HOUSE BILL 647

47th legislature - STATE OF NEW MEXICO - first session, 2005

INTRODUCED BY

Daniel R. Foley

AN ACT

RELATING TO TAXATION; REQUIRING CERTAIN MUNICIPALITIES TO EXPEND SOLELY FOR MUNICIPAL ROAD PROJECTS AND ROAD EQUIPMENT DISTRIBUTIONS FROM INCREASED GROSS RECEIPTS TAX REVENUES ATTRIBUTABLE TO RECONSTRUCTION OR IMPROVEMENT PROJECTS FOR WHICH BONDS ARE SOLD PURSUANT TO LAWS 2003 (S.S.), CHAPTER 3, SECTION 27.

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

     Section 1. Section 7-1-6.4 NMSA 1978 (being Laws 1983, Chapter 211, Section 9, as amended) is amended to read:

     "7-1-6.4. DISTRIBUTION--MUNICIPALITY FROM GROSS RECEIPTS TAX.--

          A. Except as provided in Subsection B of this section, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the product of the quotient of one and two hundred twenty-five thousandths percent divided by the tax rate imposed by Section 7-9-4 NMSA 1978 [times] multiplied by the net receipts for the month attributable to the gross receipts tax from business locations:

                (1) within that municipality;

                (2) on land owned by the state, commonly known as the "state fair grounds", within the exterior boundaries of that municipality;

                (3) outside the boundaries of any municipality on land owned by that municipality; and

                (4) on an Indian reservation or pueblo grant in an area that is contiguous to that municipality and in which the municipality performs services pursuant to a contract between the municipality and the Indian tribe or Indian pueblo if:

                     (a) the contract describes an area in which the municipality is required to perform services and requires the municipality to perform services that are substantially the same as the services the municipality performs for itself; and

                     (b) the governing body of the municipality has submitted a copy of the contract to the secretary.

          B. If the reduction made by Laws 1991, Chapter 9, Section 9 to the distribution under this section impairs the ability of a municipality to meet its principal or interest payment obligations for revenue bonds outstanding prior to July 1, 1991 that are secured by the pledge of all or part of the municipality's revenue from the distribution made under this section, then the amount distributed pursuant to this section to that municipality shall be increased by an amount sufficient to meet any required payment, provided that the distribution amount does not exceed the amount that would have been due that municipality under this section as it was in effect on June 30, 1992.

          C. Amounts distributed to a municipality pursuant to this section that are attributable to an increase in gross receipts taxes collected by the department from the sale within the municipality of goods and services sold for reconstruction or improvement projects within the municipality for which the sale of state transportation bonds is authorized pursuant to Laws 2003 (S.S.), Chapter 3, Section 27 shall be expended by the municipality:

                (1) entirely for municipal road projects and road equipment if that municipality has a population of one thousand five hundred or more; or 

                (2) for any lawful purpose if that municipality has a population of less than one thousand five hundred.

          D. For the purposes of this section:

                (1) the required expenditures in Subsection C of this section apply to the sum of all the distributions made to a municipality in a fiscal year pursuant to this section that exceed the base amount for that municipality for that fiscal year;

                (2) the base amount for a municipality for a fiscal year equals the amount distributed to that municipality pursuant to this section in fiscal year 2003 multiplied by a fraction, the numerator of which is the consumer price index for all urban consumers for all items as published by the United States department of labor for the calendar year immediately preceding the beginning of the fiscal year and the denominator of which is the same index for calendar year 2002 and further multiplied by a fraction, the numerator of which is the estimated population of that municipality in the calendar year immediately preceding the beginning of the fiscal year and the denominator of which is the population of that municipality in calendar year 2002. The local government division of the department of finance and administration shall calculate the base amount for each municipality for each fiscal year; and

                (3) "municipal road project" means construction, renovation, improvement or repair of a highway, street or road within a municipality."