HOUSE BILL 476
47th legislature - STATE OF NEW MEXICO - second session, 2006
INTRODUCED BY
Jose A. Campos
AN ACT
RELATING TO TAXATION; PROVIDING FOR A MUNICIPAL INCOME TAX DISTRIBUTION; PROVIDING FOR ADJUSTMENTS OF DISTRIBUTIONS TO MUNICIPALITIES; REQUIRING AN ANNUAL REPORT TO THE REVENUE STABILIZATION AND TAX POLICY COMMITTEE REGARDING MUNICIPAL INCOME TAX AND GROSS RECEIPTS TAX DISTRIBUTIONS; RECONCILING MULTIPLE AMENDMENTS TO THE SAME SECTION OF LAW IN LAWS 1990.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 7-1-6.1 NMSA 1978 (being Laws 1983, Chapter 211, Section 6, as amended by Laws 1990, Chapter 6, Section 19 and also by Laws 1990, Chapter 86, Section 3) is amended to read:
"7-1-6.1. IDENTIFICATION OF MONEY IN TAX ADMINISTRATION SUSPENSE FUND--DISTRIBUTION.--After the necessary disbursements have been made from the tax administration suspense fund, the money remaining, except for remittances received within the previous sixty days that are unidentified as to source or disposition, in the suspense fund as of the last day of the month shall be identified by tax source and distributed or transferred in accordance with the [provisions of Sections 7-1-6.2 through 7-1-6.19, 7-1-6.24 through 7-1-6.26 and 7-1-6.28 through 7-1-6.40 NMSA 1978] applicable distribution provisions of the Tax Administration Act. After the necessary distributions and transfers, any balance shall be distributed to the general fund."
Section 2. 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] fairgrounds", 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. If the reduction made by this 2006 act in the distribution pursuant to Subsection A of this section impairs the ability of a municipality to meet its principal or interest payment obligations for revenue bonds outstanding prior to January 1, 2007 that are secured by the pledge of all or part of the municipality's revenue from the distribution made under this section, the municipality may pledge any amount of the distribution pursuant to Section 7-1-6.54 NMSA 1978 to meet any required payment."
Section 3. Section 7-1-6.46 NMSA 1978 (being Laws 2004, Chapter 116, Section 1) is amended to read:
"7-1-6.46. DISTRIBUTION TO MUNICIPALITIES--OFFSET FOR FOOD DEDUCTION AND HEALTH CARE PRACTITIONER SERVICES DEDUCTION.--
A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to a municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the sum of:
(1) the total deductions claimed pursuant to Section 7-9-92 NMSA 1978 for the month by taxpayers from business locations attributable to the municipality multiplied by the sum of the combined rate of all municipal local option gross receipts taxes in effect in the municipality for the month, plus one [and two hundred twenty-five thousandths] percent, plus an additional two hundred twenty-five thousandths percent if a distribution is made to the municipality pursuant to Subsection A of Section 7-1-6.54 NMSA 1978; and
(2) the total deductions claimed pursuant to Section 7-9-93 NMSA 1978 for the month by taxpayers from business locations attributable to the municipality multiplied by the sum of the combined rate of all municipal local option gross receipts taxes in effect in the municipality for the month, plus one [and two hundred twenty-five thousandths] percent, plus an additional two hundred twenty-five thousandths percent if a distribution is made to the municipality pursuant to Subsection A of Section 7-1-6.54 NMSA 1978.
B. The distribution pursuant to Subsection A of this section is in lieu of revenue that would have been received by the municipality but for the deductions provided by Sections 7-9-92 and 7-9-93 NMSA 1978. The distribution shall be considered gross receipts tax revenue and shall be used by the municipality in the same manner as gross receipts tax revenue, including payment of gross receipts tax revenue bonds.
C. For the purposes of this section, "business locations attributable to the municipality" means business locations:
(1) within the municipality;
(2) on land owned by the state, commonly known as the "state fairgrounds", within the exterior boundaries of the municipality;
(3) outside the boundaries of the municipality on land owned by the municipality; and
(4) on an Indian reservation or pueblo grant in an area that is contiguous to the 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."
Section 4. A new section of the Tax Administration Act, Section 7-1-6.54 NMSA 1978, is enacted to read:
"7-1-6.54. [NEW MATERIAL] DISTRIBUTION TO MUNICIPALITIES--INCOME TAX.--In addition to any other distribution made to each municipality pursuant to the Tax Administration Act, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each municipality in an amount equal to the greater of:
A. the 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 two hundred twenty-five thousandths percent divided by the tax rate imposed by Section 7-9-4 NMSA 1978 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 fairgrounds", 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; or
B. one-twelfth of an amount equal to two hundred seventy-five thousandths percent of the adjusted gross income reported pursuant to the Income Tax Act by residents of the municipality for taxable years beginning on or after January 1 in the taxable year two years prior to the calendar year in which the distribution is being made; provided that "adjusted gross income reported" does not include adjusted gross income reported on returns filed after October 15 of the calendar year following that taxable year."
Section 5. [NEW MATERIAL] REPORT TO REVENUE STABILIZATION AND TAX POLICY COMMITTEE.--The secretary of taxation and revenue, the secretary of finance and administration and the executive director of the New Mexico municipal league shall report annually to the revenue stabilization and tax policy committee the distributions made in the most recent fiscal year or calendar year to the municipalities pursuant to Sections 7-1-6.4 and 7-1-6.54 NMSA 1978 and any recommendations for changes in the distribution formulas or revenue sources.
Section 6. TEMPORARY PROVISION.--For calendar year 2007, the secretary of taxation and revenue shall develop a method of determining as accurately as practicable the site of residence of income tax payers for purposes of determining the distribution to each municipality pursuant to the provisions of Section 7-1-6.54 NMSA 1978.
Section 7. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2007.
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