February 2, 2000

Mr. President:

Your WAYS AND MEANS COMMITTEE, to whom has been referred

has had it under consideration and reports same with recommendation that it DO PASS, amended as follows:

1. On page 12, between lines 22 and 23, insert the following new section to read:

"Section 5. Section 7-9-54 NMSA 1978 (being Laws 1969, Chapter 144, Section 44, as amended) is amended to read:

"7-9-54. DEDUCTION--GROSS RECEIPTS TAX--GOVERNMENTAL GROSS RECEIPTS TAX--SALES TO GOVERNMENTAL AGENCIES.--

A. [Except as provided otherwise in Subsection C of this section] Receipts from selling tangible personal property to the United States or New Mexico or any governmental unit or subdivision, agency, department or instrumentality thereof may be deducted from gross receipts or from governmental gross receipts. Unless contrary to federal law, the deduction provided by this subsection does not apply to:

(1) receipts from selling metalliferous mineral ore;

(2) receipts from selling tangible personal property that is or will be incorporated into a metropolitan redevelopment project created under the Metropolitan Redevelopment Code;

(3) receipts from selling tangible personal property that will become an ingredient or component part of a construction project; or

(4) that portion of the receipts from performing a "service", as defined in Subsection K of Section 7-9-3 NMSA 1978, that reflects the value of tangible personal property utilized or produced in performance of such service.

B. [Except as provided otherwise in Subsection C of this section] Receipts from selling tangible personal property to an Indian tribe, nation or pueblo or any governmental subdivision, agency, department or instrumentality thereof for use on Indian reservations or pueblo grants may be deducted from gross receipts or from governmental gross receipts.

[C. Unless contrary to federal law, the deduction provided by this section does not apply to:

(1) receipts from selling metalliferous mineral ore;

(2) receipts from selling tangible personal property that is or will be incorporated into a metropolitan redevelopment project created under the Metropolitan Redevelopment Code;

(3) receipts from selling tangible personal property that will become an ingredient or component part of a construction project; or

(4) that portion of the receipts from performing a "service", as defined in Subsection K of Section 7-9-3 NMSA 1978, that reflects the value of tangible personal property utilized or produced in performance of such service.]"".

2. Renumber the succeeding sections accordingly.,

and thence referred to the FINANCE COMMITTEE.

Respectfully submitted,

__________________________________

Carlos R. Cisneros, Chairman

Adopted_______________________ Not Adopted_______________________

(Chief Clerk) (Chief Clerk)

Date ________________________

The roll call vote was 8 For 0 Against

Yes: 8

No: 0

Excused: Carraro

Absent: None

S0103WM1 .131766.1