45th legislature - STATE OF NEW MEXICO - first session, 2001

RELATING TO TAXATION; PROVIDING AN INTERGOVERNMENTAL CREDIT FOR CERTAIN TAXES; ENACTING A SECTION OF THE NMSA 1978.

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

Section 1. A new Section 7-29C-2 NMSA 1978 is enacted to read:

"7-29C-2. [NEW MATERIAL] TRIBAL CAPITAL IMPROVEMENT TAX CREDITS.--

A. A person who is liable for the payment of the oil and gas severance tax, the oil and gas conservation tax, the oil and gas emergency school tax or the oil and gas ad valorem production tax imposed on products severed from Indian tribal land or imposed on the privilege of severing products from Indian tribal land shall be entitled to a credit to be computed pursuant to this section and deducted from the payment of those taxes on products from qualifying wells. The credit provided by this subsection may be referred to as the "tribal capital improvements production tax credit".

B. As used in this section:

(1) "Indian tribal land" means all land that on March 1, 2001 was within the exterior boundaries of an Indian reservation or pueblo grant or was held in trust by the United States for an Indian person, nation, tribe or pueblo;

(2) "product" means oil, natural gas or liquid hydrocarbon, individually or in combination, or carbon dioxide;

(3) "qualifying well" means a well on Indian tribal land; and

(4) "tribal capital improvements tax" means a tax imposed after the effective date of this section by the Indian nation, tribe or pueblo having jurisdiction over the Indian tribal land on which a qualifying well is located, that is exclusively dedicated to fund capital improvement projects on the tribe's Indian tribal land.

C. The tribal capital improvements production tax credit shall be determined separately for each calendar month and shall be equal to the lesser of:

(1) the amount of the tribal capital improvements tax imposed by the Indian nation, tribe or pueblo upon the products severed from qualifying wells or upon the privilege of severing products from qualifying wells; or

(2) two percent of the taxable value of the products severed from qualifying wells as determined by applicable state law.

D. Notwithstanding any other provision of law to the contrary, the amount of credit taken and allowed shall be applied proportionately against the amount of the oil and gas severance tax, the oil and gas conservation tax, the oil and gas emergency school tax and the oil and gas ad valorem production tax due with respect to the products or severance of products taxed.

E. The taxation and revenue department shall administer and interpret the provisions of this section in accordance with the provisions of the Tax Administration Act.

F. The burden of showing entitlement to a credit authorized by this section is on the taxpayer claiming it, and he shall furnish to the taxation and revenue department, in a manner determined by the department, proof of payment of tribal tax on which the credit is based.

G. The credit provided by this section shall be in addition to any credit claimed by the taxpayer or allowed by the taxation and revenue department pursuant to Section 7-29C-1 NMSA 1978 on the same products or on the severance of the same products. A tribal infrastructure tax that qualifies for the credit provided by this section shall constitute an increase in tribal taxes for purposes of Subsection F of Section 7-29C-1 NMSA 1978, but only to the extent that it exceeds the amount identified in Paragraph (2) of Subsection C of this section."