined in Section 513 of
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0015|     the United States Internal Revenue Code of <s>[1954]</s> <u>1986</u>, as
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0016|     amended <s>[or renumbered]</s>."
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0017|       Section 4.  Section 7-9-60 NMSA 1978 (being Laws 1970,
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0018|     Chapter 12, Section 4, as amended) is amended to read:
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0019|       "7-9-60.  DEDUCTION--GROSS RECEIPTS TAX--GOVERNMENTAL GROSS
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0020|     RECEIPTS TAX--SALES TO CERTAIN ORGANIZATIONS.--
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0021|            A.  Except as provided otherwise in Subsection B of
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0022|     this section, receipts from selling tangible personal property
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0023|     to organizations, <u>other than organizations that are principally
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<u></u>0024| <u>    engaged in scientific research</u>, that have been granted
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0025|     exemption from the federal income tax by the United States
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0001|     commissioner of internal revenue as organizations described in
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0002|     Section 501(c)(3) of the United States Internal Revenue Code of
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0003|     1986, as amended <s>[or renumbered]</s>, may be deducted from gross
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0004|     receipts or from governmental gross receipts if the sale is made
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0005|     to an organization that delivers a nontaxable transaction
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0006|     certificate to the seller.  The buyer delivering the nontaxable
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0007|     transaction certificate shall employ the tangible personal
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0008|     property in the conduct of functions described in Section
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0009|     501(c)(3) and shall not employ the tangible personal property in
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0010|     the conduct of an unrelated trade or business as defined in
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0011|     Section 513 of the United States Internal Revenue Code of 1986,
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0012|     as amended <s>[or renumbered]</s>. 
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0013|            B.  The deduction provided by this section does not
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0014|     apply to receipts from selling tangible personal property that
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0015|     will become an ingredient or component part of a construction
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0016|     project or from selling metalliferous mineral ore."
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0017|       Section 5.  A new section of the Gross Receipts and
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0018|     Compensating Tax Act, Section 7-9-88 NMSA 1978, is enacted to
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0019|     read:
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0020|       "7-9-88.  [<u>NEW MATERIAL</u>]  GROSS RECEIPTS TAX CREDIT--COMMUNITY AND ECONOMIC DEVELOPMENT SERVICES AND EXPENDITURES.--
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0021|            A.  In any reporting period, a taxpayer that is an
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0022|     organization principally engaged in scientific research that has
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0023|     been granted exemption from the federal income tax by the United
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0024|     States commissioner of internal revenue as an organization
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0025|     described in Section 501(c)(3) of the United States Internal
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0001|     Revenue Code of 1986, as amended, may claim a credit against the
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0002|     taxpayer's gross receipts tax liability in the amount of the
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0003|     taxpayer's certified community and economic development services
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0004|     and expenditures for the reporting period.
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0005|            B.  As used in this section, "certified community and
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0006|     economic development services and expenditures" means any of the
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0007|     following services provided or programs or purposes for which
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0008|     expenditures are made in New Mexico that a community development
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0009|     board certifies have been provided or made by a taxpayer
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0010|     eligible for the credit in Subsection A of this section:
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0011|                 (1)  job or entrepreneurial training programs
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0012|     and services;
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0013|                 (2)  education services provided to public
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0014|     schools, public post-secondary educational institutions or
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0015|     community agencies or organizations;
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0016|                 (3)  job creation programs;
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0017|                 (4)  seed capital for new small businesses or
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0018|     expansion of existing small businesses;
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0019|                 (5)  a revolving loan fund for expansion of job
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0020|     opportunities in any business or industry;
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0021|                 (6)  provision of services or funds for
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0022|     workshops or task forces that promote business expansions or job
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0023|     and economic diversification;
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0024|                 (7)  technology transfer programs and services
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0025|     provided in New Mexico;
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0001|                 (8)  enhancement or promotion of procurement
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0002|     from local businesses and industries;
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0003|                 (9)  programs and services for "dislocated"
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0004|     workers who have lost jobs;
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0005|                 (10)  technical assistance to new or small
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0006|     businesses in New Mexico;
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0007|                 (11)  the purchase, grant, loan or gift of land
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0008|     for or a grant, gift or loan for acquisition, construction,
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0009|     equipping or furnishing of facilities for any community or
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0010|     economic development or public purpose of a political
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0011|     subdivision of the state, any agency or institution of the
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0012|     political subdivision or any Indian tribe or pueblo; or 
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0013|                 (12)  any other similar service, program or
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0014|     expenditure certified by a community development board as a
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0015|     "community or economic development service or expenditure".
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0016|            C.  The value of any community or economic
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0017|     development service provided by a taxpayer eligible for the
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0018|     credit provided in Subsection A of this section shall be
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0019|     determined by the community development board in consultation
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0020|     with the taxpayer who has provided the service.
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0021|            D.  The department shall promulgate regulations and
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0022|     provide assistance upon request to any community development
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0023|     board to apply and interpret the provisions of this section."
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0024|       Section 6.  A new section of the Gross Receipts and 
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0025|     Compensating Tax Act is enacted to read:
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0001|       "[<u>NEW MATERIAL</u>]  DEDUCTION--GROSS RECEIPTS TAX--SCIENTIFIC RESEARCH SERVICES.--Receipts of an organization
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0002|     principally engaged in scientific research that has been granted
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0003|     exemption from the federal income tax by the United States
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0004|     commissioner of internal revenue as an organization described in
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0005|     Section 501(c)(3) of the United States Internal Revenue Code of
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0006|     1986, as amended, may be deducted from gross receipts."
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0007|       Section 7.  REPEAL.--Section 6 of this act is repealed.
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0008|       Section 8.  EFFECTIVE DATE.--
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0009|            A.  The effective date of Sections 1 through 4 and 6
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0010|     of this act is July 1, 1996.
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0011|            B.  The effective date of Sections 5 and 7 of this
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0012|     act is July 1, 1997.
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0013|                                    
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0014|   
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0015|                    FORTY-SECOND LEGISLATURE
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0016|                      SECOND SESSION, 1996
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0017|   
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0018|   
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0019|                                              JANUARY 31, 1996
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0020|   
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0021|   Mr. President:
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0022|   
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0023|     Your COMMITTEES' COMMITTEE, to whom has been referred
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0024|   
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0025|                           SENATE BILL 615
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0001|   
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0002|   has had it under consideration and finds same to be GERMANE, PURSUANT
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0003|   TO CONSTITUTIONAL PROVISIONS, and thence referred to the WAYS AND
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0004|   MEANS COMMITTEE.
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0005|   
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0006|                              Respectfully submitted,
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0007|   
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0008|   
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0009|   
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0010|   
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0011|                              __________________________________
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0012|                              SENATOR MANNY M. ARAGON, Chairman 
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0013|   
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0014|   
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0015|   
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0016|   Adopted_______________________ Not Adopted_______________________
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0017|             (Chief Clerk)                        (Chief Clerk)
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0018|   
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0019|   
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0020|                     Date ________________________
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0021|   
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0022|   
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0023|   
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0024|   S0615CC1
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