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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:

"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 foregone 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,

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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. The department is authorized to request from a

state agency or a local government agency or official,

information necessary to complete the tax expenditure budget

required by this section. An agency or official shall comply

with a request made pursuant to this section by the

department.

D. 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, taxes levied on natural

resource production and sale, 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 deduction,

credit, exemption, exclusion, preferential tax rate,

subtraction or allowance that reduces tax liability when

compared with a normal tax system as determined by the

secretary; 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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