SENATE BILL 5

46th legislature - STATE OF NEW MEXICO - first special session, 2003

INTRODUCED BY

Manny M. Aragon

AN ACT

RELATING TO PUBLIC FINANCES; PROVIDING ADDITIONAL INCOME TAX RELIEF FOR SENIOR CITIZENS, FAMILIES, INDIVIDUALS AND HEADS OF HOUSEHOLDS; PROVIDING INCENTIVES FOR ECONOMIC DEVELOPMENT INITIATIVES AND FOR THE USE OF ALTERNATIVE FUEL VEHICLES; PROVIDING GROSS RECEIPTS TAX RELIEF FOR HEALTH CARE PRACTITIONERS; AUTHORIZING PARTICIPATION IN THE STREAMLINED SALES TAX PROJECT; PROVIDING FOR ADMINISTRATIVE REFORMS; EXPANDING THE GOVERNMENTAL GROSS RECEIPTS TAX AND THE COMPENSATING TAX; PROVIDING FOR LOCAL OPTION COMPENSATING TAXES; ELIMINATING THE CIGARETTE STAMP DISCOUNT; ELIMINATING THE OFFSET AGAINST PARIMUTUEL TAX; ADJUSTING RATES OF THE MOTOR VEHICLE EXCISE TAX, THE LEASED VEHICLE SURCHARGE, THE LIQUOR EXCISE TAX, THE OIL AND GAS EMERGENCY SCHOOL TAX, THE SPECIAL FUEL EXCISE TAX AND THE WEIGHT DISTANCE TAX; CREATING A DISTRIBUTION OF LIQUOR EXCISE TAX REVENUE TO LOCAL GOVERNMENTS; ADJUSTING VEHICLE REGISTRATION FEES; ADJUSTING PERMIT FEES AND REQUIREMENTS FOR VEHICLES OF EXCESSIVE SIZE AND WEIGHT; CREATING REQUIREMENTS AND IMPOSING A FEE FOR WEIGHT DISTANCE TAX IDENTIFICATION PERMITS; MAKING DISTRIBUTIONS; CREATING A FUND; AUTHORIZING ISSUANCE OF STATE TRANSPORTATION PROJECT BONDS; AUTHORIZING TRANSPORTATION PROJECTS; AMENDING, REPEALING AND ENACTING SECTIONS OF THE NMSA 1978; MAKING APPROPRIATIONS; DECLARING AN EMERGENCY.

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

     Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 9 of this act may be cited as the "Streamlined Sales and Use Tax Administration Act".

     Section 2. [NEW MATERIAL] LEGISLATIVE FINDINGS.--The legislature finds that a simplified sales tax and use tax system that treats transactions in a competitively neutral manner will strengthen and preserve sales taxes and use taxes as vital revenue sources for this state and its local governments and will help preserve the fiscal sovereignty of this state. The legislature also finds that such a system will substantially reduce the administrative burdens of collection for sellers. While states have the sovereign right to set their own tax policies, states should cooperatively develop a streamlined sales tax and use tax system that is simplified, uniform and fair.

     Section 3. [NEW MATERIAL] DEFINITIONS.--As used in the Streamlined Sales and Use Tax Administration Act:

          A. "agreement" means the streamlined sales and use tax agreement;

          B. "certified automated system" means software certified jointly by member states to:

                (1) calculate the tax imposed by each jurisdiction on a transaction;

                (2) determine the amount of tax to remit to the appropriate state; and

                (3) maintain a record of the transaction;

          C. "certified service provider" means an agent that performs all of the sales tax functions of a seller and that is certified jointly by member states to perform all of the sales tax functions of the seller; 

          D. "member state" means a state of the United States that enters into the agreement with another state and the District of Columbia if it enters into the agreement with another state;

          E. "person" means an individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation and any other legal entity;

          F. "sales tax" means the gross receipts tax levied pursuant to the Gross Receipts and Compensating Tax Act;

          G. "seller" means a person making sales, leases and rentals of personal property and services; and

          H. "use tax" means the compensating tax levied pursuant to the Gross Receipts and Compensating Tax Act.

     Section 4. [NEW MATERIAL] AUTHORITY TO ENTER AGREEMENT.--

          A. The secretary of taxation and revenue shall enter into the agreement with one or more member states to simplify and modernize sales tax and use tax administration and to reduce the burden of tax compliance for sellers.

          B. The secretary of taxation and revenue is authorized to:

                (1) act jointly with member states to establish standards for certification of a certified automated system and establish performance standards for multistate sellers pursuant to the agreement;

                (2) take actions reasonably required to implement the provisions of the Streamlined Sales and Use Tax Administration Act; and

                (3) adopt rules with member states pursuant to the agreement. 

          C. The secretary of taxation and revenue or the secretary's designee is authorized to represent this state before member states.

     Section 5. [NEW MATERIAL] RELATIONSHIP TO STATE LAW.--A provision of the agreement does not invalidate or amend any provision of state law. Implementation of a condition of the agreement shall be adopted by the legislature.

     Section 6. [NEW MATERIAL] AGREEMENT REQUIREMENTS.--The secretary of taxation and revenue shall not enter into the agreement unless the agreement:

          A. sets restrictions to achieve more uniform state rates by limiting:

                (1) the number of member state rates;

                (2) the application of maximums on the amount of member state taxes due on transactions; and

                (3) the application of thresholds on the application of member state taxes;

          B. establishes uniform standards for:

                (1) sourcing transactions to taxing jurisdictions;

                (2) administering exempt sales; and

                (3) providing allowances that a seller can receive for bad debts;

          C. requires member states to develop and adopt uniform definitions of sales tax and use tax terms that enable the member states to make policy choices consistent with the definitions;

          D. provides for a certified automated system that allows a seller to register to collect and remit sales taxes and use taxes for each member state;

          E. provides that registration with the certified automated system and the collection of a sales tax and a use tax in a member state will not be used to determine if the seller has a nexus with a member state for tax purposes;

          F. provides for reduction of the burden of complying with local sales taxes and use taxes by:

                (1) restricting variances between the member state and local tax bases;

                (2) requiring each member state to administer the sales tax and use tax levied by a local jurisdiction within the member state so that a seller collecting and remitting the taxes will not be required to register or file a return with, remit funds to or be subject to an independent audit from a local taxing jurisdiction;

                (3) restricting change in each local sales tax rate and use tax rate and setting an effective date for a change in the boundaries of a local taxing jurisdiction; and

                (4) providing notice of a change in each local sales tax rate and use tax rate and of a change in the boundaries of a local taxing jurisdiction;

          G. outlines monetary allowances provided by member states to sellers and certified service providers;

          H. requires each state to certify compliance with the terms of the agreement before becoming a member state and to maintain compliance with provisions of the agreement pursuant to the law of the member state while a member state;

          I. requires each member state to adopt a uniform policy for certified service providers that protects the privacy of consumers and maintains the confidentiality of tax information; and

          J. provides for the appointment of an advisory council of private sector representatives and an advisory council of nonmember state representatives to consult with in the administration of the agreement.

     Section 7. [NEW MATERIAL] MEMBER STATES.--The agreement is an accord among member states in furtherance of their governmental functions. The agreement permits each member state to establish and maintain a cooperative, uniform, simplified system to apply sales taxes and use taxes pursuant to the law of the member state.

     Section 8. [NEW MATERIAL] LIMITED BINDING AND BENEFICIAL EFFECT.--

          A. The agreement binds and benefits only this state and other member states. Only a member state is an intended beneficiary of the agreement. A benefit to a person other than a member state is established by the law of this state and member states and not by the terms of the agreement.

          B. A person shall not:

                (1) have a cause of action or a defense pursuant to the agreement; and

                (2) challenge an action or inaction of a department, agency, political subdivision or instrumentality of this state on the grounds that the action or inaction is not consistent with the agreement.

          C. A law of this state or the application of the law is valid despite the inconsistency of the law or its application with the agreement.

     Section 9. [NEW MATERIAL] LIABILITY.--

          A. A certified service provider is liable for sales taxes and use taxes due from each member state on each sales transaction that it processes for the seller except as otherwise provided by this section. A seller that contracts with the certified service provider is not liable to this state for sales tax or use tax due on a transaction processed by the certified service provider unless the seller misrepresents the type of item it sells or commits fraud. In the absence of probable cause that the seller has committed fraud or made a material misrepresentation, the seller is not subject to audit on transactions processed by the certified service provider. A seller is subject to audit for a transaction not processed by the certified service provider. Member states acting jointly may:

                (1) audit data pertaining to the seller that is stored in the certified automated system; and

                (2) review procedures of the seller to determine if the certified automated system functions properly and the extent to which the transactions of the seller are processed by this certified service provider.

          B. A certified service provider is responsible for the proper functioning of a certified automated system and is liable to this state for underpayments of tax attributable to system errors. A seller that uses a certified automated system is liable to this state for reporting and remitting tax.

          C. A seller that has a proprietary system for determining the amount of tax due on a transaction and has agreed to establish a performance standard for the system is liable for failure of the system to meet the standard.

     Section 10. Section 7-1-3 NMSA 1978 (being Laws 1965, Chapter 248, Section 3, as amended) is amended to read:

     "7-1-3. DEFINITIONS.--Unless the context clearly indicates a different meaning, the definitions of words and phrases as they are stated in this section are to be used, and whenever in the Tax Administration Act these words and phrases appear, the singular includes the plural and the plural includes the singular:

          A. "automated clearinghouse transaction" means an electronic credit or debit transmitted through an automated clearinghouse payable to the state treasurer and deposited with the fiscal agent of New Mexico;

          B. "department" means the taxation and revenue department, the secretary or any employee of the department exercising authority lawfully delegated to that employee by the secretary;

          C. "electronic payment" means a payment made by automated clearinghouse deposit, any funds wire transfer system or a credit card, debit card or electronic cash transaction through the internet;

          D. "employee of the department" means any employee of the department, including the secretary, or any person acting as agent or authorized to represent or perform services for the department in any capacity with respect to any law made subject to administration and enforcement under the provisions of the Tax Administration Act;

          E. "financial institution" means any state or federally chartered, federally insured depository institution;

          F. "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended;

          G. "levy" means the lawful power, hereby invested in the secretary, to take into possession or to require the present or future surrender to the secretary or the secretary's delegate of any property or rights to property belonging to a delinquent taxpayer;

          H. "local option compensating tax" means a tax authorized to be imposed by a county or municipality upon the taxpayer's use of property, as the term "use" is defined in the Gross Receipts and Compensating Tax Act, and required to be collected by the department at the same time and in the same manner as the compensating tax; "local option compensating tax" includes the compensating taxes imposed pursuant to the Municipal Local Option Gross Receipts Taxes Act, Supplemental Municipal Gross Receipts Tax Act, County Local Option Gross Receipts Taxes Act, Local Hospital Gross Receipts Tax Act, County Correctional Facility Gross Receipts Tax Act and such other acts as may be enacted authorizing counties or municipalities to impose taxes on use of property, which taxes are to be collected by the department in the same time and in the same manner as it collects the compensating tax;

          [H.] I. "local option gross receipts tax" means a tax authorized to be imposed by a county or municipality upon the taxpayer's gross receipts, as that term is defined in the Gross Receipts and Compensating Tax Act, and required to be collected by the department at the same time and in the same manner as the gross receipts tax; "local option gross receipts tax" includes the taxes imposed pursuant to the Municipal Local Option Gross Receipts Taxes Act, Supplemental Municipal Gross Receipts Tax Act, County Local Option Gross Receipts Taxes Act, Local Hospital Gross Receipts Tax Act, County Correctional Facility Gross Receipts Tax Act and such other acts as may be enacted authorizing counties or municipalities to impose taxes on gross receipts, which taxes are to be collected by the department in the same time and in the same manner as it collects the gross receipts tax;

          [I.] J. "managed audit" means a review and analysis conducted by a taxpayer under an agreement with the department to determine the taxpayer's compliance with a tax administered pursuant to the Tax Administration Act and the presentation of the results to the department for assessment of tax found to be due;

          [J.] K. "net receipts" means the total amount of money paid by taxpayers to the department in a month pursuant to a tax or tax act less any refunds disbursed in that month with respect to that tax or tax act;

          [K.] L. "overpayment" means an amount paid, pursuant to any law subject to administration and enforcement under the provisions of the Tax Administration Act, by a person to the department or withheld from the person in excess of tax due from the person to the state at the time of the payment or at the time the amount withheld is credited against tax due;

          [L.] M. "paid" includes the term "paid over";

          [M.] N. "pay" includes the term "pay over";

          [N.] O. "payment" includes the term "payment over";

          [O.] P. "person" means any individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, limited liability company, limited liability partnership, joint venture, syndicate, other association or gas, water or electric utility owned or operated by a county or municipality; "person" also means, to the extent permitted by law, a federal, state or other governmental unit or subdivision, or an agency, department or instrumentality thereof; and "person", as used in Sections 7-1-72 through 7-1-74 NMSA 1978, also includes an officer or employee of a corporation, a member or employee of a partnership or any individual who, as such, is under a duty to perform any act in respect of which a violation occurs;

          [P.] Q. "property" means property or rights to property;

          [Q.] R. "property or rights to property" means any tangible property, real or personal, or any intangible property of a taxpayer;

          [R.] S. "secretary" means the secretary of taxation and revenue and, except for purposes of Subsection B of Section 7-1-4 NMSA 1978 and Subsection E of Section 7-1-24 NMSA 1978, also includes the deputy secretary or a division director or deputy division director delegated by the secretary;

          [S.] T. "secretary or the secretary's delegate" means the secretary or any employee of the department exercising authority lawfully delegated to that employee by the secretary;

          [T.] U. "security" means money, property or rights to property or a surety bond;

          [U.] V. "state" means any state of the United States, the District of Columbia, the commonwealth of Puerto Rico and any territory or possession of the United States;

          [V.] W. "tax" means the total amount of each tax imposed and required to be paid, withheld and paid or collected and paid under provision of any law made subject to administration and enforcement according to the provisions of the Tax Administration Act and, unless the context otherwise requires, includes the amount of any interest or civil penalty relating thereto; "tax" also means any amount of any abatement of tax made or any credit, rebate or refund paid or credited by the department under any law subject to administration and enforcement under the provisions of the Tax Administration Act to any person contrary to law and includes, unless the context requires otherwise, the amount of any interest or civil penalty relating thereto;

          [W.] X. "taxpayer" means a person liable for payment of any tax, a person responsible for withholding and payment or for collection and payment of any tax or a person to whom an assessment has been made, if the assessment remains unabated or the amount thereof has not been paid; and

          [X.] Y. "tax return preparer" means a person who prepares for others for compensation or who employs one or more persons to prepare for others for compensation any return of income tax, a substantial portion of any return of income tax, any claim for refund with respect to income tax or a substantial portion of any claim for refund with respect to income tax; provided that a person shall not be a "tax return preparer" merely because such person:

                (1) furnishes typing, reproducing or other mechanical assistance;

                (2) is an employee who prepares an income tax return or claim for refund with respect to an income tax return of the employer, or of an officer or employee of the employer, by whom the person is regularly and continuously employed; or

                (3) prepares as a trustee or other fiduciary an income tax return or claim for refund with respect to income tax for any person."

     Section 11. Section 7-1-6.10 NMSA 1978 (being Laws 1983, Chapter 211, Section 15, as amended) is amended to read:

     "7-1-6.10. DISTRIBUTIONS--STATE ROAD FUND.--

          A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the state road fund in an amount equal to the net receipts attributable to the taxes, surcharges, penalties and interest imposed pursuant to the Gasoline Tax Act and to the taxes, surtaxes, fees, penalties and interest imposed pursuant to the Special Fuels Supplier Tax Act and the Alternative Fuel Tax Act less:

                (1) the amount distributed to the state aviation fund pursuant to Subsection B of Section 7-1-6.7 NMSA 1978;

                (2) the amount distributed to the motorboat fuel tax fund pursuant to Section 7-1-6.8 NMSA 1978;

                (3) the amount distributed to municipalities and counties pursuant to Subsection A of Section 7-1-6.9 NMSA 1978;

                (4) the amount distributed to the county government road fund pursuant to Section 7-1-6.19 NMSA 1978;

                (5) the amount distributed to the local governments road fund pursuant to Section 7-1-6.39 NMSA 1978;

                (6) the amount distributed to the municipalities pursuant to Section 7-1-6.27 NMSA 1978;

                (7) the amount distributed to the municipal arterial program of the local governments road fund pursuant to Section 7-1-6.28 NMSA 1978; and

                (8) the amount distributed to a qualified tribe pursuant to a gasoline tax sharing agreement entered into between the secretary of [highway and] transportation and the qualified tribe pursuant to the provisions of Section

67-3-8.1 NMSA 1978.

          B. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the state road fund in an amount equal to the net receipts attributable to the taxes, [fees] interest and penalties from the Weight Distance Tax Act."

     Section 12. 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 TAXES--REVENUES FROM LOCAL OPTION 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 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 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 any additional administrative fee withheld pursuant to Subsection C of Section [1 of this 1997 act] 7-1-6.41 NMSA 1978.

          B. 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 compensating tax imposed by that municipality in an amount, subject to any increase or decrease pursuant to Section 7-1-6.15 NMSA 1978, equal to the net receipts attributable to the local option compensating tax imposed by that municipality."

     Section 13. 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 TAXES--REVENUES FROM LOCAL OPTION COMPENSATING TAXES.--

          A. Except as provided in Subsection [B] C of this section, 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 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 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 any additional administrative fee withheld pursuant to Subsection C of Section 7-1-6.41 NMSA 1978.

          B. 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 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 compensating tax imposed by that county.

          [B.] C. In lieu of a distribution pursuant to Subsection A of this section to a class B county with a population, as shown in the last federal decennial census, of more than twenty-five thousand and a net taxable value in the 2002 property tax year of less than two hundred million dollars ($200,000,000), the department shall make a distribution of the following amounts to the largest municipality in that county for the purpose of maintaining and operating a hospital:

                (1) amounts attributable to the second

one-eighth percent increment of the local option gross receipts tax; and

                (2) amounts attributable to the special county hospital gross receipts tax."

     Section 14. Section 7-1-6.15 NMSA 1978 (being Laws 1983, Chapter 211, Section 20, as amended) is amended to read:

     "7-1-6.15. ADJUSTMENTS OF DISTRIBUTIONS OR TRANSFERS TO MUNICIPALITIES OR COUNTIES.--

          A. The provisions of this section apply to:

                (1) any distribution to a municipality of gross receipts taxes pursuant to Section 7-1-6.4 NMSA 1978 or of interstate telecommunications gross receipts tax pursuant to Section 7-1-6.36 NMSA 1978;

                (2) any transfer to a municipality with respect to any local option gross receipts tax or local option compensating tax imposed by that municipality;

                (3) any transfer to a county with respect to any local option gross receipts tax or local option compensating tax imposed by that county;

                (4) any distribution to a county pursuant to Section 7-1-6.16 NMSA 1978;

                (5) any distribution to a municipality or a county of gasoline taxes pursuant to Section 7-1-6.9 NMSA 1978;

                (6) any transfer to a county with respect to any tax imposed in accordance with the Local Liquor Excise Tax Act;

                (7) any distribution to a municipality or a county of cigarette taxes pursuant to Sections 7-1-6.11, 7-12-15 and 7-12-16 NMSA 1978;

                (8) any distribution to a county from the county government road fund pursuant to Section 7-1-6.26 NMSA 1978;

                (9) any distribution to a municipality of gasoline taxes pursuant to Section 7-1-6.27 NMSA 1978; and

                (10) any distribution to a municipality, county, school district or special district of oil and gas ad valorem production tax reduced as a result of a refund requested in December 1998 with respect to production of carbon dioxide.

          B. If the secretary determines that any prior distribution or transfer to a political subdivision was erroneous, the secretary shall increase or decrease the next distribution or transfer amount for that political subdivision after the determination, except as provided in Subsection C, D or E of this section, by the amount necessary to correct the error. Subject to the provisions of Subsection E of this section, the secretary shall notify the political subdivision of the amount of each increase or decrease.

          C. No decrease shall be made to current or future distributions or transfers to a political subdivision for any excess distribution or transfer made to that political subdivision more than one year prior to the calendar year in which the determination of the secretary was made.

          D. The secretary, in lieu of recovery from the next distribution or transfer amount, may recover an excess distribution or transfer of one hundred dollars ($100) or more to the political subdivision in installments from current and future distributions or transfers to that political subdivision pursuant to an agreement with the officials of the political subdivision whenever the amount of the distribution or transfer decrease for the political subdivision exceeds ten percent of the average distribution or transfer amount for that political subdivision for the twelve months preceding the month in which the secretary's determination is made; provided that for the purposes of this subsection, the "average distribution or transfer amount" shall be the arithmetic mean of the distribution or transfer amounts within the twelve months immediately preceding the month in which the determination is made.

          E. Except for the provisions of this section, if the amount by which a distribution or transfer would be adjusted pursuant to Subsection B of this section is one hundred dollars ($100) or less, no adjustment or notice need be made.

          F. The secretary is authorized to decrease a distribution to a municipality or county upon being directed to do so by the secretary of finance and administration pursuant to the State Aid Intercept Act or to redirect a distribution to the New Mexico finance authority pursuant to an ordinance or a resolution passed by the county or municipality and a written agreement of the municipality or county and the New Mexico finance authority. Upon direction to decrease a distribution or notice to redirect a distribution to a municipality or county, the secretary shall decrease or redirect the next designated distribution, and succeeding distributions as necessary, by the amount of the state distributions intercept authorized by the secretary of finance and administration pursuant to the State Aid Intercept Act or by the amount of the state distribution intercept authorized pursuant to an ordinance or a resolution passed by the county or municipality and a written agreement with the New Mexico finance authority. The secretary shall transfer the state distributions intercept amount to the municipal or county treasurer or other person designated by the secretary of finance and administration or to the New Mexico finance authority pursuant to written agreement to pay the debt service to avoid default on qualified local revenue bonds or meet other local revenue bond, loan or other debt obligations of the municipality or county to the New Mexico finance authority."

     Section 15. A new section of the Tax Administration Act is enacted to read:

     "[NEW MATERIAL] LOCATION OF USE.--

          A. For compensating tax and local option compensating tax purposes, use of property occurs in the jurisdiction in which:

                (1) the buyer's place of business is located if the buyer is engaging in business in New Mexico and uses the property in furtherance of that business;

                (2) the buyer's principal office is located if the buyer is the state or a local government or an agency or instrumentality of the state or a local government; or

                (3) the buyer's residence is located if the buyer is not engaging in business in New Mexico or does not use the property in furtherance of business.

          B. The department shall promulgate regulations to determine where use will be attributed when the buyer has more than one business location or residence in New Mexico."

     Section 16. Section 7-1-6.39 NMSA 1978 (being Laws 1995, Chapter 6, Section 9) is amended to read:

     "7-1-6.39. DISTRIBUTION OF SPECIAL FUEL EXCISE TAX TO LOCAL GOVERNMENTS ROAD FUND.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the local governments road fund in an amount equal to [eleven and eleven-hundredths] eight and seven-tenths percent of the net receipts attributable to the taxes, exclusive of penalties and interest, from the special fuel excise tax imposed by the Special Fuels Supplier Tax Act."

     Section 17. Section 7-1-6.40 NMSA 1978 (being Laws 1997, Chapter 182, Section 1, as amended) is amended to read:

     "7-1-6.40. [DISTRIBUTION] DISTRIBUTIONS OF LIQUOR EXCISE TAX--LOCAL DWI GRANT FUND--MUNICIPALITIES AND COUNTIES.--

          A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the local DWI grant fund in an amount equal to [thirty-four and fifty-seven hundredths] twelve and three-tenths percent of the net receipts attributable to the liquor excise tax.

          B. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to municipalities in an aggregate amount equal to seven and six-tenths percent of the net receipts attributable to the liquor excise tax. Each municipality shall receive an amount derived by multiplying the aggregate amount to be distributed by a percentage that is the sum of:

                (1) fifty percent of a fraction, the numerator of which is the population of the municipality according to the most recent federal decennial census and the denominator of which is the combined population of all municipalities in the state according to the most recent federal decennial census; and

                (2) fifty percent of a fraction, the numerator of which is the total taxable gross receipts in the municipality for the previous fiscal year and the denominator of which is the combined total taxable gross receipts of all municipalities in the state for the previous fiscal year.

          C. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to counties in an aggregate amount equal to one and four tenths percent of the net receipts attributable to the liquor excise tax. Each county shall receive an amount derived by multiplying the aggregate amount to be distributed by a percentage that is the sum of:

                (1) fifty percent of a fraction, the numerator of which is the population of the county according to the most recent federal decennial census and the denominator of which is the combined population of all counties in the state according to the most recent federal decennial census; and

                (2) fifty percent of a fraction, the numerator of which is the total taxable gross receipts in the county for the previous fiscal year and the denominator of which is the combined total taxable gross receipts of all counties in the state for the previous fiscal year."

     Section 18. Section 7-1-17 NMSA 1978 (being Laws 1965, Chapter 248, Section 20, as amended) is amended to read:

     "7-1-17. ASSESSMENT OF TAX--PRESUMPTION OF CORRECTNESS.--

          A. If the secretary or the secretary's delegate determines that a taxpayer is liable for taxes in excess of [ten dollars ($10.00)] twenty-five dollars ($25.00) that are due and that have not been previously assessed to the taxpayer, the secretary or the secretary's delegate shall promptly assess the amount thereof to the taxpayer.

          B. Assessments of tax are effective:

                (1) when a return of a taxpayer is received by the department showing a liability for taxes;

                (2) when a document denominated "notice of assessment of taxes", issued in the name of the secretary, is mailed or delivered in person to the taxpayer against whom the liability for tax is asserted, stating the nature and amount of the taxes assertedly owed by the taxpayer to the state, demanding of the taxpayer the immediate payment of the taxes and briefly informing the taxpayer of the remedies available to the taxpayer; or

                (3) when an effective jeopardy assessment is made as provided in the Tax Administration Act.

          C. Any assessment of taxes or demand for payment made by the department is presumed to be correct.

          D. When taxes have been assessed to any taxpayer and remain unpaid, the secretary or the secretary's delegate may demand payment at any time except as provided otherwise by Section 7-1-19 NMSA 1978."

     Section 19. Section 7-1-24 NMSA 1978 (being Laws 1965, Chapter 248, Section 26, as amended) is amended to read:

     "7-1-24. ADMINISTRATIVE HEARING--PROCEDURE.--

          A. Any taxpayer may dispute the assessment to the taxpayer of any amount of tax, the application to the taxpayer of any provision of the Tax Administration Act or the denial of or failure to either allow or deny a claim for refund made in accordance with Section 7-1-26 NMSA 1978 by filing with the secretary a written protest against the assessment or against the application to the taxpayer of the provision or against the denial of or the failure to allow or deny the amount claimed to have been erroneously paid as tax. Every protest shall identify the taxpayer and the tax involved and state the grounds for the taxpayer's protest and the affirmative relief requested. The statement of grounds for protest shall specify individual grounds upon which the protest is based and a summary statement of the evidence expected to be produced supporting each ground asserted, if any; provided that the taxpayer may supplement the statement at any time prior to ten days before any hearing conducted on the protest pursuant to Subsection D of this section or, if a scheduling order has been issued, in accordance with the scheduling order. The secretary may, in appropriate cases, provide for an informal conference before setting a hearing of the protest or acting on any claim for refund.

          B. Any protest by a taxpayer shall be filed within thirty days of the date of the mailing to the taxpayer by the department of the notice of assessment or mailing to, or service upon, the taxpayer of other peremptory notice or demand, or the date of mailing or filing a return. Upon written request of the taxpayer made within the time permitted for filing a protest, the secretary may grant an extension of time, not to exceed sixty days, within which to file the protest. If a protest is not filed within the time required for filing a protest or, if an extension has been granted, within the extended time, the secretary may proceed to enforce collection of any tax if the taxpayer is delinquent within the meaning of Section 7-1-16 NMSA 1978. Upon written request of the taxpayer made after the time for filing a protest but not more than sixty days after the expiration of the time for filing a protest, the secretary may grant a retroactive extension of time, not to exceed sixty days, within which to file the protest; provided that the taxpayer demonstrates to the secretary's satisfaction that the taxpayer was not able to file a protest or to request an extension within the time to file the protest and that the grounds for the protest have substantial merit. The fact that the department did not mail the assessment or other peremptory notice or demand by certified or registered mail or otherwise demand and receive acknowledgment of receipt by the taxpayer shall not be deemed to demonstrate the taxpayer's inability to protest or request an extension within the time for filing a protest within the required time. The secretary shall not grant a retroactive extension if a levy has already been served under Section 7-1-31 or 7-1-33 NMSA 1978 or a jeopardy assessment has been made under Section 7-1-59 NMSA 1978. No proceedings other than those to enforce collection of any amount assessed as tax and to protect the interest of the state by injunction, as provided in Sections 7-1-31, 7-1-33, 7-1-34, 7-1-40, 7-1-53, 7-1-56 and 7-1-58 NMSA 1978, are stayed by timely filing of a protest under this section.

          C. Claims for refund shall be filed as provided for in Section 7-1-26 NMSA 1978.

          D. Upon timely receipt of a protest, the department or hearing officer shall promptly set a date for hearing and on that date hear the protest or claim.

          E. A hearing officer shall be designated by the secretary to conduct the hearing. Taxpayers may appear at a hearing for themselves or be represented by a bona fide employee, an attorney, a certified public accountant or a registered public accountant. Hearings shall not be open to the public except upon request of the taxpayer and may be postponed or continued at the discretion of the hearing officer.

          F. A hearing officer shall not engage or participate in any way as an employee of the department in the areas of enforcement or formulating general tax policy other than to conduct hearings. A taxpayer may request that the secretary determine whether a hearing officer has engaged or participated in tax policy or enforcement in a way that might reasonably be expected to affect the hearing officer's impartiality in a particular matter. The secretary may designate another hearing officer for the matter to avoid actual or apparent prejudice.

          G. A hearing officer shall not engage in ex-parte communications concerning the substantive issues of any matter that has been protested while that matter is still pending. If the secretary finds that a hearing officer has engaged in prohibited ex-parte communications, the secretary shall designate another hearing officer for that matter.

          H. In hearings before the hearing officer, the taxpayer may elect that the Rules of Civil Procedure for the District Courts apply to the proceedings. The secretary shall prescribe by regulation the manner in which an election shall be made. In the absence of such an election, the technical rules of evidence shall not apply, but in ruling on the admissibility of evidence, the hearing officer may require reasonable substantiation of statements or records tendered, the accuracy or truth of which is in reasonable doubt. A taxpayer may request a written ruling on any contested question of evidence in a matter in which the taxpayer has filed a written protest and that protest is pending.

          I. In hearings before the hearing officer when the Rules of Civil Procedure for the District Courts [shall] do not apply, [but] the hearing shall be conducted so that both complaints and defenses are amply and fairly presented. To this end, the hearing officer shall hear arguments, permit discovery, entertain and dispose of motions, require written expositions of the case as the circumstances justify and render a decision in accordance with the law and the evidence presented and admitted. A taxpayer may request a written ruling on any contested question of procedure in a matter in which the taxpayer has filed a written protest and that protest is pending.

          J. In the case of the hearing of any protest, the hearing officer shall make and preserve a complete record of the proceedings. At the beginning of the hearing, the hearing officer shall inform the taxpayer of the taxpayer's right to representation. The hearing officer, within thirty days of the hearing, shall inform the protestant in writing of the decision, informing the protestant at the same time of the right to, and the requirements for perfection of, an appeal from the decision to the court of appeals and of the consequences of a failure to appeal. The written decision shall embody an order granting or denying the relief requested or granting such part thereof as seems appropriate.           K. A taxpayer with two or more protests containing related issues may request that such protests be combined and heard jointly. The designated hearing officer shall grant the request to combine protests unless it would create an unreasonable burden on the department. 

          L. Nothing in this section shall be construed to authorize any criminal proceedings hereunder or to authorize an administrative protest of the issuance of a subpoena or summons."

     Section 20. Section 7-1-26 NMSA 1978 (being Laws 1965, Chapter 248, Section 28, as amended) is amended to read:

     "7-1-26. CLAIM FOR REFUND.--

          A. Any person who believes that an amount of tax has been paid by or withheld from that person in excess of that for which the person was liable, who has been denied any credit or rebate claimed or who claims a prior right to property in the possession of the department pursuant to a levy made under authority of Sections 7-1-31 through 7-1-34 NMSA 1978 may claim a refund by directing to the secretary, within the time limited by the provisions of Subsections D, E and F of this section, a written claim for refund. Except as provided in Subsection J of this section, a refund claim shall include the taxpayer's name, address and identification number, the type of tax for which a refund is being claimed, the sum of money being claimed, the period for which overpayment was made and the basis for the refund. As used in this subsection, "basis for the refund" means a brief statement of the facts and the law on which the claim is based. Upon receipt of a claim for refund of gross receipts tax, compensating tax, personal income tax for years other than the current tax year or corporate income tax for years other than the current tax year, other than a claim described in Subsection J of this section, the department shall promptly send a notice to the person filing the claim stating that it has received the claim and indicating whether it considers the claim to be complete. The department and the person filing the claim may agree to designate the claim as a protective claim.

          B. The secretary or the secretary's delegate may allow the claim in whole or in part or may deny the claim.

                (1) If the claim is denied in whole or in part in writing, no claim may be refiled with respect to that which was denied but the person, within ninety days after either the mailing or delivery of the denial of all or any part of the claim, may elect to pursue one, but not more than one, of the remedies in Subsection C of this section.

                (2) For a claim other than a protective claim, if the department has neither granted nor denied any portion of a claim for refund within one hundred twenty days of the date the claim was mailed or delivered to the department, the person may refile it within the time limits set forth in Subsection C of this section or may within ninety days elect to pursue one, but only one, of the remedies in Subsection C of this section. After the expiration of the two hundred ten days from the date the claim was mailed or delivered to the department, the department may not approve or disapprove the claim unless the person has pursued one of the remedies under Subsection C of this section.

                (3) For a protective claim, if the department has not acted within one hundred twenty days from either the date of a final decision in the lead case from which appeal may not be taken or the last date on which appeal may be taken when no appeal is taken, any part of the claim not granted or denied is denied.

          C. A person may elect to pursue one, but only one, of the remedies in Paragraphs (1) and (2) of this subsection. In any case, if a person does timely pursue more than one remedy, the person shall be deemed to have elected the first remedy invoked. The remedies are as follows:

                (1) the person may direct to the secretary a written protest against the denial of, or failure to either allow or deny the claim or portion thereof, which shall be set for hearing by a hearing officer designated by the secretary promptly after the receipt of the protest in accordance with the provisions of Section 7-1-24 NMSA 1978, and pursue the remedies of appeal from decisions adverse to the protestant as provided in Section 7-1-25 NMSA 1978; or

                (2) the person may commence a civil action in the district court for Santa Fe county by filing a complaint setting forth the circumstance of the claimed overpayment, alleging that on account thereof the state is indebted to the plaintiff in the amount stated, together with any interest allowable, demanding the refund to the plaintiff of that amount and reciting the facts of the claim for refund. The plaintiff or the secretary may appeal from any final decision or order of the district court to the court of appeals.

          D. Except as otherwise provided in Subsections E and F of this section, no credit or refund of any amount may be allowed or made to any person unless as the result of a claim made by that person as provided in this section:

                (1) within three years of the end of the calendar year in which:

                     (a) the payment was originally due or the overpayment resulted from an assessment by the department pursuant to Section 7-1-17 NMSA 1978, whichever is later;

                     (b) the final determination of value occurs with respect to any overpayment that resulted from a disapproval by any agency of the United States or the state of New Mexico or any court of increase in value of a product subject to taxation under the Oil and Gas Severance Tax Act, the Oil and Gas Conservation Tax Act, the Oil and Gas Emergency School Tax Act, the Oil and Gas Ad Valorem Production Tax Act or the Natural Gas Processors Tax Act; or

                     (c) property was levied upon pursuant to the provisions of the Tax Administration Act;

                (2) when an amount of a claim for credit under the provisions of the Investment Credit Act, Laboratory Partnership with Small Business Tax Credit Act, Technology Jobs Tax Credit Act, Capital Equipment Tax Credit Act or similar act or for the rural job tax credit pursuant to Sections 7-2E-1 and 7-2E-2 NMSA 1978 or similar credit has been denied, the taxpayer may claim a refund of the credit no later than one year after the date of the denial;

                (3) when a taxpayer under audit by the department has signed a waiver of the limitation on assessments on or after July 1, 1993 pursuant to Subsection F of Section 7-1-18 NMSA 1978, the taxpayer may file a claim for refund of the same tax paid for the same period for which the waiver was given, until a date one year after the later of the date of the mailing of an assessment issued pursuant to the audit, the date of the mailing of final audit findings to the taxpayer or the date a proceeding is begun in court by the department with respect to the same tax and the same period;

                (4)  if the payment of an amount of tax was not made within three years of the end of the calendar year in which the original due date of the tax or date of the assessment of the department occurred, a claim for refund of that amount of tax can be made within one year of the date on which the tax was paid; or

                (5) when a taxpayer has been assessed a tax on or after July 1, 1993 under Subsection B, C or D of Section 7-1-18 NMSA 1978 and when the assessment applies to a period ending at least three years prior to the beginning of the year in which the assessment was made, the taxpayer may claim a refund for the same tax for the period of the assessment or for any period following that period within one year of the date of the assessment unless a longer period for claiming a refund is provided in this section.

          E. No credit or refund shall be allowed or made to any person claiming a refund of gasoline tax under Section

7-13-11 NMSA 1978 unless notice of the destruction of the gasoline was given the department within thirty days of the actual destruction and the claim for refund is made within six months of the date of destruction. No credit or refund shall be allowed or made to any person claiming a refund of gasoline tax under Section 7-13-17 NMSA 1978 unless the refund is claimed within six months of the date of purchase of the gasoline and the gasoline has been used at the time the claim for refund is made.

          F. If, as a result of an audit by the internal revenue service or the filing of an amended federal return changing a prior election or making any other change for which federal approval is required by the Internal Revenue Code, any adjustment of federal tax is made with the result that there would have been an overpayment of tax if the adjustment to federal tax had been applied to the taxable period to which it relates, claim for credit or refund of only that amount based on the adjustment may be made as provided in this section within one year of the date of the internal revenue service audit adjustment or payment of the federal refund or within the period limited by Subsection D of this section, whichever expires later. Interest computed at the rate specified in Subsection B of Section 7-1-68 NMSA 1978 shall be allowed on any such claim for refund from the date one hundred twenty days after the claim is made until the date the final decision to grant the credit or refund is made.

          G. If as a result of an audit by the department or a managed audit covering multiple periods an overpayment of tax is found in any period under the audit, that overpayment may be credited against an underpayment of the same tax found in another period under audit pursuant to Section 7-1-29 NMSA 1978, provided that the taxpayer files a claim for refund for the overpayments identified in the audit.
          H. Any refund of tax paid under any tax or tax act administered under Subsection B of Section 7-1-2 NMSA 1978 may be made, at the discretion of the department, in the form of credit against future tax payments if future tax liabilities in an amount at least equal to the credit amount reasonably may be expected to become due.

          I. For the purposes of this section, the term "oil and gas tax return" means a return reporting tax due with respect to oil, natural gas, liquid hydrocarbons or carbon dioxide pursuant to the Oil and Gas Severance Tax Act, the Oil and Gas Conservation Tax Act, the Oil and Gas Emergency School Tax Act, the Oil and Gas Ad Valorem Production Tax Act, the Natural Gas Processors Tax Act or the Oil and Gas Production Equipment Ad Valorem Tax Act.

          J. The filing of a fully completed original income tax return, corporate income tax return, corporate income and franchise tax return, estate tax return or special fuel excise tax return that shows a balance due the taxpayer or a fully completed amended income tax return, an amended corporate income tax return, an amended corporate income and franchise tax return, an amended estate tax return, an amended special fuel excise tax return or an amended oil and gas tax return that shows a lesser tax liability than the original return constitutes the filing of a claim for refund for the difference in tax due shown on the original and amended returns.

          K. For the purposes of this section:

                (1) "protective claim" means a claim for refund filed by a person asserting that the person's entitlement to a refund will be established by a final decision of a New Mexico court of competent jurisdiction on a claim for refund or protest previously filed by that person or another; and

                (2) "lead case" means the previously filed claim or protest described in Paragraph (1) of this subsection.

          L. Disposition of a protective claim shall be postponed until a final decision is reached in the lead case."

     Section 21. Section 7-1-67 NMSA 1978 (being Laws 1965, Chapter 248, Section 68, as amended) is amended to read:

     "7-1-67. INTEREST ON DEFICIENCIES.--

          A. If a tax imposed is not paid on or before the day on which it becomes due, interest shall be paid to the state on that amount from the first day following the day on which the tax becomes due, without regard to any extension of time or installment agreement, until it is paid, except that:

                (1) for income tax imposed on a member of the armed services of the United States serving in a combat zone under orders of the president of the United States, interest shall accrue only for the period beginning the day after any applicable extended due date if the tax is not paid;

                (2) if the amount of interest due at the time payment is made is less than one dollar ($1.00), then no interest shall be due;

                (3) if demand is made for payment of a tax, including accrued interest, and if the tax is paid within ten days after the date of the demand, no interest on the amount paid shall be imposed for the period after the date of the demand;

                (4) if a managed audit is completed by the taxpayer on or before the date required, as provided in the agreement for the managed audit, and payment of any tax found to be due is made in full within thirty days of the date the secretary has mailed or delivered an assessment for the tax to the taxpayer, no interest shall be due on the assessed tax;

                (5) when, as the result of an audit or a managed audit, an overpayment of a tax is credited against an underpayment of tax pursuant to Section 7-1-29 NMSA 1978, interest shall accrue from the date the tax was due until the tax is deemed paid;

                (6) if the department does not issue an assessment for the tax program and period within the time provided in Subsection D of Section 7-1-11.2 NMSA 1978, interest shall be paid from the first day following the day on which the tax becomes due until the tax is paid, excluding the period between either:

                     (a) the one hundred eightieth day after giving a notice of outstanding records or books of account and the date of the assessment of the tax; or

                     (b) the ninetieth day after the expiration of the additional time requested by the taxpayer to comply, if such request was granted, and the date of the assessment of the tax; and

                (7) if the taxpayer was not provided with proper notices as required in Section 7-1-11.2 NMSA 1978, interest shall be paid from the first day following the day on which the tax becomes due until the tax is paid, excluding the period between one hundred eighty days prior to the date of assessment and the date of assessment.

          B. Interest due to the state under Subsection A or [D] E of this section shall be:

                (1) through June 30, 2004, at the rate of fifteen percent a year, computed on a daily basis [provided that];

                (2) from July 1, 2004 through December 31, 2005, at the rate of ten percent a year computed on a daily basis; and

                (3) on and after January 1, 2006, at the underpayment rate for the period determined in accordance with Section 6621 of the Internal Revenue Code.

          C. If a different rate than the rate established by Subsection B of this section is specified by a compact or other interstate agreement to which New Mexico is a party, [that] the rate specified by the compact or other agreement shall be applied to amounts due under the compact or other agreement.

          [C.] D. Nothing in this section shall be construed to impose interest on interest or interest on the amount of any penalty.

          [D.] E. If any tax required to be paid in accordance with Section 7-1-13.1 NMSA 1978 is not paid in the manner required by that section, interest shall be paid to the state on the amount required to be paid in accordance with Section 7-1-13.1 NMSA 1978. If interest is due under this subsection and is also due under Subsection A of this section, interest shall be due and collected only pursuant to Subsection A of this section."

     Section 22. Section 7-1-68 NMSA 1978 (being Laws 1965, Chapter 248, Section 69, as amended by Laws 2003, Chapter 2, Section 1 and by Laws 2003, Chapter 439, Section 6) is amended to read:

     "7-1-68. INTEREST ON OVERPAYMENTS.--

          A. As provided in this section, interest shall be allowed and paid on the amount of tax overpaid by a person that is subsequently refunded or credited to that person.

          B. Interest on overpayments of tax shall accrue and be paid:

                (1) through June 30, 2004, at the rate of fifteen percent a year, computed on a daily basis [provided that];

                (2) from July 1, 2004 through December 31, 2005, at the rate of ten percent a year computed on a daily basis; and

                (3) on and after January 1, 2006, at the underpayment rate for the period determined in accordance with Section 6621 of the Internal Revenue Code.

          C. If a different rate than the rate established by Subsection B of this section is specified by a compact or other interstate agreement to which New Mexico is a party, [that] the rate specified by the compact or other agreement shall apply to amounts due under the compact or other agreement.

          [C.] D. Unless otherwise provided by this section, interest on an overpayment not arising from an assessment by the department shall be paid from the date of the claim for refund until a date preceding by not more than thirty days the date of the credit or refund to any person; interest on an overpayment arising from an assessment by the department shall be paid from the date of overpayment until a date preceding by not more than thirty days the date of the credit or refund to any person.

          E. Interest on a refund or credit of tax paid on a deduction initially disallowed by the department for failure to produce a proper nontaxable transaction certificate or not claimed by the taxpayer on a timely filed original return shall be paid from the date on which the taxpayer produces to the department proof that the nontaxable transaction certificate has been obtained.

          [D.] F. No interest shall be allowed or paid with respect to an amount credited or refunded if:

                (1) the amount of interest due is less than one dollar ($1.00);

                (2) the credit or refund is made within:

                     (a) fifty-five days of the date of the claim for refund of income tax, pursuant to either the Income Tax Act or the Corporate Income and Franchise Tax Act for the tax year immediately preceding the tax year in which the claim is made; or

                     (b) seventy-five days of the date of the claim for refund of gasoline tax to users of gasoline off the highways;

                (3) the credit or refund is made within one hundred twenty days of the date of the claim for refund of income tax, pursuant to the Income Tax Act or the Corporate Income and Franchise Tax Act, for any tax year more than one year prior to the year in which the claim is made;

                (4) Sections 6611(f) and 6611(g) of the Internal Revenue Code, as those sections may be amended or renumbered, prohibit payment of interest for federal income tax purposes;

                (5) the credit or refund is made within sixty days of the date of the claim for refund of any tax other than income tax;

                (6) the credit results from overpayments found in an audit of multiple reporting periods and applied to underpayments found in that audit or refunded as a net overpayment to the taxpayer pursuant to Section 7-1-29 NMSA 1978; 

                (7) the department applies the credit or refund to an intercept program, to the taxpayer's estimated payment prior to the due date for the estimated payment, or to offset prior liabilities of the taxpayer pursuant to Subsection E of Section 7-1-29 NMSA 1978; [or]

                (8) the credit or refund results from overpayments the department finds pursuant to Subsection F of Section 7-1-29 NMSA 1978 that exceed the refund claimed by the taxpayer on the return; or

                (9) the credit or refund is in settlement of a protective claim, as defined in Section 7-1-26 NMSA 1978; provided that interest shall be paid with respect to the period from the date of the final unappealable decision in the lead case until a date preceding by not more than thirty days the date the credit or refund is paid on the protective claim.

          [E.] G. Nothing in this section shall be construed to require the payment of interest upon interest."

     Section 23. Section 7-1-69 NMSA 1978 (being Laws 1965, Chapter 248, Section 70, as amended) is amended to read:

     "7-1-69. CIVIL PENALTY FOR FAILURE TO PAY TAX OR FILE A RETURN.--

          A. Except as provided in Subsection C of this section, in the case of failure due to negligence or disregard of department rules and regulations, but without intent to evade or defeat a tax, to pay when due the amount of tax required to be paid, to pay in accordance with the provisions of Section 7-1-13.1 NMSA 1978 when required to do so or to file by the date required a return regardless of whether a tax is due, there shall be added to the amount assessed a penalty in an amount equal to the greater of:

                (1) two percent per month or any fraction of a month from the date the tax was due multiplied by the amount of tax due but not paid, not to exceed ten percent of the tax due but not paid;

                (2) two percent per month or any fraction of a month from the date the return was required to be filed multiplied by the tax liability established in the late return, not to exceed ten percent of the tax liability established in the late return; or

                (3) a minimum of [five dollars ($5.00)] twenty-five dollars ($25.00), but the [five-dollar ($5.00)] minimum penalty shall not apply to taxes levied under the Income Tax Act or taxes administered by the department pursuant to Subsection B of Section 7-1-2 NMSA 1978.

          B. No penalty shall be assessed against a taxpayer if the failure to pay an amount of tax when due results from a mistake of law made in good faith and on reasonable grounds.

          C. If a different penalty is specified in a compact or other interstate agreement to which New Mexico is a party, the penalty provided in the compact or other interstate agreement shall be applied to amounts due under the compact or other interstate agreement at the rate and in the manner prescribed by the compact or other interstate agreement.

          D. In the case of failure, with willful intent to evade or defeat a tax, to pay when due the amount of tax required to be paid, there shall be added to the amount fifty percent of the tax or a minimum of twenty-five dollars ($25.00), whichever is greater, as penalty.

          E. If demand is made for payment of a tax, including penalty imposed pursuant to this section, and if the tax is paid within ten days after the date of such demand, no penalty shall be imposed for the period after the date of the demand with respect to the amount paid.

          F. If a taxpayer makes electronic payment of a tax but the payment does not include all of the information required by the department pursuant to the provisions of Section 7-1-13.1 NMSA 1978 and if the department does not receive the required information within five business days from the later of the date a request by the department for that information is received by the taxpayer or the due date, the taxpayer shall be subject to a penalty of two percent per month or any fraction of a month from the fifth day following the date the request is received. If a penalty is imposed under Subsection A of this section with respect to the same transaction for the same period, no penalty shall be imposed under this subsection.

          G. No penalty shall be imposed on:

                (1) tax due in excess of tax paid in accordance with an approved estimated basis pursuant to Section 7-1-10 NMSA 1978;

                (2) tax due as the result of a managed audit; or

                (3) tax that is deemed paid by crediting overpayments found in an audit or managed audit of multiple periods pursuant to Section 7-1-29 NMSA 1978."

     Section 24. Section 7-2-5.2 NMSA 1978 (being Laws 1985, Chapter 114, Section 1, as amended) is amended to read:

     "7-2-5.2. EXEMPTION--INCOME OF PERSONS SIXTY-FIVE AND OLDER OR BLIND.--Any individual sixty-five years of age or older or who, for federal income tax purposes, is blind may claim an exemption in an amount specified in Subsections A through C of this section not to exceed eight thousand dollars ($8,000) of income includable except for this exemption in net income. Individuals having income both within and without this state shall apportion this exemption in accordance with regulations of the secretary.

          A. For married individuals filing separate returns, for any taxable year beginning on or after January 1, 1987:

                                       The maximum amount of

If adjusted                            exemption allowable under

gross income is:                       this section shall be:

Not over $15,000                                $8,000

Over $15,000 but not over $16,500               $7,000

Over $16,500 but not over $18,000               $6,000

Over $18,000 but not over $19,500               $5,000

Over $19,500 but not over $21,000               $4,000

Over $21,000 but not over $22,500               $3,000

Over $22,500 [but not over $24,000              $2,000] $2,500

[Over $24,000 but not over $25,500              $1,000

Over $25,500                                     0].

         B. For heads of household, surviving spouses and married individuals filing joint returns, for any taxable year beginning on or after January 1, 1987:

                                       The maximum amount of

If adjusted                            exemption allowable under

gross income is:                       this section shall be:

Not over $30,000                                $8,000

Over $30,000 but not over $33,000               $7,000

Over $33,000 but not over $36,000               $6,000

Over $36,000 but not over $39,000               $5,000

Over $39,000 but not over $42,000               $4,000

Over $42,000 but not over $45,000               $3,000

Over $45,000 [but not over $48,000              $2,000] $2,500

[Over $48,000 but not over $51,000              $1,000

Over $51,000                                     0].

         C. For single individuals, for any taxable year beginning on or after January 1, 1987:

                                       The maximum amount of

If adjusted                            exemption allowable under

gross income is:                       this section shall be:

Not over $18,000                                $8,000

Over $18,000 but not over $19,500               $7,000

Over $19,500 but not over $21,000               $6,000

Over $21,000 but not over $22,500               $5,000

Over $22,500 but not over $24,000               $4,000

Over $24,000 but not over $25,500               $3,000

Over $25,500 [but not over $27,000              $2,000] $2,500

[Over $27,000 but not over $28,500              $1,000

Over $28,500                                     0]."

     Section 25. Section 7-2-7 NMSA 1978 (being Laws 2003, Chapter 2, Section 3), which is to become effective January 1, 2004, is amended to read:

     "7-2-7. INDIVIDUAL INCOME TAX RATES.--The tax imposed by Section 7-2-3 NMSA 1978 shall be at the following rates for any taxable year beginning in 2004:

          A. For married individuals filing separate returns:

     If the taxable income is:       The tax shall be:

Not over $4,000                       1.7% of taxable income

Over $ 4,000 but not over $ 8,000   $ 68.00 plus 3.2% of

                                      excess over $ 4,000

Over $ 8,000 but not over $ 12,000   $ 196 plus 4.7% of

                                      excess over $ 8,000

Over $ 12,000 but not over $ 20,000   $ 384 plus 6.0% of

                                      excess over $ 12,000

Over $ 20,000                         $ 864 plus 6.8% of

                                      excess over $ 20,000.

          B. For heads of household, surviving spouses and married individuals filing joint returns:

     If the taxable income is:       The tax shall be:

Not over $8,000                       1.7% of taxable income

Over $ 8,000 but not over $ 16,000   $ 136 plus 3.2% of

                                      excess over $ 8,000

Over $ 16,000 but not over $ 24,000   $ 392 plus 4.7% of                                        excess over $ 16,000

Over $ 24,000 but not over $ 40,000   $ 768 plus 6.0% of                                        excess over $ 24,000

Over $ 40,000                         $ 1,728 plus 6.8% of

                                      excess over $ 40,000.

          C. For single individuals and for estates and trusts:

     If the taxable income is:       The tax shall be:

Not over $5,500                       1.7% of taxable income

Over $ 5,500 but not over $ 11,000   $ 93.50 plus 3.2% of

                                      excess over $ 5,500

Over $ 11,000 but not over $ 16,000   $ 269.50 plus 4.7% of

                                      excess over $ 11,000

Over $ 16,000 but not over $ 26,000   $ 504.50 plus 6.0% of

                                      excess over $ 16,000

Over $ 26,000                         $1,104.50 plus 6.8% of

                                      excess over $ 26,000.

          [D. For heads of household filing returns:

     If the taxable income is:       The tax shall be:

Not over $7,000                       1.7% of taxable income

Over $ 7,000 but not over $ 14,000   $ 119 plus 3.2% of

                                      excess over $ 7,000

Over $ 14,000 but not over $ 20,000   $ 343 plus 4.7% of

                                      excess over $ 14,000

Over $ 20,000 but not over $ 33,000   $ 625 plus 6.0% of

                                      excess over $ 20,000

Over $ 33,000                         $1,405 plus 6.8% of

                                      excess over $ 33,000.

          E.] D. The tax on the sum of any lump-sum amounts included in net income is an amount equal to five multiplied by the difference between:

                (1) the amount of tax due on the taxpayer's taxable income; and

                (2) the amount of tax that would be due on an amount equal to the taxpayer's taxable income and twenty percent of the taxpayer's lump-sum amounts included in net income."

     Section 26. Section 7-2-7 NMSA 1978 (being Laws 2003, Chapter 2, Section 4), which is to become effective January 1, 2005, is amended to read:

     "7-2-7. INDIVIDUAL INCOME TAX RATES.--The tax imposed by Section 7-2-3 NMSA 1978 shall be at the following rates for any taxable year beginning in 2005:

          A. For married individuals filing separate returns:

     If the taxable income is:       The tax shall be:

Not over $4,000                       1.7% of taxable income

Over $ 4,000 but not over $ 8,000   $ 68.00 plus 3.2% of

                                      excess over $ 4,000

Over $ 8,000 but not over $ 12,000   $ 196 plus 4.7% of

                                      excess over $ 8,000

Over $ 12,000                         $ 384 plus 6.0% of  excess over $ 12,000.

          B. For heads of household, surviving spouses and married individuals filing joint returns:

     If the taxable income is:       The tax shall be:

Not over $8,000                       1.7% of taxable income

Over $ 8,000 but not over $ 16,000   $ 136 plus 3.2% of                                        excess over $ 8,000

Over $ 16,000 but not over $ 24,000   $ 392 plus 4.7% of                                        excess over $ 16,000

Over $ 24,000                         $ 768 plus 6.0% of  excess over $ 24,000.

          C. For single individuals and for estates and trusts:

     If the taxable income is:       The tax shall be:

Not over $5,500                       1.7% of taxable income

Over $ 5,500 but not over $ 11,000   $ 93.50 plus 3.2% of                                       excess over $ 5,500

Over $ 11,000 but not over $ 16,000   $ 269.50 plus 4.7% of                                       excess over $ 11,000

Over $ 16,000                         $ 504.50 plus 6.0% of excess over $ 16,000.

          [D. For heads of household filing returns:

     If the taxable income is:       The tax shall be:

Not over $7,000                       1.7% of taxable income

Over $ 7,000 but not over $ 14,000   $ 119 plus 3.2% of

                                      excess over $ 7,000

Over $ 14,000 but not over $ 20,000   $ 343 plus 4.7% of

                                      excess over $ 14,000

Over $ 20,000                         $ 625 plus 6.0% of

                                      excess over $ 20,000.

          E.] D. The tax on the sum of any lump-sum amounts included in net income is an amount equal to five multiplied by the difference between:

                (1) the amount of tax due on the taxpayer's taxable income; and

                (2) the amount of tax that would be due on an amount equal to the taxpayer's taxable income and twenty percent of the taxpayer's lump-sum amounts included in net income."

     Section 27. Section 7-2-7 NMSA 1978 (being Laws 2003, Chapter 2, Section 5), which is to become effective January 1, 2006, is amended to read:

     "7-2-7. INDIVIDUAL INCOME TAX RATES.--The tax imposed by Section 7-2-3 NMSA 1978 shall be at the following rates for any taxable year beginning in 2006:

          A. For married individuals filing separate returns:

     If the taxable income is:       The tax shall be:

Not over $4,000                       1.7% of taxable income

Over $ 4,000 but not over $ 8,000   $ 68.00 plus 3.2% of

                                      excess over $ 4,000

Over $ 8,000 but not over $ 12,000   $ 196 plus 4.7% of  excess over $ 8,000

Over $ 12,000                         $ 384 plus 5.3% of  excess over $ 12,000.

          B. For heads of household, surviving spouses and married individuals filing joint returns:

     If the taxable income is:       The tax shall be:

Not over $8,000                       1.7% of taxable income

Over $ 8,000 but not over $ 16,000   $ 136 plus 3.2% of                                        excess over $ 8,000

Over $ 16,000 but not over $ 24,000   $ 392 plus 4.7% of                                        excess over $ 16,000

Over $ 24,000                         $ 768 plus 5.3% of  excess over $ 24,000.

          C. For single individuals and for estates and trusts:

     If the taxable income is:       The tax shall be:

Not over $5,500                       1.7% of taxable income

Over $ 5,500 but not over $ 11,000   $ 93.50 plus 3.2% of excess over $ 5,500

Over $ 11,000 but not over $ 16,000   $ 269.50 plus 4.7% of excess over $ 11,000

Over $ 16,000                         $ 504.50 plus 5.3% of excess over $ 16,000.

          [D. For heads of household filing returns:

     If the taxable income is:       The tax shall be:

Not over $7,000                       1.7% of taxable income

Over $ 7,000 but not over $ 14,000   $ 119 plus 3.2% of

excess over $ 7,000

Over $ 14,000 but not over $ 20,000   $ 343 plus 4.7% of

excess over $ 14,000

Over $ 20,000                         $ 625 plus 5.3% of

excess over $ 20,000.

          E.] D. The tax on the sum of any lump-sum amounts included in net income is an amount equal to five multiplied by the difference between:

                (1) the amount of tax due on the taxpayer's taxable income; and

                (2) the amount of tax that would be due on an amount equal to the taxpayer's taxable income and twenty percent of the taxpayer's lump-sum amounts included in net income."

     Section 28. Section 7-2-7 NMSA 1978 (being Laws 2003, Chapter 2, Section 6), which is to become effective January 1, 2007, is amended to read:

     "7-2-7. INDIVIDUAL INCOME TAX RATES.--The tax imposed by Section 7-2-3 NMSA 1978 shall be at the following rates for any taxable year beginning on or after January 1, 2007:

          A. For married individuals filing separate returns:

     If the taxable income is:       The tax shall be:

Not over $4,000                       1.7% of taxable income

Over $ 4,000 but not over $ 8,000   $ 68.00 plus 3.2% of excess over $ 4,000

Over $ 8,000 but not over $ 12,000   $ 196 plus 4.7% of  excess over $ 8,000

Over $ 12,000                         $ 384 plus 4.9% of  excess over $ 12,000.

          B. For heads of household, surviving spouses and married individuals filing joint returns:

     If the taxable income is:       The tax shall be:

Not over $8,000                       1.7% of taxable income

Over $ 8,000 but not over $ 16,000   $ 136 plus 3.2% of                                        excess over $ 8,000

Over $ 16,000 but not over $ 24,000   $ 392 plus 4.7% of                                        excess over $ 16,000

Over $ 24,000                         $ 768 plus 4.9% of  excess over $ 24,000.

          C. For single individuals and for estates and trusts:

     If the taxable income is:       The tax shall be:

Not over $5,500                       1.7% of taxable income

Over $ 5,500 but not over $ 11,000   $ 93.50 plus 3.2% of excess over $ 5,500

Over $ 11,000 but not over $ 16,000   $ 269.50 plus 4.7% of excess over $ 11,000

Over $ 16,000                         $ 504.50 plus 4.9% of excess over $ 16,000.

          [D. For heads of household filing returns:

     If the taxable income is:       The tax shall be:

Not over $7,000                       1.7% of taxable income

Over $ 7,000 but not over $ 14,000   $ 119 plus 3.2% of

excess over $ 7,000

Over $ 14,000 but not over $ 20,000   $ 343 plus 4.7% of

excess over $ 14,000

Over $ 20,000                         $ 625 plus 4.9% of

excess over $ 20,000.

          E.] D. The tax on the sum of any lump-sum amounts included in net income is an amount equal to five multiplied by the difference between:

                (1) the amount of tax due on the taxpayer's taxable income; and

                (2) the amount of tax that would be due on an amount equal to the taxpayer's taxable income and twenty percent of the taxpayer's lump-sum amounts included in net income."

     Section 29. Section 7-2-14 NMSA 1978 (being Laws 1972, Chapter 20, Section 2, as amended) is amended to read:

     "7-2-14. [LOW-INCOME COMPREHENSIVE TAX REBATE] FAMILY AND INDIVIDUAL REBATE.--

          A. Except as otherwise provided in Subsection B of this section, any resident who files an individual New Mexico income tax return and who is not a dependent of another individual may claim a tax rebate for a portion of state and local taxes to which the resident has been subject during the taxable year for which the return is filed. The tax rebate may be claimed even though the resident has no income taxable under the Income Tax Act. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the tax rebate that would have been allowed on a joint return.

          B. No claim for the tax rebate provided in this section shall be filed by a resident who was an inmate of a public institution for more than six months during the taxable year for which the tax rebate could be claimed or who was not physically present in New Mexico for at least six months during the taxable year for which the tax rebate could be claimed.

          C. For the purposes of this section, the total number of exemptions for which a tax rebate may be claimed or allowed is determined by adding the number of federal exemptions allowable for federal income tax purposes for each individual included in the return who is domiciled in New Mexico plus two additional exemptions for each individual domiciled in New Mexico included in the return who is sixty-five years of age or older plus one additional exemption for each individual domiciled in New Mexico included in the return who, for federal income tax purposes, is blind plus one exemption for each minor child or stepchild of the resident who would be a dependent for federal income tax purposes if the public assistance contributing to the support of the child or stepchild was considered to have been contributed by the resident.

          D. The tax rebate provided for in this section may be claimed in the amount shown in the following table:

Modified gross And the total number

income is: of exemptions is:

[ But Not 6 or

Over Over 1 2 3 4 5 More

$ 0   $ 500  $120 $160 $200 $240 $280 $320

   500     1,000   135   195   250    310  350   415

 1,000     1,500   135   195   250    310  350   435

 1,500     2,000   135   195   250    310  350   450

 2,000     2,500   135   195   250    310  350   450

 2,500     3,000   135   195   250    310  350   450

 3,000     3,500   135   195   250    310  350   450

 3,500     4,000   135   195   250    310  355   450

 4,000     4,500   135   195   250    310  355   450

 4,500     5,000   125   190   240    305  355   450

 5,000     5,500   115   175   230    295  355   430

 5,500     6,000   105   155   210    260  315   410

 6,000     7,000    90   130   170    220  275   370

 7,000     8,000    80   115   145    180  225   295

 8,000     9,000    70   105   135    170  195   240

 9,000    10,000    65    95   115    145  175   205

10,000   11,000    60    80   100    130  155   185

11,000   12,000    55    70    90    110  135   160

12,000   13,000    50    65    85    100  115   140

13,000   14,000    50    65    85    100  115   140

14,000   15,000    45    60    75     90  105   120

15,000   16,000    40    55    70     85   95   110

16,000   17,000    35    50    65     80   85   105

17,000   18,000    30    45    60     70   80    95

18,000   19,000    25    35    50     60   70    80

19,000   20,000    20    30    40     50   60    65

20,000   21,000    15    25    30     40   50    55

21,000   22,000    10    20    25     35   40    45]

         But Not     7 or

Over Over 1 2     3 4 5 6     More

$ 0  $1,000   $180   $281  $373  $460  $515  $605  $704

 1,000    3,000    180    281   373   460   515   640   745

 3,000    5,000    180    281   373   460   520   640   745

 5,000    6,000    160    261   353   445   520   620   722

 6,000    7,000    135    216   293   370   440   560   652

 7,000    8,000    125    201   268   330   390   485   564

 8,000    9,000    115    191   258   320   360   430   500

 9,000   10,000    103    181   238   295   340   395   459

10,000  11,000    85    166   223   280   320   375   436

11,000  12,000    65    156   213   260   300   350   407

12,000  13,000    50    144   208   250   280   330   383

13,000  14,000    50    137   208   250   280   330   383

14,000  15,000    45    120   198   240   270   310   360

15,000  16,000    40    105   193   235   260   300   348

16,000  17,000    35    90   170   230   250   295   343

17,000  18,000    30    78   155   220   245   285   331

18,000  19,000    25    61   130   210   235   270   313

19,000  20,000    20    49   105   195   225   255   296

20,000  21,000    15    37   80   175   215   245   284

21,000  22,000    10    20   70   160   205   235   273

22,000  23,000    0    0   45   115   155   183   220

23,000  24,000    0    0   0   105   145   176   210

24,000  25,000    0    0   0   60   135   169   200

25,000  26,000    0    0   0   45   125   145   190

26,000  27,000    0    0   0   30   115   138   180

27,000  28,000    0    0   0   15   105   131   170

28,000  29,000   0    0   0   0   95   124   150

29,000  30,000    0    0   0   0   45   117   130

30,000  31,000    0    0   0   0   30   105   120

31,000  32,000    0    0   0   0   0   93   115

32,000  33,000    0    0   0   0   0   81   100

33,000  34,000    0    0   0   0   0   45   85

34,000  35,000    0    0   0   0   0   30   73

35,000  36,000    0    0   0   0   0   15   61

36,000  37,000    0    0   0   0   0   0   49

37,000  38,000    0    0   0   0   0   0   37

38,000  39,000    0    0   0   0   0   0   25.

          E. If a taxpayer's modified gross income is zero, the taxpayer may claim a credit in the amount shown in the first row of the table appropriate for the taxpayer's number of exemptions.

          F. The tax rebates provided for in this section may be deducted from the taxpayer's New Mexico income tax liability for the taxable year. If the tax rebates exceed the taxpayer's income tax liability, the excess shall be refunded to the taxpayer.

          G. For purposes of this section:

                 (1) "dependent" means "dependent" as defined by Section 152 of the Internal Revenue Code of 1986, as that section may be amended or renumbered, but also includes any minor child or stepchild of the resident who would be a dependent for federal income tax purposes if the public assistance contributing to the support of the child or stepchild was considered to have been contributed by the resident; and

                 (2) "modified gross income" means "modified gross income" as defined in Section 7-2-2 NMSA 1978 but also includes the value of food stamp program benefits."

     Section 30. A new section of the Income Tax Act is enacted to read:

     "[NEW MATERIAL] ADDITIONAL EXEMPTION AMOUNT.--

          A. An individual may claim an additional exemption amount as specified in Subsections B, C and D of this section; provided that the additional exemption amount shall not exceed an amount equal to the number of federal exemptions multiplied by three thousand dollars ($3,000) of income includable, except for this exemption, in net income. Individuals having income both within and without this state shall apportion this exemption in accordance with regulations of the secretary.

          B. For single individuals: 

                (1) if the number of federal exemptions is one, the additional exemption amount shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting eight thousand dollars ($8,000) from the adjusted gross income;

                (2) if the number of federal exemptions is two, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting eleven thousand dollars ($11,000) from the adjusted gross income;

                (3) if the number of federal exemptions is three, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting fourteen thousand dollars ($14,000) from the adjusted gross income;

                (4) if the number of federal exemptions is four, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting seventeen thousand dollars ($17,000) from the adjusted gross income;

                (5) if the number of federal exemptions is five, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twenty thousand dollars ($20,000) from the adjusted gross income;

                (6) if the number of federal exemptions is six, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twenty-three thousand dollars ($23,000) from the adjusted gross income; and

                (7) if the number of federal exemptions is seven or more, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twenty-six thousand dollars ($26,000) from the adjusted gross income.

           C. For heads of household, surviving spouses and married individuals filing joint returns:

                (1) if the number of federal exemptions is one, the additional exemption amount shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twelve thousand dollars ($12,000) from the adjusted gross income;

                (2) if the number of federal exemptions is two, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting fifteen thousand dollars ($15,000) from the adjusted gross income;

                (3) if the number of federal exemptions is three, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting eighteen thousand dollars ($18,000) from the adjusted gross income;

                (4) if the number of federal exemptions is four, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twenty-one thousand dollars ($21,000) from the adjusted gross income;

                (5) if the number of federal exemptions is five, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twenty-four thousand dollars ($24,000) from the adjusted gross income;

                (6) if the number of federal exemptions is six, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twenty-seven thousand dollars ($27,000) from the adjusted gross income; and

                (7) if the number of federal exemptions is seven or more, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting thirty thousand dollars ($30,000) from the adjusted gross income.

          D. For married individuals filing separate returns:

                (1) if the number of federal exemptions is one, the additional exemption amount shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting six thousand dollars ($6,000) from the adjusted gross income;

                (2) if the number of federal exemptions is two, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting seven thousand five hundred dollars ($7,500) from the adjusted gross income;

                (3) if the number of federal exemptions is three, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting nine thousand dollars ($9,000) from the adjusted gross income;

                (4) if the number of federal exemptions is four, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting ten thousand five hundred dollars ($10,500) from the adjusted gross income;

                (5) if the number of federal exemptions is five, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting twelve thousand dollars ($12,000) from the adjusted gross income;

                (6) if the number of federal exemptions is six, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting thirteen thousand five hundred dollars ($13,500) from the adjusted gross income; and

                (7) if the number of federal exemptions is seven or more, the additional exemption amount for each federal exemption shall be three thousand dollars ($3,000) less fifteen percent of the amount obtained by subtracting fifteen thousand dollars ($15,000) from the adjusted gross income.

          E. For the purposes of this section, "federal exemption" means an exemption allowable for federal income tax purposes for an individual included in the return who is domiciled in New Mexico.

          F. In lieu of the computations required to determine the amount of the additional exemption provided by this section, the secretary may adopt regulations allowing the use of tables to determine the additional exemption amount. The tables may be established either by regulation or instruction but shall be computed substantially on the basis of the computations prescribed in this section."

     Section 31. [NEW MATERIAL] BUSINESS SERVICES TAX CREDIT.--

          A. The tax credit provided in this section may be referred to as the "business services tax credit". An eligible taxpayer may apply for, and the taxation and revenue department may allow, a tax credit in an amount equal to six hundred twenty-five thousandths percent of qualified business service expenditures by the taxpayer.

          B. The business services tax credit may be claimed by an eligible taxpayer for qualified business service expenditures paid on or after July 1, 2004 and within three years of the end of the calendar year in which the expenditure was made.

          C. The business services tax credit may be claimed against state gross receipts tax, compensating tax or withholding tax for which the taxpayer would be liable for a tax reporting period in which the qualified business service expenditure was paid or later periods. In no case may the credit taken exceed the total gross receipts tax, compensating tax or witholding tax due for the reporting period. After the initial reporting period in which part of the credit for a qualified expenditure was claimed, any excess credit may be carried forward and used in future reporting periods. 

          D. For the purposes of this section:

                (1) "department means "department" as defined in the Tax Administration Act;

                (2) "eligible taxpayer" means "taxpayer" as defined in the Tax Administration Act but does not include:

                     (a) a federal, state or other governmental unit or subdivision or an agency, department, institution or instrumentality thereof; or

                     (b) a taxpayer qualified to take the exemption granted under Section 7-9-29 NMSA 1978; and

                (3) "qualified business service expenditure" means an amount paid to purchase services performed in New Mexico if the receipts from that purchase are subject to gross receipts tax and are not eligible for a deduction or exemption from the gross receipts tax, but does not include expenditures for:

                     (a) entertainment or recreational services, including expenditures not deductible for purposes of determining net income under the Internal Revenue Code and expenditures deductible only under Section 274 of the Internal Revenue Code;

                     (b) janitorial services;

                     (c) repair and maintenance services;

                     (d) services in respect to which the taxpayer applies for and is granted any other New Mexico tax credit; and

                     (e) gross receipts taxes.

          E. The department shall provide forms and instructions for claiming the business services tax credit as a reduction of tax due on the tax return on which the taxpayer reports gross receipts tax, compensating tax or witholding tax.

          F. The department shall administer the business services tax credit pursuant to the provisions of the Tax Administration Act.

     Section 32. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] HIGH-WAGE JOBS TAX CREDIT.--

          A. A taxpayer who is an eligible employer may apply for, and the taxation and revenue department may allow, a tax credit for each new high-wage economic-based job. The credit provided in this section may be referred to as the "high-wage jobs tax credit".

          B. The high-wage jobs tax credit may be claimed and allowed in an amount equal to ten percent of the wages distributed to an eligible employee in a new high-wage economic-based job, but shall not exceed twelve thousand dollars ($12,000).

          C. The high-wage jobs tax credit may be claimed by an eligible employer for each new high-wage economic-based job performed for the year in which the new high-wage economic-based job is created and for the three following qualifying periods.

          D. A new high-wage economic-based job shall not be eligible for a credit pursuant to this section unless the eligible employer's total number of employees with new high-wage economic-based jobs on the last day of the qualifying period at the location at which the job is performed or based is at least one more than the number on the day prior to the date the job was created.

          E. With respect to each new high-wage economic-based job for which an eligible employer seeks the high-wage jobs tax credit, the employer shall certify:

                (1) the amount of wages paid to each eligible employee in a new high-wage economic-based job during each qualifying period;

                (2) the number of weeks the position was occupied during the qualifying period;

                (3) whether the new high-wage economic-based job was performed or based in:

                     (a) a municipality with a population of forty thousand or more according to the most recent federal decennial census;

                     (b) a municipality with a population of less than forty thousand according to the most recent federal decennial census; or

                     (c) the unincorporated area of a county; and

                (4) the total number of employees employed by the employer at the job location on the day prior to the qualifying period and on the last day of the qualifying period.

          F. To receive a high-wage jobs tax credit with respect to any qualifying period, an eligible employer shall apply to the taxation and revenue department on forms and in the manner prescribed by the department. The application shall include a certification made pursuant to Subsection E of this section.

          G. The credit provided in this section may be deducted from the modified combined tax liability of a taxpayer. If the credit exceeds the modified combined tax liability of the taxpayer, the excess shall be refunded to the taxpayer. 

          H. As used in this section:

                (1) "eligible employee" means an individual who is employed by an eligible employer and who is a resident of New Mexico; "eligible employee" does not include an individual who:

                     (a) bears any of the relationships described in Paragraphs (1) through (8) of 26 U.S.C. Section 152(a) to the employer or, if the employer is a corporation, to an individual who owns, directly or indirectly, more than fifty percent in value of the outstanding stock of the corporation or, if the employer is an entity other than a corporation, to an individual who owns, directly or indirectly, more than fifty percent of the capital and profits interest in the entity;

                     (b) if the employer is an estate or trust, is a grantor, beneficiary or fiduciary of the estate or trust or is an individual who bears any of the relationships described in Paragraphs (1) through (8) of 26 U.S.C. Section 152(a) to a grantor, beneficiary or fiduciary of the estate or trust;

                     (c) is a dependent, as that term is described in 26 U.S.C. Section 152(a)(9), of the employer or, if the taxpayer is a corporation, of an individual who owns, directly or indirectly, more than fifty percent in value of the outstanding stock of the corporation or, if the employer is an entity other than a corporation, of an individual who owns, directly or indirectly, more than fifty percent of the capital and profits interests in the entity or, if the employer is an estate or trust, of a grantor, beneficiary or fiduciary of the estate or trust; or

                     (d) is working or has worked as an employee or as an independent contractor for an entity that directly or indirectly owns stock in a corporation of the eligible employer or other interest of the eligible employer that represents fifty percent or more of the total voting power of that entity or has a value equal to fifty percent or more of the capital and profits interest in the entity;

                (2) "eligible employer" means an employer that:

                     (a) made more than fifty percent of its sales to persons outside New Mexico during the most recent twelve months of the employer's modified combined tax liability reporting periods ending prior to claiming a high-wage jobs tax credit; and

                     (b) is eligible for training assistance pursuant to Section 21-19-7 NMSA 1978;

                (3) "modified combined tax liability" means the total liability for the reporting period for the gross receipts tax imposed by Section 7-9-4 NMSA 1978 together with any tax collected at the same time and in the same manner as the gross receipts tax, including the compensating tax, withholding tax, interstate telecommunications gross receipts tax, surcharges imposed by Section 63-9D-5 NMSA 1978 and the surcharge imposed by Section 63-9F-11 NMSA 1978, minus the amount of any credit other than the high-wage jobs tax credit applied against any or all of these taxes or surcharges; but "modified combined tax liability" excludes all amounts collected with respect to local option gross receipts taxes;

                (4) "new high-wage economic-based job" means a job created by an eligible employer on or after July 1, 2004 and prior to July 1, 2009 that is occupied for at least forty-eight weeks of a qualifying period by an eligible employee who is paid wages calculated for the qualifying period to be at least:

                     (a) forty thousand dollars ($40,000) if the job is performed or based in a municipality with a population of forty thousand or more according to the most recent federal decennial census; and

                     (b) twenty-eight thousand dollars ($28,000) if the job is performed or based in a municipality with a population of less than forty thousand according to the most recent federal decennial census or in the unincorporated area of a county;

                (5) "qualifying period" means the period of twelve months beginning on the day an eligible employee begins working in a new high-wage economic-based job or the period of twelve months beginning on the anniversary of the day an eligible employee began working in a new high-wage economic-based job; and

                (6) "wages" means wages as defined in Paragraphs (1), (2) and (3) of 26 U.S.C. Section 51(c)."

     Section 33. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] DEDUCTION--GROSS RECEIPTS--RESEARCH AND DEVELOPMENT SMALL BUSINESSES.--

          A. Receipts of a qualified research and development small business may be deducted from gross receipts to the extent that such receipts are directly related to the subject matter of its qualified research, as defined in Paragraph (3) of Subsection B of this section. The deduction provided by this section may be claimed only for a period ending thirty-five consecutive calendar months after the first calendar month for which the deduction is claimed by the taxpayer or by a person to whom the taxpayer is a successor pursuant to Section 7-1-61 NMSA 1978.

          B. As used in this section:

                (1) "qualified research and development small business" means a business, including a corporation, general partnership, limited partnership, limited liability company, sole proprietorship or other similar entity, that:

                     (a) employed no more than twenty-five employees on a full-time-equivalent basis in any prior calendar month;

                     (b) had total revenues of no more than ten million dollars ($10,000,000) in any prior fiscal year;

                     (c) did not in any prior calendar month have more than fifty percent of its voting securities or other equity interest with the right to designate or elect the board of directors or other governing body of the qualified business owned directly or indirectly by another business; and

                     (d) has made qualified research expenditures for the period of twelve calendar months ending with the month for which the deduction is sought of at least twenty percent of its total revenues for those twelve calendar months;

                (2) "qualified research expenditure" means an expenditure in connection with qualified research, but does not include any expenditure on research funded by any grant, contract or similar mechanism by another person or governmental entity, and does not include any expenditure on property that is owned by a municipality or county in connection with an industrial revenue bond project or property for which the taxpayer has received any credit pursuant to the Capital Equipment Tax Credit Act, the Investment Credit Act or the Technology Jobs Tax Credit Act; and

                (3) "qualified research" means research:

                     (a) that is undertaken for the purpose of discovering information that is technological in nature and the application of which is intended to be useful in the development of a new or improved business component of the taxpayer; and

                     (b) in which substantially all activities constitute elements of a process of experimentation related to new or improved function, performance, reliability or quality, but not related to style, taste, cosmetic or seasonal design factors."

     Section 34. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] DEDUCTION--COMPENSATING TAX--RESEARCH AND DEVELOPMENT SMALL BUSINESSES.--

          A. A qualified research and development small business may deduct the value of tangible personal property in computing the compensating tax due if the property is used in connection with a qualified research expenditure. The deduction provided by this section may be claimed only for a period ending thirty-five consecutive calendar months after the first calendar month for which the deduction is claimed.

          B. As used in this section:

                (1) "qualified research and development small business" means a business, including a corporation, general partnership, limited partnership, limited liability company, sole proprietorship or other similar entity, that:

                     (a) employed no more than twenty-five employees on a full-time-equivalent basis in any prior calendar month;

                     (b) had total revenues of no more than ten million dollars ($10,000,000) in any prior fiscal year;

                     (c) did not in any prior calendar month have more than fifty percent of its voting securities or other equity interest with the right to designate or elect the board of directors or other governing body of the qualified business owned directly or indirectly by another business; and

                     (d) has made qualified research expenditures for the period of twelve calendar months ending with the month for which the deduction is sought of at least twenty percent of its total revenues for those twelve calendar months;

                (2) "qualified research expenditure" means an expenditure in connection with qualified research, but does not include any expenditure on research funded by any grant, contract or similar mechanism by another person or governmental entity, and does not include any expenditure on property that is owned by a municipality or county in connection with an industrial revenue bond project or property for which the taxpayer has received any credit pursuant to the Capital Equipment Tax Credit Act, the Investment Credit Act or the Technology Jobs Tax Credit Act; and

                (3) "qualified research" means research:

                     (a) that is undertaken for the purpose of discovering information that is technological in nature and the application of which is intended to be useful in the development of a new or improved business component of the taxpayer; and

                     (b) in which substantially all activities constitute elements of a process of experimentation related to new or improved function, performance, reliability or quality, but not related to style, taste, cosmetic or seasonal design factors."

     Section 35. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] DEDUCTION--GROSS RECEIPTS--CERTAIN RECEIPTS FROM SERVICES PROVIDED BY LICENSED HEALTH CARE PRACTITIONERS.--

          A. Receipts of a licensed health care practitioner from payments by a managed health care provider for medicare part C services or commercial contract services may be deducted from gross receipts.

          B. As used in this section:

                (1) "commercial contract services" means health care services performed pursuant to a contract with a managed health care provider other than those health care services provided for medicare patients pursuant to Title 18 of the federal Social Security Act or for medicaid patients pursuant to Title 19 or Title 21 of the federal Social Security Act;

                (2) "licensed health care practitioner" means:

                     (a) a chiropractic physician licensed pursuant to the provisions of the Chiropractic Physician Practice Act;

                     (b) a dentist or dental hygienist licensed pursuant to the provisions of the Dental Health Care Act;

                     (c) a physician or physician assistant licensed pursuant to the provisions of the Medical Practice Act;

                     (d) an osteopathic physician licensed pursuant to the provisions of Chapter 61, Article 10 NMSA 1978 or an osteopathic physician's assistant licensed pursuant to the provisions of the Osteopathic Physicians' Assistants Act;

                     (e) a doctor of oriental medicine licensed pursuant to the provisions of the Acupuncture and Oriental Medicine Practice Act;

                     (f) a podiatrist licensed pursuant to the provisions of the Podiatry Act;

                     (g) a psychologist licensed pursuant to the provisions of the Professional Psychologist Act;

                     (h) a registered nurse or licensed practical nurse licensed pursuant to the provisions of the Nursing Practice Act;

                     (i) a registered lay midwife registered by the department of health;

                     (j) a physical therapist licensed pursuant to the provisions of the Physical Therapy Act;

                     (k) an optometrist licensed pursuant to the provisions of the Optometry Act;

                     (l) a registered occupational therapist registered pursuant to the provisions of the Occupational Therapy Act;

                     (m) a respiratory care practitioner licensed pursuant to the provisions of the Respiratory Care Act;

                     (n) a clinical laboratory accredited pursuant to 42 USCA 263; and

                     (o) a speech-language pathologist or audiologist licensed pursuant to the Speech-Language Pathology, Audiology and Hearing Aid Dispensing Practices Act;

                (3) "managed health care provider" means a person licensed by the insurance division of the public regulation commission that provides for the delivery of comprehensive basic health care services and medically necessary services to individuals enrolled in a plan through its own employed health care providers or by contracting with selected or participating health care providers; and

                (4) "medicare part C services" means services performed pursuant to a contract with a managed health care provider for medicare patients pursuant to Title 18 of the federal Social Security Act."

     Section 36. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] EXEMPTION--GROSS RECEIPTS TAX--RECEIPTS FROM CERTAIN ATHLETIC CONTESTS, SPORTING EVENTS AND CONCERTS.--Exempted from the gross receipts tax are:

          A. receipts from promoting professional contests subject to the regulatory fee imposed pursuant to Section 60-2A-23 NMSA 1978 and from exhibiting live professional contests subject to the supervisory fee imposed pursuant to Section 60-2A-26 NMSA 1978;

          B. receipts from ticket sales or admission fees for professional contests as defined in Section 60-2A-2 NMSA 1978, auto racing and one-time sporting events; and

          C. receipts from ticket sales or admission fees for a live concert held at a venue capable of accommodating at least two thousand five hundred persons."

     Section 37. Section 7-9-3.2 NMSA 1978 (being Laws 1991, Chapter 8, Section 1, as amended) is amended to read:

     "7-9-3.2. ADDITIONAL DEFINITION.--

          A. As used in the Gross Receipts and Compensating Tax Act, "governmental gross receipts" means all receipts of the state or any agency, institution, instrumentality or political subdivision thereof from:

                (1) the sale of tangible personal property other than water from facilities open to the general public;

                (2) the performance of or admissions to recreational, athletic or entertainment services or events in facilities open to the general public;

                (3) refuse collection, refuse disposal or both;

                (4) sewage services; [and]

                (5) the sale of water by a utility owned or operated by a county, municipality or other political subdivision of the state; and

                (6) the renting of parking, docking or tie-down spaces or the granting of permission to park vehicles, tie down aircraft or dock boats.

     "Governmental gross receipts" includes receipts from the sale of tangible personal property handled on consignment when sold from facilities open to the general public but excludes cash discounts taken and allowed, governmental gross receipts tax payable on transactions reportable for the period and any type of time-price differential.

          B. As used in this section, "facilities open to the general public" does not include point of sale registers or electronic devices at a bookstore owned or operated by a public post-secondary educational institution when the registers or devices are utilized in the sale of textbooks or other materials required for courses at the institution to a student enrolled at the institution who displays a valid student identification card."

     Section 38. Section 7-9-7 NMSA 1978 (being Laws 1966, Chapter 47, Section 7, as amended) is amended to read:

     "7-9-7. IMPOSITION AND RATE OF TAX--DENOMINATION AS "COMPENSATING TAX".--

          A. For the privilege of using tangible property in New Mexico, there is imposed on the person using the property an excise tax equal to five percent of the value of tangible property that was:

                (1) manufactured by the person using the property in the state;

                (2) acquired outside this state as the result of a transaction that would have been subject to the gross receipts tax had it occurred within this state; or

                (3) acquired as the result of a transaction which was not initially subject to the compensating tax imposed by Paragraph (2) of this subsection or the gross receipts tax but which transaction, because of the buyer's subsequent use of the property, should have been subject to the compensating tax imposed by Paragraph (2) of this subsection or the gross receipts tax.

          B. For the purpose of Subsection A of this section, value of tangible property shall be the adjusted basis of the property for federal income tax purposes determined as of the time of acquisition or introduction into this state or of conversion to use, whichever is later. If no adjusted basis for federal income tax purposes is established for the property, a reasonable value of the property shall be used.

          C. For the privilege of using services rendered in New Mexico, there is imposed on the person using such services an excise tax equal to five percent of the value of the services at the time they were rendered. The services, to be taxable under this subsection, must have been rendered as the result of a transaction which was not initially subject to the gross receipts tax but which transaction, because of the buyer's subsequent use of the services, should have been subject to the gross receipts tax.

          D. For the privilege of using services performed outside New Mexico, the product of which is initially used in New Mexico, there is imposed an excise tax equal to five percent of the value of the services at the time they were performed. The services, to be taxable under this subsection, must have been performed by a seller that has no nexus with this state in a transaction that would have been subject to the gross receipts tax had it occurred within this state. The department may promulgate rules to establish the value of the services performed and to apportion fairly the value when the services are performed or delivered simultaneously in more than one state.

          [D.] E. The tax imposed by this section shall be referred to as the "compensating tax"."

     Section 39. Section 7-9-7.1 NMSA 1978 (being Laws 1993, Chapter 45, Section 1, as amended) is amended to read:

     "7-9-7.1. DEPARTMENT BARRED FROM TAKING COLLECTION ACTIONS WITH RESPECT TO CERTAIN COMPENSATING TAX LIABILITIES.--

          A. The department shall take no action to enforce collection of compensating tax or any local option compensating tax due on purchases made by an individual if:

                (1) the property is used only for nonbusiness purposes;

                (2) the property is not a manufactured home; and

                (3) the individual is not an agent for collection of compensating tax pursuant to Section 7-9-10 NMSA 1978.

          B. The prohibition in Subsection A of this section does not prevent the department from enforcing collection of compensating tax or any local option compensating tax on purchases from persons who are not individuals, who are agents for collection pursuant to Section 7-9-10 NMSA 1978 or who use the property in the course of engaging in business in New Mexico or from enforcing collection of compensating tax or any local option compensating tax due on purchase of manufactured homes."

     Section 40. Section 7-9-9 NMSA 1978 (being Laws 1966, Chapter 47, Section 9, as amended) is amended to read:

     "7-9-9. LIABILITY OF USER FOR PAYMENT OF COMPENSATING TAX AND LOCAL OPTION COMPENSATING TAX.--Any person in New Mexico using property on the value of which compensating tax and local option compensating tax is payable but has not been paid is liable to the state for payment of the compensating tax and applicable local option compensating tax, but this liability is discharged if the buyer has paid the compensating tax and applicable local option compensating tax to the seller for payment over to the department."

     Section 41. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

     "[NEW MATERIAL] CREDIT--COMPENSATING TAX--MUNICIPAL COMPENSATING TAX PAID.--A credit shall be allowed for each reporting period against the compensating tax for an amount of the municipal compensating tax equal to:

          A. one-half percent of the value of property for which the taxpayer is liable for that reporting period if the rate of the municipal compensating tax in effect at the time of the use was at least one-half percent; or

          B. one-fourth percent of the value of property for which the taxpayer is liable for that reporting period if the rate of the municipal compensating tax in effect at the time of the use was one-fourth percent."

     Section 42. Section 7-9-22 NMSA 1978 (being Laws 1969, Chapter 144, Section 15, as amended) is amended to read:

     "7-9-22. EXEMPTION--GROSS RECEIPTS TAX--VEHICLES.--Exempted from the gross receipts tax are the receipts from selling vehicles on which a tax is imposed by the Motor Vehicle Excise Tax Act, [and on] vehicles subject to registration under Section 66-3-16 NMSA 1978 and vehicles exempt from the motor vehicle excise tax pursuant to Subsection F of Section 7-14-6 NMSA 1978."

     Section 43. Section 7-9-23 NMSA 1978 (being Laws 1969, Chapter 144, Section 16, as amended) is amended to read:

     "7-9-23. EXEMPTION--COMPENSATING TAX--VEHICLES.--Exempted from the compensating tax is the use of vehicles on which the tax imposed by the Motor Vehicle Excise Tax Act has been paid, [and on] the use of vehicles subject to registration under Section 66-3-16 NMSA 1978 and the use of vehicles exempt from the motor vehicle excise tax pursuant to Subsection F of Section 7-14-6 NMSA 1978."

     Section 44. Section 7-9-43 NMSA 1978 (being Laws 1966, Chapter 47, Section 13, as amended) is amended to read:

     "7-9-43. NONTAXABLE TRANSACTION CERTIFICATES AND OTHER EVIDENCE REQUIRED TO ENTITLE PERSONS TO DEDUCTIONS [RENEWAL].--

          A. [All nontaxable transaction certificates of the appropriate series executed by buyers or lessees should be in the possession of the seller or lessor for nontaxable transactions at the time the return is due for receipts from the transactions. If the seller or lessor is not in possession of the required nontaxable transaction certificates within sixty days from the date that the notice requiring possession of these nontaxable transaction certificates is given the seller or lessor by the department, deductions claimed by the seller or lessor that require delivery of these nontaxable transaction certificates shall be disallowed. The] Nontaxable transaction certificates shall contain the information and be in a form prescribed by the department. The department by regulation may deem to be nontaxable transaction certificates documents issued by other states or the multistate tax commission to taxpayers not required to be registered in New Mexico. Only buyers or lessees who have a registration number or have applied for a registration number and have not been refused one under Subsection C of Section 7-1-12 NMSA 1978 shall execute nontaxable transaction certificates issued by the department. If the seller or lessor has been given an identification number for tax purposes by the department, the seller or lessor shall disclose that identification number to the buyer or lessee prior to or upon acceptance of a nontaxable transaction certificate. When the seller or lessor accepts a nontaxable transaction certificate [within the required time and] in good faith that the buyer or lessee will employ the property or service transferred in a nontaxable manner, the properly executed nontaxable transaction certificate shall be conclusive evidence, and the only material evidence, that the proceeds from the transaction are deductible from the seller's or lessor's gross receipts.

          B. Notwithstanding any other provision of the Gross Receipts and Compensating Tax Act, when a seller or lessor required by provisions of this act to have a nontaxable transaction certificate to claim a deduction is unable to obtain the required nontaxable transaction certificate because the buyer or lessee has initiated bankruptcy proceedings under federal bankruptcy laws, is dead or no longer exists as a business entity, the department shall allow the deduction upon presentation of other evidence acceptable to the secretary that the taxpayer is entitled to claim the deduction.

          [B.] C. Properly executed documents required to support the deductions provided in Sections 7-9-57, 7-9-58 and 7-9-74 NMSA 1978 should be in the possession of the seller at the time the return is due for receipts from the transactions. If the seller is not in possession of these documents [within sixty days from the date that the notice requiring possession of these documents is given to the seller by the department] on a date not later than thirty days prior to the date of a formal hearing on a protest that requires the documents to establish the taxpayer's entitlement to any deduction under protest, the deductions claimed by the seller or lessor that require delivery of these documents shall be disallowed. These documents shall contain the information and be in a form prescribed by the department. When the seller accepts these documents within the required time and in good faith that the buyer will employ the property or service transferred in a nontaxable manner, the properly executed documents shall be conclusive evidence, and the only material evidence, that the proceeds from the transaction are deductible from the seller's gross receipts.

          [C. Notice, as used in this section, is sufficient if the notice is mailed or served as provided in Subsection A of Section 7-1-9 NMSA 1978. Notice by the department under this section shall not be given prior to the commencement of an audit of the seller required to be in possession of the documents.

          D. On January 1, 2005, every nontaxable transaction certificate, except for nontaxable transaction certificates of the series applicable to the twelve-year period beginning January 1, 2005 and issued by the department prior to that date, is void with respect to transactions after December 31, 2004. The department shall issue separate series of nontaxable transaction certificates for the twelve-year period beginning January 1, 2005 and for each twelve-year period beginning on January 1 of every twelfth year succeeding calendar year 2005. A series of nontaxable transaction certificates issued by the department for any twelve-year period may be executed by buyers or lessees for transactions occurring within or prior to that twelve-year period but is not valid for transactions occurring after that twelve-year period, except the nontaxable transaction certificates issued by the department for the period January 1, 1992 to December 31, 2001 may be executed by buyers or lessees for transactions occurring prior to December 31, 2004. For administrative convenience, the department may accept and approve qualifying applications for the privilege of executing nontaxable transaction certificates and pre-issue certificates of any series within the six-month period immediately preceding the beginning of the twelve-year period to which the series of nontaxable transaction certificates applies.

          E.] D. To exercise the privilege of executing appropriate nontaxable transaction certificates, a buyer or lessee shall apply to the department for permission to execute nontaxable transaction certificates, except with respect to documents issued by other states or the multistate tax commission that the department has deemed to be nontaxable transaction certificates. If a person is shown on the department's records to be a delinquent taxpayer or to have a non-filed period, the department may refuse to approve the application of the person until the person has filed returns for all non-filed periods and is no longer shown to be a delinquent taxpayer, and the taxpayer may protest that refusal pursuant to Section 7-1-24 NMSA 1978. Upon the department's approval of the application, the buyer or lessee may request appropriate nontaxable transaction certificates for execution by the buyer or lessee; provided that if a person is shown on the department's records to be a delinquent taxpayer or to have a non-filed period, the department may refuse to issue nontaxable transaction certificates to the person until the person has filed returns for all non-filed periods and is no longer shown to be a delinquent taxpayer. The taxpayer may protest that refusal pursuant to Section 7-1-24 NMSA 1978. The department may require a buyer or lessee requesting and receiving nontaxable transaction certificates for execution by that buyer or lessee to report to the department the names, addresses and identification numbers assigned by the department of the sellers and lessors to whom they have delivered nontaxable transaction certificates. The department may require a seller or lessor engaged in business in New Mexico to report to the department the names, addresses and federal employer identification numbers or state identification numbers for tax purposes issued by the department of the buyers or lessees from whom the seller or lessor has accepted nontaxable transaction certificates."

     Section 45. Section 7-12-7 NMSA 1978 (being Laws 1971, Chapter 77, Section 7, as amended) is amended to read:

     "7-12-7. SALE OF STAMPS--PRICES.--

          A. The department shall sell stamps to any person who sells in New Mexico cigarettes manufactured by that person and to any person who receives on consignment or buys unstamped cigarettes for sale, gift or consumption in New Mexico; provided [such persons are] that the person is registered with the department [under] pursuant to the provisions of Section 7-1-12 NMSA 1978. Stamps shall be sold at their face value. [with the following discounts:

                (1) four percent less than the face value of the first thirty thousand dollars ($30,000) of stamps purchased in one calendar month;

                (2) three percent less than the face value of the second thirty thousand dollars ($30,000) of stamps purchased in one calendar month; and

                (3) two percent less than the face value of all stamps purchased in excess of sixty thousand dollars ($60,000) in one calendar month.

          B. If the face value of stamps sold in a single sale is less than one thousand dollars ($1,000), the discount provided for in this section shall not be allowed.

          C.] B. Payment for stamps shall be made on or before the twenty-fifth day of the month following the month in which the sale of stamps by the department is made."

     Section 46. Section 7-14-4 NMSA 1978 (being Laws 1988, Chapter 73, Section 14) is amended to read:

     "7-14-4. DETERMINATION OF AMOUNT OF MOTOR VEHICLE EXCISE TAX.--

          A. The rate of the motor vehicle excise tax is [three] four percent and is applied to the price paid for the vehicle. If the price paid does not represent the value of the vehicle in the condition that existed at the time it was acquired, the tax rate shall be applied to the reasonable value of the vehicle in such condition at such time. However, allowances granted for vehicle trade-ins may be deducted from the price paid or the reasonable value of the vehicle purchased.

          B. Notwithstanding the provisions of Subsection A of this section, the minimum amount of motor vehicle excise tax imposed pursuant to Subsection 7-14-3 shall be twenty dollars ($20.00)."

     Section 47. Section 7-14-6 NMSA 1978 (being Laws 1988, Chapter 73, Section 16, as amended) is amended to read:

     "7-14-6. EXEMPTIONS FROM TAX.--

          A. Persons who acquire a vehicle out of state thirty or more days before establishing a domicile in this state are exempt from the tax if the vehicle was acquired for personal use.

          B. Persons applying for a certificate of title for a vehicle registered in another state are exempt from the tax if they have previously registered and titled the vehicle in New Mexico and have owned the vehicle continuously since that time.

          C. Certificates of title for all vehicles owned by this state or any political subdivision are exempt from the tax.

          D. A vehicle subject to registration under Section 66-3-16 NMSA 1978 is exempt from the tax.

          E. Persons who acquire vehicles for subsequent lease shall be exempt from the tax if:

                (1) the person does not use the vehicle in any manner other than holding it for lease or sale or leasing or selling it in the ordinary course of business;

                (2) the lease is for a term of more than six months;

                (3) the receipts from the subsequent lease are subject to the gross receipts tax; and

                (4) the vehicle does not have a gross vehicle weight of over twenty-six thousand pounds.

          F. Vehicles that are manufactured to operate exclusively on alternative fuel or are gasoline-electric hybrid vehicles with a United States environmental protection agency fuel economy rating of at least twenty-two and one-half miles per gallon are eligible for a one-time exemption from the tax at the time of the issuance of the original certificate of title for the vehicle. For purposes of this subsection, "alternative fuel" means natural gas, liquefied petroleum gas, electricity, hydrogen, a fuel mixture containing not less than eighty-five percent ethanol or methanol, a fuel mixture containing not less than twenty percent vegetable oil or a water-phased hydrocarbon fuel emulsion consisting of a hydrocarbon base and water in an amount not less than twenty percent by volume of the total water-phased fuel emulsion."

     Section 48. Section 7-14A-3.1 NMSA 1978 (being Laws 1993, Chapter 359, Section 1) is amended to read:

     "7-14A-3.1. IMPOSITION AND RATE--LEASED VEHICLE SURCHARGE.--There is imposed a surcharge on the leasing of a vehicle to another person by a person engaging in business in New Mexico if the lease is subject to the leased vehicle gross receipts tax. The amount of this surcharge is [two dollars ($2.00)] four dollars ($4.00) for each day [each] the vehicle is leased by the person. The surcharge may be referred to as the "leased vehicle surcharge"."

     Section 49. Section 7-15A-2 NMSA 1978 (being Laws 1988, Chapter 73, Section 29) is amended to read:

     "7-15A-2. DEFINITIONS.--As used in the Weight Distance Tax Act:

          A. "bus" means [every] a motor vehicle designed and used for the transportation of [persons] a person and [every] a motor vehicle, other than a taxicab, designed and used for the transportation of [persons] a person for compensation;

          B. "declared gross weight" means the declared gross weight for purposes of the Motor Transportation Act;

          C. "department" means the taxation and revenue department, the secretary of taxation and revenue or [any] an employee of that department exercising authority lawfully delegated to that employee by the secretary;

          D. "gross vehicle weight" means the weight of a vehicle without load, plus the weight of [any] a load [thereon] upon the vehicle;

          E. "motor vehicle" means [every] a vehicle [which] that is self-propelled and [every] a vehicle [which] that is propelled by electric power obtained from batteries or from overhead trolley wires, but not operated upon rails;

          F. "person" means [any]:

                (1) an individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, joint venture, syndicate or other association; ["person" also means] and

                (2) to the extent permitted by law, [any] a federal, state or other governmental unit or subdivision or an agency, department or instrumentality [thereof] of the federal, state or other governmental unit;

          G. "registrant" means [any] a person who has registered the vehicle pursuant to the laws of this state or another state;

          H. "secretary" means the secretary of taxation and revenue or the secretary's delegate;

          I. "tax" means the weight distance tax imposed by the Weight Distance Tax Act; [and]

          J. "vehicle" means [every] a device in, upon or by which [any] a person or property is or may be transported or drawn upon a highway, including [any] a frame, chassis or body of [any] a vehicle or motor vehicle, except [devices] a device moved by human power or used exclusively upon stationary rails or tracks; and

          K. "weight distance tax identification permit" means an administrative certificate that is issued by the department and that identifies a specific vehicle as subject to the tax imposed pursuant to the Weight Distance Tax Act."

     Section 50. Section 7-15A-6 NMSA 1978 (being Laws 1988, Chapter 73, Section 33) is amended to read:

     "7-15A-6. TAX RATE FOR MOTOR VEHICLES OTHER THAN BUSES--REDUCTION OF RATE FOR ONE-WAY HAULS.--

          A. For on-highway operations of motor vehicles other than buses, the weight distance tax shall be computed in accordance with the following schedule:

         Declared Gross Weight              Tax Rate

         (Gross Vehicle Weight)             (Mills per Mile)

         26,000 to 28,000                    [7.97] 11.32

         28,001 to 30,000                    [8.60] 12.22

         30,001 to 32,000                    [9.24] 13.13

         32,001 to 34,000                    [9.87] 14.02

         34,001 to 36,000                   [10.51] 14.93

         36,001 to 38,000                   [11.14] 15.82

         38,001 to 40,000                   [12.11] 17.20

         40,001 to 42,000                   [13.06] 18.55

         42,001 to 44,000                   [14.01] 19.90

         44,001 to 46,000                   [14.97] 21.26

         46,001 to 48,000                   [15.93] 22.63

         48,001 to 50,000                   [16.88] 23.98

         50,001 to 52,000                   [17.84] 25.34

         52,001 to 54,000                   [18.79] 26.69

         54,001 to 56,000                   [19.75] 28.05

         56,001 to 58,000                   [20.71] 29.42         58,001 to 60,000                   [21.66] 30.77

         60,001 to 62,000                   [22.61] 32.12

         62,001 to 64,000                   [23.58] 33.49

         64,001 to 66,000                   [24.53] 34.84

         66,001 to 68,000                   [25.48] 36.19

         68,001 to 70,000                   [26.43] 37.54

         70,001 to 72,000                   [27.40] 38.92

         72,001 to 74,000                   [28.41] 40.36

         74,001 to 76,000                   [29.46] 41.85

         76,001 to 78,000                   [30.55] 43.39

         78,001 and over                    [31.68] 45.00.

          B. All motor vehicles for which the tax is computed under Subsection A of this section shall pay a tax [which] that is two-thirds of the tax computed under Subsection A of this section if:

                (1) the motor vehicle is customarily used for one-way haul;

                (2) forty-five percent or more of the mileage traveled by the motor vehicle for a registration year is mileage [which] that is traveled empty of all load; and

                (3) the registrant, owner or operator of the vehicle attempting to qualify under this subsection has made a sworn application to the department to be classified under this subsection for a registration year and has given whatever information is required by the department to determine the eligibility of the vehicle to be classified under this subsection and the vehicle has been so classified."

     Section 51. Section 7-15A-7 NMSA 1978 (being Laws 1988, Chapter 73, Section 34) is amended to read:

     "7-15A-7. TAX RATE FOR BUSES.--For all buses, the weight distance tax shall be computed in accordance with the following schedule:

         Declared Gross Weight              Tax Rate

         (Gross Vehicle Weight)             (Mills per Mile)

         26,000 to 28,000                    [7.97] 11.32

         28,001 to 30,000                    [8.60] 12.22

         30,001 to 32,000                    [9.24] 13.13

         32,001 to 34,000                    [9.87] 14.02

         34,001 to 36,000                   [10.52] 14.93

         36,001 to 38,000                   [11.15] 15.82

         38,001 to 40,000                   [12.12] 17.20

         40,001 to 42,000                   [13.07] 18.55

         42,001 to 44,000                   [14.02] 19.90

         44,001 to 46,000                   [14.97] 21.26

         46,001 to 48,000                   [15.94] 22.63

         48,001 to 50,000                   [16.89] 23.98

         50,001 to 52,000                   [17.85] 25.34

         52,001 to 54,000                   [18.80] 26.69

         54,001 and over                    [19.76] 28.05."

    Section 52. A new section of the Weight Distance Tax Act is enacted to read:

    "[NEW MATERIAL] WEIGHT DISTANCE TAX IDENTIFICATION PERMITS--SUSPENSION AND RENEWAL.--

         A. An operator of a motor vehicle registered in this state and subject to the weight distance tax shall display a weight distance tax identification permit issued for that vehicle to an enforcement officer of the department of public safety upon demand of that employee and when the vehicle passes through a port of entry.

         B. The department may suspend or decline to renew a weight distance tax identification permit for a motor vehicle if the owner or operator of the vehicle does not comply with the provisions of the Weight Distance Tax Act."

    Section 53. A new section of the Weight Distance Tax Act is enacted to read:

    "[NEW MATERIAL] WEIGHT DISTANCE TAX IDENTIFICATION PERMIT ADMINISTRATIVE FEE.--

         A. A person that obtains a weight distance tax identification permit shall pay an administrative fee to the department for the reasonable and necessary expense that the department incurs for processing and issuing a weight distance tax identification permit. The fee shall be paid in addition to a weight distance tax, special fuel excise tax and other use fee imposed for the use of public highways of this state. The department shall determine the amount of the fee pursuant to regulation. The fee shall not exceed ten dollars ($10.00).

         B. The department shall deposit to the weight distance tax identification permit administration fund all proceeds from administrative fees collected by the department pursuant to this section."

    Section 54. A new section of the Weight Distance Tax Act is enacted to read:

    "[NEW MATERIAL] WEIGHT DISTANCE TAX IDENTIFICATION PERMIT ADMINISTRATION FUND.--The "weight distance tax identification permit administration fund" is created in the state treasury. The purpose of the fund is to provide an account from which the department may pay the costs of issuing and administering weight distance tax identification permits. The fund shall consist of administrative fees collected pursuant to the Weight Distance Tax Act. Money in the fund shall be appropriated to the department to pay for the cost of issuing and administering weight distance tax identification permits. Disbursements from the fund shall be by warrant of the secretary of finance and administration upon vouchers signed by the secretary or the secretary's authorized representative. Money in the fund shall not revert to the general fund at the end of a fiscal year."

     Section 55. Section 7-16A-3 NMSA 1978 (being Laws 1992, Chapter 51, Section 3, as amended) is amended to read:

     "7-16A-3. IMPOSITION AND RATE OF TAX--DENOMINATION AS SPECIAL FUEL EXCISE TAX.--

          A. For the privilege of receiving or using special fuel in this state, there is imposed an excise tax at a rate provided in Subsection B of this section on each gallon of special fuel received in New Mexico.

          B. The tax imposed by Subsection A of this section shall be [eighteen cents ($.18)] twenty-three cents ($.23) per gallon of special fuel received or used in New Mexico.

          C. The tax imposed by this section may be called the "special fuel excise tax"."

     Section 56. Section 7-17-5 NMSA 1978 (being Laws 1993, Chapter 65, Section 8, as amended) is amended to read:

     "7-17-5. IMPOSITION AND RATE OF LIQUOR EXCISE TAX.--There is imposed on [any] a wholesaler who sells alcoholic beverages on which the tax imposed by this section has not been paid an excise tax, to be referred to as the "liquor excise tax", at the following rates on alcoholic beverages sold:

          A. on spirituous liquors, [one dollar sixty cents ($1.60)] three dollars eighty-six cents ($3.86) per liter;

          B. on beer, except as provided in Subsection E of this section, [forty-one cents ($.41)] one dollar forty-eight cents ($1.48) per gallon;

          C. on wine, except as provided in Subsections D and F of this section, [forty-five cents ($.45)] one dollar thirteen cents ($1.13) per liter;

          D. on fortified wine, one dollar fifty cents ($1.50) per liter;

          E. on beer manufactured or produced by a microbrewer and sold in this state, provided that proof is furnished to the department that the beer was manufactured or produced by a microbrewer, eight cents ($.08) per gallon;

          F. on wine manufactured or produced by a small winer or winegrower and sold in this state, provided that proof is furnished to the department that the wine was manufactured or produced by a small winer or winegrower, ten cents ($.10) per liter on the first eighty thousand liters sold and twenty cents ($.20) per liter on all liters sold over eighty thousand liters but less than five hundred sixty thousand liters; and

          G. on cider, forty-one cents ($.41) per gallon."

     Section 57. Section 7-19-12 NMSA 1978 (being Laws 1979, Chapter 397, Section 3, as amended) is amended to read:

     "7-19-12. AUTHORIZATION TO IMPOSE SUPPLEMENTAL MUNICIPAL GROSS RECEIPTS TAX AND SUPPLEMENTAL MUNICIPAL COMPENSATING TAX--AUTHORIZATION FOR ISSUANCE OF SUPPLEMENTAL MUNICIPAL GROSS RECEIPTS BONDS--ELECTION REQUIRED.--

          A. The majority of the members elected to the governing body of a municipality may enact an ordinance imposing an excise tax on any person engaging in business in the municipality for the privilege of engaging in business in the municipality. This tax is to be referred to as the "supplemental municipal gross receipts tax". The rate of the tax shall not exceed one percent of the gross receipts of the person engaging in business and shall be imposed in one-fourth percent increments if less than one percent.

          B. An ordinance imposing a tax authorized by Subsection A of this section shall also impose a tax for the privilege of using property in the municipality if the use or service is subject to the compensating tax. This tax shall be referred to as the "supplemental municipal compensating tax". The rate of the tax imposed pursuant to this subsection shall be the same as the rate of tax imposed pursuant to Subsection A of this section. If, at the time this 2003 act becomes effective, a municipality has in effect any amount of supplemental municipal gross receipts tax, a supplemental municipal compensating tax is hereby imposed at the same rate, effective on the effective date of this 2003 act.

          [B.] C. The governing body of a municipality enacting an ordinance imposing the tax authorized in [Subsection A] Subsections A and B of this section shall submit the question of imposing such [tax] taxes and the question of the issuance of supplemental municipal gross receipts bonds in an amount not to exceed nine million dollars ($9,000,000), for which the revenue from the supplemental municipal gross receipts tax and supplemental municipal compensating tax is dedicated, to the qualified electors of the municipality at a regular or special election.

          [C.] D. The questions referred to in Subsection [B] C of this section shall be submitted to a vote of the qualified electors of the municipality as two separate ballot questions, which shall be substantially in the following form:

                (1) "Shall the municipality be authorized to issue supplemental municipal gross receipts bonds in an amount of not exceeding ____________________ dollars for the purpose of constructing and equipping and otherwise acquiring a municipal water supply system?

                For __________ Against __________"; and

                (2) "Shall the municipality impose an excise tax for the privilege of engaging in business in the municipality which shall be known as the "supplemental municipal gross receipts tax" and an excise tax on the use of property in the municipality which shall be known as the "supplemental municipal compensating tax", both of which shall be imposed at a rate of __________ percent [of the gross receipts of the person engaging in business], the proceeds of which are dedicated to the payment of supplemental municipal gross receipts bonds?

                For __________ Against __________".

          [D.] E. Only those voters who are registered electors who reside within the municipality shall be permitted to vote on these two questions. The procedures for conducting the election shall be substantially the same as the applicable provisions in Sections 3-30-1, 3-30-6 and 3-30-7 NMSA 1978 relating to municipal debt.

          [E.] F. If at an election called pursuant to this section a majority of the voters voting on each of the two questions vote in the affirmative on each [such] question, [then] the ordinance imposing the supplemental municipal gross receipts tax and supplemental municipal compensating tax shall be approved. If at such election a majority of the voters voting on such questions fail to approve any of the questions, [then] the ordinance imposing the [tax] taxes shall be disapproved and the questions required to be submitted by Subsection [B] C of this section shall not be submitted to the voters for a period of one year from the date of the election.

          [F.] G. Any ordinance enacted under the provisions of this section shall include an effective date of either July 1 or January 1, whichever date occurs first after the expiration of at least [five] three months from the date of the election. A certified copy of any ordinance imposing a supplemental municipal gross receipts tax and supplemental municipal compensating tax shall be mailed to the [division] department within five days after the ordinance is adopted by the approval by the electorate. Any ordinance repealing the imposition of a tax under the provisions of the Supplemental Municipal Gross Receipts Tax Act shall become effective on either July 1 or January 1, after the expiration of at least [five] three months from the date the ordinance is repealed by the governing body.

          [G.] H. Nothing in this section is intended to or does alter the effectiveness or validity of any actions taken in accordance with Subsection G of Section 80 of Chapter 20 of Laws 1986."

     Section 58. Section 7-19-13 NMSA 1978 (being Laws 1979, Chapter 397, Section 4) is amended to read:

     "7-19-13. ORDINANCE [MUST] SHALL CONFORM TO CERTAIN PROVISIONS OF THE GROSS RECEIPTS AND COMPENSATING TAX ACT AND REQUIREMENTS OF THE [DIVISION] DEPARTMENT.--

          A. Any ordinance imposing a supplemental municipal gross receipts tax and supplemental municipal compensating tax shall adopt by reference the same definitions and the same provisions relating to exemptions and deductions as are contained in the Gross Receipts and Compensating Tax Act then in effect and as it may be amended from time to time.

          B. The governing body of any municipality imposing or increasing the supplemental municipal gross receipts tax [must] and supplemental municipal compensating tax shall adopt the language of the model ordinance furnished to the municipality by the [division] department for the portion of the ordinance relating to the tax."

     Section 59. Section 7-19-15 NMSA 1978 (being Laws 1979, Chapter 397, Section 6, as amended) is amended to read:

     "7-19-15. COLLECTION BY DEPARTMENT--TRANSFER OF PROCEEDS--DEDUCTIONS.--

          A. The department shall collect the supplemental municipal gross receipts tax in the same manner and at the same time it collects the state gross receipts tax. The department shall collect the supplemental municipal compensating tax in the same manner and at the same time it collects the compensating tax.

          B. The department shall withhold an administrative fee pursuant to Section [1 of this 1997 act] 7-1-6.41 NMSA 1978. The department shall transfer to each municipality for which it is collecting a supplemental municipal gross receipts tax the amount of the tax collected less the administrative fee withheld and less any disbursements for tax credits, refunds and the payment of interest applicable to the supplemental municipal gross receipts tax. The department shall transfer to each municipality for which it is collecting a supplemental municipal compensating tax the amount of the tax collected less any disbursements for tax credits, refunds and payment of interest applicable to the supplemental municipal compensating tax. Transfer of the [tax] taxes to a municipality shall be made within the month following the month in which the [tax is] taxes are collected."

     Section 60. Section 7-19-16 NMSA 1978 (being Laws 1979, Chapter 397, Section 7) is amended to read:

     "7-19-16. INTERPRETATION OF ACT--ADMINISTRATION AND ENFORCEMENT OF [TAX] TAXES.--

          A. The [division] department shall interpret the provisions of the Supplemental Municipal Gross Receipts Tax Act.

          B. The [division] department shall administer and enforce the collection of the supplemental municipal gross receipts tax and the supplemental municipal compensating tax, and the Tax Administration Act applies to the administration and enforcement of the [tax] taxes."

     Section 61. Section 7-19-18 NMSA 1978 (being Laws 1979, Chapter 397, Section 9, as amended) is amended to read:

     "7-19-18. SUPPLEMENTAL MUNICIPAL GROSS RECEIPTS TAX--SUPPLEMENTAL MUNICIPAL COMPENSATING TAX--USE OF PROCEEDS--RESTRICTION.--

          A. The proceeds from the supplemental municipal gross receipts tax and supplemental municipal compensating tax shall be deposited in a special improvement account of the municipality and shall be used only for:

                (1) the payment of the principal of, interest on, any prior redemption premiums due in connection with and other expenses related to the supplemental municipal gross receipts bonds issued pursuant to the Supplemental Municipal Gross Receipts Tax Act;

                (2) the funding of any reserves and other accounts in connection with such bonds;

                (3) refunding bonds; and

                (4) to the extent not needed for those purposes, the improvement of the municipality's water system.           B. When any issue of supplemental municipal gross receipts bonds is fully paid, the supplemental municipal gross receipts tax and supplemental municipal compensating tax shall cease to be imposed for that issue, but may continue to be imposed for bonds enacted and approved pursuant to Section 7-19-12 NMSA 1978 and thereafter issued, or for refunding bonds issued pursuant to Section [4 of this 1997 act] 7-19-17.1 NMSA 1978. Any money remaining in a special improvement account after the obligations for supplemental municipal gross receipts bonds and refunding bonds are fully paid may be transferred to any other fund of the municipality."

     Section 62. A new section of the Municipal Local Option Gross Receipts Taxes Act is enacted to read:

     "[NEW MATERIAL] MUNICIPAL LOCAL OPTION COMPENSATING TAXES.--

          A. An ordinance imposing, increasing or repealing a local option gross receipts tax authorized by the Municipal Local Option Gross Receipts Taxes Act shall also impose, increase or repeal a tax for the privilege of using property in the municipality if the use of the property is subject to the compensating tax. The rate of the municipal tax on use imposed, increased or repealed shall be the same as the rate of the local option gross receipts tax imposed, increased or repealed.

          B. If, at the time this 2003 act becomes effective, a municipality has in effect a local option gross receipts tax authorized by the Municipal Local Option Gross Receipts Taxes Act, a municipal tax on use is hereby imposed at the same rate, effective on the effective date of this 2003 act.

          C. The municipal taxes on use authorized or imposed by this section may be referred to generally as "municipal local option compensating taxes". Each tax may be referred to individually by reference to the local option gross receipts tax with which it is associated."

     Section 63. Section 7-19D-7 NMSA 1978 (being Laws 1993, Chapter 346, Section 7, as amended) is amended to read:

     "7-19D-7. COLLECTION BY DEPARTMENT--TRANSFER OF

PROCEEDS--DEDUCTIONS.--

          A. The department shall collect each local option gross receipts tax imposed pursuant to the provisions of the Municipal Local Option Gross Receipts Taxes Act in the same manner and at the same time it collects the state gross receipts tax. The department shall collect the municipal local option compensating taxes imposed pursuant to the provisions of the Municipal Local Option Gross Receipts Taxes Act in the same manner and at the same time it collects the compensating tax.

          B. Except as provided in Subsection C of this section, the department shall withhold an administrative fee pursuant to Section [1 of this 1997 act] 7-1-6.41 NMSA 1978. The department shall transfer to each municipality for which it is collecting a local option gross receipts tax pursuant to the provisions of the Municipal Local Option Gross Receipts Taxes Act the amount of each tax collected for that municipality, less the administrative fee withheld and less any disbursements for tax credits, refunds and the payment of interest applicable to the tax. The department shall transfer to each municipality for which it collects a municipal local option compensating tax pursuant to the provisions of the Municipal Local Option Gross Receipts Taxes Act the amount of each tax collected for that municipality, less any disbursements for tax credits, refunds and payment of interest applicable to the tax. The transfer to the municipality shall be made within the month following the month in which the tax is collected.

          C. With respect to the municipal gross receipts tax imposed by a municipality pursuant to Section 7-19D-9 NMSA 1978, the department shall withhold the administrative fee pursuant to Section [1 of this 1997 act] 7-1-6.41 NMSA 1978 only on that portion of the municipal gross receipts tax arising from a municipal gross receipts tax rate in excess of one-half [of one] percent."

     Section 64. A new section of the Local Hospital Gross Receipts Tax Act is enacted to read:

     "[NEW MATERIAL] MATCHING LOCAL HOSPITAL COMPENSATING TAX.--An ordinance imposing, increasing or repealing a local hospital gross receipts tax authorized by the Local Hospital Gross Receipts Tax Act shall also impose, increase or repeal a tax for the privilege of using property in the county if the use of the property is subject to the compensating tax. This tax may be referred to as the "local hospital compensating tax". The rate of the local hospital compensating tax imposed, increased or repealed shall be the same as the rate of local hospital gross receipts tax imposed, increased or repealed. If, at the time this 2003 act becomes effective, a county has in effect a local hospital gross receipts tax, a local hospital compensating tax is hereby imposed at the same rate, effective on the effective date of this 2003 act."

     Section 65. Section 7-20C-6 NMSA 1978 (being Laws 1991, Chapter 176, Section 6, as amended) is amended to read:

     "7-20C-6. COLLECTION BY DEPARTMENT--TRANSFER OF PROCEEDS--DEDUCTIONS.--

          A. The department shall collect the local hospital gross receipts tax in the same manner and at the same time it collects the state gross receipts tax. The department shall collect the local hospital compensating tax in the same manner and at the same time it collects the compensating tax.

          B. The department shall withhold an administrative fee pursuant to Section 7-1-6.41 NMSA 1978. Except as provided in Subsection C of this section, the department shall transfer to each county for which it is collecting such tax the amount of the tax collected less the administrative fee withheld and less any disbursements for tax credits, refunds and the payment of interest applicable to the tax. The department shall transfer to each county for which it is collecting the local hospital compensating tax the amount of the tax collected less any disbursements for tax credits, refunds and the payment of interest applicable to the tax. Transfer [of the tax] to a county shall be made within the month following the month in which the tax is collected.

          C. In lieu of a transfer pursuant to Subsection B of this section to a class B county with a population, as shown in the last federal decennial census, of more than twenty-five thousand and a net taxable value in the 2002 property tax year of less than two hundred million dollars ($200,000,000), the department shall make the transfer to the largest municipality in that county for the purpose of maintaining and operating a hospital."

     Section 66. A new section of the County Local Option Gross Receipts Taxes Act is enacted to read:

     "[NEW MATERIAL] MATCHING LOCAL OPTION COMPENSATING TAX.--

          A. An ordinance imposing, increasing or repealing a local option gross receipts tax authorized by the County Local Option Gross Receipts Taxes Act to be imposed on a county-wide basis shall also impose, increase or repeal a tax for the privilege of using property in the county if the use of the property is subject to the compensating tax. The rate of county tax on use imposed, increased or repealed shall be the same as the rate of the local option gross receipts tax imposed, increased or repealed.

          B. An ordinance imposing, increasing or repealing a local option gross receipts tax authorized by the County Local Option Gross Receipts Taxes Act to be imposed only in the county area shall also impose, increase or repeal a tax for the privilege of using property in the county area if the use of the property is subject to the compensating tax and if the department is not prohibited pursuant to Section 7-9-7.1 NMSA 1978 from collecting the compensating tax on the use. The rate of county area tax on use imposed, increased or repealed shall be the same as the rate of the local option gross receipts tax imposed, increased or repealed.

          C. If, at the time this 2003 act becomes effective, a county has in effect a local option gross receipts tax authorized to be imposed on a county-wide basis, a county tax on use of property in the county is hereby imposed at the same rate, effective on the effective date of this 2003 act. If, at the time this 2003 act becomes effective, a county has in effect a local option gross receipts tax authorized to be imposed only in the county area, a county tax on use of property in the county area is hereby imposed at the same rate, effective on the effective date of this 2003 act.

          D. The county taxes on use authorized or imposed by this section may be referred to generally as "county local option compensating taxes". Each tax may be referred to individually by reference to the local option gross receipts tax with which it is associated."

     Section 67. Section 7-20E-7 NMSA 1978 (being Laws 1993, Chapter 354, Section 7, as amended) is amended to read:

     "7-20E-7. COLLECTION BY DEPARTMENT--TRANSFER OF

PROCEEDS--DEDUCTIONS.--

          A. The department shall collect each county local option gross receipts tax imposed pursuant to the provisions of the County Local Option Gross Receipts Taxes Act in the same manner and at the same time it collects the state gross receipts tax. The department shall collect each county local option compensating tax imposed pursuant to the provisions of the County Local Option Gross Receipts Taxes Act in the same manner and at the same time it collects the compensating tax.

          B. The department shall withhold an administrative fee pursuant to Section [1 of this 1997 act] 7-1-6.41 NMSA 1978. The department shall transfer to each county for which it is collecting a county local option gross receipts tax pursuant to the provisions of the County Local Option Gross Receipts Taxes Act the amount of each county local option gross receipts tax collected for that county, less the administrative fee withheld and less any disbursements for tax credits, refunds and the payment of interest applicable to the tax. The department shall transfer to each county for which it is collecting a county local option compensating tax pursuant to the provisions of the County Local Option Gross Receipts Taxes Act the amount of each local option compensating tax collected for that county, less any disbursements for tax credits, refunds and the payment of interest applicable to the tax. The transfer to the county shall be made within the month following the month in which the tax is collected."

     Section 68. Section 7-20F-3 NMSA 1978 (being Laws 1993, Chapter 303, Section 3, as amended) is amended to read:

     "7-20F-3. COUNTY CORRECTIONAL FACILITY GROSS RECEIPTS TAX--COUNTY CORRECTIONAL FACILITY COMPENSATING TAX--AUTHORITY TO IMPOSE--RATE--ORDINANCE REQUIREMENTS--REFERENDUM.--

          A. The majority of the members elected to the county board may enact an ordinance imposing on a county-wide basis an excise tax not to exceed a rate of one-eighth [of one] percent of the gross receipts of any person engaging in business in the county, including all municipalities within the county; provided that the voters of:

                (1) a class A county described in Paragraph (1) of Subsection A of Section 7-20F-2 NMSA 1978 or a class B county described in Paragraph (2) of Subsection A of Section 7-20F-2 NMSA 1978 have approved the issuance of general obligation bonds of the county sufficient to pay at least one-half of the costs of the construction and equipping of the new county judicial-correctional facility for which the county correctional facility gross receipts tax revenue is dedicated; or

                (2) a class B county described in Paragraph (3) of Subsection A of Section 7-20F-2 NMSA 1978 have approved the issuance of bonds by the New Mexico finance authority sufficient to pay at least one-half of the costs of designing, constructing, equipping, furnishing and otherwise improving the new county correctional facility for which the county correctional facility gross receipts tax revenue is dedicated.

          B. The tax imposed pursuant to Subsection A of this section may be referred to as the "county correctional facility gross receipts tax". The county correctional facility gross receipts tax shall be imposed only once for the period necessary for payment of the principal and interest on revenue bonds issued pursuant to the County Correctional Facility Gross Receipts Tax Act, but the period shall not exceed ten years from the effective date of the ordinance imposing the tax.

          C. An ordinance imposing a county correctional facility gross receipts tax shall also impose a tax on the use of property in the county if the use of the property is subject to the compensating tax. This tax may be referred to as the "county correctional facility compensating tax". The rate of the county correctional facility compensating tax imposed shall be the same as the rate of county correctional facility gross receipts tax imposed. If, at the time this 2003 act becomes effective, a county has in effect a county correctional facility gross receipts tax, a county correctional facility compensating tax is hereby imposed at the same rate, effective on the effective date of this 2003 act.

          [C.] D. Any ordinance imposing a county correctional facility gross receipts tax and county correctional facility compensating tax pursuant to this section shall:

                (1) impose the tax in any number of increments of one-sixteenth [of one] percent not to exceed an aggregate amount of one-eighth [of one] percent; provided that the rate of the two taxes is the same;

                (2) specify that the imposition of the tax will begin on either July 1 or January 1, whichever occurs first after the expiration of at least three months from the date that the department is notified personally or by mail by the county that imposition of the county correctional facility gross receipts tax and county correctional facility compensating tax has been approved by a majority of the registered voters in the county voting on the question; and

                (3) dedicate the revenue from the county correctional facility gross receipts tax and county correctional facility compensating tax for the purpose of constructing, purchasing, furnishing, equipping, rehabilitating, expanding or improving a judicial-correctional or a county correctional facility or the grounds of a judicial-correctional or county correctional facility, including [but not limited to] acquiring and improving parking lots, landscaping or any combination of the foregoing or to payment of principal and interest on revenue bonds or refunding bonds issued pursuant to the provisions of the County Correctional Facility Gross Receipts Tax Act.

          [D.] E. An ordinance imposing a county correctional facility gross receipts tax and county correctional facility compensating tax pursuant to this section shall not become effective until after an election is held and a simple majority of the qualified electors of the county voting in the election votes in favor of imposing the tax.

          [E.] F. The [governing body] county board shall adopt a resolution calling for an election within seventy-five days of the date the ordinance is adopted on the question of imposing the [tax] taxes and:

                (1) in a class A county described in Paragraph (1) of Subsection A of Section 7-20F-2 NMSA 1978 or a class B county described in Paragraph (2) of Subsection A of Section 7-20F-2 NMSA 1978, if a property tax at a rate necessary to comply with the provisions of Subsection A of this section has not been approved by the voters of the county, the question submitted to the voters shall be the question of imposing a county correctional facility gross receipts tax, a county correctional facility compensating tax and a property tax at a rate necessary for the issuance of general obligation bonds of the county sufficient to comply with the provisions of the County Correctional Facility Gross Receipts Tax Act; or

                (2) in a class B county described in Paragraph (3) of Subsection A of Section 7-20F-2 NMSA 1978, the question to be submitted to the voters is "Shall a county correctional facility gross receipts tax and a county correctional facility compensating tax be imposed to repay bonds that will be issued by the New Mexico finance authority in an amount sufficient to pay at least one-half of the costs of designing, constructing, equipping, furnishing and otherwise improving the new county correctional facility?".

          [F.] G. The question shall be submitted to the voters at any general election or special election called for that purpose by the county board.

          [G.] H. The election upon the question shall be called, held, conducted and canvassed in substantially the same manner as may be provided by law for general elections.             [H.] I. If the question of imposing the county correctional facility gross receipts tax and a property tax, if the question includes a property tax, fails, the board shall not again propose imposition of a county correctional facility gross receipts tax for a period of one year after the election.

          [I.] J. Revenue produced by the imposition of a county correctional facility gross receipts tax and a county correctional facility compensating tax that is in excess of the annual principal and interest due on bonds secured by a pledge of the county correctional facility gross receipts tax and the county correctional facility compensating tax may be accumulated in a debt service reserve account until an amount equal to the maximum amount permitted pursuant to the provisions of the United States treasury regulations is accumulated in the debt service reserve account. After the debt service reserve account requirements have been met, the excess revenue shall be accumulated in an extraordinary mandatory redemption fund and annually used to redeem the bonds prior to their stated maturity date.

          [J.] K. When all outstanding bonds have been paid, whether from the debt service reserve, the redemption fund or maturity, the ordinance shall be repealed if the [county correctional facility gross receipts tax] revenue from the county correctional facility gross receipts tax and county correctional facility compensating tax is no longer required for the purposes for which it may be used pursuant to the provisions of the County Correctional Facility Gross Receipts Tax Act.

          [K.] L. The repeal of an ordinance imposing a county correctional facility gross receipts tax and a county correctional facility compensating tax shall state that the repeal shall be effective on January 1 or July 1, whichever occurs first following the date the department is notified personally or by mail by the county of the repeal."

     Section 69. Section 7-20F-5 NMSA 1978 (being Laws 1993, Chapter 303, Section 5) is amended to read:

     "7-20F-5. COLLECTION BY DEPARTMENT--TRANSFER OF

PROCEEDS--DEDUCTIONS.--

          A. The department shall collect the county correctional facility gross receipts tax in the same manner and at the same time it collects the state gross receipts tax. The department shall collect the county correctional facility compensating tax in the same manner and at the same time it collects the compensating tax.

          B. The department shall remit to each county for which it is collecting a county correctional facility gross receipts tax and a county correctional facility compensating tax the amount of the [tax] taxes collected, less any disbursement for tax credits, refunds and the payment of interest applicable to the [county correctional facility gross receipts tax] taxes. Transfer [of the tax] to a county shall be made within the month following the month in which the [tax is] taxes are collected."

     Section 70. Section 7-20F-7 NMSA 1978 (being Laws 1993, Chapter 303, Section 7) is amended to read:

     "7-20F-7. REVENUE BONDS--AUTHORITY TO ISSUE--ORDINANCE AUTHORIZING ISSUE--PLEDGE OF REVENUE.--

          A. In addition to any other law authorizing a county to issue revenue bonds, a county may issue revenue bonds pursuant to the County Correctional Facility Gross Receipts Tax Act for the purposes specified in that act. Revenue bonds issued pursuant to the County Correctional Facility Gross Receipts Tax Act may be referred to as "county correctional facility gross receipts tax revenue bonds".

          B. A county board, by majority vote, may adopt an ordinance providing for issuance of revenue bonds pursuant to the provisions of the County Correctional Facility Gross Receipts Tax Act, the principal and interest of which shall be paid from the revenue derived by the county from the county correctional facility gross receipts tax, the county correctional facility compensating tax and any other revenue that the county may dedicate to the payment of the revenue bonds.

          C. Revenue bonds or refunding revenue bonds issued as authorized pursuant to the County Correctional Facility Gross Receipts Tax Act are:

                (1) not general obligations of the county; and

                (2) collectible only from the county correctional facility gross receipts tax, the county correctional facility compensating tax and, if authorized, other properly pledged revenues, and each bond shall be payable solely from the properly pledged revenues and the bondholders shall not look to any other county fund for the payment of the interest and principal of the bonds."

     Section 71. Section 7-31-4 NMSA 1978 (being Laws 1959, Chapter 54, Section 4, as amended) is amended to read:

     "7-31-4. PRIVILEGE TAX LEVIED--COLLECTED BY DEPARTMENT--RATE--INTEREST OWNER'S LIABILITY TO STATE--INDIAN LIABILITY.--

          A. There is levied and shall be collected by the department a privilege tax on the business of every person severing products in this state. The measure of the tax shall be:

                (1) on oil and on oil and other liquid hydrocarbons removed from natural gas at or near the wellhead, except as provided in Paragraphs (4) and (5) of this subsection, [three and fifteen hundredths] four percent of the taxable value determined pursuant to Section 7-31-5 NMSA 1978;

                (2) on carbon dioxide, [three and fifteen hundredths] four percent of the taxable value determined pursuant to Section 7-31-5 NMSA 1978;

                (3) on natural gas, except as provided in Paragraphs (6) and (7) of this subsection, four percent of the taxable value determined pursuant to Section 7-31-5 NMSA 1978;

                (4) on the oil and on other liquid hydrocarbons removed from natural gas at or near the wellhead from a stripper well property, [one and fifty-eight hundredths] two percent of the taxable value determined pursuant to Section 7-31-5 NMSA 1978; provided that the average annual taxable value of oil was equal to or less than fifteen dollars ($15.00) per barrel in the calendar year preceding July 1 of the fiscal year in which the tax rate is to be imposed;

                (5) on the oil and on other liquid hydrocarbons removed from natural gas at or near the wellhead from a stripper well property, [two and thirty-six hundredths] three percent of the taxable value determined pursuant to Section 7-31-5 NMSA 1978; provided that the average annual taxable value of oil was greater than fifteen dollars ($15.00) per barrel but not more than eighteen dollars ($18.00) per barrel in the calendar year preceding July 1 of the fiscal year in which the tax rate is to be imposed;

                (6) on the natural gas removed from a stripper well property, two percent of the taxable value determined pursuant to Section 7-31-5 NMSA 1978; provided that the average annual taxable value of natural gas was equal to or less than one dollar fifteen cents ($1.15) per thousand cubic feet in the calendar year preceding July 1 of the fiscal year in which the tax rate is to be imposed; and

                (7) on the natural gas removed from a stripper well property, three percent of the taxable value determined pursuant to Section 7-31-5 NMSA 1978; provided that the average annual taxable value of natural gas was greater than one dollar fifteen cents ($1.15) per thousand cubic feet but not more than one dollar thirty-five cents ($1.35) per thousand cubic feet in the calendar year preceding July 1 of the fiscal year in which the tax rate is to be imposed.

          B. Every interest owner, for the purpose of levying this tax, is deemed to be in the business of severing products and is liable for this tax to the extent of his interest in the value of the products or to the extent of his interest as may be measured by the value of the products.

          C. Any Indian tribe, Indian pueblo or Indian is liable for this tax to the extent authorized or permitted by law."

     Section 72. Section 9-11-6.2 NMSA 1978 (being Laws 1995, Chapter 31, Section 3) is amended to read:

     "9-11-6.2. ADMINISTRATIVE REGULATIONS, RULINGS, INSTRUCTIONS AND ORDERS--PRESUMPTION OF CORRECTNESS.--

          A. The secretary is empowered and directed to issue and file as required by law all regulations, rulings, instructions or orders necessary to implement and enforce any provision of any law the administration and enforcement of which the department, the secretary, any division of the department or any director of any division of the department is charged, including all rules and regulations necessary by reason of any alteration of any such law. In order to accomplish its purpose, this provision is to be liberally construed.

          B. Directives issued by the secretary shall be in form substantially as follows:

                (1) regulations shall be written statements of the secretary of general application, interpreting and exemplifying or implementing the [statues] statutes to which they relate and may be issued in response to a request from a taxpayer or other interested party;

                (2) rulings shall be written statements of the secretary, of limited application to one or a small number of persons, interpreting the statutes to which they relate, ordinarily issued in response to a request for clarification of the consequences of a specified set of circumstances;

                (3) orders shall be written statements of the secretary or a hearing officer or other delegate of the secretary to implement a decision after a hearing; and

                (4) instructions shall be other written statements or directives of the secretary or secretary's delegate not dealing with the merits of any law but otherwise in aid of the accomplishment of the duties of the secretary.

          C. To be effective, any ruling or regulation issued by the secretary shall be reviewed by the attorney general or other legal counsel of the department prior to being filed as required by law, and the fact of the review shall be indicated on the ruling or regulation.

          D. To be effective, a regulation shall first be issued as a proposed regulation and filed for public inspection in the office of the secretary. Unless otherwise provided by statute, no regulation affecting any person or agency outside the department shall be adopted, amended or repealed without a public hearing on the proposed action before the secretary or a hearing officer designated by the secretary. The public hearing shall be held in Santa Fe unless otherwise permitted by statute. Notice of the subject matter of the regulation, the action proposed to be taken, the time and place of the hearing, the manner in which interested parties may present their views and the method by which copies of the proposed regulation, proposed amendment or repeal of an existing regulation may be obtained shall be published at least thirty days prior to the hearing date in [a] the New Mexico register and mailed at least thirty days prior to the hearing date to all persons who have made a written request for advance notice of hearing. After the proposed regulation has been on file for not less than sixty days and a public hearing on the proposed action has been held by the secretary or a hearing officer designated by the secretary, the secretary may issue it as a final regulation by signing the regulation and filing the regulation in the manner required by law. The secretary shall not delegate the authority to sign regulations.

          E. In addition to filing copies of regulations with the state records center as required by law, the secretary shall maintain in the office of the secretary a duplicate official set of current and superseded regulations, a set of current and superseded rulings and such additional sets of those regulations and rulings as appear necessary, which duplicate or additional sets shall be available for inspection by the public, but superseded regulations need be maintained for no longer than ten years from the date of supersession.

          F. The secretary shall develop and maintain a file of names and addresses of individuals and professional and industry groups having an interest in the promulgation of new, revised or proposed regulations. At convenient times, the secretary shall distribute to these persons all such regulations and all pertinent rulings, making such charges as will defray the expense incurred in their physical preparation and mailing. Such charges are appropriated to the department to defray the costs of preparing and distributing regulations and rulings.

          G. Any regulation, ruling, instruction or order issued by the secretary or order or instruction issued by a hearing officer or other delegate of the secretary is presumed to be a proper implementation of the provisions of the laws that are charged to the department, the secretary, any division of the department or any director of any division of the department.

          H. The extent to which regulations, rulings and orders will have retroactive effect shall be stated and, if no such statement is made, they will be applied prospectively only."

     Section 73. Section 60-1-15 NMSA 1978 (being Laws 1933, Chapter 55, Section 9, as amended) is amended to read:

     "60-1-15. TAX LEVIED--CERTAIN LICENSE FEES AND TAXES

PROHIBITED.--

          A. In addition to the daily tax provided in Section 60-1-8 NMSA 1978, a tax of two and three-sixteenths percent is levied on the gross amount wagered each day at each place where horse racing is conducted by any state fair association designated by law that in good faith conducts a public fair and exhibition of stock and farming products or where horse racing for profit is held. The tax shall be paid from the commissions of the licensee.

          [B. To encourage the improvement of horse racing facilities for the benefit of the public, breeders and horse owners and to increase the revenue to the state from the increase in pari-mutuel wagering and tourism resulting from these improvements, not more than two percent of the tax levied under Subsection A of this section:

                (1) for the first two hundred fifty thousand dollars ($250,000) of daily handle only, shall be offset for class A licensees by the amount that each licensee expends for capital improvements or in financing term investment in capital improvements at existing racetrack facilities and for class B licensees by the amount that the licensee expends for capital improvements, not to exceed fifty percent of the tax levied under this section, and by the amount the licensee expends for advertising, marketing and promoting horse racing in the state, not to exceed fifty percent of the tax levied under this section. The offset provided in this paragraph shall also apply to the daily handle generated at its facility by a licensee engaged solely in simulcasting pursuant to Section 60-1-25 NMSA 1978. The term "capital improvement" means any capital investment in items that are subject to depreciation under the United States Internal Revenue Code of 1986 and are approved by the state racing commission; and

                (2) for class A licensees for the period through June 30, 1995 for the total amount wagered each day on amounts in excess of two hundred fifty thousand dollars ($250,000) but not in excess of three hundred fifty thousand dollars ($350,000), shall be offset by the amount that each licensee expends for advertising, marketing and promoting horse racing in the state. The offset provided in this paragraph shall also apply to the daily handle generated at its facility by a licensee engaged solely in simulcasting pursuant to Section 60-1-25 NMSA 1978. The licensee is required to keep accurate records of any expenditures made pursuant to this paragraph, and the state auditor is required to audit the expenditures and submit his report to the state racing commission.]

          B. The revenue from the tax imposed pursuant to Subsection A of this section shall be distributed as follows:

                [C.] (1) to compensate for the additional municipal services required by the location of a racetrack within a municipality, an amount of revenue [derived from the tax levied on such a racetrack under Subsection A of this section, above the amount offset by capital expenditures and advertising as provided in Subsection B of this section] determined pursuant to the provisions of Section 60-1-15.2 NMSA 1978 shall be transferred to the municipal treasurer of the municipality in which the track generating the revenue is located for expenditure by the municipality in providing those additional municipal services. [The amount to be transferred shall be determined in accordance with the provisions of Section 60-1-15.2 NMSA 1978];

               (2) an amount equal to fifty percent of the tax levied pursuant to Subsection A of this section on the first two hundred fifty thousand dollars ($250,000) of daily handle of class A licensees plus an amount equal to fifty percent of the tax levied by Subsection A of this section for class B licensees shall be transferred to the state fair for expenditure on capital improvements at the state fairgrounds other than improvements of the casino and racetrack and related facilities; and

                (3) the amount remaining after the distributions pursuant to Paragraphs (1) and (2) of this subsection shall be deposited in the general fund.

          [D.] C. Accurate records shall be kept by the licensee to show all commissions, total gross amounts wagered and breakage, as well as other information the state racing commission may require. Records shall be open to inspection and shall be audited by the commission or any of its authorized representatives. Should [any] a licensee fail to keep records accurately and intelligibly, the commission may prescribe the method in which the licensee shall keep records.

          [E. All remaining revenues collected as a result of the tax on the gross amount wagered shall be deposited in the state general fund.

          F.] D. Notwithstanding any other provision of law, no political subdivision of this state may impose any occupational tax against a racetrack operating under authority of a license granted by the state racing commission. No political subdivision may levy an excise tax against any racetrack operating under authority of a license granted by the state racing commission, except that [taxes imposed pursuant to the County Gross Receipts Tax Act, the County Fire Protection Excise Tax Act, the County Sales Tax Act, the Municipal Gross Receipts Tax Act, the Supplemental Municipal Gross Receipts Tax Act and the Special Municipal Gross Receipts Tax Act] local option gross receipts taxes may be imposed to the extent permitted by law."

     Section 74. Section 60-2A-23 NMSA 1978 (being Laws 1980, Chapter 90, Section 23, as amended) is amended to read:

     "60-2A-23. [PRIVILEGE TAX] REGULATORY FEES ON PROMOTIONS.--

          A. In addition to any other taxes or fees provided by law, there is imposed upon every promoter for the privilege of promoting a professional [contests] contest a [tax at the rate of] regulatory fee in an amount determined pursuant to the rules of the commission to be sufficient to cover the costs of regulating the contest; provided that the fee may not exceed four percent of the total gross receipts of any professional contest conducted live in New Mexico.

          B. The commission shall adopt rules and regulations for the administration, collection and enforcement of the [tax] fee imposed [in] pursuant to this section.

          C. As used in this section, "total gross receipts of any professional contest" includes:

                (1) the gross price charged for the sale, lease or other exploitation of broadcasting, television or motion picture rights of [such] the professional contest without any deductions for commissions, brokerage fees, distribution fees, advertising or other expenses or charges;

                (2) the face value of all tickets sold and complimentary tickets issued; and

                (3) any sums received as consideration for holding a professional contest at a particular location."

     Section 75. Section 60-2A-24 NMSA 1978 (being Laws 1980, Chapter 90, Section 24) is amended to read:

     "60-2A-24. ATHLETIC COMMISSION FUND.--The proceeds of the [privilege tax] regulatory fee on promotions and of the [privilege tax] supervisory fee on closed-circuit television or motion pictures, together with any license fees or other fees authorized [under] pursuant to the Professional Athletic Competition Act, shall be deposited with the state treasurer to the credit of the "athletic commission fund", which is hereby created. Expenditures from the athletic commission fund shall only be made on vouchers issued and signed by the person designated by the commission upon warrants drawn by the department of finance and administration in accordance with the budget approved by the department of finance and administration."

     Section 76. Section 60-2A-25 NMSA 1978 (being Laws 1980, Chapter 90, Section 25) is amended to read:

     "60-2A-25. TIME OF PAYMENT OF [PRIVILEGE TAX] REGULATORY FEE.--

          A. Any person upon whom the [privilege tax] regulatory fee is imposed [by] pursuant to Section [23 of the Professional Athletic Competition Act] 60-2A-23 NMSA 1978 shall, within seventy-two hours after the completion of any professional contest for which an admission fee is charged and received or a contribution is requested and received, furnish to the commission a written report on forms prescribed by the commission showing:

                (1) the number of tickets sold and issued or sold or issued for [such] the professional contest;

                (2) the amount of the gross receipts or value thereof;

                (3) the amount of gross receipts derived from the sale, lease or other exploitation of broadcasting, motion picture or television rights of [such] the professional contest, [and] without any deductions for commissions, brokerage fees, distribution fees, advertising or any other expenses or charges; and

                (4) such other matters as the commission may prescribe.

          B. The commission or any of its authorized employees may inspect the books, ticket stubs or any other data necessary for the proper enforcement of the [privilege tax] regulatory fee and supervisory fee imposed [in] pursuant to the Professional Athletic Competition Act."

     Section 77. Section 60-2A-26 NMSA 1978 (being Laws 1980, Chapter 90, Section 26, as amended) is amended to read:

     "60-2A-26. [PRIVILEGE TAX] SUPERVISORY FEE ON CLOSED-CIRCUIT TELECASTS OR MOTION PICTURES--REPORT TO COMMISSION.--

          A. Any person who charges and receives an admission fee for exhibiting any live professional contest on a closed-circuit telecast or motion picture shall, within seventy-two hours after the event, furnish to the commission a verified written report on a form prescribed by the commission showing the number of tickets sold and issued or sold or issued and the gross receipts for the exhibition without any deductions.

          B. There is imposed a [tax] supervisory fee upon the privilege of exhibiting for an admission fee any live professional contest [except a live professional boxing contest held in New Mexico between the effective date of this 1997 act and July 1, 1999] on a closed-circuit telecast or motion picture. [The rate of the tax imposed is] A supervisory fee is imposed in an amount determined pursuant to the rules of the commission to be sufficient to cover the costs of supervising the exhibition; provided that the fee may not exceed five percent of the gross receipts derived from the exhibition.

          C. The [privilege tax] fee imposed [in] pursuant to this section shall be administered, collected, enforced and the proceeds deposited as provided in Section 60-2A-24 NMSA 1978."

     Section 78. Section 60-2A-27 NMSA 1978 (being Laws 1980, Chapter 90, Section 27) is amended to read:

     "60-2A-27. PENALTY--NONPAYMENT OF FEE.--Any person who willfully attempts to evade or defeat any [tax] regulatory or supervisory fee or the payment thereof imposed [by] pursuant to the Professional Athletic Competition Act is guilty of a fourth degree felony."

     Section 79. Section 60-2A-28 NMSA 1978 (being Laws 1980, Chapter 90, Section 28) is amended to read:

     "60-2A-28. CIVIL PENALTY.--In the case of failure due to negligence or disregard of rules and regulations of the commission, but without intent to defraud, to pay when due any amount of [tax] regulatory or supervisory fee required to be paid by the Professional Athletic Competition Act, there shall be added to the amount two percent per month or a fraction [thereof] of a month from the date the tax was due or from the date the report was required to be filed, not to exceed ten percent [thereof] of the fee due."

     Section 80. A new section of the Professional Athletic Competition Act is enacted to read:

     "[NEW MATERIAL] COOPERATIVE AGREEMENTS WITH TRIBAL GOVERNMENTS.--

          A. The commission may enter into a cooperative agreement with an Indian nation, tribe or pueblo whose tribal lands lie wholly or partly in New Mexico for the exchange of information and for the reciprocal, joint or common direction, management or control of professional contests conducted, held or given in New Mexico. To be effective, an agreement must be signed by the governor of this state.

          B. Money collected by the commission on behalf of an Indian nation, tribe or pueblo in accordance with an agreement entered into pursuant to this section is not money of this state and shall be collected and disbursed in accordance with the terms of the agreement, notwithstanding any other provision of law.

          C. Nothing in an agreement entered into pursuant to this section shall be construed as an assertion or an admission by either this state or by the Indian nation, tribe or pueblo that the fees of one have precedence over the fees of the other when the person, event or transaction is subject to the jurisdiction of both governments. An agreement entered into pursuant to this section shall be construed solely as an agreement between the two party governments and shall not alter or affect the government-to-government relations between this state and any other Indian nation, tribe or pueblo."

     Section 81. Section 66-3-3.1 NMSA 1978 (being Laws 1992, Chapter 106, Section 7, as amended) is amended to read:

     "66-3-3.1. TAX IDENTIFICATION CARD.--The department shall implement a system for identifying motor carriers subject to the weight distance tax and special fuel user permit requirements, including an identifying number for each motor carrier covered by the system. Annually, the department shall issue [a tax identification card in] one or more [copies to] original tax identification cards sufficient for the number of vehicles specified by each motor carrier who applies for a tax identification card; provided that [the card shall be renewed automatically each year as long as] the motor carrier continues to be subject to and in compliance with the weight distance tax and special fuel user permit requirements. The tax identification card shall contain the department's identifying number for the motor carrier and [such] other information [as] that the department deems necessary."

     Section 82. Section 66-6-1 NMSA 1978 (being Laws 1978, Chapter 35, Section 336, as amended) is amended to read:

     "66-6-1. MOTORCYCLES--REGISTRATION FEES.--

          A. For the registration of motorcycles, the department shall collect the following fees for a twelve-month registration period:

                (1) for a motorcycle having not more than two wheels in contact with the ground, [eleven dollars ($11.00)] fifteen dollars ($15.00); and

                (2) for a motorcycle having three wheels in contact with the ground or having a sidecar, [eleven dollars ($11.00)] fifteen dollars ($15.00).

          B. In addition to other fees required by this section, the department shall collect for each motorcycle an annual tire recycling fee of one dollar ($1.00) for a twelve-month registration period."

     Section 83. Section 66-6-2 NMSA 1978 (being Laws 1978, Chapter 35, Section 337, as amended) is amended to read:

     "66-6-2. PASSENGER VEHICLES--REGISTRATION FEES.--For the registration of motor vehicles other than motorcycles, trucks, buses and tractors, the division shall collect the following fees for each twelve-month registration period:

          A. for a vehicle whose gross factory shipping weight is not more than two thousand pounds, [twenty dollars ($20.00)] twenty-seven dollars ($27.00); provided, however, that after five years of registration, calculated from the date when the vehicle was first registered in this or another state, the fee is [sixteen dollars ($16.00)] twenty-one dollars ($21.00);

          B. for a vehicle whose gross factory shipping weight is more than two thousand but not more than three thousand pounds, [twenty-nine dollars ($29.00)] thirty-nine dollars ($39.00); provided, however, that after five years of registration, calculated from the date when the vehicle was first registered in this or another state, the fee is [twenty-three dollars ($23.00)] thirty-one dollars ($31.00);

          C. for a vehicle whose gross factory shipping weight is more than three thousand pounds, [forty-two dollars ($42.00)] fifty-six dollars ($56.00); provided, however, that after five years of registration, calculated from the date when the vehicle was first registered in this or another state, the fee is [thirty-four dollars ($34.00)] forty-five dollars ($45.00); and

          D. for a vehicle registered pursuant to the provisions of this section, a tire recycling fee of one dollar fifty cents ($1.50)."

     Section 84. Section 66-6-3 NMSA 1978 (being Laws 1978, Chapter 35, Section 338, as amended) is amended to read:

     "66-6-3. TRAILERS--REGISTRATION FEES.--

          A. For the registration of freight trailers and utility trailers, the following fees shall be collected:

                (1) for the permanent registration or reregistration of freight trailers, [ten dollars ($10.00)] thirteen dollars ($13.00);

                (2) for the annual registration of each utility trailer not permanently registered, [five dollars ($5.00) plus one dollar ($1.00)] seven dollars ($7.00) plus one dollar ($1.00) for each one hundred pounds or major fraction thereof of actual empty weight over five hundred pounds actual empty weight; except that in the case of travel trailers, actual empty weight shall be one-half of the gross factory shipping weight or, if gross factory shipping weight is not available, then actual empty weight shall be one-half of actual gross vehicle weight; and

                (3) for the permanent registration of utility trailers not used in commerce that have a gross vehicle weight of less than six thousand one pounds, [twenty-five dollars ($25.00) plus five dollars ($5.00)] thirty-three dollars ($33.00) plus seven dollars ($7.00) for each one hundred pounds or major fraction thereof of actual empty weight over five hundred pounds actual empty weight; except that in the case of travel trailers, actual empty weight shall be one-half of the gross factory shipping weight or, if gross factory shipping weight is not available, then actual empty weight shall be one-half of actual gross vehicle weight and for the reregistration of such utility trailers upon their sale or transfer, [five dollars ($5.00)] seven dollars ($7.00).

          B. At the option of the owner of a fleet of fifty or more utility trailers wishing to register them in New Mexico, the [motor vehicle] division shall issue a registration and registration plate for each trailer in the fleet, the registration and registration plate to expire on the last day of the final month of a five-year period. Registrations and registration plates shall be issued for five years only if the owner of the trailers meets the following requirements:

                (1) application is made on forms prescribed by the [motor vehicle] division and payment of the proper fee is made;

                (2) upon the option of the director, presentation is made at the time of registration of a surety bond, certificate of deposit or of other financial security; and

                (3) payment is made by the fleet owner of all registration fees due each year prior to the expiration date. If such fees are not paid, all registrations and registration plates in the fleet shall be canceled."

     Section 85. Section 66-6-4 NMSA 1978 (being Laws 1978, Chapter 35, Section 339, as amended) is amended to read:

    "66-6-4. REGISTRATION FEES--TRUCKS, TRUCK TRACTORS, ROAD TRACTORS AND BUSES.--

         A. Within their respective jurisdictions, the motor vehicle division and the motor transportation division of the department of public safety shall charge registration fees for trucks, truck tractors, road tractors and buses, except as otherwise provided by law, according to the schedule of Subsection B of this section.

         B. Declared Gross Weight          Fee

                001 to 4,000 [$ 30] $   40

              4,001 to  6,000              [41]     55

              6,001 to  8,000              [52]     69

              8,001 to 10,000              [63]     84

             10,001 to 12,000              [74]     99

             12,001 to 14,000              [85]     113

             14,001 to 16,000              [96]     128

             16,001 to 18,000              [107]    143

             18,001 to 20,000              [118]    157

             20,001 to 22,000              [129]    172

             22,001 to 24,000              [140]    187

             24,001 to 26,000              [151]    201

             26,001 to 48,000              [88.50]  118

             48,001 and over               [129.50] 172.

         C. All trucks whose declared gross weight or whose gross vehicle weight is less than twenty-six thousand pounds, after five years of registration, calculated from the date when the vehicle was first registered in this or another state, shall be charged registration fees at eighty percent of the rate set out in Subsection B of this section.

         D. All trucks with a gross vehicle weight of more than twenty-six thousand pounds and all truck tractors and road tractors used to tow freight trailers shall be registered on the basis of combination gross vehicle weight.

         E. All trucks with a gross vehicle weight of twenty-six thousand pounds or less shall be registered on the basis of gross vehicle weight. A trailer, semitrailer or pole trailer towed by a truck of such gross vehicle weight shall be classified as a utility trailer for registration purposes unless otherwise provided by law.

         F. All farm vehicles having a declared gross weight of more than six thousand pounds shall be charged registration fees of two-thirds of the rate of the respective fees provided in this section and shall be issued distinctive registration plates. "Farm vehicle" means [any] a vehicle owned by a person whose principal occupation is farming or ranching and which vehicle is used principally in the transportation of farm and ranch products to market and farm and ranch supplies and livestock from the place of purchase to farms and ranches in this state; provided that the vehicle is not used for hire.

         G. In addition to other registration fees imposed by this section, beginning July 1, 1994, there is imposed at the time of registration an annual tire recycling fee of one dollar fifty cents ($1.50) on each vehicle subject to a registration fee pursuant to this section, except for vehicles with a declared gross weight of greater than twenty-six thousand pounds upon which registration fees are imposed by Subsection B of this section.

         H. [Four] Three percent of registration fees of trucks having from twenty-six thousand one pounds to forty-eight thousand pounds declared gross vehicle weight is to be transferred to the tire recycling fund pursuant to the provisions of Section 66-6-23 NMSA 1978.

         I. [Five] Three and seventy-five hundredths percent of registration fees of trucks in excess of forty-eight thousand pounds declared gross vehicle weight is to be transferred to the tire recycling fund pursuant to the provisions of Section 66-6-23 NMSA 1978."

    Section 86. Section 66-6-5 NMSA 1978 (being Laws 1978, Chapter 35, Section 340, as amended) is amended to read:

    "66-6-5. BUS REGISTRATION FEES.--All buses shall pay the registration fees provided in Section 66-6-4 NMSA 1978, except for school buses and buses operated by religious or nonprofit charitable organizations for the express purpose of the organization for which the annual registration fee is [five dollars ($5.00)] seven dollars ($7.00). In addition to other registration fees imposed by this section, beginning July 1, 1994, there is imposed at the time of registration an annual tire recycling fee of fifty cents ($.50) per wheel that is in contact with the ground on each vehicle subject to a registration fee pursuant to this section."

    Section 87. Section 66-6-8 NMSA 1978 (being Laws 1978, Chapter 35, Section 343, as amended) is amended to read:

    "66-6-8. BUS REGISTRATION--AGRICULTURAL LABOR FEES.--

         A. A bus that has a normal seating capacity of forty passengers or less and that is used exclusively for the transportation of agricultural laborers may be registered upon payment to the division of a fee of [twenty-five dollars ($25.00)] thirty-three dollars ($33.00).

         B. In addition to the registration fee imposed by this section, there is imposed at the time of registration an annual tire recycling fee of fifty cents ($.50) per wheel that is in contact with the ground on each vehicle subject to a registration fee pursuant to this section.

         C. Application for registration of a bus [under] pursuant to this section shall be made in the form prescribed by the division and shall be accompanied by an affidavit that the bus will be used exclusively for the transportation of agricultural laborers. Upon registration, the bus is exempt from tariff-filing requirements of the public regulation commission."

    Section 88. Section 66-6-9 NMSA 1978 (being Laws 1978, Chapter 35, Section 344) is amended to read:

    "66-6-9. FEE FOR FERTILIZER TRAILERS.--In lieu of the registration fee provided for in Section [64-6-3 NMSA 1953] 66-6-3 NMSA 1978, the division shall collect a registration fee of [five dollars ($5.00)] seven dollars ($7.00) for each trailer used on the highways of this state by any commercial fertilizer company solely for the delivery or distribution of liquid fertilizer to a farmer; provided [such] the trailer has an empty weight not in excess of three thousand five hundred pounds."

    Section 89. Section 66-6-10 NMSA 1978 (being Laws 1978, Chapter 35, Section 345, as amended) is amended to read:

    "66-6-10. REGISTRATION FEES FOR MANUFACTURED HOMES AND TRAVEL TRAILERS--DIVISION TO NOTIFY COUNTY ASSESSOR OF MANUFACTURED HOME REGISTRATION.--

         A. For the registration of each manufactured home, the division shall collect a fee of [five dollars ($5.00)] seven dollars ($7.00).

         B. The division shall compile and transmit to each county assessor each year a list of the manufactured homes that are registered with the division showing [his] the assessor's county as the principal location of the manufactured home. The listing shall include all data pertinent to and necessary for the county assessor to value the manufactured homes in accordance with valuation [regulations] rules promulgated by the property tax division [under] pursuant to Section 7-36-26 NMSA 1978. The listing required by this subsection shall be transmitted no later than thirty days following the close of the annual registration process and shall be supplemented no less often than every thirty days to provide information to the appropriate county assessors on registrations occurring throughout the year.

         C. At the time a person registers [his] a manufactured home and pays the fee required by this section, [he] the person shall be notified in writing by the division that the information required by Subsection B of this section will be furnished to the county assessor of the county of the principal location of the manufactured home and that the manufactured home is subject to property taxation under the Property Tax Code."

    Section 90. Section 66-6-12 NMSA 1978 (being Laws 1978, Chapter 35, Section 347) is amended to read:

    "66-6-12. FEES FOR SCHOOL BUSES.--

         A. Registration fees for school buses used solely for the purpose of transportation of school children and other school activities shall be [five dollars ($5.00)] seven dollars ($7.00) a year.

         B. The application for registration of a school bus shall be accompanied by the certificate of the director of transportation of the [state department of] public education department stating that the vehicle is used solely and exclusively as a school bus. [No] A passenger car shall not be considered [as] a school bus for the purposes of this section."

    Section 91. Section 66-6-23.1 NMSA 1978 (being Laws 1999, Chapter 49, Section 8) is amended to read:

    "66-6-23.1. FORMULAIC DISTRIBUTION.--

         A. The balance from Section 66-6-23 NMSA 1978 shall be transferred or distributed by the state treasurer on or before the last day of the month next after its receipt, as follows:

             (1) [sixty-six and five hundred forty-one thousandths] seventy-four and sixty-five hundredths percent shall be distributed to the state road fund;

             (2) [ten and thirty-two thousandths] seven and six-tenths percent shall be transferred to each county in the proportion, determined by the department in accordance with Subsection B of this section, that the registration fees for vehicles in that county are to the total registration fees for vehicles in all counties;

             (3) [ten and thirty-two thousandths] seven and six-tenths percent shall be transferred to the counties, with each county receiving an amount equal to the proportion, determined by the secretary of [highway and] transportation in accordance with Subsection D of this section, that the mileage of public roads maintained by the county is to the total mileage of public roads maintained by all counties of the state. Amounts distributed to each county in accordance with this paragraph shall be credited to the respective county road fund and be used for the improvement and maintenance of the public roads in the county and to pay for the acquisition of rights of way and material pits. For this purpose, the board of county commissioners of each of the respective counties shall certify by April 1 of each year to the secretary of [highway and] transportation the total mileage as of April 1 of that year; provided that in their report, the boards of county commissioners shall identify each of the public roads maintained by them by name, route and location. By agreement and in cooperation with the [state highway and] department of transportation [department], the boards of county commissioners of the various counties may use or designate any of the funds provided in this paragraph for [any] a federal aid program;

             (4) [five and three hundred fifty-eight thousandths] four and six-hundredths percent shall be allocated among the counties in the proportion, determined by the department in accordance with Subsection B of this section, that the registration fees for vehicles in that county are to the total registration fees for vehicles in all counties. The amount allocated to each county shall be transferred to the incorporated municipalities within the county in the proportion, determined by the department of finance and administration in accordance with Subsection C of this section, that the sum of net taxable value, as that term is defined in the Property Tax Code, plus the assessed value, as that term is used in the Oil and Gas Ad Valorem Production Tax Act and in the Oil and Gas Production Equipment Ad Valorem Tax Act, determined for the incorporated municipality is to the sum of net taxable value plus assessed value determined for all incorporated municipalities within the county. Amounts transferred to incorporated municipalities pursuant to the provisions of this paragraph shall be used for the construction, maintenance and repair of streets within the municipality and for payment of paving assessments against property owned by federal, county or municipal governments. In [any] a county in which there are no incorporated municipalities, the amount allocated pursuant to this paragraph shall be transferred to the county government road fund and used in accordance with the provisions of Paragraph (3) of this subsection; and

             (5) [eight and thirty-seven thousandths] six and nine-hundredths percent shall be allocated among the counties in the proportion, determined by the department of finance and administration in accordance with Subsection C of this section, that the registration fees for vehicles in that county are to the total registration fees for vehicles in all counties. The amount allocated to each county shall be transferred to the county and incorporated municipalities within the county in the proportion, determined by the department of finance and administration in accordance with Subsection B of this section, that the computed taxes due for the county and each incorporated municipality within the county bear to the total computed taxes due for the county and incorporated municipalities within the county. For the purposes of this paragraph, the term "computed taxes due" for [any] a jurisdiction means the sum of the net taxable value, as that term is defined in the Property Tax Code, plus the assessed value, as that term is used in the Oil and Gas Ad Valorem Production Tax Act and in the Oil and Gas Production Equipment Ad Valorem Tax Act, for that jurisdiction multiplied by an average of the rates for residential and nonresidential property imposed for that jurisdiction pursuant to Subsection B of Section 7-37-7 NMSA 1978.

         B. To carry out the provisions of this section, during the month of June of each year:

             (1) the department shall determine and certify to the department of finance and administration the proportions [which] that the department is required to determine pursuant to Subsection A of this section using information for the preceding calendar year on the number of vehicles registered in each county based on the address of the owner or place where the vehicle is principally located, the registration fees for the vehicles registered in each county, the total number of vehicles registered in the state and the total registration fees for all vehicles registered in the state; and

             (2) the department of finance and administration shall determine the proportions that the department of finance and administration is required to determine pursuant to [Subsection B of this section] this subsection based upon the net taxable value, as that term is defined in the Property Tax Code, and the assessed value, as that term is used in the Oil and Gas Ad Valorem Production Tax Act and the Oil and Gas Production Equipment Ad Valorem Tax Act, for the preceding tax year and the tax rates imposed pursuant to Subsection B of Section 7-37-7 NMSA 1978 in the preceding September.

         C. By June 30 of each year, the department of finance and administration shall determine the appropriate percentage of money to be transferred to each county and municipality for each purpose in accordance with Subsection A of this section based upon the proportions determined by or certified to the department of finance and administration. The percentages determined shall be used to compute the amounts to be transferred to the counties and municipalities during the succeeding fiscal year.

         D. The board of county commissioners of each of the respective counties shall, by April 1 of every year, certify reports to the secretary of [highway and] transportation of the total mileage of public roads maintained by each county as of April 1 of every year; provided that in their reports, the boards of county commissioners shall identify each of the public roads maintained by them by name, route and location. By July 1 of every year, the secretary of [highway and] transportation shall verify the reports of the counties and revise, if necessary, the total mileage of public roads maintained by each county. The mileage verified by the secretary of [highway and] transportation shall be the official mileage of public roads maintained by each county. Distribution of amounts to [any] a county for road purposes shall be made in accordance with this section.

         E. If a county has not made the required mileage certification pursuant to Section 67-3-28.3 NMSA 1978 by April 1 of any year, the secretary of [highway and] transportation shall estimate the mileage maintained by those counties for the purpose of making distribution to all counties, and the amount calculated to be distributed each month to those counties not certifying mileage shall be reduced by one-third each month for that fiscal year, and that amount not distributed to those counties shall be distributed equally to all counties that have certified mileages."

    Section 92. Section 66-7-413 NMSA 1978 (being Laws 1978, Chapter 35, Section 484, as amended by Laws 2003, Chapter 141, Section 4 and by Laws 2003, Chapter 142, Section 23 and by Laws 2003, Chapter 359, Section 42 and also by Laws 2003, Chapter 361, Section 1) is amended to read:

    "66-7-413. PERMITS FOR EXCESSIVE SIZE AND WEIGHT--SPECIAL NOTIFICATION REQUIRED ON MOVEMENT OF MANUFACTURED HOMES.--

         A. The department of public safety and local highway authorities may, in their discretion, upon application in writing and good cause being shown, issue a special permit in writing authorizing the applicant to operate or move a vehicle or load of a size or weight exceeding the maximum specified in Sections 66-7-401 through 66-7-416 NMSA 1978 on [any] a highway under the jurisdiction of the state transportation commission or local authorities. Except for the movement of manufactured homes, a permit may be granted, in cases of emergency, for the transportation of loads on a certain unit or combination of equipment for a specified period of time not to exceed one year, and the permit shall contain the route to be traversed, the type of load to be transported and any other restrictions or conditions deemed necessary by the body granting the permit. In every other case, the permit shall be issued for a single trip and may designate the route to be traversed and contain any other restrictions or conditions deemed necessary by the body granting the permit. Every permit shall be carried in the vehicle to which it refers and shall be opened for inspection to any peace officer. It is a misdemeanor for [any] a person to violate [any of the conditions] a condition or [terms] term of the special permit.

         B. The department of public safety shall charge and collect, when the movement consists of [any] a load of a width of twenty feet or greater for a distance of five miles or more, the sum of three hundred dollars ($300) a day or fraction thereof to defray the cost of state or local police escort. The permit issued and the fee charged shall be based upon the entire movement at one time requiring police escort and not upon the number of vehicles involved.

         C. The department of public safety shall promulgate [regulations] rules in accordance with the State Rules Act pertaining to safety practices, liability insurance and equipment for escort vehicles provided by the motor carrier himself and for escort vehicles provided by a private business in this state.

             (1) [If a motor carrier provides his own escort vehicles and personnel] The department [shall not charge an escort fee but] of public safety shall provide the [motor carrier] escort personnel with a copy of applicable [regulations] rules and shall inspect the escort vehicles for the safety equipment required by the [regulations] rules. If the escort vehicles and personnel meet the requirements set forth in the [regulations and if the motor carrier holds a valid certificate of public convenience and necessity or permit, as applicable, issued pursuant to Chapter 65, Article 2 NMSA 1978] rules, the department of public safety shall issue the special permit, but shall not charge an escort fee. If the motor carrier provides its own escort vehicles and personnel, the department of public safety shall require that the motor carrier have a warrant issued by the public regulation commission.

             [(2) If the escort service is a private business, the business shall have applied to the public regulation commission for and been issued a permit or certificate to operate as a contract or common motor carrier pursuant to Chapter 65, Article 2 NMSA 1978. The public regulation commission shall supply copies of applicable regulations to the business by mail and shall supply additional copies upon request. If the escort vehicles and personnel meet the requirements set forth in the regulations and if the escort service holds a certificate, the special permit shall be issued and the department shall not charge an escort fee.

             (3)] (2) The movement of vehicles upon the highways of this state requiring a special permit and required to use an escort of the type noted in [Paragraphs (1) and (2)] Paragraph (1) of this subsection is subject to department of public safety authority and inspection at all times.

             [(4)] (3) The [state highway and] department of transportation [department] shall conduct engineering investigations and engineering inspections to determine which four-lane highways are safe for the operation or movement of manufactured homes without an escort. After making that determination, the [state highway and] department of transportation [department] shall hold public hearings in the area of the state affected by the determination, after which it may adopt [regulations] rules designating those four-lane highways as being safe for the operation or movement of manufactured homes without an escort. If [any] a portion of such a four-lane highway lies within the boundaries of a municipality, the [state highway and] department of transportation [department], after obtaining the approval of the municipal governing body, shall include such portions in its [regulations] rules.

         D. Except for the movement of manufactured homes, special permits may be issued for a single vehicle or combination of vehicles by the department of public safety for a period not to exceed one year for a fee of [sixty dollars ($60.00)] three hundred dollars ($300). The permits may allow excessive height, length and width for a vehicle or combination of vehicles or load thereon and may include a provision for excessive weight if [the operation is to be within the vicinity of a municipality] the distance between the origin and the destination of each single trip is thirty miles or less. Utility service vehicles, operating with special permits pursuant to this subsection, shall be exempt from prohibitions or restrictions relating to hours or days of operation or restrictions on movement because of poor weather conditions.

         E. Special permits for a single trip for a vehicle or combination of vehicles or load thereon of excessive weight, width, length and height may be issued by the department of public safety for a single vehicle for a fee of [fifteen dollars ($15.00)] twenty-five dollars ($25.00) plus the product of four cents ($.04) for each two thousand pounds in excess of eighty-six thousand four hundred pounds or major fraction thereof multiplied by the number of miles to be traveled by the vehicle or combination of vehicles on the highways of this state.

         F. If [the] a vehicle for which a permit is issued [under] pursuant to this section is a manufactured home, the department of public safety or local highway authority issuing the permit shall furnish the following information to the property tax division of the taxation and revenue department, which shall [then] forward the information:

             (1) to the county assessor of [any] a county from which a manufactured home is being moved, the date the permit was issued, the location being moved from, the location being moved to if within the same county, the name of the owner of the manufactured home and the identification and registration numbers of the manufactured home;

             (2) to the county assessor of any county in this state to which a manufactured home is being moved, the date the permit was issued, the location being moved from, the location being moved to, the name of the owner of the manufactured home and the registration and identification numbers of the manufactured home; and

             (3) to the owner of a manufactured home having a destination in this state, notification that the information required in Paragraphs (1) and (2) of this subsection is being given to the respective county assessors and that manufactured homes are subject to property taxation.

         G. Except as provided in Subsection H of this section, if the movement of a manufactured home originates in this state, [no] a permit shall not be issued [under] pursuant to Subsection F of this section until the owner of the manufactured home or [his] the authorized agent of the owner obtains and presents to the department of public safety proof that a certificate has been issued by the county assessor or treasurer of the county in which the manufactured home movement originates showing that either:

             (1) all property taxes due or to become due on the manufactured home for the current tax year or any past tax years have been paid, except for manufactured homes located on an Indian reservation; or

             (2) [no] liability for property taxes on the manufactured home [exists] does not exist for the current tax year or [any] a past tax [years] year, except for manufactured homes located on an Indian reservation.

         H. The movement of a manufactured home from the lot or business location of a manufactured home dealer to its destination designated by an owner-purchaser is not subject to the requirements of Subsection G of this section if the manufactured home movement originates from the lot or business location of the dealer and the manufactured home was part of [his] the dealer's inventory prior to the sale to the owner-purchaser; however, the movement of a manufactured home by a dealer or [his] the dealer's authorized agent as a result of a sale or trade-in from a nondealer-owner is subject to the requirements of Subsection G of this section whether the destination is the business location of a dealer or some other destination.

         I. [No] A permit shall not be issued [under] pursuant to this section for movement of a manufactured home whose width exceeds eighteen feet with no more than a six-inch roof overhang on the left side or twelve inches on the right side in addition to the eighteen-foot width of the manufactured home. Manufactured homes exceeding the limitations of this section shall only be moved on dollies placed on the front and the rear of the structure.

         J. The secretary of public safety may by [regulation] rule provide for movers of manufactured homes to self-issue permits for certain sizes of manufactured homes over specific routes [however, in no case may]. The cost of [each] a permit shall not be less than [fifteen dollars ($15.00)] twenty-five dollars ($25.00).

         K. The secretary of public safety may provide by [regulation] rule for dealers of implements of husbandry to self-issue permits for the movement of certain sizes of implements of husbandry from the lot or business location of the dealer over specific routes with specific escort requirements, if necessary, to a destination designated by an owner-purchaser or for purposes of a working demonstration on the property of a proposed owner-purchaser. The department of public safety shall charge a fee for each self-issued permit not to exceed fifteen dollars ($15.00).

         L. [Any] A private motor carrier requesting an oversize or overweight permit shall provide proof of insurance in at least the following amounts:

             (1) bodily injury liability, providing:

                  (a) fifty thousand dollars ($50,000) for each person; and

                  (b) one hundred thousand dollars ($100,000) for each accident; and

             (2) property damage liability, providing twenty-five thousand dollars ($25,000) for each accident.

         M. [Any common] A motor carrier requesting an oversize permit shall produce a copy of a [form "e" or other acceptable] warrant or single state registration receipts as evidence that the [common] motor carrier maintains the insurance minimums prescribed by the public regulation commission.

         N. The department of public safety may provide by rule the time periods during which a vehicle or load of a size or weight exceeding the maximum specified in Sections 66-7-401 through 66-7-416 NMSA 1978 may be operated or moved by a motor carrier on a highway under the jurisdiction of the state transportation commission or local authorities.

         O. Revenue from fees for special permits authorizing vehicles and loads of excessive size or weight to operate or move upon a highway under the jurisdiction of the state transportation commission or local authorities shall be collected for the department of transportation and transferred to the state road fund."

    Section 93. Section 66-7-413.4 NMSA 1978 (being Laws 2001, Chapter 20, Section 2) is amended to read:

    "66-7-413.4. PERMITS FOR EXCESSIVE WEIGHT.--

         A. In addition to the authority granted in Section 66-7-413 NMSA 1978, the motor transportation division of the department of public safety may issue special permits authorizing an increase of up to twenty-five percent in axle weight for liquid hauling tank vehicles whenever the liquid hauling tank vehicles would have to haul less than a full tank under the maximum weights authorized in Section 66-7-409 and 66-7-410 NMSA 1978. A special permit under this section may be issued for a single trip or for a year. The fee for the permits shall be thirty-five dollars ($35.00) for a single-trip permit and one hundred twenty dollars ($120) for an annual permit. Revenue from the permit fee shall be used to build, maintain, repair or reconstruct the highways and bridges of this state. Revenue from the permit shall be collected for the department of transportation and transferred to the state road fund.

         B. The special permits authorized by this section shall not be valid for transportation of excessive weights on the interstate system as currently defined in federal law or as that system may be defined in the future. [No] A special permit issued pursuant to this section shall not be valid for gross vehicle weights in excess of eighty-six thousand four hundred pounds or for [any] a combination vehicle.

         C. If the federal highway administration of the United States department of transportation gives official notice that money will be withheld or that this section violates the grandfather provision of 23 USCA 127, the secretary may withdraw all special permits and discontinue issuance of all special permits authorized in this section until such time that final determination is made. If the final determination allows the state to issue the special permits without sanction of funds or weight tables, [then] the secretary shall reissue the special permits previously withdrawn and make the special permits available pursuant to this section."

    Section 94. Section 67-3-59.2 NMSA 1978 (being Laws 1999 (1st S.S.), Chapter 9, Section 3) is amended to read:

    "67-3-59.2. HIGHWAY INFRASTRUCTURE FUND CREATED--PURPOSE.--

         A. The "highway infrastructure fund" is created in the state treasury and shall be administered by the department. The fund shall consist of money from various fees and taxes distributed to the fund. Earnings on investment of the fund shall be credited to the fund. Balances in the fund at the end of any fiscal year shall not revert and shall remain in the fund for the purposes authorized in this section.

         B. Money in the fund shall be used solely for acquisition of rights of way or planning, design, engineering, construction or improvement of state highway projects authorized pursuant to the provisions of Laws 1998, Chapter 84, [and] Subsections C through H of Section 1 of Chapter 85 of Laws 1998 and Sections 97 and 98 of this 2003 act and is appropriated to the department for expenditure for those purposes.

         C. The taxes and fees required by law to be distributed to the highway infrastructure fund may be pledged for the payment of state highway bonds issued pursuant to [Section] Sections 67-3-59.1 and 67-3-59.3 NMSA 1978 for the highway projects authorized in the laws specified in Subsection B of this section."

    Section 95. A new section of Chapter 67, Article 3 NMSA 1978, Section 67-3-59.3 NMSA 1978, is enacted to read:

    "67-3-59.3. [NEW MATERIAL] STATE TRANSPORTATION PROJECT BONDS--ISSUANCE--LIMITS--APPROVAL.--

         A. In order to provide funds to finance state transportation projects, the New Mexico finance authority, when directed by the state transportation commission, is authorized, subject to the limitations of this section, to issue bonds from time to time, payable from:

             (1) federal funds not otherwise obligated that are paid into the state road fund;

             (2) proceeds of the collection of additional taxes and fees that are required in this 2003 act to be paid into the state road fund and not otherwise pledged exclusively to the payment of outstanding bonds and debentures; and

             (3) taxes and fees required by law to be paid into the highway infrastructure fund.

         B. Upon authorization of state transportation projects and appropriation of net bond proceeds by the legislature, bonds in the total aggregate principal amount of one billion five hundred eighty-five million dollars ($1,585,000,000) may be issued by the New Mexico finance authority pursuant to this section for state transportation projects, to be secured by or payable from taxes or fees required by law to be paid into the state road fund, federal funds not otherwise obligated that are paid into the state road fund and taxes or fees required by law to be paid into the highway infrastructure fund.

         C. The New Mexico finance authority, when directed by the state transportation commission, may issue bonds to refund other bonds issued by or at the direction of the state transportation commission pursuant to this section or Section 67-3-59.1 NMSA 1978 by exchange or current or advance refunding.

         D. In consultation with the state transportation commission, the New Mexico finance authority shall determine all terms, covenants and conditions of the bonds; provided that the project design life of a project meets or exceeds the life of the bond issued for that project, and each series of bonds shall be sold, executed and delivered in accordance with the provisions of the New Mexico Finance Authority Act. The New Mexico finance authority may enter into interest rate exchange agreements, interest rate swap contracts, insurance agreements, remarketing agreements and any other agreements deemed necessary in connection with the issuance of the bonds without obtaining the approval of such agreements by any agency or board of the state, notwithstanding the provisions of any other law of the state.

         E. Proceeds of the bonds and amounts on deposit in the state road fund and the highway infrastructure fund may be used to pay expenses incurred in the preparation, administration, issuance and sale of the bonds and, together with the earnings on the proceeds of the bonds, may be used to pay rebate, penalty, interest and other obligations relating to the bonds and the proceeds of the bonds under the Internal Revenue Code of 1986, as amended.

         F. This section is full authority for the issuance and sale of the bonds, and the bonds shall not be invalid for any irregularity or defect in the proceedings for their issuance and sale and shall be incontestable in the hands of bona fide purchasers or holders of the bond for value.

         G. The bonds shall be legal investments for a person or board charged with the investment of public funds and may be accepted as security for a deposit of public money and, with the interest thereon, are exempt from taxation by the state and a political subdivision or agency of the state.

         H. Any law authorizing the imposition or distribution of taxes or fees paid into the state road fund or the highway infrastructure fund or that affects those taxes and fees shall not be amended or repealed or otherwise directly or indirectly modified so as to impair outstanding bonds secured by a pledge of revenues from those taxes and fees paid into the state road fund or the highway infrastructure fund, unless the bonds have been discharged in full or provisions have been made for a full discharge. In addition, while any bonds issued by the New Mexico finance authority pursuant to the provisions of this section remain outstanding, the powers or duties of the state transportation commission or the authority shall not be diminished or impaired in any manner that will affect adversely the interests and rights of the holder of such bonds.

         I. In contracting for state transportation projects to be paid in whole or in part with proceeds of bonds authorized by this section, the department shall require that any sand, gravel, caliche or similar material needed for the project shall, if practicable, be mined from state lands. Each contract shall provide that the contractor notify the commissioner of public lands of the need for the material and that, through lease or purchase, the material shall be mined from state lands if:

             (1) the material needed is available from state lands in the vicinity of the project;

             (2) the commissioner determines that the lease or purchase is in the best interest of the state land trust beneficiaries; and

             (3) the cost to the contractor for the material, including the costs of transportation, is competitive with other available material from nonstate lands.

         J. Bonds issued pursuant to this section shall be paid solely from federal funds not otherwise obligated and taxes and fees deposited into the state road fund and the highway infrastructure fund and shall not constitute a general obligation of the state.

         K. For purposes of this section, "state transportation project bonds" includes only those bonds issued pursuant to this section and excludes transportation bonds as defined in Section 67-3-72 NMSA 1978."

    Section 96. Section 67-3-65.1 NMSA 1978 (being Laws 1983, Chapter 211, Section 40) is amended to read:

    "67-3-65.1. STATE ROAD FUND DISTRIBUTION.--The amounts distributed to the state road fund pursuant to [Section] Sections 7-1-6.10, 66-6-23 and 66-6-23.1 NMSA 1978 shall be used for maintenance, construction and improvement of [the public highways] state transportation projects and to meet federal allotments under the federal-aid road laws, but sufficient money from the state road fund shall be set aside each year by the state treasurer to pay the principal and interest [coupons of highway debentures] due each year on state transportation revenue bonds issued to anticipate the collection of this revenue [as the principal and interest coupons mature]."

    Section 97. [NEW MATERIAL] APPROPRIATION OF BOND PROCEEDS--AUTHORIZED TRANSPORTATION PROJECTS.--

         A. The net proceeds of state transportation project bonds issued by the New Mexico finance authority pursuant to Section 67-3-59.3 NMSA 1978 and Subsection B of this section are appropriated to the department of transportation for the following authorized transportation projects:

             (1) for the reconstruction of the interchange at the intersection of Coors boulevard and interstate 40 in Albuquerque;

             (2) for the reconstruction and improvement of interstate 25 to accommodate public transportation elements, including commuter rail from Albuquerque to Santa Fe;

             (3) for the reconstruction and improvement of United States highway 54 from Tularosa to Santa Rosa;

             (4) for the reconstruction and improvement of United States highway 64/87 from Raton to Clayton;

             (5) for the reconstruction and improvement of United States highway 491 from Tohatchi to Shiprock;

             (6) for the reconstruction and improvement of United States highway 491 from Shiprock to the Colorado state line;

             (7) for the reconstruction and improvement of United States highway 62/180 from the Texas state line to Carlsbad;

             (8) for the reconstruction and improvement of various sections of interstate 40 from Newkirk to Tucumcari;

             (9) for the reconstruction and improvement of various sections of interstate 40 between Gallup and the Arizona state line;

             (10) for the reconstruction and improvement of various sections of interstate 40 between Thoreau and Grants;

             (11) for the reconstruction and improvement of interstate 40 in Albuquerque from Carlisle boulevard to Juan Tabo boulevard;

             (12) for the reconstruction and improvement of interstate 40 east of Albuquerque from Carnuel to Sedillo;

             (13) for the reconstruction and improvement of interstate 40 in Albuquerque from Central avenue to Coors boulevard;

             (14) for the reconstruction and improvement of interstate 40 at various locations from the Pueblo of Laguna to Mesita;

             (15) for the reconstruction and improvement of interstate 40 from Canoncito to Rio Puerco;

             (16) for the reconstruction and improvement of interstate 40 in Moriarty from the west interchange to the east interchange;

             (17) for the reconstruction and improvement of interstate 10 from Lordsburg to the junction of state highway 146;

             (18) for the reconstruction and improvement to accommodate public transportation elements of interstate 10 from the Texas state line to Las Cruces;

             (19) for the reconstruction and improvement of United States highway 84/285 from Pojoaque to Espanola;

             (20) for the reconstruction and improvement of state highway 45 in Albuquerque from the junction above interstate 25 north to Central avenue;

             (21) for the reconstruction and improvement of state highway 128 from state highway 31 to the Texas state line;

             (22) for the reconstruction and improvement of state highway 11 from Columbus to Deming;

             (23) for the reconstruction and improvement of United States highway 60 from Abo to Willard;

             (24) for the reconstruction and improvement of United States highway 56 from Springer east to Abbott;

             (25) for the reconstruction and improvement of United States highway 380 west of Tatum east to the Texas state line;

             (26) for the reconstruction and improvement of various sections of United States highway 380 from Capitan to Hondo;

             (27) for the reconstruction and improvement of various sections of United States highway 64 from the San Juan-Rio Arriba county line to the junction of United States highway 84;

             (28) for the reconstruction and improvement of state highway 8 from Eunice to United States highway 62;

             (29) for the reconstruction and improvement of United States highway 285 from Encino to Clines Corners;

             (30) for the reconstruction and improvement of various sections of United States highway 84 from interstate 25 south to Dilia;

             (31) for the reconstruction and improvement of various sections of state highway 26 between Deming and Hatch;

             (32) for the reconstruction and improvement of state highway 83 from Lovington to the junction of state highway 132;

             (33) for the reconstruction and improvement of state highway 209 from NM 268 to Grady;

             (34) for the reconstruction and improvement of United States highway 84 from Fort Sumner to Santa Rosa;

             (35) for the reconstruction and improvement of various sections of United States highway 62/180 from the Texas state line to the Lea-Eddy county line;

             (36) for the reconstruction and improvement of United States highway 285 from Clines Corners to Lamy;

             (37) for the reconstruction and improvement of United States highway 180 from Deming to Bayard; and

             (38) for improvements to the physical facilities of the department of transportation.

         B. The New Mexico finance authority may issue and sell state transportation project bonds for the state transportation projects authorized in this section when directed by the state transportation commission and when the commission certifies a need for issuance of the bonds for the projects. Within thirty days of commission authorization for a bond sale, the New Mexico finance authority oversight committee and the legislative finance committee shall hold a joint meeting at which the New Mexico finance authority and the department of transportation shall present details of the proposed bond sale to the committees.

         C. Any unexpended or unencumbered balance after the completion of the projects authorized in this section shall revert to the state road fund.

         D. For purposes of this section, "construction", "reconstruction", "rehabilitation" and "improvement" include planning, designing, engineering, constructing and acquiring rights of way.

    Section 98. [NEW MATERIAL] APPROPRIATION OF BOND PROCEEDS--AUTHORIZED TRANSPORTATION PROJECTS--MATCHING FUNDS.--

         A. The net proceeds of state transportation project bonds issued by the New Mexico finance authority pursuant to Section 67-3-59.3 NMSA 1978 and Subsection B of this section are appropriated to the department of transportation for the following transportation projects subject to the provisions of Subsection B of this section:

             (1) for the Rio Bravo boulevard extension and interchange construction to access Mesa del Sol in Albuquerque and Bernalillo county; and

             (2) for the reconstruction of an interchange at interstate 40 and West Central avenue in Albuquerque and Bernalillo county.

         B. The New Mexico finance authority may issue and sell state transportation project bonds for six million dollars ($6,000,000) per project for the state transportation projects authorized in this section if:

             (1) directed by the state transportation commission;

             (2) the state transportation commission certifies a need for issuance of the bonds for the projects; and

             (3) prior to issuing bonds, the political subdivision benefiting from the project deposits local matching funds with the state transportation commission for the authorized project in an amount that, when added to the net proceeds of the bonds, would be adequate to complete the project.

         C. The amount of the local match for projects authorized by this section shall be determined by a sliding scale based on the political subdivision's financial capacity to pay a portion of the project from local resources pursuant to rules promulgated by the state transportation commission.

    Section 99. TEMPORARY PROVISION--OUTSTANDING STATE HIGHWAY REVENUE BONDS.--

         A. Nothing in this act shall be deemed to impair state highway revenue bonds previously issued by the state transportation commission and outstanding on the effective date of this act.

         B. If required by the terms, covenants and provisions of state highway revenue bonds previously issued by the state transportation commission and outstanding on the effective date of this act, additional bonds issued by the state transportation commission or the New Mexico finance authority when directed by the state transportation commission pursuant to this act shall contain any required terms, covenants and provisions required to avoid impairment of the previously issued bonds.

    Section 100. REPEAL.--Sections 7-9-13.1 and 7-15A-10 NMSA 1978 (being Laws 1989, Chapter 262, Section 4 and Laws 1988, Chapter 24, Section 9, as amended) are repealed.

    Section 101. APPLICABILITY.--The provisions of Sections 24 through 30 of this act apply to taxable years beginning on or after January 1, 2004.

    Section 102. EFFECTIVE DATE.--

         A. The effective date of the provisions of Sections 17, 45, 46, 48, 56, 71, 73 and 82 through 91 of this act is March 1, 2004.

         B. The effective date of the provisions of Sections

11, 16, 18 through 23, 32 through 34, 36 through 38, 42 through 44, 47, 49 through 55, 72, 74 through 81, 92, 93 and 100 of this act is July 1, 2004.

         C. The effective date of the provisions of Section 35 of this act is January 1, 2005.

         D. The effective date of the provisions of Sections 10, 12 through 15, 31, 39 through 41 and 57 through 70 of this act is July 1, 2005.

    Section 103. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.

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