SENATE BILL 578
49th legislature - STATE OF NEW MEXICO - first session, 2009
INTRODUCED BY
Carlos R. Cisneros
AN ACT
RELATING TO TAXATION; AUTHORIZING A LOCAL OPTION HOSPITALITY TAX ON ALCOHOLIC BEVERAGES SERVED AND CONSUMED ON LICENSED PREMISES IN CERTAIN MUNICIPALITIES IN RURAL COMMUNITIES; DEDICATING THE REVENUE TO LOCALLY DEFINED ECONOMIC DEVELOPMENT PROJECTS; AUTHORIZING REVENUE BONDING; MAKING A DISTRIBUTION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 10 of this act may be cited as the "Local Option Hospitality Liquor Excise Tax Act".
Section 2. [NEW MATERIAL] DEFINITIONS.--As used in the Local Option Hospitality Liquor Excise Tax Act:
A. "department" means the taxation and revenue department;
B. "drink" means a serving of alcoholic beverages in which the seal on the container is broken and the contents are served or in an open container, a glass or other drinking vessel on licensed premises to sell alcoholic beverages by the drink or in open bottles or containers for consumption on the premises;
C. "drinking vessel" means any object that will hold liquid from which a person can drink;
D. "economic development project" means public infrastructure or public facilities that require significant capital outlay expenditures to plan, design, construct, equip or furnish or a continuous revenue source to operate, market or maintain, identified by the governing body as the project for which at least fifty percent of the net revenue from the hospitality liquor excise tax is to be used;
E. "governing body" means the governing council or commission of a municipality;
F. "licensed premises" means the premises identified in a Liquor Control Act permit or license application submitted by a licensee on which that licensee is allowed by the alcohol and gaming division of the regulation and licensing department to sell or serve alcoholic beverages;
G. "licensee" means a person licensed pursuant to the Liquor Control Act;
H. "municipality" means an incorporated municipality with a population of less than fifteen thousand people according to the 2000 federal decennial census or any federal decennial census completed after that year; and
I. "open container" means a bottle, container or other form of drinking vessel sold as a unit or from which alcoholic beverages may be served, on which the seal is broken to enable the alcoholic beverage within to be consumed.
Section 3. [NEW MATERIAL] AUTHORIZATION TO IMPOSE LOCAL OPTION HOSPITALITY LIQUOR EXCISE TAX--LOCAL OPTION ELECTION.--
A. The majority of the members elected to the governing body of a municipality may enact an ordinance imposing on a licensee who sells or serves alcoholic beverages pursuant to the Liquor Control Act for consumption on that licensee's licensed premises a local option excise tax on each drink or open container of alcoholic beverage sold or served for consumption on the licensee's licensed premises. The local option hospitality liquor excise tax is imposed and shall be paid in addition to all other taxes imposed on the distribution, sale or service of that drink or open container. The tax authorized to be imposed by this section may be referred to as the "hospitality liquor excise tax". The tax may be imposed at a rate of two percent of the retail cost of the drink or open container sold or served to a consumer. Samples of alcoholic beverages that are permitted as part of a license that has tasting or sampling privileges, that are promotional and for which no charge is permitted by law are not subject to the hospitality liquor excise tax.
B. The governing body at the time of enacting an ordinance imposing the hospitality liquor excise tax shall dedicate fifty percent of the money distributed to the municipality imposing the tax by the department from the net revenue of the tax to fund specific economic development projects within the municipality and for no other purpose. The remaining fifty percent may be used for public transportation, administration of the tax revenue and economic development projects, tourism marketing or repayment of debt, debt service or the costs of issuing bonds for the economic development projects and repayment of bonds for the economic development projects approved.
C. The governing body enacting an ordinance imposing the hospitality liquor excise tax shall submit the question of imposing the tax, including a statement identifying the economic development projects that will be funded by the tax to the qualified voters of the municipality at a regular or special municipal election.
D. Only those voters who are registered within the municipality shall be permitted to vote. The election shall be called, conducted and canvassed in substantially the same manner as provided by law for municipal elections.
E. If at an election called pursuant to this section a majority of the voters voting on the question to impose a hospitality liquor excise tax to fund the identified economic development projects vote in the affirmative on the question, then the ordinance imposing the hospitality liquor excise tax shall be approved. If at the election a majority of the voters voting on the question fail to approve the question, then the ordinance shall be disapproved and a question submitted pursuant to this section shall not be submitted to the voters for a period of at least one year from the date of the election.
F. An ordinance enacted under the provisions of this section that imposes a hospitality liquor excise tax shall include an effective date that is the first day of a month that begins no earlier than ninety days after the date of the election. A certified copy of an ordinance imposing a hospitality liquor excise tax shall be mailed or personally delivered to the department within five days after the ordinance is certified to have been approved by the voters. G. An ordinance repealing the imposition of a hospitality liquor excise tax imposed pursuant to the provisions of this section shall contain an effective date that is the first day of any month beginning no earlier than sixty days from the date the ordinance repealing the tax is adopted by the governing body. A certified copy of an ordinance repealing a hospitality liquor excise tax shall be mailed or personally delivered to the department within five days of the date the ordinance is adopted.
H. The economic development project funded by the hospitality liquor excise tax revenues may be changed only by a subsequent election. Should the subsequent election fail, the hospitality liquor excise tax shall be rescinded. A rescinded hospitality liquor excise tax may be re-enacted by a vote of the voters of the municipality.
Section 4. [NEW MATERIAL] ECONOMIC DEVELOPMENT PROJECTS--ELIGIBLE USES OF HOSPITALITY LIQUOR EXCISE TAX REVENUES.--
A. A minimum of fifty percent of the net revenue from the hospitality liquor excise tax shall fund the economic development projects identified by the governing body and submitted to the voters as part of the question that the voters approved.
B. A minimum of ten percent of the net revenue from the hospitality liquor excise tax shall be used to fund public transportation.
C. No more than twenty percent of the net revenue from the hospitality liquor excise tax may be used for tourism marketing.
D. Up to five percent of the net revenue from the hospitality liquor excise tax may be used to provide staff to the special authority board and to administer the hospitality liquor excise tax funds.
E. A municipality may pledge irrevocably up to seventy-five percent of the projected net revenue from the hospitality liquor excise tax to the payment of costs of issuing, payment of principal and interest of hospitality liquor excise tax revenue bonds or refunding bonds pursuant to Chapter 3, Article 31 NMSA 1978 or through other bonding mechanisms for which revenue from the hospitality liquor excise tax may be pledged to payment of the principal and interest to discharge the bonds. Forms of indebtedness shall include hospitality liquor excise tax bonds or other bonds repayable with the revenues of the hospitality liquor excise tax, loans or other financial mechanisms generally available to municipalities to complete capital improvement projects.
Section 5. [NEW MATERIAL] SPECIAL AUTHORITY BOARD.--
A. Upon approval of a hospitality liquor excise tax, the municipality imposing the tax may appoint a special authority board composed of an odd number of no less than seven members and no greater than eleven members that shall direct the expenditure of the hospitality liquor excise tax revenues.
B. The municipality shall appoint a staff member or members to provide support to the special authority board.
C. The special authority board shall determine annually at a public hearing the expenditure of the projected hospitality liquor excise tax revenues in accordance with the limitations set forth above and excluding those funds dedicated to capital debt service and administration costs.
D. The municipality shall by resolution set rules by which the special authority board shall conduct business.
E. The special authority board shall comply with the Open Meetings Act.
Section 6. [NEW MATERIAL] COLLECTION OF REVENUES.--
A. A municipality that imposes a hospitality liquor excise tax shall provide no more than five hundred dollars ($500) from the net tax revenue in assistance per liquor licensee that is subject to the hospitality liquor excise tax for the actual costs to upgrade and reprogram registers as needed for the collection of the tax.
B. Hospitality liquor excise tax revenues shall be collected at the point of sale and shall be remitted to the department pursuant to the Local Option Hospitality Liquor Excise Tax Act.
C. The department may retain and is appropriated up to three percent of the hospitality liquor excise tax revenues to use for administrative costs.
D. The department shall disburse the hospitality liquor excise tax revenues to the municipality imposing the hospitality liquor excise tax on the same schedule as the disbursement of local gross receipts taxes.
Section 7. [NEW MATERIAL] DATE PAYMENT DUE.--The hospitality liquor excise tax imposed by a municipality shall be remitted to the department on or before the twenty-fifth day of the month following the month in which the taxable event occurs.
Section 8. [NEW MATERIAL] EXEMPTION.--Exempted from the hospitality liquor excise tax is the sale of alcoholic beverages by an instrumentality of the armed forces of the United States engaged in alcoholic beverage resale activities.
Section 9. [NEW MATERIAL] ADMINISTRATIVE CHARGE.--The department may deduct an amount not to exceed three percent of the net revenue of a hospitality liquor excise tax remitted as a charge for the administration of the tax.
Section 10. [NEW MATERIAL] INTERPRETATION OF ACT--ADMINISTRATION AND ENFORCEMENT.--
A. The department shall interpret the provisions of the Local Option Hospitality Liquor Excise Tax Act.
B. The department shall administer and enforce the Local Option Hospitality Liquor Excise Tax Act pursuant to the Tax Administration Act.
Section 11. Section 3-31-1 NMSA 1978 (being Laws 1973, Chapter 395, Section 3, as amended) is amended to read:
"3-31-1. REVENUE BONDS--AUTHORITY TO ISSUE--PLEDGE OF
REVENUES--LIMITATION ON TIME OF ISSUANCE.--In addition to any other law and constitutional home rule powers authorizing a municipality to issue revenue bonds, a municipality may issue revenue bonds pursuant to Chapter 3, Article 31 NMSA 1978 for the purposes specified in this section. The term "pledged revenues", as used in Chapter 3, Article 31 NMSA 1978, means the revenues, net income or net revenues authorized to be pledged to the payment of particular revenue bonds as specifically provided in Subsections A through [J] K of this section.
A. Utility revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing or otherwise improving a municipal utility or for any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the net revenues from the operation of the municipal utility or of any one or more of other such municipal utilities for payment of the interest on and principal of the revenue bonds. These bonds are sometimes referred to in Chapter 3, Article 31 NMSA 1978 as "utility revenue bonds" or "utility bonds".
B. Joint utility revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing or otherwise improving joint water facilities, sewer facilities, gas facilities or electric facilities or for any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the net revenues from the operation of these municipal utilities for the payment of the interest on and principal of the bonds. These bonds are sometimes referred to in Chapter 3, Article 31 NMSA 1978 as "joint utility revenue bonds" or "joint utility bonds".
C. For the purposes of this subsection, "gross receipts tax revenue bonds" means gross receipts tax revenue bonds or sales tax revenue bonds. Gross receipts tax revenue bonds may be issued for any one or more of the following purposes:
(1) constructing, purchasing, furnishing, equipping, rehabilitating, making additions to or making improvements to one or more public buildings or purchasing or improving any ground relating thereto, including but not necessarily limited to acquiring and improving parking lots, or any combination of the foregoing;
(2) acquiring or improving municipal or public parking lots, structures or facilities or any combination of the foregoing;
(3) purchasing, acquiring or rehabilitating firefighting equipment or any combination of the foregoing;
(4) acquiring, extending, enlarging, bettering, repairing, improving or maintaining storm sewers and other drainage improvements, sanitary sewers, sewage treatment plants or water utilities, including but not necessarily limited to the acquisition of rights of way and water and water rights, or any combination of the foregoing;
(5) reconstructing, resurfacing, maintaining, repairing or otherwise improving existing alleys, streets, roads or bridges or any combination of the foregoing or laying off, opening, constructing or otherwise acquiring new alleys, streets, roads or bridges or any combination of the foregoing; provided that any of the foregoing improvements may include but are not limited to the acquisition of rights of way;
(6) purchasing, acquiring, constructing, making additions to, enlarging, bettering, extending or equipping airport facilities or any combination of the foregoing, including without limitation the acquisition of land, easements or rights of way therefor;
(7) purchasing or otherwise acquiring or clearing land or for purchasing, otherwise acquiring and beautifying land for open space;
(8) acquiring, constructing, purchasing, equipping, furnishing, making additions to, renovating, rehabilitating, beautifying or otherwise improving public parks, public recreational buildings or other public recreational facilities or any combination of the foregoing;
(9) acquiring, constructing, extending, enlarging, bettering, repairing, otherwise improving or maintaining solid waste disposal equipment, equipment for operation and maintenance of sanitary landfills, sanitary landfills, solid waste facilities or any combination of the foregoing; and
(10) acquiring, constructing, extending, bettering, repairing or otherwise improving a public transit system or regional transit systems or facilities.
The municipality may pledge irrevocably any or all of the gross receipts tax revenue received by the municipality pursuant to Section 7-1-6.4 or 7-1-6.12 NMSA 1978 to the payment of the interest on and principal of the gross receipts tax revenue bonds for any of the purposes authorized in this section or for specific purposes or for any area of municipal government services, including but not limited to those specified in Subsection C of Section 7-19D-9 NMSA 1978, or for public purposes authorized by municipalities having constitutional home rule charters. A law that imposes or authorizes the imposition of a municipal gross receipts tax or that affects the municipal gross receipts tax, or a law supplemental thereto or otherwise appertaining thereto, shall not be repealed or amended or otherwise directly or indirectly modified in such a manner as to impair adversely any outstanding revenue bonds that may be secured by a pledge of such municipal gross receipts tax unless the outstanding revenue bonds have been discharged in full or provision has been fully made therefor.
Revenues in excess of the annual principal and interest due on gross receipts tax revenue bonds secured by a pledge of gross receipts tax revenue may be accumulated in a debt service reserve account. The governing body of the municipality may appoint a commercial bank trust department to act as trustee of the gross receipts tax revenue and to administer the payment of principal of and interest on the bonds.
D. As used in this section, the term "public building" includes but is not limited to fire stations, police buildings, municipal jails, regional jails or juvenile detention facilities, libraries, museums, auditoriums, convention halls, hospitals, buildings for administrative offices, city halls and garages for housing, repairing and maintaining city vehicles and equipment. As used in Chapter 3, Article 31 NMSA 1978, the term "gross receipts tax revenue bonds" means the bonds authorized in Subsection C of this section, and the term "gross receipts tax revenue" means the amount of money distributed to the municipality as authorized by Section 7-1-6.4 NMSA 1978 or the amount of money transferred to the municipality as authorized by Section 7-1-6.12 NMSA 1978 for any municipal gross receipts tax imposed pursuant to the Municipal Local Option Gross Receipts Taxes Act. As used in Chapter 3, Article 31 NMSA 1978, the term "bond" means any obligation of a municipality issued under Chapter 3, Article 31 NMSA 1978, whether designated as a bond, note, loan, warrant, debenture, lease-purchase agreement or other instrument evidencing an obligation of a municipality to make payments.
E. Gasoline tax revenue bonds may be issued for laying off, opening, constructing, reconstructing, resurfacing, maintaining, acquiring rights of way, repairing and otherwise improving municipal buildings, alleys, streets, public roads and bridges or any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the gasoline tax revenue received by the municipality to the payment of the interest on and principal of the gasoline tax revenue bonds. As used in Chapter 3, Article 31 NMSA 1978, "gasoline tax revenue bonds" means the bonds authorized in this subsection, and "gasoline tax revenue" means all or portions of the amounts of tax revenues distributed to municipalities pursuant to Sections 7-1-6.9 and 7-1-6.27 NMSA 1978, as from time to time amended and supplemented.
F. Project revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing, improving, constructing, purchasing, furnishing, equipping and rehabilitating any revenue-producing project, including, where applicable, purchasing, otherwise acquiring or improving the ground therefor, including but not necessarily limited to acquiring and improving parking lots, or for any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the net revenues from the operation of the revenue-producing project for which the particular project revenue bonds are issued to the payment of the interest on and principal of the project revenue bonds. The net revenues of any revenue-producing project may not be pledged to the project revenue bonds issued for a revenue-producing project that clearly is unrelated in nature; but nothing in this subsection shall prevent the pledge to such project revenue bonds of any revenues received from existing, future or disconnected facilities and equipment that are related to and that may constitute a part of the particular revenue-producing project. A general determination by the governing body that any facilities or equipment is reasonably related to and constitutes a part of a specified revenue-producing project shall be conclusive if set forth in the proceedings authorizing the project revenue bonds. As used in Chapter 3, Article 31 NMSA 1978:
(1) "project revenue bonds" means the bonds authorized in this subsection; and
(2) "project revenues" means the net revenues of revenue-producing projects that may be pledged to project revenue bonds pursuant to this subsection.
G. Fire district revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing, improving, constructing, purchasing, furnishing, equipping and rehabilitating any fire district project, including where applicable purchasing, otherwise acquiring or improving the ground therefor, or for any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the revenues received by the fire district from the fire protection fund as provided in the Fire Protection Fund Law and any or all of the revenues provided for the operation of the fire district project for which the particular bonds are issued to the payment of the interest on and principal of the bonds. The revenues of any fire district project shall not be pledged to the bonds issued for a fire district project that clearly is unrelated in its purpose; but nothing in this section prevents the pledge to such bonds of any revenues received from existing, future or disconnected facilities and equipment that are related to and that may constitute a part of the particular fire district project. A general determination by the governing body of the municipality that any facilities or equipment is reasonably related to and constitutes a part of a specified fire district project shall be conclusive if set forth in the proceedings authorizing the fire district bonds.
H. Law enforcement protection revenue bonds may be issued for the repair and purchase of law enforcement apparatus and equipment that meet nationally recognized standards. The municipality may pledge irrevocably any or all of the revenues received by the municipality from the law enforcement protection fund distributions pursuant to the Law Enforcement Protection Fund Act to the payment of the interest on and principal of the law enforcement protection revenue bonds.
I. Economic development gross receipts tax revenue bonds may be issued for the purpose of furthering economic development projects as defined in the Local Economic Development Act. The municipality may pledge irrevocably any or all of the revenue received from the municipal infrastructure gross receipts tax to the payment of the interest on and principal of the economic development gross receipts tax revenue bonds for any of the purposes authorized in this subsection. A law that imposes or authorizes the imposition of a municipal infrastructure gross receipts tax or that affects the municipal infrastructure gross receipts tax, or a law supplemental to or otherwise pertaining to the tax, shall not be repealed or amended or otherwise directly or indirectly modified in such a manner as to impair adversely any outstanding revenue bonds that may be secured by a pledge of the municipal infrastructure gross receipts tax unless the outstanding revenue bonds have been discharged in full or provision has been fully made for their discharge. As used in Chapter 3, Article 31 NMSA 1978, "economic development gross receipts tax revenue bonds" means the bonds authorized in this subsection, and "municipal infrastructure gross receipts tax revenue" means any or all of the revenue from the municipal infrastructure gross receipts tax transferred to the municipality pursuant to Section 7-1-6.12 NMSA 1978.
J. Municipal higher education facilities gross receipts tax revenue bonds may be issued for the purpose of acquisition, construction, renovation or improvement of facilities of a four-year post-secondary public educational institution located in the municipality and acquisition of or improvements to land for those facilities. The municipality may pledge irrevocably any or all of the revenue received from the municipal higher education facilities gross receipts tax to the payment of the interest on and principal of the municipal higher education facilities gross receipts tax revenue bonds. A law that imposes or authorizes the imposition of a municipal higher education facilities gross receipts tax or that affects the municipal higher education facilities gross receipts tax, or a law supplemental to or otherwise pertaining to the tax, shall not be repealed or amended or otherwise directly or indirectly modified in such a manner as to impair adversely any outstanding revenue bonds that may be secured by a pledge of the municipal higher education facilities gross receipts tax unless the outstanding revenue bonds have been discharged in full or provision has been fully made for their discharge. As used in Chapter 3, Article 31 NMSA 1978, "municipal higher education facilities gross receipts tax revenue bonds" means the bonds authorized in this subsection and "municipal higher education facilities gross receipts tax revenue" means any or all of the revenue from the municipal higher education facilities gross receipts tax transferred to the municipality pursuant to Section 7-1-6.12 NMSA 1978.
K. A municipality may issue revenue bonds that may be referred to as "hospitality liquor excise tax revenue bonds" for the purpose of funding capital outlay projects for economic development infrastructure or public facilities. The projects shall be identified by the governing body of a municipality pursuant to the provisions of the Local Option Hospitality Liquor Excise Tax Act and approved by the voters pursuant to that act. The proceeds from the revenue bonds may be used to plan, design or construct public infrastructure or to plan, design, construct, equip or furnish a public facility for economic development purposes. The municipality may pledge irrevocably up to seventy-five percent of hospitality liquor excise tax revenue from the imposition of a hospitality liquor excise tax imposed pursuant to the Local Option Hospitality Liquor Excise Tax Act to the payment of costs of issuing, payment of principal and of interest on the hospitality liquor excise tax revenue bonds or refunding bonds. A law that imposes or authorizes the imposition of a hospitality liquor excise tax or that affects the hospitality liquor excise tax, or a law supplemental to or otherwise pertaining to the tax, shall not be repealed or amended or otherwise directly or indirectly modified in such a manner as to impair adversely any outstanding revenue bonds that may be secured by a pledge of the hospitality liquor excise tax revenue unless the outstanding revenue bonds have been discharged in full or provision has been fully made for their discharge. As used in Chapter 3, Article 31 NMSA 1978:
(1) "hospitality liquor excise tax revenue" means any or all of the revenue from a hospitality liquor excise tax imposed pursuant to the Local Option Hospitality Liquor Excise Tax Act by a municipality; and
(2) "municipality" means an incorporated municipality with a population of less than fifteen thousand based on the 2000 federal decennial census or any federal decennial census occurring after that year.
[K.] L. Except for the purpose of refunding previous revenue bond issues, no municipality may sell revenue bonds payable from pledged revenues after the expiration of two years from the date of the ordinance authorizing the issuance of the bonds or, for bonds to be issued and sold to the New Mexico finance authority as authorized in Subsection C of Section 3-31-4 NMSA 1978, after the expiration of two years from the date of the resolution authorizing the issuance of the bonds. However, any period of time during which a particular revenue bond issue is in litigation shall not be counted in determining the expiration date of that issue."
Section 12. A new section of the Tax Administration Act is enacted to read:
"[NEW MATERIAL] DISTRIBUTION--HOSPITALITY LIQUOR EXCISE TAX.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to a municipality that has imposed a hospitality liquor excise tax pursuant to the Local Option Hospitality Liquor Excise Tax Act in an amount equal to the net revenue from the hospitality liquor excise tax revenue remitted to the department from that municipality."
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