HOUSE BILL 965

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

INTRODUCED BY

Gail Chasey

AN ACT

RELATING TO TAXATION; INCREASING THE CIGARETTE TAX; RESTATING THE DISTRIBUTIONS OF THE CIGARETTE TAX PROCEEDS, INCLUDING THE NEW CIGARETTE TAX; ALLOCATING THE INCREASE OF THE CIGARETTE TAX TO CONSTRUCT A NEW UNIVERSITY OF NEW MEXICO CANCER RESEARCH AND TREATMENT CENTER; PROVIDING FOR SALES AND ISSUANCE OF BONDS FOR A NEW CANCER RESEARCH AND TREATMENT CENTER BY THE NEW MEXICO FINANCE AUTHORITY; INCREASING THE TOBACCO PRODUCTS TAX; MAKING APPROPRIATIONS.

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

     Section 1. Section 6-21-6.7 NMSA 1978 (being Laws 2003, Chapter 341, Section 5, as amended) is amended to read:

     "6-21-6.7. CREDIT ENHANCEMENT ACCOUNT CREATED--USE OF ACCOUNT--RELEASE OF MONEY TO THE GENERAL FUND.--

          A. The "credit enhancement account" is created as a separate account within the authority for use only as provided in this section.

          B. All cigarette tax proceeds distributed each month to the authority pursuant to Subsection G of Section

7-1-6.11 NMSA 1978 shall be deposited in the credit enhancement account.

          C. Amounts deposited in the credit enhancement account may be pledged irrevocably as additional security for the payment of the principal, interest, premiums and expenses on bonds issued by the authority for:

                (1) land acquisition, planning, designing, constructing, equipping and furnishing additions [and], improvements [to] and new facilities for the university of New Mexico hospital and the cancer research and treatment center at the university of New Mexico health sciences center; and

                (2) land acquisition and the planning, designing, construction and equipping of department of health facilities or improvements to such facilities.

          D. The authority shall determine monthly upon receipt of cigarette tax proceeds if the individual amounts of cigarette tax proceeds distributed pursuant to Subsection E or F, respectively, of Section 7-1-6.11 NMSA 1978 are sufficient to meet the monthly amount required for immediate payment or designation for payment of principal, interest, premiums and expenses on bonds additionally secured by the credit enhancement account. Any insufficient amount shall be paid immediately from the credit enhancement account. A payment from the credit enhancement account shall be reimbursed in succeeding months from the individual amount of cigarette tax proceeds distributed pursuant to Subsection E or F, as applicable, of Section 7-1-6.11 NMSA 1978 in excess of the amount required for immediate payment or designation for payment of principal, interest, premiums and expenses on bonds. All money in the credit enhancement account in excess of the monthly amount required for immediate payment or designation for payment of principal, interest, premiums and expenses on bonds shall be transferred monthly by the authority to the general fund.

          E. Upon payment of all principal, interest, premiums and expenses on bonds additionally secured by a pledge of amounts deposited in the credit enhancement account, the authority shall certify to the secretary of taxation and revenue that all obligations for bonds have been fully discharged and shall direct the secretary of taxation and revenue and the state treasurer to cease distributing cigarette tax proceeds to the authority pursuant to Subsection G of Section 7-1-6.11 NMSA 1978 and to distribute those cigarette tax proceeds to the general fund.

          F. Any law authorizing the imposition, collection or distribution of the cigarette tax or that affects the cigarette tax shall not be amended, repealed or otherwise directly or indirectly modified so as to impair or reduce debt service coverage for any outstanding revenue bonds that may be secured by a pledge of those cigarette tax proceeds distributed to the credit enhancement account, unless the revenue bonds have been discharged in full or provisions have been made for a full discharge."

     Section 2. Laws 2003, Chapter 341, Section 3, as amended by Laws 2005, Chapter 319, Section 1, shall be compiled in the New Mexico Finance Authority Act and is amended to read:

     "[Section 2. NEW MEXICO FINANCE] AUTHORITY REVENUE

BONDS--PURPOSE--APPROPRIATION.--

           A. The [New Mexico finance] authority may issue and sell revenue bonds in compliance with the New Mexico Finance Authority Act for a term not exceeding twenty years in an amount not exceeding sixty million dollars ($60,000,000) for the purpose of land acquisition, planning, designing, constructing, equipping and furnishing additions [and], improvements [to] and new facilities for the university of New Mexico hospital and the cancer research and treatment center at the university of New Mexico health sciences center.

          B. The [New Mexico finance] authority may issue and sell additional revenue bonds in compliance with the New Mexico Finance Authority Act for a term not exceeding twenty years in an amount not exceeding fifteen million dollars ($15,000,000) for the purpose of supplementing the proceeds of the bonds issued pursuant to Subsection A of this section to acquire land, plan, design, construct, equip and furnish additions [and], improvements [to] and new facilities for the university of New Mexico hospital and the cancer research and treatment center at the university of New Mexico health sciences center.

           C. The [New Mexico finance] authority may issue and sell revenue bonds authorized by this section when the vice president for health sciences of the university of New Mexico certifies the need for issuance of the bonds. The net proceeds from the sale of the bonds are appropriated to the health sciences center of the university of New Mexico for the purposes described in Subsections A and B of this section.

           D. The cigarette tax proceeds distributed to the [New Mexico finance] authority pursuant to Subsection E of Section 7-1-6.11 NMSA 1978 shall be pledged irrevocably for the payment of the principal, interest, premiums and related expenses on the bonds and for payment of the expenses incurred by the authority related to the issuance, sale and administration of the bonds.

           E. The cigarette tax proceeds distributed to the [New Mexico finance] authority pursuant to Subsection E of Section 7-1-6.11 NMSA 1978 shall be deposited each month in a separate fund or account of the authority. Money in the separate fund or account in excess of the monthly amount necessary for immediate payment or designation for payment of principal and interest due on the bonds is appropriated to the university of New Mexico health sciences center and shall be transferred each month to the university of New Mexico health sciences center.

           F. Upon payment of all principal, interest and other expenses or obligations related to the bonds, the [New Mexico finance] authority shall certify to the secretary of taxation and revenue that all obligations for the bonds issued pursuant to this section have been fully discharged and shall direct the secretary of taxation and revenue and the state treasurer to cease distributing cigarette tax proceeds to the authority pursuant to Subsection E of Section 7-1-6.11 NMSA 1978 and to distribute those cigarette tax proceeds to the general fund.

           G. Any law authorizing the imposition, collection or distribution of the cigarette tax or that affects the cigarette tax shall not be amended, repealed or otherwise directly or indirectly modified so as to impair or reduce debt service coverage for any outstanding revenue bonds that may be secured by a pledge of those cigarette tax revenues, unless the revenue bonds have been discharged in full or provisions have been made for a full discharge.

           H. The [New Mexico finance] authority may additionally secure the revenue bonds issued pursuant to this section by a pledge of money in the public project revolving fund with a lien priority on the money in the public project revolving fund as determined by the authority.

          I. The [New Mexico finance] authority may purchase revenue bonds issued pursuant to this section with money in the public project revolving fund pursuant to the provisions of Section 6-21-6 NMSA 1978."

     Section 3. Section 7-1-6.11 NMSA 1978 (being Laws 1983, Chapter 211, Section 16, as amended) is amended to read:

     "7-1-6.11. DISTRIBUTIONS OF CIGARETTE TAXES.--

          A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the county and municipality recreational fund in an amount equal to [one and thirty-five hundredths] seventy-nine hundredths percent of the net receipts, exclusive of penalties and interest, attributable to the cigarette tax.

          B. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the county and municipal cigarette tax fund in an amount equal to [two and sixty-nine hundredths] one and fifty-nine hundredths percent of the net receipts, exclusive of penalties and interest, attributable to the cigarette tax.

          C. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the cancer research and treatment center at the university of New Mexico health sciences center in an amount equal to [one and thirty-five hundredths] six and nine- hundredths percent of the net receipts, exclusive of penalties and interest, attributable to the cigarette tax.

          D. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the New Mexico finance authority in an amount equal to [two and two-hundredths] one and nineteen- hundredths percent of the net receipts, exclusive of penalties and interest, attributable to the cigarette tax.

          E. A distribution pursuant to Section 7-1-6.1 NMSA 1978 in an amount equal to [fourteen and thirty-seven hundredths] seventeen and fifty-five hundredths percent of the net receipts, exclusive of penalties and interest, attributable to the cigarette tax, shall be made, on behalf of and for the benefit of the university of New Mexico health sciences center, to the New Mexico finance authority.

          F. A distribution pursuant to Section 7-1-6.1 NMSA 1978 in an amount equal to [six and five-hundredths] three and sixty-four hundredths percent of the net receipts, exclusive of penalties and interest, attributable to the cigarette tax shall be made to the New Mexico finance authority for land acquisition and the planning, designing, construction and equipping of department of health facilities or improvements to such facilities.

          G. A distribution pursuant to Section 7-1-6.1 NMSA 1978 in an amount equal to [fifteen and seventy-nine hundredths] twenty-five and forty-three hundredths percent of the net receipts, exclusive of penalties and interest, attributable to the cigarette tax shall be made to the New Mexico finance authority for deposit in the credit enhancement account created in the authority.

          H. A distribution pursuant to Section 7-1-6.1 NMSA 1978 in an amount equal to [one] six and ninety-five hundredths percent of the net receipts, exclusive of penalties and interest, attributable to the cigarette tax shall be made, on behalf of and for the benefit of the rural county cancer treatment fund, to the New Mexico finance authority.

          I. A distribution pursuant to Section 7-1-6.1 NMSA 1978 in an amount equal to three and thirty-one hundredths percent of the net receipts, exclusive of penalties and interest, attributable to the cigarette tax shall be made to the department of health to support public health programs, including those programs providing services for tobacco cessation and control, the tobacco quitline, cardiovascular disease prevention and cervical cancer vaccination outreach."

     Section 4. Section 7-12-3 NMSA 1978 (being Laws 1971, Chapter 77, Section 3, as amended) is amended to read:

     "7-12-3. EXCISE TAX ON CIGARETTES--RATES.--

          A. For the privilege of selling, giving or consuming cigarettes in New Mexico, there is levied an excise tax at the rate of [four and fifty-five hundredths cents ($.0455)] seven and fifty-five hundredths cents ($.0755) for each cigarette sold, given or consumed in this state.

          B. The tax imposed by this section shall be referred to as the "cigarette tax"."

     Section 5. Section 7-12A-3 NMSA 1978 (being Laws 1986, Chapter 112, Section 4, as amended) is amended to read:

     "7-12A-3. IMPOSITION AND RATE OF TAX--DENOMINATION AS "TOBACCO PRODUCTS TAX"--DATE PAYMENT OF TAX DUE.--

          A. For the manufacture or acquisition of tobacco products in New Mexico for sale in the ordinary course of business, there is imposed an excise tax at the rate of [twenty-five] forty percent of the product value of the tobacco products.

          B. The tax imposed by Subsection A of this section may be referred to as the "tobacco products tax".

          C. The tobacco products tax shall be paid by the first purchaser on or before the twenty-fifth day of the month following the month in which the taxable event occurs."

     Section 6. EFFECTIVE DATE.--The effective date of the provisions of Sections 4 and 5 of this act is July 1, 2007. The effective date of the provisions of Sections 1, 2 and 3 of this act is August 1, 2007.

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