HOUSE BILL 355
46th legislature - STATE OF NEW MEXICO - second session, 2004
INTRODUCED BY
James G. Taylor
AN ACT
RELATING TO FINANCE; ENACTING THE MUNICIPAL ARENA FUNDING ACT; AUTHORIZING MUNICIPALITIES TO REQUIRE VENDORS TO COLLECT A SURCHARGE ON REVENUES ARISING FROM ACTIVITIES AT A MUNICIPAL ARENA; PROVIDING LEGISLATIVE AUTHORIZATION FOR THE NEW MEXICO FINANCE AUTHORITY TO PROVIDE FINANCING FOR A MUNICIPAL ARENA; EXEMPTING RECEIPTS SUBJECT TO A SURCHARGE FROM THE GROSS RECEIPTS TAX AND THE GOVERNMENTAL GROSS RECEIPTS TAX; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 9 of this act may be cited as the "Municipal Arena Funding Act".
Section 2. [NEW MATERIAL] FINDINGS AND PURPOSE.--
A. The legislature finds that:
(1) the costs of land for municipal arenas and the costs of designing, purchasing, constructing, remodeling, rehabilitating, renovating, improving, equipping, furnishing, operating and maintaining municipal arenas have increased to a level that local financial resources are inadequate to meet all of the costs;
(2) functional and modern municipal arenas are essential in retaining and attracting sporting events, concert performances and other entertainment and recreational performances to the state; and
(3) even after using financial resources, municipalities need additional means to provide complete funding for functional and modern municipal arenas.
B. The purpose of the Municipal Arena Funding Act is to provide an additional method of accessing the capital markets with the assistance of the authority to meet the need for a complete funding package for functional and modern municipal arenas.
Section 3. [NEW MATERIAL] DEFINITIONS.--As used in the Municipal Arena Funding Act:
A. "arena lease revenues" means receipts, fees, rentals or other charges paid to a municipality for the right to use, operate or manage a municipal arena by any person, corporation or other entity;
B. "arena surcharge" means a surcharge on tickets, parking, souvenirs, concessions, programs, advertising, merchandise, corporate suites or boxes, broadcast rights and all other products or services sold at or related to the municipal arena or activities occurring at the arena;
C. "authority" means the New Mexico finance authority;
D. "chief executive officer" means the mayor or chief administrative officer of a municipality when designated in writing by the mayor to perform duties required by the Municipal Arena Funding Act;
E. "governing body" means the council, commission or other group of elected officials of a municipality in which the legislative authority of a municipality is vested;
F. "loan" means a loan or other financial arrangement pursuant to which money is lent or otherwise made available by the authority to a municipality to pay for some or all of the costs of land for and designing, purchasing, constructing, remodeling, rehabilitating, renovating, improving, equipping and furnishing a municipal arena;
G. "loan payments" means all payments of principal, interest, premiums, charges, expenses or other obligations required to be paid by a municipality to the authority to repay the loan;
H. "municipal arena" means an arena, including land, buildings and related improvements, primarily designed and intended for performances of sporting events, concerts and other entertainment and recreational events;
I. "municipality" means a city located in a class A county with a population of more than two hundred thousand according to the 2000 federal decennial census;
J. "vendor" means a person, corporation, partnership or other entity, including a division or department of a municipality, providing products or services sold at or related to the municipal arena; and
K. "vendor contract" means a contract, agreement or other written arrangement between a municipality and a vendor pursuant to which the vendor provides products or services sold at or related to the municipal arena.
Section 4. [NEW MATERIAL] AUTHORIZATION OF SURCHARGE--USE OF PROCEEDS.--
A. A municipality may impose an arena surcharge by majority vote of the governing body. If an arena surcharge has been imposed, the municipality shall include an arena surcharge in each vendor contract and each vendor contract shall be signed by the chief executive officer.
B. Before establishing the amount of the arena surcharge to be included in each vendor contract, the municipality shall notify the authority in writing of the proposed amount of the loan requested for the municipal arena and of the proposed amount of the arena surcharge to be included in each vendor contract. The authority shall review the proposed amount of the arena surcharge and shall make a written recommendation to a municipality setting forth the minimum amount of the arena surcharge to be set forth in the loan and related documents. The minimum amount of the surcharge shall not be less than five percent and may be any higher percentage recommended by the authority or otherwise established by the municipality.
C. After receipt of the written recommendation from the authority, a municipality shall establish the amount of the arena surcharge to be included in each vendor contract; provided that the amount of the surcharge to be set forth in the loan and related documents shall be at least the minimum amount recommended by the authority.
D. Receipts from the arena surcharge may be used by the municipality for all or any portion of:
(1) loan payments;
(2) costs of constructing, renovating, operating, maintaining or improving the municipal arena; or
(3) costs of collecting and otherwise administering the surcharge.
E. A municipality shall establish a fund for construction, renovation, operation, maintenance and improvement of a municipal arena for deposit of all receipts from the arena surcharge that exceed the required loan payments and all receipts deposited in that fund shall be used for those purposes for the costs of collecting and administering the surcharge.
Section 5. [NEW MATERIAL] COLLECTION OF SURCHARGE--REMITTANCE TO THE MUNICIPALITY.--
A. A vendor shall collect the arena surcharge on behalf of the municipality and shall act as a trustee for the vendor.
B. The arena surcharge shall be collected by vendors from the users of products or services subject to the arena surcharge. Users shall be charged separately for the surcharge from the cost of the product or service subject to the surcharge or the vendor shall institute accounting controls or procedures sufficient to identify the amount of the surcharge owed to a municipality for each sale, transaction or exchange subject to the surcharge.
C. Receipts from the arena surcharge shall be remitted by vendors to the treasurer of the municipality no later than the tenth day of the month following collection of the receipts. The treasurer of the municipality shall deposit the receipts in a separate account and shall act as trustee of the receipts on behalf of the authority so long as any loan is unpaid.
Section 6. [NEW MATERIAL] AUDITS.--A municipality shall provide by ordinance a method to either audit or otherwise ensure that vendors subject to the arena surcharge collect and remit to the treasurer of the municipality the full amount of the surcharge receipts due to the municipality.
Section 7. [NEW MATERIAL] ENFORCEMENT--PENALTIES.--
A. An action to enforce the imposition and collection of an arena surcharge by a vendor may be brought by a municipality.
B. A district court may issue an appropriate judgment, order or remedy to enforce the provisions of a vendor contract.
C. Any judgment issued by a district court requiring arena surcharge receipts to be paid to a municipal treasurer by a vendor shall also award interest at twelve percent on past due amounts, attorney fees and costs to the municipality.
Section 8. [NEW MATERIAL] AUTHORIZATION OF PROJECT.--
A. Pursuant to the provisions of Section 6-21-6 NMSA 1978, the authority may make a loan from the public project revolving fund to a municipality to acquire land for and to design, purchase, construct, remodel, renovate, rehabilitate, improve, equip or furnish a municipal arena on terms and conditions established by the authority.
B. Prior to receiving the loan, the governing body shall approve the loan and related documents by an ordinance to be adopted by a majority of the members of the governing body. The ordinance shall pledge the arena lease revenues and the arena surcharge receipts to make the loan payments. In addition to pledging the arena lease revenues and the arena surcharge receipts for making loan payments, the ordinance shall pledge legally available gross receipts tax revenues distributed to a municipality pursuant to Section 7-1-6.4 or 7-1-6.12 NMSA 1978 in an amount satisfactory to the authority and in an amount at least sufficient to make the loan payments. An action shall not be brought questioning the legality of the pledge of arena lease revenues, arena surcharge receipts and gross receipts tax revenues, the ordinance, the loan, the proceedings, the arena surcharge to be included in each vendor contract or any other matter concerning the loan after thirty days from the date of publication of the ordinance approving the loan and related documents and pledging arena lease revenues, arena surcharge receipts and gross receipts tax revenues of a municipality to make the loan payments.
C. The legislature or a municipality shall not repeal, amend or otherwise modify any law or ordinance that adversely affects or impairs the arena surcharge or any loan from the authority secured by a pledge of the arena lease revenues, arena surcharge, receipts and gross receipts tax revenues, unless the loan has been paid in full or provisions have been made for full payment.
Section 9. [NEW MATERIAL] CUMULATIVE AND COMPLETE AUTHORITY.--The Municipal Arena Funding Act shall be deemed to provide an additional and alternative method for obtaining funding for a municipal arena, establishing the arena surcharge, completing the acts authorized and shall be regarded as supplemental and additional to powers conferred by those other laws of the state and shall constitute full authority for the exercise of powers granted, including the pledging of arena lease revenues, arena surcharge receipts and gross receipts tax revenues by the governing body to make loan payments to the authority.
Section 10. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:
"[NEW MATERIAL] EXEMPTION--GROSS RECEIPTS TAX AND GOVERNMENTAL GROSS RECEIPTS TAX--ARENA SURCHARGE.--Exempted from the gross receipts tax and from the governmental gross receipts tax are receipts subject to the arena surcharge pursuant to the Municipal Arena Funding Act."
Section 11. LIBERAL INTERPRETATION.--The Municipal Arena Funding Act, being necessary for the welfare of the state and its inhabitants, shall be liberally construed to effect the purposes of that act.
Section 12. SEVERABILITY.--If any part or application of the Municipal Arena Funding Act is held invalid, the remainder or its application to other situations or persons shall not be affected.
Section 13. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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