AN ACT

RELATING TO TAXATION; CHANGING THE GROSS RECEIPTS TAX AND COMPENSATING TAX DEDUCTIONS FOR FUEL SPECIALLY PREPARED AND SOLD FOR TURBOPROP OR JET-TYPE ENGINES; PROVIDING DISTRIBUTIONS; MAKING AN APPROPRIATION.

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

     Section 1. Section 7-1-6.7 NMSA 1978 (being Laws 1994, Chapter 5, Section 2, as amended) is amended to read:

     "7-1-6.7. DISTRIBUTIONS--STATE AVIATION FUND.--

          A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the state aviation fund in an amount equal to four and seventy-nine hundredths percent of the taxable gross receipts attributable to the sale of fuel specially prepared and sold to commercial aviation operators for use in turboprop or jet-type engines as determined by the department.

          B. A monthly distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the state aviation fund in an amount equal to three and seven hundred seventy-five thousandths percent of the taxable gross receipts attributable to the sale of fuel specially prepared and sold to persons or entities that are not commercial aviation operators for use in turboprop or jet-type engines as determined by the department.

          C. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the state aviation fund in an amount equal to twenty-six hundredths percent of gasoline taxes, exclusive of penalties and interest, collected pursuant to the Gasoline Tax Act.

          D. From July 1, 2002 through June 30, 2007, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the state aviation fund in an amount equal to

forty-six thousandths percent of the net receipts attributable to the gross receipts tax distributable to the general fund.

          E. For the purposes of this section, "commercial aviation operator" means a person or entity that, for compensation or hire, engages in the carriage by aircraft in air commerce of persons or property in accordance with part 121 and scheduled air operations pursuant to part 135 of Title 14 of the Code of Federal Regulations."

     Section 2. Section 7-9-83 NMSA 1978 (being Laws 1993, Chapter 364, Section 1, as amended) is amended to read:

     "7-9-83. DEDUCTION--GROSS RECEIPTS TAX--JET FUEL.--

          A. Fifty-five percent of the receipts from the sale of fuel specially prepared and sold to commercial aviation operators for use in turboprop or jet-type engines as determined by the department may be deducted from gross receipts.

          B. For the purposes of this section, "commercial aviation operator" means a person or entity that, for compensation or hire, engages in the carriage by aircraft in air commerce of persons or property in accordance with part 121 and scheduled air operations pursuant to part 135 of Title 14 of the Code of Federal Regulations."

     Section 3. Section 7-9-84 NMSA 1978 (being Laws 1993, Chapter 364, Section 2, as amended) is amended to read:

     "7-9-84. DEDUCTION--COMPENSATING TAX--JET FUEL.--

          A. Fifty-five percent of the value of the fuel specially prepared and sold to commercial aviation operators for use in turboprop or jet-type engines as determined by the department may be deducted in computing the compensating tax due.

          B. For the purposes of this section, "commercial aviation operator" means a person or entity that, for compensation or hire, engages in the carriage by aircraft in air commerce of persons or property in accordance with part 121 and scheduled air operations pursuant to part 135 of Title 14 of the Code of Federal Regulations."

     Section 4. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2005.