HOUSE BILL 105

54th legislature - STATE OF NEW MEXICO - second session, 2020

INTRODUCED BY

Cathrynn N. Brown and James G. Townsend

 

 

 

 

 

AN ACT

RELATING TO TAXATION; AMENDING THE LODGERS' TAX TO ALTER CERTAIN EXEMPTIONS; CHANGING THE ALLOWABLE USES OF LODGERS' TAX REVENUE.

 

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

     SECTION 1. Section 3-38-13 NMSA 1978 (being Laws 1969, Chapter 199, Section 1, as amended) is amended to read:

     "3-38-13. SHORT TITLE.--Sections 3-38-13 through [3-38-24] 3-38-25 NMSA 1978 may be cited as the "Lodgers' Tax Act"."

     SECTION 2. Section 3-38-15 NMSA 1978 (being Laws 1969, Chapter 199, Section 3, as amended) is amended to read:

     "3-38-15. AUTHORIZATION OF TAX--LIMITATIONS ON USE OF PROCEEDS.--

          A. A municipality may impose by ordinance an occupancy tax for revenues on lodging within the municipality, and the board of county commissioners of a county may impose by ordinance an occupancy tax for revenues on lodging within that part of the county outside of the incorporated limits of a municipality.

          B. The occupancy tax shall not exceed five percent of the gross taxable rent.

          C. Every vendor who is furnishing any lodgings within a municipality or county is exercising a taxable privilege.

          D. The following portions of the proceeds from the occupancy tax that are collected based on the first thirty days a vendee rents lodging in taxable premises shall be used only for advertising, publicizing and promoting tourist-related facilities and attractions [facilities] and tourist-related events:

                (1) if the municipality or county imposes an occupancy tax of no more than two percent, not less than one-fourth of the proceeds shall be used for those purposes;

                (2) if the occupancy tax imposed is more than two percent and the municipality is not located in a class A county or the county is not a class A county, not less than one-half of the proceeds from the first three percent of the occupancy tax and not less than one-fourth of the proceeds from the occupancy tax in excess of three percent shall be used for those purposes; and

                (3) if the occupancy tax imposed is more than two percent and the municipality is located in a class A county or the county is a class A county, not less than one-half of the proceeds from the occupancy tax shall be used for those purposes.

          E. The proceeds from the occupancy tax that are collected based on the first thirty days a vendee rents lodging in taxable premises in excess of the amount required to be used for advertising, publicizing and promoting tourist-related facilities and attractions [facilities] and tourist-related events may be used for any purpose authorized in Section 3-38-21 NMSA 1978.

          F. The proceeds from the occupancy tax that are required to be used to advertise, publicize and promote tourist-related facilities and attractions [facilities] and tourist-related events shall be used within two years of the close of the fiscal year in which they were collected and shall not be accumulated beyond that date or used for any other purpose.

          G. Notwithstanding the provisions of Paragraph (2) of Subsection D of this section, any use by a municipality or county of occupancy tax proceeds on January 1, 1996 may continue to be so used after July 1, 1996 in accordance with the provisions of this section and Section 3-38-21 NMSA 1978 as they were in effect prior to July 1, 1996; provided, any change in the use of those occupancy tax proceeds after July 1, 1996 is subject to the limitations of that paragraph.

          H. Notwithstanding the provisions of Paragraph (2) of Subsection D of this section, the payment of principal and interest on outstanding bonds issued prior to January 1, 1996 pursuant to Section 3-38-23 or 3-38-24 NMSA 1978 shall be made in accordance with the retirement schedules of the bonds established at the time of issuance. The amount of expenditures required under Paragraph (2) of Subsection D of this section shall be reduced each year, if necessary, to make the required payments of principal and interest of all outstanding bonds issued prior to January 1, 1996."

     SECTION 3. Section 3-38-16 NMSA 1978 (being Laws 1969, Chapter 199, Section 4, as amended) is amended to read:

     "3-38-16. EXEMPTIONS.--

          A. If the latest ordinance imposing an occupancy tax passed before July 1, 2020, the occupancy tax shall not apply:

                [A.] (1) if a vendee:

                     [(1)] (a) has been a permanent resident of the taxable premises for a period of at least thirty consecutive days; or

                     [(2)] (b) enters into or has entered into a written agreement for lodgings at the taxable premises for a period of at least thirty consecutive days;

                [B.] (2) if the rent paid by a vendee is less than two dollars ($2.00) a day;

                [C.] (3) to lodging accommodations at institutions of the federal government, the state or any political subdivision thereof;

                [D.] (4) to lodging accommodations at religious, charitable, educational or philanthropic institutions, including accommodations at summer camps operated by such institutions;

                [E.] (5) to clinics, hospitals or other medical facilities; or

                [F.] (6) to privately owned and operated convalescent homes or homes for the aged, infirm, indigent or chronically ill.

          B. If the latest ordinance imposing an occupancy tax passed on or after July 1, 2020, the occupancy tax shall not apply:

                (1) if a vendee:

                     (a) has manifested an intent to make the

taxable premises a residence or household; or

                     (b) provides proof to a vendor that the vendee's income is below one hundred eighty-five percent of the federal poverty guidelines;

                (2) if the rent paid by a vendee is less than two dollars ($2.00) a day;

                (3) to lodging accommodations at institutions of the federal government, the state or any political subdivision thereof;

                (4) to lodging accommodations at religious, charitable, educational or philanthropic institutions, including accommodations at summer camps operated by such institutions;

                (5) to clinics, hospitals or other medical facilities; or

                (6) to privately owned and operated convalescent homes or homes for the aged, infirm, indigent or chronically ill."

     SECTION 4. Section 3-38-21 NMSA 1978 (being Laws 1969, Chapter 199, Section 9, as amended) is amended to read:

     "3-38-21. ELIGIBLE USES OF TAX PROCEEDS.--

          A. Subject to the limitations contained in Section 3-38-15 NMSA 1978, a municipality or county imposing an occupancy tax may use the proceeds from the occupancy tax that are collected based on the first thirty days a vendee rents lodging in taxable premises to defray costs of:

                (1) collecting and otherwise administering the occupancy tax, including the performance of audits required by the Lodgers' Tax Act pursuant to guidelines issued by the department of finance and administration;

                (2) establishing, operating, purchasing, constructing, otherwise acquiring, reconstructing, extending, improving, equipping, furnishing or acquiring real property or any interest in real property for the site or grounds for tourist-related facilities and attractions or tourist-related transportation systems of the municipality, the county in which the municipality is located or the county;

                (3) the principal of and interest on any prior redemption premiums due in connection with and any other charges pertaining to revenue bonds authorized by Section 3-38-23 or 3-38-24 NMSA 1978;

                (4) advertising, publicizing and promoting tourist-related attractions, facilities and events of the municipality or county and tourist-related facilities, attractions and events within the area;

                (5) providing police and fire protection and sanitation service for tourist-related facilities, attractions and events located in the respective municipality or county;

                (6) providing a required minimum revenue guarantee for air service to the municipality or county to increase the ability of tourists to easily access the municipality's or county's tourist-related facilities, attractions and events; or

                (7) any combination of the foregoing purposes or transactions stated in this section, but for no other municipal or county purpose.

          B. A municipality or county imposing an occupancy tax may use the proceeds from the occupancy tax that are collected based on the thirty-first and subsequent days a vendee rents lodging in taxable premises for any municipality or county purpose; provided that the use is stated in the ordinance imposing the tax.

          [B.] C. As used in this section, "minimum revenue guarantee" is the amount of money guaranteed by a municipality or county to be earned by an airline providing air services to and from that municipality or county, which is the difference between the minimum flight charge revenue specified in the contract between the municipality or county and the airline and the amount of actual flight charge revenue received by the airline that is less than that contractual amount."

     SECTION 5. A new section of the Lodgers' Tax Act, Section 3-38-25 NMSA 1978, is enacted to read:

     "3-38-25. [NEW MATERIAL] MAINTAINING REVENUE DEDICATION.--If a municipality or county has dedicated any amount of revenue attributable to a tax imposed pursuant to the Lodgers' Tax Act, the municipality or county shall continue to dedicate the same amount of revenue attributable to the tax until the ordinance dedicating the revenue expires, the term of the dedication expires, the governing body acts to change the dedication or, in the case of bonded indebtedness, the debt is fully discharged or otherwise provided for in full."

     SECTION 6. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2020.

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