SB0148FCS

SENATE FINANCE COMMITTEE SUBSTITUTE FOR

SENATE BILL 148

56th legislature - STATE OF NEW MEXICO - second session, 2024

AN ACT

RELATING TO TAXATION; PHASING OUT AND REPEALING ADMINISTRATIVE FEES IMPOSED FOR COLLECTING, DISTRIBUTING AND TRANSFERRING CERTAIN TAXES AND OTHER FEES; ALLOWING AN ADMINISTRATIVE FEE FOR CERTAIN DISTRIBUTIONS.

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

SECTION 1. 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 AND COMPENSATING 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 tax and municipal compensating 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 tax and municipal compensating 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 tax and municipal compensating tax and any additional] the administrative fee that may be withheld prior to July 1, 2028 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 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 7-1-6.67 NMSA 1978 and with respect to the amount dedicated by a municipality pursuant to Subsection B of Section 5-10-17 NMSA 1978.

D. A transfer pursuant to this section shall be adjusted for a distribution made to the metropolitan redevelopment fund pursuant to Section [11 of this 2023 act] 7-1-6.71 NMSA 1978 and with respect to the amount dedicated by a municipality pursuant to Section 3-60A-23 NMSA 1978."

SECTION 2. 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 AND COMPENSATING 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 tax and county compensating 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 tax and county compensating 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 tax and county compensating tax and any additional] the administrative fee that may be withheld prior to July 1, 2028 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 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 7-1-6.67 NMSA 1978 and with respect to the amount dedicated by a county pursuant to Subsection B of Section 5-10-17 NMSA 1978.

D. A transfer pursuant to this section shall be adjusted for a distribution made to the metropolitan redevelopment fund pursuant to Section [11 of this 2023 act] 7-1-6.71 NMSA 1987 and with respect to the amount dedicated by a county pursuant to Section 3-60A-23 NMSA 1978."

SECTION 3. Section 7-1-6.32 NMSA 1978 (being Laws 1990, Chapter 99, Section 44, as amended) is amended to read:

"7-1-6.32. DISTRIBUTION--SOLID WASTE ASSESSMENT FEE.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the solid waste facility grant fund of the net receipts attributable to the solid waste assessment fee authorized under the Solid Waste Act [less any administrative fee withheld pursuant to Section 7-1-6.41 NMSA 1978]."

SECTION 4. Section 7-1-6.41 NMSA 1978 (being Laws 1997, Chapter 125, Section 1) is amended to read:

"7-1-6.41. ADMINISTRATIVE FEE IMPOSED [APPROPRIATION].--

[A. The taxation and revenue department is directed to withhold an administrative fee of three percent of the net amount to be distributed under the provisions of:

(1) Section 7-1-6.32 NMSA 1978;

(2) Section 66-12-20 NMSA 1978; and

(3) Section 74-1-13 NMSA 1978.

B. The administrative fee to be withheld pursuant to Subsection A of this section shall be withheld on distributions made on or after July 1, 1997 and shall continue until the earlier of December 31, 2006 or the date on which the New Mexico finance authority certifies to the taxation and revenue department that all obligations for bonds issued pursuant to Section 12 of this 1997 act have been fully discharged and directs the department to cease distributing money to the authority pursuant to this section.

C. The taxation and revenue department is directed to withhold an additional administrative fee at the following percentage of the net amount to be distributed pursuant to the following provisions of law:

(1) two percent of the net amount to be distributed pursuant to Section 7-1-6.12 NMSA 1978; and

(2) six-tenths of one percent of the net amount to be distributed pursuant to Section 7-1-6.13 NMSA 1978.

D. The administrative fee to be withheld under Subsection C of this section shall be withheld on distributions made on or after July 1, 1997 and shall continue until the earlier of July 1, 2000 or the date on which the New Mexico finance authority certifies to the taxation and revenue department that all obligations for bonds issued pursuant to Section 12 of this 1997 act have been fully discharged and directs the department to cease distributing money to the authority pursuant to this section.

E. The administrative fee to be withheld by the taxation and revenue department under Section 7-1-6.12 and 7-1-6.13 NMSA 1978 shall be set at three percent of the net amount to be distributed pursuant to the provisions of those sections.

F. The administrative fee to be withheld under Subsection E of this section shall be withheld on distributions made on or after July 1, 2000 and shall continue until the earlier of December 31, 2006 or the date on which the New Mexico finance authority certifies to the taxation and revenue department that all obligations for bonds issued pursuant to Section 12 of this 1997 act have been fully discharged and directs the department to cease distributing money to the authority pursuant to this section. After the department has been directed by the authority to cease distributing money to the authority pursuant to this section, the administrative fee shall be remitted to the state treasurer for deposit in the state general fund each month.

G. The administrative fee shall be distributed monthly to the New Mexico finance authority to be pledged irrevocably for the payment of principal, interest and any expenses or obligations related to the bonds issued by the authority to finance the taxation and revenue information management systems project.] The administrative fee to be withheld by the department pursuant to Sections 7-1-6.12 and 7-1-6.13 NMSA 1978 shall be set at the following percentages of the net amount to be distributed pursuant to the provisions of those sections, and the money from the fee shall be remitted to the state treasurer for deposit in the general fund each month:

A. prior to July 1, 2026, three percent;

B. beginning July 1, 2026 and prior to July 1, 2027, two percent; and

C. beginning July 1, 2027 and prior to July 1, 2028, one percent."

SECTION 5. 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--ADMINISTRATIVE FEE.--

A. 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 tax increment, to a special fund of the tax increment development district.

B. The department shall withhold an administrative fee of three percent of the net amount to be distributed pursuant to Subsection A of this section, and the money from the fee shall be remitted to the state treasurer for deposit in the general fund each month."

SECTION 6. 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--ADMINISTRATIVE FEE.--

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 tax and the state compensating tax; and

(2) fifty percent of the net receipts attributable to the local option gross receipts tax and county compensating tax imposed by a county and local option gross receipts tax and municipal compensating tax imposed by a municipality.

[B.] C. 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 7. Section 7-1-6.71 NMSA 1978 (being Laws 2023, Chapter 112, Section 11) is amended to read:

"7-1-6.71. DISTRIBUTION--METROPOLITAN REDEVELOPMENT FUND--ADMINISTRATIVE FEE.--

A. A distribution for a metropolitan redevelopment project pursuant to the Metropolitan Redevelopment Code shall be made to the metropolitan redevelopment fund in accordance with a notice filed by a municipality or county pursuant to Section 3-60A-21 NMSA 1978 with respect to a dedication of a gross receipts tax increment.

SECTION 8. Section 66-12-20 NMSA 1978 (being Laws 1959, Chapter 338, Section 19, as amended) is amended to read:

"66-12-20. DISPOSITION OF FEES.--The fees collected pursuant to the provisions of the Boat Act [less the administrative fee withheld pursuant to Section 1 of this 1997 act] shall be [covered] deposited into the state park and recreation fund."

SECTION 9. Section 74-1-13 NMSA 1978 (being Laws 1993, Chapter 317, Section 2, as amended) is amended to read:

"74-1-13. WATER CONSERVATION FEE--IMPOSITION--DEFINITIONS.--

A. There is imposed on every person who operates a public water supply system a water conservation fee in an amount equal to three cents ($.03) per thousand gallons of water produced on which the fee imposed by this subsection has not been paid.

B. The "water conservation fund" is created in the state treasury and shall be administered by the department. The fund shall consist of water conservation fees collected pursuant to this section. Balances in the fund at the end of any fiscal year shall not revert to the general fund but shall accrue to the credit of the fund. Earnings on the fund shall be credited to the fund.

C. Money in the water conservation fund is appropriated to the department for administration of a public water supply program to:

(1) test public water supplies for the contaminants required to be tested pursuant to the provisions of the federal Safe Drinking Water Act, as amended, and collect chemical compliance samples as required by those provisions of the federal act;

(2) perform vulnerability assessments that will be used to assess a public water supply's susceptibility to those contaminants; and

(3) implement new requirements of the Utility Operators Certification Act and provide training for all public water supply operators.

D. The taxation and revenue department shall provide by regulation for the manner and form of collection of the water conservation fee. All water conservation fees collected by the taxation and revenue department [less the administrative fee withheld pursuant to Section 7-1-6.41 NMSA 1978] shall be deposited in the water conservation fund.

E. The fee imposed by this section shall be administered in accordance with the provisions of the Tax Administration Act and shall be paid to the taxation and revenue department by each person who operates a public water supply system in the manner required by the department on or before the twenty-fifth day of the month following the month in which the water is produced.

F. Each operator of a public water supply system shall register and comply with the provisions of Section 7-1-12 NMSA 1978 and furnish such information as may be required by the taxation and revenue department.

G. The department shall compile a list of the contaminants that require testing pursuant to Paragraph (1) of Subsection C of this section. The list shall be compiled no less than once every twelve months and include the contaminants that will be tested in the subsequent twelve months. The department shall establish by rule procedures to compile the list and to determine which contaminants that require testing will be tested in the subsequent twelve months. The determination of which contaminants will be tested shall include consideration of the availability of funds in the water conservation fund, the needs of the public water supplies being tested for additional contaminants and public health and safety.

H. As used in this section:

(1) "person" means any individual or legal entity and also means, to the extent permitted by law, any federal, state or other governmental unit or subdivision or an agency, department or instrumentality thereof; and

(2) "public water supply system" means a system that provides piped water to the public for human consumption and that has at least fifteen service connections or regularly services an average of at least twenty-five individuals at least sixty days per year."

SECTION 10. DELAYED REPEAL.--Section 7-1-6.41 NMSA 1978 (being Laws 1997, Chapter 125, Section 1) is repealed effective July 1, 2028.

SECTION 11. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2025.