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

RELATING TO TAXATION; EXEMPTING POWER PROJECTS ON NAVAJO NATION LAND FROM PAYMENT OF CERTAIN STATE TAXES; AUTHORIZING DEVELOPMENT FUNDING THROUGH THE NEW MEXICO FINANCE AUTHORITY.

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

Section 1. Section 7-2A-4 NMSA 1978 (being Laws 1981, Chapter 37, Section 37, as amended) is amended to read:

"7-2A-4. EXEMPTIONS.--No corporate income or franchise tax shall be imposed upon:

A. insurance companies or reciprocal or inter-insurance exchanges [which] that pay a premium tax to the state;

B. a trust organized or created in the United States and forming part of a stock bonus, pension or profit-sharing plan of an employer for the exclusive benefit of his employees or their beneficiaries, which trust is exempt from taxation under the provisions of the Internal Revenue Code; [or]

C. religious, educational, benevolent or other organizations not organized for profit [which] that are exempt from income taxation under the Internal Revenue Code, unless the organization receives income [which] that is subject to federal income taxation as "unrelated business income" under the Internal Revenue Code, in which case the organization is subject to the corporate franchise tax, and the corporate income tax applies to the unrelated business income; or

D. a corporation, limited liability company, limited liability partnership or any other legal entity that constructs or operates a generation, transmission or distribution power project located on the reservation or trust land of the Navajo Nation."

Section 2. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

"[NEW MATERIAL] EXEMPTION--GROSS RECEIPTS TAX--COMPENSATING TAX--POWER PROJECTS ON NAVAJO NATION LANDS.--

A. Exempt from the gross receipts tax are the receipts of a person that constructs or operates a generation, transmission or distribution power project, including generation, transmission or distribution facilities, switch yards, substations or other facilities, installations or infrastructure associated with a power project located on reservation land or trust land of the Navajo Nation.

B. Exempt from the compensating tax is the use of property by a person who constructs or operates a generation, transmission or distribution power project, including generation, transmission or distribution facilities, switch yards, substations or other facilities, installations or infrastructure associated with a power project located on reservation land or trust land of the Navajo Nation."

Section 3. A new section of the New Mexico Finance Authority Act is enacted to read:

"[NEW MATERIAL] POWER PROJECTS ON THE NAVAJO NATION.--

A. The authority shall work with the Navajo Nation to provide funding for development of power projects that are wholly owned by the Navajo Nation.

B. As used in this section, "power project" means a generation, transmission or distribution facility, including the infrastructure, switch yards, substations and raw material delivery systems, as well as the power plant and its associated installations."

Section 4. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2001.