HOUSE VOTERS AND ELECTIONS COMMITTEE SUBSTITUTE FOR

HOUSE BILL 808

49th legislature - STATE OF NEW MEXICO - first session, 2009

AN ACT

RELATING TO TAX-EXEMPT ORGANIZATIONS; REQUIRING REPORTING BY TAX-EXEMPT ORGANIZATIONS OF CERTAIN CONTRIBUTIONS AND TARGETED ELECTION-RELATED COMMUNICATION EXPENDITURES.

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

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

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

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

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

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

     Section 2. A new section of the Corporate Income and Franchise Tax Act is enacted to read:

     "[NEW MATERIAL] EXEMPTIONS.--

          A. No corporate income or franchise tax shall be imposed upon religious, educational, benevolent or other organizations not organized for profit that are exempt from income taxation under the Internal Revenue Code unless:

                (1) the organization receives income that is subject to federal income taxation as "unrelated business income" under the Internal Revenue Code, in which case the organization is subject to the corporate franchise tax, and the corporate income tax applies to the unrelated business income; or

                (2) the organization engages in a targeted election-related communication and the organization fails to file a disclosure report with the secretary of state in accordance with the provisions of Subsection B of this section, in which case the organization is subject to the corporate income tax and franchise tax.

          B. Reports required by Paragraph (2) of Subsection A of this section shall be filed in accordance with the provisions of Paragraphs (1) through (3) of Subsection B of Section 1-19-29 NMSA 1978 and shall contain the following information:

                (1) all expenditures related to the targeted election-related communication, the purpose of the expenditure and the name and address of the person or entity to whom an expenditure was made;

                (2) each donation, grant or allocation received by the entity in excess of one thousand dollars ($1,000), regardless of whether it is related to the targeted election-related communication;

                (3) the name and address of the person or entity from which the donation, grant or allocation was received; and

                (4) the date the expenditure was made.

          C. For the purposes of this section:

                (1) "general election" means the day of the general election;

                (2) "primary election" means the day of the primary election;

                (3) "relevant electorate" means voters residing in the district of a candidate that is identified in a targeted election-related communication; and

                (4) "targeted election-related communication":

                     (a) means any radio, television, cable or satellite broadcast or any print advertisement, including direct or bulk mailings, that: 1) refers to a clearly identified candidate for state office; 2) is made during the ninety days preceding a primary election or a general election for the office sought by the candidate; and 3) is targeted to the relevant electorate;

                     (b) does not include a voter guide allowed by the Internal Revenue Code for Section 501(c)(3) organizations;

                     (c) does not include communications from an organization to its own members or to persons who have requested the organization to send them information, including information conveyed on an organization's web site; and

                     (d) does not include a communication appearing in a news story, commentary or editorial distributed through the print media or the facilities of any broadcasting station, unless such facilities or print media are owned or controlled by any political party, political committee or candidate."

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