0001|                           SENATE BILL 1128
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0002|     43rd legislature - STATE OF NEW MEXICO - first session, 1997
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0003|                            INTRODUCED BY
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0004|                          JOHN ARTHUR SMITH
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0005|     
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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|                                AN ACT
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0011|     RELATING TO TAXATION; REQUIRING THAT THE INVESTMENT CREDIT BE
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0012|     CLAIMED ONLY FOR EQUIPMENT FOR MANUFACTURING OPERATIONS IN
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0013|     COUNTIES WITH HIGH UNEMPLOYMENT; AMENDING SECTIONS OF THE NMSA
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0014|     1978.
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0015|     
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0016|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0017|          Section 1.  Section 7-9A-3 NMSA 1978 (being Laws 1979,
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0018|     Chapter 347, Section 3, as amended by Laws 1991, Chapter 159,
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0019|     Section 2 and also by Laws 1991, Chapter 162, Section 2) is
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0020|     amended to read:
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0021|          "7-9A-3.  DEFINITIONS.--As used in the Investment Credit
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0022|     Act:
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0023|               A.  "department" means the taxation and revenue
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0024|     department, the secretary of taxation and revenue or any
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0025|     employee of the department exercising authority lawfully
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0001|     delegated to that employee by the secretary;
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0002|               B.  "equipment" means an essential machine,
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0003|     mechanism or tool, or a component or fitting thereof, used
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0004|     directly and exclusively in a manufacturing operation and
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0005|     subject to depreciation for purposes of the Internal Revenue
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0006|     Code by the taxpayer carrying on the manufacturing operation. 
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0007|     "Equipment" does not include any vehicle that leaves the site
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0008|     of the manufacturing operation for purposes of transporting
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0009|     persons or property or any property for which the taxpayer
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0010|     claims the credit pursuant to Section 7-9-79 NMSA 1978;
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0011|               <u>C.  "high unemployment county" means a county with
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<u></u>0012| <u>    an annualized unemployment rate of ten percent or more as
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<u></u>0013| <u>    determined by the labor department;</u>
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0014|               <s>[C.]</s> <u>D.</u>  "manufacturing" means combining or
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0015|     processing components or materials, including recyclable
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0016|     materials, to increase their value for sale in the ordinary
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0017|     course of business, including genetic testing and production,
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0018|     but not including:
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0019|                    (1)  construction;
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0020|                    (2)  farming;
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0021|                    (3)  power generation; or
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0022|                    (4)  processing natural resources, including
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0023|      hydrocarbons;
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0024|               <s>[D.]</s> <u>E.</u>  "manufacturing operation" means a
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0025|     plant, including a genetic testing and production facility,
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0001|     employing personnel to perform production tasks, in conjunction
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0002|     with equipment not previously existing at the site, to produce
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0003|     goods; 
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0004|               <s>[E.]</s> <u>F.</u>  "recyclable materials" means materials
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0005|     that would otherwise become solid waste if not recycled and
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0006|     that can be collected, separated or processed and placed in use
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0007|     in the form of raw materials or products; and
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0008|               <s>[F.]</s> <u>G.</u>  "taxpayer" means a person liable for
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0009|     payment of any tax, a person responsible for withholding and
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0010|     payment over or for collection and payment over of any tax, or
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0011|     a person to whom an assessment has been made, if the assessment
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0012|     remains unabated or the amount thereof has not been paid."
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0013|          Section 2.  Section 7-9A-5 NMSA 1978 (being Laws 1979,
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0014|     Chapter 347, Section 5, as amended by Laws 1991, Chapter 159,
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0015|     Section 4 and also by Laws 1991, Chapter 162, Section 4) is
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0016|     amended to read:
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0017|          "7-9A-5.  INVESTMENT CREDIT--AMOUNT--CLAIMANT.--The
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0018|     investment credit provided for in the Investment Credit Act is
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0019|     an amount equal to the percent of the compensating tax rate
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0020|     provided for in the Gross Receipts and Compensating Tax Act
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0021|     applied to the value of the qualified equipment and may be
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0022|     claimed by the taxpayer carrying on a manufacturing operation
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0023|     <u>in a high unemployment county</u> in New Mexico."
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0024|          Section 3.  Section 7-9A-6 NMSA 1978 (being Laws 1979,
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0025|     Chapter 347, Section 6, as amended) is amended to read:
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0001|          "7-9A-6.  QUALIFIED EQUIPMENT.--Equipment not previously
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0002|     used in New Mexico and not previously approved for a credit
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0003|     under the Investment Credit Act that is owned by the taxpayer
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0004|     or owned by the United States or an agency or instrumentality
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0005|     thereof or the state or a political subdivision thereof and
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0006|     leased or subleased to the taxpayer is qualified equipment if
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0007|     it is in New Mexico and is incorporated or to be incorporated
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0008|     within one year into a manufacturing operation <u>in a high
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<u></u>0009| <u>    unemployment county in New Mexico</u>."
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0010|          Section 4.  TEMPORARY PROVISION.--The provisions of this
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0011|     act shall not affect claims for an investment credit for
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0012|     qualified equipment incorporated into a manufacturing operation
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0013|     prior to the effective date of this act and those claims shall
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0014|     be subject to the provisions of the Investment Credit Act in
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0015|     effect on the day prior to the effective date of this act.
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0016|          Section 5.  Laws 1990, Chapter 3, Section 10, as amended
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0017|     by Laws 1992, Chapter 17, Section 1 and also by Laws 1992,
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0018|     Chapter 104, Section 1, is amended to read:
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0019|          "Section 10.  EFFECTIVE DATE.--
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0020|               A.  The effective date of the provisions of Sections
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0021|     1, 2, 4, 5, 7 and 9 of this act is January 1, 1991.
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0022|               B.  The effective date of the provisions of Sections
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0023|     6 and 8 of this act is January 1, <s>[1998]</s> <u>2002</u>."
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0024|          Section 6.  EFFECTIVE DATE.--The effective date of the
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0025|     provisions of this act is July 1, 1997.
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