HOUSE BILL 235

48th legislature - STATE OF NEW MEXICO - first session, 2007

INTRODUCED BY

Brian K. Moore

FOR THE LEGISLATIVE FINANCE COMMITTEE

AN ACT

RELATING TO TAX ADMINISTRATION; REQUIRING THE SECRETARY OF TAXATION AND REVENUE TO DEVELOP A TAX EXPENDITURE BUDGET; REQUIRING REPORTING.

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

     Section 1. A new section of the Tax Administration Act is enacted to read:

     "[NEW MATERIAL] TAX EXPENDITURE BUDGET--MANDATORY REPORT--SECRETARY'S DUTY--DEADLINE.--

          A. No later than October 15 of each year, the secretary shall compile a tax expenditure budget for the upcoming fiscal year and present the tax expenditure budget, including an analysis, of tax expenditures to the governor and the legislative finance committee. The tax expenditure budget shall report on tax expenditures with revenue impacts of more than one million dollars ($1,000,000) in the aggregate for a specific tax expenditure.

          B. A tax expenditure budget shall detail the approximate costs in lost revenue from tax expenditures. A tax expenditure budget shall:

                (1) include a projection of the costs of tax expenditures for all significant general fund revenue sources;

                (2) identify each tax expenditure and its statutory basis, year of enactment, date of repeal, if any, and purpose;

                (3) quantify the revenue lost to the state from each tax expenditure;

                (4) identify the beneficiaries of the tax expenditure, including the number of businesses that used the tax expenditure and the number of businesses that potentially qualify but failed to use the tax expenditure, to the extent possible;

                (5) identify unintended consequences of the tax expenditure that have come to the attention of the department; and

                (6) provide a total of all of the costs in each fiscal year for all tax expenditures.

          C. As used in this section:

                (1) "significant general fund revenue sources" means state taxes, including the gross receipts tax, compensating tax, corporate income tax, personal income tax, tobacco excise tax, liquor excise tax, severance taxes, motor vehicle excise tax, gaming excise tax and other sources of revenue such as rents and royalties, tribal revenue sharing, fire protection fund reversions, premium taxes and the leased vehicle surcharge;

                (2) "tax expenditure" means a tax provision in state law that exempts, in whole or in part, a person, income, goods, services or property from established taxes, including deductions, credits, exemptions, exclusions, preferential tax rates, subtractions or allowances; and

                (3) "tax expenditure budget" means a compilation of information about New Mexico's tax expenditures that includes data from the three years preceeding the current fiscal year, the current fiscal year and the upcoming fiscal year."

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