Senate Bill text for SB0222

SENATE BILL 222

47th legislature - STATE OF NEW MEXICO - second session, 2006

INTRODUCED BY

James G. Taylor

FOR THE REVENUE STABILIZATION AND TAX POLICY COMMITTEE

AN ACT

RELATING TO TAXATION; PROVIDING FOR A MUNICIPAL PROPERTY TAX REBATE FOR LOW-INCOME HOMEOWNERS; PERMITTING MUNICIPALITIES TO SUBMIT TO QUALIFIED ELECTORS THE QUESTION OF A NEW PROPERTY TAX IMPOSITION.

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

Section 1. Section 7-2-14.3 NMSA 1978 (being Laws 1994, Chapter 111, Section 1, as amended) is amended to read:

"7-2-14.3. TAX REBATE OF PART OF PROPERTY TAX DUE FROM

LOW-INCOME TAXPAYER--LOCAL OPTION [REFUND].--

A. The tax rebate provided by this section may be claimed for the taxable year for which the return is filed by an individual who:

(1) has [his] a principal place of residence in a county or municipality that has adopted an ordinance pursuant to Subsection [G] H or I of this section;

(2) is not a dependent of another individual;

(3) files a return pursuant to the Income Tax Act; and

(4) incurred a property tax liability on [his] the principal place of residence in the taxable year.

B. The tax rebate provided by this section shall be allowed for [any] an individual eligible to claim the [refund] rebate pursuant to Subsection A of this section [and] who:

(1) was not an inmate of a public institution for more than six months during the taxable year;

(2) was physically present in New Mexico for at least six months during the taxable year for which the rebate is claimed; and

(3) is eligible for the rebate as a low-income property taxpayer in accordance with the provisions of Subsection [D] E of this section.

C. A husband and wife who file separate returns for the taxable year in which they could have filed a joint return may each claim only one-half of the tax rebate that would have been allowed on the joint return.

D. As used [in the table] in this [subsection] section:

(1) "governing body" means, for a county, the board of county commissioners, and for a municipality, the city council or city commission of a city, the board of trustees of a town or village and the board of county commissioners of an H class county;

(2) "principal place of residence" means the dwelling owned and occupied by the taxpayer and so much of the land surrounding it, not to exceed five acres, as is reasonably necessary for use of the dwelling as a home and may consist of a part of a multidwelling or a multipurpose building and a part of the land upon which it is built; and

(3) "property tax liability" means the amount of property tax resulting from the imposition of the county and municipal property tax operating impositions on the net taxable value of the taxpayer's principal place of residence calculated for the year for which the rebate is claimed.

E. The tax rebate provided in this section is as specified in the following table; provided that if a taxpayer's modified gross income is zero, the taxpayer may claim a rebate in the amount shown in the first row of the table; and further provided that the amounts are subject to the limitations of Subsection F of this section:

LOW-INCOME TAXPAYER'S PROPERTY TAX REBATE TABLE

Taxpayer's Modified Gross Income Property Tax Rebate But Not

Over Over

$ 0 $ 8,000 75% of property tax liability

8,000 10,000 70% of property tax liability

10,000 12,000 65% of property tax liability

12,000 14,000 60% of property tax liability

14,000 16,000 55% of property tax liability

16,000 18,000 50% of property tax liability

18,000 20,000 45% of property tax liability

20,000 22,000 40% of property tax liability

22,000 24,000 35% of property tax liability.

[E. If a taxpayer's modified gross income is zero, the taxpayer may claim a tax rebate in the amount shown in the first row of the table.]

F. The tax rebate provided for in this section shall not exceed three hundred fifty dollars ($350) per return and, if a return is filed separately that could have been filed jointly, the tax rebate shall not exceed one hundred seventy-five dollars ($175). No tax rebate shall be allowed any taxpayer whose modified gross income exceeds twenty-four thousand dollars ($24,000).

[F.] G. The tax rebate provided for in this section may be deducted from the taxpayer's New Mexico income tax liability for the taxable year. If the tax rebate exceeds the taxpayer's income tax liability, the excess shall be refunded to the taxpayer.

[G.] H. In January of every odd-numbered year in which a county does not have in effect an ordinance adopted pursuant to this subsection, the board of county commissioners of the county shall conduct a public hearing on the question of whether the property tax rebate provided in this section benefiting low-income property taxpayers in the county should be made available through adoption of a county ordinance. Notice of the public hearing shall be published once at least two weeks prior to the hearing date in at least one newspaper of general circulation in the county and broadcast at some time within the week before the hearing on at least one radio station with substantial broadcasting coverage in the county. At the public hearing, the board shall take action on the question and if a majority of the members elected votes to adopt an ordinance, it shall be adopted no later than thirty days after the public hearing.

I. If the county in which the municipality is wholly or partially located does not have in effect for the tax year an ordinance pursuant to Subsection H of this section, a municipality may adopt an ordinance providing a low-income property tax rebate pursuant to this section. If a county in which the municipality is located concurrently or subsequently adopts an ordinance pursuant to this section for any taxable year included in the municipal ordinance, the municipal ordinance is void with respect to that taxable year.

[H.] J. An ordinance adopted pursuant to Subsection [G] H or I of this section shall specify the taxable years to which it is applicable. The [board of county commissioners] governing body adopting an ordinance shall notify the department of the adoption of the ordinance and furnish a copy of the ordinance to the department no later than September 1 of the first taxable year to which the ordinance applies.

[I.] K. No later than December 31 of the year immediately following the first year in which the low-income taxpayer property tax rebate provided in the Income Tax Act is in effect for a county or a municipality, and no later than December 31 of each year thereafter in which the tax rebate is in effect, the department shall certify to the county and the municipality the amount of the loss of income tax revenue to the state for the previous taxable year attributable to the allowance of property tax rebates to taxpayers of that county or municipality. The county or municipality shall promptly pay the amount certified to the department. If a county or municipality fails to pay the amount certified within thirty days of the date of certification, the department may enforce collection of the amount by action against the county or municipality and may withhold from any revenue distribution to the county or municipality, not dedicated or pledged, amounts up to the amount certified. A county and any municipality wholly or partially located within that county may enter into an agreement pursuant to the Joint Powers Agreements Act or any other written agreement to reimburse the paying party all or part of the amount paid to the department.

[J. As used in this section, "principal place of residence" means the dwelling owned and occupied by the taxpayer and so much of the land surrounding it, not to exceed five acres, as is reasonably necessary for use of the dwelling as a home and may consist of a part of a multidwelling or a multipurpose building and a part of the land upon which it is built.]"

Section 2. Section 7-2-14.5 NMSA 1978 (being Laws 1994, Chapter 111, Section 3) is amended to read:

"7-2-14.5. IMPOSITION OF TAX--LIMITATIONS.--

A. If, as a result of an election held on the question of imposing a property tax to fund the property tax rebate for low-income taxpayers provided in the Income Tax Act, a majority of the qualified electors voting on the question votes in favor of the imposition of the tax, the tax rate shall be certified by the department of finance and administration for any year in which the tax is imposed. The rate certified shall be the rate specified in the authorizing resolution or any lower rate required by operation of the rate limitation provisions of Section 7-37-7.1 NMSA 1978. The tax shall be imposed at the rate certified unless the [board of county commissioners] governing body determines that the tax imposition be decreased or not made pursuant to Subsection B of this section. The revenue produced by the tax shall be placed in a separate fund in the county treasury or municipal treasury, as appropriate, and is pledged solely for the payment of the income tax revenue reduction resulting from the implementation of the property tax rebate for low-income taxpayers.

B. A tax imposed pursuant to Subsection A of this section shall be imposed for one, two, three, four or five years commencing with the property tax year in which the tax rate is first imposed. The [board of county commissioners] governing body may direct that the rate of imposition of the tax be decreased for any year if, in its judgment, imposition of the total rate is not necessary for such year. The [board of county commissioners] governing body shall direct that the imposition not be made for any property tax year for which the property tax rebate for low-income taxpayers is not provided [or for any year in which the county has imposed a property transfer tax pursuant to the Transfer Tax Act].

C. As used in this section, "governing body" means, for a county, the board of county commissioners, and for a municipality, the city council or city commission of a city, the board of trustees of a town or village and the board of county commissioners of an H class county."

Section 3. A new section of the Income Tax Act is enacted to read:

"[NEW MATERIAL] AUTHORIZATION TO FUND PROPERTY TAX REBATE FOR LOW-INCOME TAXPAYERS--TAX IMPOSITION--ELECTION.--

A. If the county in which the municipality is wholly or partially located does not have in effect for the taxable year an ordinance pursuant to Section 7-2-14.3 NMSA 1978, the governing body of the municipality may adopt an ordinance to submit to the qualified electors of the municipality the question of whether a property tax at a rate not to exceed one dollar ($1.00) per one thousand dollars ($1,000) of taxable value of property should be imposed for the purpose of providing the necessary funding for the property tax rebate for low-income taxpayers provided in the Income Tax Act if the municipality has adopted an ordinance providing the property tax rebate.

B. The ordinance shall:

(1) specify the rate of the proposed tax, which shall not exceed one dollar ($1.00) per one thousand dollars ($1,000) of taxable value of property;

(2) specify the date an election will be held to submit the question of imposition of the tax to the qualified electors of the municipality;

(3) impose the tax for one, two, three, four or five property tax years and limit the imposition of the proposed tax to five property tax years; and

(4) pledge the revenue from the tax solely for the payment of the income tax revenue reduction resulting from the implementation of the property tax rebate for low-income taxpayers.

C. The ordinance authorized in Subsection A of this section shall be adopted no later than May 15 in the year prior to the year in which the tax is proposed to be imposed. By adoption of an appropriate resolution or ordinance, the governing body may submit the question of imposing the tax for successive periods of one, two, three, four or five years to the qualified electors of the municipality. The procedures for the election and for the imposition of the tax for subsequent periods shall be the same as those applying to the initial imposition of the tax. The election shall be scheduled so that the imposition of the tax for successive periods is in continuity of the tax.

D. An election on the question of imposing the tax authorized pursuant to this section may be held in conjunction with a regular municipal election or may be conducted as or held in conjunction with a special election, but the election shall be held by the date necessary to ensure that the results of the election on the question of imposing the tax may be certified no later than July 1 of the first property tax year in which the tax is proposed to be imposed. Conduct of the election shall be as provided by the Municipal Election Code.

E. As used in this section:

(2) "taxable value of property" means the combined total of net taxable value of property allocated to the municipality pursuant to the Property Tax Code; the assessed value of products severed and sold in the municipality for the calendar year preceding the year for which a determination is made as determined pursuant to the Oil and Gas Ad Valorem Production Tax Act; the assessed value of equipment in the municipality as determined pursuant to the Oil and Gas Production Equipment Ad Valorem Tax Act; and the taxable value of copper mineral property in the municipality pursuant to Section 7-39-7 NMSA 1978."

Section 4. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2006 and to the 2006 and subsequent property tax years.

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