HOUSE BILL 495

52nd legislature - STATE OF NEW MEXICO - first session, 2015

INTRODUCED BY

Patricia Roybal Caballero

AN ACT

RELATING TO TAXATION; IMPOSING A CORPORATE LOW WAGE TAX ON CERTAIN EMPLOYERS; CREATING A DISTRIBUTION OF THE CORPORATE LOW WAGE TAX TO THE PRESCHOOL PROGRAM FUND; ENACTING THE PRESCHOOL PROGRAM ACT; CREATING THE PRESCHOOL PROGRAM FUND TO FUND PRESCHOOL DEVELOPMENT PROGRAMS; REPEALING SECTION 22-8-19.1 NMSA 1978 (BEING LAWS 1992, CHAPTER 83, SECTION 1, AS AMENDED); IMPOSING A CIVIL PENALTY; MAKING AN APPROPRIATION.

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

     SECTION 1. A new section of the Tax Administration Act is enacted to read:

     "[NEW MATERIAL] DISTRIBUTION--PRESCHOOL PROGRAM FUND--CORPORATE LOW WAGE TAX.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the preschool program fund in an amount equal to the net receipts attributable to the corporate low wage tax."

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

     "[NEW MATERIAL] CORPORATE LOW WAGE TAX--IMPOSITION--

RATE.--

          A. A tax to be known as the "corporate low wage tax" is imposed in the amount specified in Subsection B of this section on every employer corporation having a global gross income of over one billion dollars ($1,000,000,000) that is employed or engaged in the transaction of business in, into or from this state or deriving any income from any property or employment within this state.

          B. The amount of the corporate low wage tax shall be one dollar ($1.00) for every hour the employer corporation pays an employee of the employer corporation a low wage in a taxable year.

          C. Notwithstanding any other law to the contrary, any tax credit allowed pursuant to the Corporate Income and Franchise Tax Act shall not be applied against the liabilities imposed by the corporate low wage tax.

          D. A corporate employer that is liable to pay the corporate low wage tax shall, within six months of the end of the taxable year in which the corporate employer becomes liable to pay the tax, make a public disclosure that:

                (1) the corporate employer is liable to pay the tax;

                (2) the number of employees to whom the corporate employer paid a low wage in that taxable year; and

                (3) the number of hours worked in that taxable year that the tax represents.

          E. A person with good cause may bring a civil action in a court of competent jurisdiction to challenge a corporate employer for underpayment of the corporate low wage tax and, upon prevailing, shall allow the department to recover the balance of the taxes owed, including interest, an additional amount equal to twice the taxes owed and any other appropriate legal or equitable relief. An employee of a corporate employer who has suffered discrimination in any manner or had adverse action taken against that employee in retaliation for challenging a corporate employer pursuant to this section may bring a civil action in a court of competent jurisdiction and, upon prevailing, shall recover actual damages plus reinstatement in the case of discharge. If an employee has been discharged in retaliation for challenging a corporate employer pursuant to this section, the period of violation extends from the day of discharge until the day the employee is reinstated, the day the employee agrees to waive reinstatement or, in the case of an employee who may not be rehired, from the day of discharge until the day legal judgment is final. The requirements of this section may also be enforced by the attorney general. A plaintiff prevailing in an action to enforce this section shall be entitled to recover costs and expenses of suit and reasonable attorney fees.

          F. For purposes of this section:

                (1) "benefits" means all remuneration for work performed that is provided to an employee in whole or in part by the employer corporation, other than wages, including insurance programs; health care, medical, dental and vision plans; life insurance; employer contributions to pensions, such as a 401(k); and employer-provided services, such as child care, offered by an employer to the employee. "Benefits" does not include the employer's share of payroll taxes, social security or medicare contributions, federal or state unemployment insurance contributions or workers' compensation;

                (2) "employer corporation" means every person, firm, partnership, association, corporation, receiver or other officer of the court of this state, and any agent or officer of any of the above-mentioned classes, employing any person in this state, except employers of domestic labor in private homes. "Employer corporation" includes more than one individual or entity, including in circumstances in which one individual or entity controls, is controlled by, has the right to control or is under common control with another employer, and circumstances in which one individual or entity exerts control over or has the right to exert control over the operations of another employer. A contract between two employers or an individual and an employer does not, by itself, constitute evidence of the lack of an employment relationship; and

                (3) "low wage" means an hourly wage paid by an employer corporation to an employee that, when multiplied by two thousand eighty hours, results in an income level that is less than two hundred percent of the federal poverty level for a family of three. "Low wage" includes benefits and does not include the employer corporation's share of payroll taxes."

     SECTION 3. [NEW MATERIAL] SHORT TITLE.--Sections 3 through 8 of this act may be cited as the "Preschool Program Act".

     SECTION 4. [NEW MATERIAL] DEFINITIONS.--As used in the Preschool Program Act:

          A. "child" or "children" means a child or children from zero to five years of age who are not three- or four-year-old developmentally delayed or disabled children funded through the public school funding formula or who are not children funded through other statutory programs;

          B. "department" means the children, youth and families department;

          C. "early childhood development staff" means one or more adults who are trained in early childhood development and who make up the staff responsible for working directly with children in providing preschool program services;

          D. "eligible provider" means a person who is licensed by the department to provide preschool programs or preschool special education for children, or that is a public school, private school, tribal program or head start program; and

          E. "preschool program" means a licensed program that provides early childhood developmental readiness services or preschool special education to children, but does not include pre-kindergarten programs funded through the Pre-Kindergarten Act."

     SECTION 5. [NEW MATERIAL] PRESCHOOL PROGRAMS--APPLICATIONS--LICENSURE--LICENSE FEE.--

          A. The department may promulgate rules to carry out the provisions of the Preschool Program Act.

          B. The department is responsible for licensing and funding preschool programs that meet the requirements of the Preschool Program Act and the standards of the department. The department shall distribute any money for this purpose upon its approval of applications and proposals from eligible providers. Early childhood service providers and early childhood programs that are not seeking state funding are not required to be licensed.

          C. An eligible provider who operates a preschool program for which state funding is being sought shall apply to the department for licensure. One license covers both the eligible provider and the preschool program, unless the eligible provider proposes to provide a preschool program that is not covered by the initial license. An application for licensure shall include the following:

                (1) the qualifications of the eligible provider and the eligible provider's early childhood development staff, including copies of any other applicable licenses pertinent to being an early childhood care provider or early childhood care facility or evidence of accreditation by the public education department, and degrees or licenses required or obtained by the early childhood development staff;

                (2) the way in which the preschool program comprehensively addresses the total developmental needs of the children served, including physical, cognitive, social and emotional needs and including aspects of health care, nutrition, safety, the needs of the family and multicultural sensitivity, and the way in which the program coordinates with other community and state resources for families;

                (3) the way in which the preschool program meets other rules and standards of the department;

                (4) the number and ages of children to be served by the preschool program;

                (5) site and floor plans and a description of the preschool facilities;

                (6) revenue sources and amounts other than state funding available for the preschool program;

                (7) the proposed budget for the ensuing year;

                (8) the plan for communicating with and involving parents in the preschool program;

                (9) the way in which the preschool program services meet the continuum of services to children;

                (10) other relevant information requested by the department; and

                (11) a signed and sworn statement by the eligible provider that the preschool program shall not include any religious, sectarian or denominational purposes, instruction or material.

          D. The department by rule shall provide for criminal background checks of all staff of a preschool program who have access to children. Convictions of felonies or misdemeanors contained in the federal bureau of investigation record shall be used in accordance with the Criminal Offender Employment Act. Other information contained in the federal bureau of investigation record, if supported by independent evidence, may form the basis for the denial, suspension or revocation of a license or employment for good and just cause. Records and related information shall be privileged and shall not be disclosed to a person not directly involved in the licensure or employment decisions affecting the specific individual. The department shall not pay for the cost of obtaining the federal bureau of investigation record. A potential employee with an eligible provider who has undergone a background check within twenty-four months of applying for employment with an eligible provider shall not be required to submit to another background check if the department has copies of the employee's federal bureau of investigation records on file. An eligible provider who operates a preschool program shall report to the department any known conviction of a felony or misdemeanor involving moral turpitude that results in any type of action against the employee.

          E. The department by rule shall provide the length of time for which a license is issued and renewal dates and requirements. The department may allow for truncated license renewal applications that indicate only material changes from the initial application.

          F. The department may charge a license fee not to exceed two hundred dollars ($200). The department may charge different fees for different classes of preschool programs. Public schools and other governmental eligible providers shall not be charged a license fee. License fees shall be deposited in the preschool program fund.

          G. A preschool program shall collaborate, where possible, with existing head start programs and other appropriate early childhood developmental readiness programs in the community.

          H. Each preschool program shall have a strong parental involvement component, a staff development component and a procedural process to enable the department to monitor and evaluate the preschool program.

     SECTION 6. [NEW MATERIAL] PRESCHOOL PROGRAMS--FUNDING PROPOSALS--PER-CHILD REIMBURSEMENT--STAFF DEVELOPMENT.--

          A. The department shall rank preschool program funding applications pursuant to the requirements of Subsection B of this section. Depending on the amount available in the preschool program fund, funding allocations shall be based on a per-child calculation determined by the department for approved and ranked applications, taking into account the following:

                (1) priority funding for preschool programs specified in Subsection B of this section;

                (2) each preschool program's costs associated with overhead and training and professional development for qualified early childhood development staff;

                (3) the length of time, measured in hours, days or weeks as determined by the department, the preschool program will operate in the upcoming fiscal year;

                (4) the amount of funding derived from copayments, tuition, gifts, grants, donations and other revenue sources; and

                (5) separate awards for research-based quality initiatives to improve developmental outcomes.

          B. For funding purposes, applications shall be evaluated and priority given to preschool programs in communities with public elementary schools that are designated as Title 1 public schools and that have at least sixty-six percent of the children served living within the attendance zone of a Title 1 public elementary school. Additional funding criteria include:

                (1) the number of children proposed to be served and the length of the preschool program's year;

                (2) the adequacy and capacity of preschool programs and facilities in the community;

                (3) language and literacy services in the community;

                (4) the cultural, historic and linguistic responsiveness of the preschool program to the community;

                (5) parent education services available for parents of children in the community;

                (6) the qualifications of eligible providers and early childhood development staff of the applicant and the qualifications of eligible providers and early childhood development staff in the community;

                (7) staff professional development plans;

                (8) the capacity of local organizations and other persons interested in and involved in preschool programs and other services for children and the local organizations' or other persons' commitment to work together to ensure that children have the best preparation for school beginning at age five;

                (9) the extent of local support for preschool programs in the community; and

                (10) other relevant criteria specified by rule of the department.

          C. The department shall provide by rule for quantifying priorities and application criteria to rank preschool programs as provided in this section.

          D. By April 1 of each year, the department shall determine:

                (1) the number and amount of funding proposals for the ensuing fiscal year;

                (2) the number of children enrolled in each preschool program in the state that is requesting funding;

                (3) the amount available for funding; and

                (4) the per-child calculation.

          E. By July 1, the department shall distribute one-fourth of the per-child calculation to each eligible provider. After two quarters of funding, the department shall recalculate the per-child distribution to each preschool program and may increase or decrease funding in the next two quarters based on the recalculation.

     SECTION 7. [NEW MATERIAL] PRESCHOOL PROGRAM FUND--CREATED--PURPOSE--DISBURSEMENTS.--

          A. The "preschool program fund" is created as a nonreverting fund in the state treasury. The fund consists of tax distributions, license fees, appropriations, gifts, grants, donations and income from investment of the fund. The department shall administer the fund, and money in the fund is appropriated to the department only to carry out the purposes of the Preschool Program Act. Disbursements from the fund shall be by warrant of the secretary of finance and administration upon vouchers signed by the secretary of children, youth and families or the secretary's authorized representative.

          B. The fund shall be used to foster preschool development as follows:

                (1) increasing access to preschool programs by increasing eligibility and funding outreach programs to increase enrollment;

                (2) increasing affordability by making parent copayments for preschool programs no more than ten percent of family annual adjusted income for families of fewer than five earning less than two hundred percent of the federal poverty level;

                (3) funding quality initiatives that are supported by data to improve developmental outcomes; and

                (4) sustaining New Mexico's preschool infrastructure by providing adequate per-child funding.

     SECTION 8. [NEW MATERIAL] CONTRACT PROVISIONS--MONITORING--AUDITS.--

          A. A contract or other agreement between the department and an eligible provider shall specify and ensure that state funds or any other funds of a preschool program that is partially funded by state funds are not being used for any religious, sectarian or denominational purposes, instruction or material. The department shall monitor preschool programs to ensure compliance with this subsection.

          B. The department shall require every eligible provider to have an independent audit each year as required by the Audit Act.

          C. The department shall monitor and evaluate the effectiveness of every preschool program at least once every license period. The department may require information about any preschool program during the interim between license periods. At any time the department judges a preschool program to be programmatically or fiscally deficient, it may intervene and require the eligible provider to:

                (1) change staff or program elements;

                (2) change financial accounting systems or personnel; or

                (3) make other changes as determined by the department.

          D. The department may suspend, revoke or refuse to renew a license for an eligible provider or preschool program. After a hearing, the department shall state the reasons for the suspension, revocation or refusal to renew a license in its order, and the eligible provider may appeal the decision as provided in Section 39-3-1.1 NMSA 1978.

     SECTION 9. REPEAL.--Section 22-8-19.1 NMSA 1978 (being Laws 1992, Chapter 83, Section 1, as amended) is repealed.

     SECTION 10. APPLICABILITY.--The provisions of Sections 1 and 2 of this act apply to taxable years beginning on or after January 1, 2015.

     SECTION 11. EFFECTIVE DATE.--The effective date of the provisions of Sections 3 through 9 of this act is January 1, 2016.

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