0001|     
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0002|                           SENATE BILL 190
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0003|     43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998
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0004|                            INTRODUCED BY
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0005|                          CARROLL H. LEAVELL
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0006|     
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0007|                                   
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0008|     
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0009|                                   
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0010|     
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0011|                                AN ACT
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0012|     RELATING TO TAXATION; CREATING THE RURAL JOB TAX CREDIT.
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0013|     
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0014|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0015|          Section 1.  TAX CREDIT--RURAL JOB TAX CREDIT.--
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0016|               A.  The tax credit created by this section may be
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0017|     referred to as the "rural job tax credit".  Until June 30,
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0018|     2004, every eligible employer may apply for, and the taxation
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0019|     and revenue department may allow, a tax credit for each
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0020|     qualifying job the employer creates in the period beginning
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0021|     July 1, 1998 and ending June 30, 2003.  The maximum tax credit
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0022|     amount with respect to each qualifying job is equal to: 
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0023|                    (1)  twenty-five percent of the first sixteen
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0024|     thousand dollars ($16,000) in wages paid for the qualifying
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0025|     job if the job is performed or based at a location in a tier
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0001|     one area; or
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0002|                    (2)  twelve and one-half percent of the first
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0003|     sixteen thousand dollars ($16,000) in wages paid if the
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0004|     qualifying job is performed or based at a location in a tier
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0005|     two area.
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0006|               B.  As used in this section:
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0007|                    (1)  "eligible employee" means any individual
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0008|     other than an individual who:
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0009|                         (a)  bears any of the relationships
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0010|     described in Paragraphs (1) through (8) of 26 U.S.C. Section
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0011|     152(a) to the employer or, if the employer is a corporation,
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0012|     to an individual who owns, directly or indirectly, more than
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0013|     fifty percent in value of the outstanding stock of the
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0014|     corporation or, if the employer is an entity other than a
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0015|     corporation, to any individual who owns, directly or
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0016|     indirectly, more than fifty percent of the capital and profits
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0017|     interests in the entity;
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0018|                         (b)  if the employer is an estate or
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0019|     trust, is a grantor, beneficiary or fiduciary of the estate or
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0020|     trust or is an individual who bears any of the relationships
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0021|     described in Paragraphs (1) through (8) of 26 U.S.C. Section
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0022|     152(a) to a grantor, beneficiary or fiduciary of the estate or
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0023|     trust; or

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0024|                         (c)  is a dependent, as that term is
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0025|     described in 26 U.S.C. Section 152(a)(9), of the employer or,
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0001|     if the taxpayer is a corporation, of an individual who owns,
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0002|     directly or indirectly, more than fifty percent in value of
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0003|     the outstanding stock of the corporation or, if the employer
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0004|     is an entity other than a corporation, of any individual who
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0005|     owns, directly or indirectly, more than fifty percent of the
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0006|     capital and profits interests in the entity or, if the
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0007|     employer is an estate or trust, of a grantor, beneficiary or
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0008|     fiduciary of the estate or trust;
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0009|                    (2)  "eligible employer" means an employer
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0010|     who has been approved for in-plant training assistance
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0011|     pursuant to Section 21-19-7 NMSA 1978;
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0012|                    (3)  "metropolitan statistical area" means a
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0013|     metropolitan statistical area in New Mexico as determined by
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0014|     the United States bureau of the census;
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0015|                    (4)  "modified combined tax liability" means
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0016|     the total liability for the reporting period for gross
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0017|     receipts tax imposed by Section 7-9-4 NMSA 1978 together with
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0018|     any tax collected at the same time and in the same manner as
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0019|     that gross receipts tax, such as the compensating tax, the
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0020|     withholding tax, the interstate telecommunications gross
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0021|     receipts tax, the surcharges imposed by Section 63-9D-5 NMSA
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0022|     1978 and the surcharge imposed by Section 63-9F-11 NMSA 1978,
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0023|     minus the amount of any credit other than the rural job tax
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0024|     credit applied against any or all of these taxes or
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0025|     surcharges; but "modified combined tax liability" excludes all
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0001|     amounts collected with respect to local option gross receipts
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0002|     taxes;
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0003|                    (5)  "qualifying job" means a job established
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0004|     by the employer that:
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0005|                         (a)  qualifies for in-plant training
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0006|     assistance; and
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0007|                         (b)  is occupied by an eligible employee
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0008|     for at least forty-eight weeks of a qualifying period;
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0009|                    (6)  "qualifying period" means the period of
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0010|     twelve months beginning on the day an eligible employee begins
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0011|     working in a qualifying job or the period of twelve months
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0012|     beginning on the anniversary of the day an eligible employee
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0013|     began working in a qualifying job;
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0014|                    (7)  "rural area" means any part of the state
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0015|     other than:
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0016|                         (a)  an H class county;
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0017|                         (b)  the state fairgrounds;
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0018|                         (c)  an incorporated municipality within
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0019|     a metropolitan statistical area if the municipality's
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0020|     population is thirty thousand or more according to the most
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0021|     recent federal decennial census; and
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0022|                         (d)  any area within ten miles of the
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0023|     exterior boundaries of a municipality described in
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0024|     Subparagraph (c) of this paragraph;
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0025|                    (8)  "tier one area" means any municipality
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0001|     within the rural area if the municipality's population
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0002|     according to the most recent federal decennial census is
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0003|     fifteen thousand or less;
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0004|                    (9)  "tier two area" means any part of the
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0005|     rural area not a tier one area; and
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0006|                    (10)  "wages" means wages as defined by
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0007|     Paragraphs (1), (2) and (3) of 26 U.S.C. Section 51(c).
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0008|               C.  The amount of the rural job tax credit shall be
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0009|     six and one-fourth percent of the first sixteen thousand
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0010|     dollars ($16,000) in wages paid for the qualifying job in a
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0011|     qualifying period.  The rural job tax credit may be claimed
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0012|     for each qualifying job for a maximum of:
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0013|                    (1)  four qualifying periods for each
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0014|     qualifying job performed or based at a location in a tier one
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0015|     area; and
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0016|                    (2)  two qualifying periods for each
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0017|     qualifying job performed or based at a location in a tier two
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0018|     area.
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0019|              D.  With respect to each qualifying job for which
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0020|     an eligible employer seeks the rural job tax credit, the
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0021|     employer shall request the economic development department to
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0022|     certify the amount of wages paid to each eligible employee
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0023|     during each qualifying period, the number of weeks during the
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0024|     qualifying period the position was occupied and whether the
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0025|     qualifying job was in a tier one or tier two area.  The
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0001|     economic development department may require the employer to
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0002|     submit such information as is necessary for the economic
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0003|     development department to make the certification requested. 
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0004|     When the economic development department obtains sufficient
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0005|     information, either from its own records or from the employer,
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0006|     the economic development department shall make the
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0007|     certification requested.
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0008|              E.  The economic development department shall
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0009|     determine which employers are eligible employers and shall
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0010|     report the listing of eligible businesses to the taxation and
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0011|     revenue department in a manner and at times the departments
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0012|     shall agree upon.
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0013|              F.  To receive a rural job tax credit with respect
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0014|     to any qualifying period, an eligible employer must apply to
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0015|     the taxation and revenue department on forms and in the manner
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0016|     the department may prescribe.  The application shall include a
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0017|     copy of the certification from the economic development
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0018|     department made pursuant to Subsection D of this section.  If
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0019|     all the requirements of this section have been complied with,
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0020|     the taxation and revenue department may issue to the applicant
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0021|     a document granting a tax credit for the respective qualifying
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0022|     period.  The tax credit document shall be numbered for
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0023|     identification and declare its date of issuance and the amount
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0024|     of rural job tax credit allowed for the respective jobs
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0025|     created.  Such tax credit documents may be sold, exchanged or
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0001|     otherwise transferred and can be carried forward for a period
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0002|     of three years from the date of issuance.  The parties to such
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0003|     a transaction shall notify the department of the sale,
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0004|     exchange or transfer within ten days of the sale, exchange or
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0005|     transfer.
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0006|              G.  The holder of the tax credit document may apply
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0007|     all or a portion of the rural job tax credit granted by the
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0008|     document against the holder's modified combined tax liability,
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0009|     personal income tax liability or corporate income tax
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0010|     liability.  Any balance of rural job tax credit granted by the
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0011|     document may be carried forward for up to three years from the
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0012|     date of issuance of the tax credit document.  No amount of
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0013|     rural job tax credit may be applied against a gross receipts
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0014|     tax imposed by a municipality or county.
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0015|              H.  Notwithstanding the provisions of Section 7-1-8
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0016|     NMSA 1978, the taxation and revenue department may disclose to
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0017|     any person the balance of rural job tax credit remaining on
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0018|     any tax credit document and the balance of credit remaining on
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0019|     that document for any period. 
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0020|              I.  The secretary of economic development, the
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0021|     secretary of taxation and revenue and the secretary of labor
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0022|     or their designees shall annually evaluate the effectiveness
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0023|     of the rural job tax credit in stimulating economic
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0024|     development in the rural areas of New Mexico and make a joint
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0025|     report of their findings to each session of the legislature so
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0001|     long as the rural job tax credit is in effect.
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0002|         Section 2.  CONTINUED APPLICABILITY OF RURAL JOB TAX
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0003|     CREDIT.--The balance of any rural job tax credit granted with
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0004|     respect to qualifying periods occurring after July 1, 2004 or
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0005|     remaining on a tax credit document issued prior to that date
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0006|     may be applied after that date in the manner provided in
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0007|     Section 1 of this act against the holder's modified combined
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0008|     tax liability or corporate or personal income tax liability as
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0009|     if the provisions of Section 1 of this act were still in
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0010|     effect.
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0011|         Section 3.  DELAYED REPEAL.--Section 1 of this act is
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0012|     repealed on July 1, 2004.
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0013|         Section 4.  EFFECTIVE DATE.--The effective date of the
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0014|     provisions of this act is July 1, 1998.
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