HB 374

Page 1

AN ACT

RELATING TO TAXATION; AUTHORIZING A MUNICIPAL HIGHER EDUCATION

FACILITIES GROSS RECEIPTS TAX; AUTHORIZING ISSUANCE OF

MUNICIPAL REVENUE BONDS.

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

Section 1. A new section of the Municipal Local Option

Gross Receipts Taxes Act is enacted to read:

"MUNICIPAL HIGHER EDUCATION FACILITIES GROSS RECEIPTS

TAX.--

A. The majority of the members of the governing

body of an eligible municipality may impose by ordinance an

excise tax at a rate not to exceed one-fourth of one percent

of the gross receipts of a person engaging in business in the

municipality for the privilege of engaging in business. The

tax may be imposed in increments of one-sixteenth of one

percent not to exceed an aggregate rate of one-fourth of one

percent. The tax shall be imposed for a period of not more

than twenty years from the effective date of the ordinance

imposing the tax.

B. The tax imposed pursuant to this section may be

referred to as the "municipal higher education facilities

gross receipts tax".

C. The governing body, at the time of enacting an

ordinance imposing a rate of tax authorized in Subsection A of

HB 374

Page 2

this section, shall dedicate the revenue only for:

(1) acquisition, construction, renovation or

improvement of facilities of a four-year post-secondary public

educational institution located in the municipality and

acquisition of or improvements to land for those facilities;

or

(2) payment of municipal higher education

facilities gross receipts tax revenue bonds issued pursuant to

Chapter 3, Article 31 NMSA 1978.

D. An ordinance imposing any increment of the

municipal higher education facilities gross receipts tax shall

not go into effect until after an election is held and a

majority of the voters of the municipality voting in the

election votes in favor of imposing the tax. The governing

body shall adopt a resolution calling for an election on the

question of imposing the tax at the next regular municipal

election. The question shall be submitted to the voters of

the municipality as a separate question. If a majority of the

voters voting on the question approves the ordinance imposing

the municipal higher education facilities gross receipts tax,

the ordinance shall become effective in accordance with the

provisions of the Municipal Local Option Gross Receipts Taxes

Act. If the question of imposing the municipal higher

education facilities gross receipts tax fails, the governing

body shall not again propose the imposition of any increment

HB 374

Page 3

of the tax for a period of one year from the date of the

election.

E. For the purposes of this section, "eligible

municipality" means a municipality that has a population

greater than fifty thousand according to the most recent

federal decennial census and that is located in a class B

county having a net taxable value for rate-setting purposes

for the 2006 property tax year or any subsequent year of more

than two billion dollars ($2,000,000,000)."

Section 2. Section 3-31-1 NMSA 1978 (being Laws 1973,

Chapter 395, Section 3, as amended) is amended to read:

"3-31-1. REVENUE BONDS--AUTHORITY TO ISSUE--PLEDGE OF

REVENUES--LIMITATION ON TIME OF ISSUANCE.--In addition to any

other law and constitutional home rule powers authorizing a

municipality to issue revenue bonds, a municipality may issue

revenue bonds pursuant to Chapter 3, Article 31 NMSA 1978 for

the purposes specified in this section. The term "pledged

revenues", as used in Chapter 3, Article 31 NMSA 1978, means

the revenues, net income or net revenues authorized to be

pledged to the payment of particular revenue bonds as

specifically provided in Subsections A through J of this

section.

A. Utility revenue bonds may be issued for

acquiring, extending, enlarging, bettering, repairing or

otherwise improving a municipal utility or for any combination

HB 374

Page 4

of the foregoing purposes. The municipality may pledge

irrevocably any or all of the net revenues from the operation

of the municipal utility or of any one or more of other such

municipal utilities for payment of the interest on and

principal of the revenue bonds. These bonds are sometimes

referred to in Chapter 3, Article 31 NMSA 1978 as "utility

revenue bonds" or "utility bonds".

B. Joint utility revenue bonds may be issued for

acquiring, extending, enlarging, bettering, repairing or

otherwise improving joint water facilities, sewer facilities,

gas facilities or electric facilities or for any combination

of the foregoing purposes. The municipality may pledge

irrevocably any or all of the net revenues from the operation

of these municipal utilities for the payment of the interest

on and principal of the bonds. These bonds are sometimes

referred to in Chapter 3, Article 31 NMSA 1978 as "joint

utility revenue bonds" or "joint utility bonds".

C. For the purposes of this subsection, "gross

receipts tax revenue bonds" means gross receipts tax revenue

bonds or sales tax revenue bonds. Gross receipts tax revenue

bonds may be issued for any one or more of the following

purposes:

(1) constructing, purchasing, furnishing,

equipping, rehabilitating, making additions to or making

improvements to one or more public buildings or purchasing or

HB 374

Page 5

improving any ground relating thereto, including but not

necessarily limited to acquiring and improving parking lots,

or any combination of the foregoing;

(2) acquiring or improving municipal or

public parking lots, structures or facilities or any

combination of the foregoing;

(3) purchasing, acquiring or rehabilitating

firefighting equipment or any combination of the foregoing;

(4) acquiring, extending, enlarging,

bettering, repairing, otherwise improving or maintaining storm

sewers and other drainage improvements, sanitary sewers,

sewage treatment plants or water utilities, including but not

necessarily limited to the acquisition of rights of way and

water and water rights, or any combination of the foregoing;

(5) reconstructing, resurfacing,

maintaining, repairing or otherwise improving existing alleys,

streets, roads or bridges or any combination of the foregoing

or laying off, opening, constructing or otherwise acquiring

new alleys, streets, roads or bridges or any combination of

the foregoing; provided that any of the foregoing improvements

may include but are not limited to the acquisition of rights

of way;

(6) purchasing, acquiring, constructing,

making additions to, enlarging, bettering, extending or

equipping airport facilities or any combination of the

HB 374

Page 6

foregoing, including without limitation the acquisition of

land, easements or rights of way therefor;

(7) purchasing or otherwise acquiring or

clearing land or for purchasing, otherwise acquiring and

beautifying land for open space;

(8) acquiring, constructing, purchasing,

equipping, furnishing, making additions to, renovating,

rehabilitating, beautifying or otherwise improving public

parks, public recreational buildings or other public

recreational facilities or any combination of the foregoing;

(9) acquiring, constructing, extending,

enlarging, bettering, repairing, otherwise improving or

maintaining solid waste disposal equipment, equipment for

operation and maintenance of sanitary landfills, sanitary

landfills, solid waste facilities or any combination of the

foregoing; and

(10) acquiring, constructing, extending,

bettering, repairing or otherwise improving a public transit

system or regional transit systems or facilities.

The municipality may pledge irrevocably any or all of

the gross receipts tax revenue received by the municipality

pursuant to Section 7-1-6.4 or 7-1-6.12 NMSA 1978 to the

payment of the interest on and principal of the gross receipts

tax revenue bonds for any of the purposes authorized in this

section or for specific purposes or for any area of municipal

HB 374

Page 7

government services, including but not limited to those

specified in Subsection C of Section 7-19D-9 NMSA 1978, or for

public purposes authorized by municipalities having

constitutional home rule charters. A law that imposes or

authorizes the imposition of a municipal gross receipts tax or

that affects the municipal gross receipts tax, or a law

supplemental thereto or otherwise appertaining thereto, shall

not be repealed or amended or otherwise directly or indirectly

modified in such a manner as to impair adversely any

outstanding revenue bonds that may be secured by a pledge of

such municipal gross receipts tax unless the outstanding

revenue bonds have been discharged in full or provision has

been fully made therefor.

Revenues in excess of the annual principal and interest

due on gross receipts tax revenue bonds secured by a pledge of

gross receipts tax revenue may be accumulated in a debt

service reserve account. The governing body of the

municipality may appoint a commercial bank trust department to

act as trustee of the gross receipts tax revenue and to

administer the payment of principal of and interest on the

bonds.

D. As used in this section, the term "public

building" includes but is not limited to fire stations, police

buildings, municipal jails, regional jails or juvenile

detention facilities, libraries, museums, auditoriums,

HB 374

Page 8

convention halls, hospitals, buildings for administrative

offices, city halls and garages for housing, repairing and

maintaining city vehicles and equipment. As used in Chapter

3, Article 31 NMSA 1978, the term "gross receipts tax revenue

bonds" means the bonds authorized in Subsection C of this

section, and the term "gross receipts tax revenue" means the

amount of money distributed to the municipality as authorized

by Section 7-1-6.4 NMSA 1978 or the amount of money

transferred to the municipality as authorized by Section

7-1-6.12 NMSA 1978 for any municipal gross receipts tax

imposed pursuant to the Municipal Local Option Gross Receipts

Taxes Act. As used in Chapter 3, Article 31 NMSA 1978, the

term "bond" means any obligation of a municipality issued

under Chapter 3, Article 31 NMSA 1978, whether designated as a

bond, note, loan, warrant, debenture, lease-purchase agreement

or other instrument evidencing an obligation of a municipality

to make payments.

E. Gasoline tax revenue bonds may be issued for

laying off, opening, constructing, reconstructing,

resurfacing, maintaining, acquiring rights of way, repairing

and otherwise improving municipal buildings, alleys, streets,

public roads and bridges or any combination of the foregoing

purposes. The municipality may pledge irrevocably any or all

of the gasoline tax revenue received by the municipality to

the payment of the interest on and principal of the gasoline

HB 374

Page 9

tax revenue bonds. As used in Chapter 3, Article 31 NMSA

1978, "gasoline tax revenue bonds" means the bonds authorized

in this subsection, and "gasoline tax revenue" means all or

portions of the amounts of tax revenues distributed to

municipalities pursuant to Sections 7-1-6.9 and 7-1-6.27 NMSA

1978, as from time to time amended and supplemented.

F. Project revenue bonds may be issued for

acquiring, extending, enlarging, bettering, repairing,

improving, constructing, purchasing, furnishing, equipping and

rehabilitating any revenue-producing project, including, where

applicable, purchasing, otherwise acquiring or improving the

ground therefor, including but not necessarily limited to

acquiring and improving parking lots, or for any combination

of the foregoing purposes. The municipality may pledge

irrevocably any or all of the net revenues from the operation

of the revenue-producing project for which the particular

project revenue bonds are issued to the payment of the

interest on and principal of the project revenue bonds. The

net revenues of any revenue-producing project may not be

pledged to the project revenue bonds issued for a revenue-

producing project that clearly is unrelated in nature; but

nothing in this subsection shall prevent the pledge to such

project revenue bonds of any revenues received from existing,

future or disconnected facilities and equipment that are

related to and that may constitute a part of the particular

HB 374

Page 10

revenue-producing project. A general determination by the

governing body that any facilities or equipment is reasonably

related to and constitutes a part of a specified revenue-

producing project shall be conclusive if set forth in the

proceedings authorizing the project revenue bonds. As used in

Chapter 3, Article 31 NMSA 1978:

(1) "project revenue bonds" means the bonds

authorized in this subsection; and

(2) "project revenues" means the net

revenues of revenue-producing projects that may be pledged to

project revenue bonds pursuant to this subsection.

G. Fire district revenue bonds may be issued for

acquiring, extending, enlarging, bettering, repairing,

improving, constructing, purchasing, furnishing, equipping and

rehabilitating any fire district project, including where

applicable purchasing, otherwise acquiring or improving the

ground therefor, or for any combination of the foregoing

purposes. The municipality may pledge irrevocably any or all

of the revenues received by the fire district from the fire

protection fund as provided in the Fire Protection Fund Law

and any or all of the revenues provided for the operation of

the fire district project for which the particular bonds are

issued to the payment of the interest on and principal of the

bonds. The revenues of any fire district project shall not be

pledged to the bonds issued for a fire district project that

HB 374

Page 11

clearly is unrelated in its purpose; but nothing in this

section prevents the pledge to such bonds of any revenues

received from existing, future or disconnected facilities and

equipment that are related to and that may constitute a part

of the particular fire district project. A general

determination by the governing body of the municipality that

any facilities or equipment is reasonably related to and

constitutes a part of a specified fire district project shall

be conclusive if set forth in the proceedings authorizing the

fire district bonds.

H. Law enforcement protection revenue bonds may be

issued for the repair and purchase of law enforcement

apparatus and equipment that meet nationally recognized

standards. The municipality may pledge irrevocably any or all

of the revenues received by the municipality from the law

enforcement protection fund distributions pursuant to the Law

Enforcement Protection Fund Act to the payment of the interest

on and principal of the law enforcement protection revenue

bonds.

I. Economic development gross receipts tax revenue

bonds may be issued for the purpose of furthering economic

development projects as defined in the Local Economic

Development Act. The municipality may pledge irrevocably any

or all of the revenue received from the municipal

infrastructure gross receipts tax to the payment of the

HB 374

Page 12

interest on and principal of the economic development gross

receipts tax revenue bonds for any of the purposes authorized

in this subsection. A law that imposes or authorizes the

imposition of a municipal infrastructure gross receipts tax or

that affects the municipal infrastructure gross receipts tax,

or a law supplemental to or otherwise pertaining to the tax,

shall not be repealed or amended or otherwise directly or

indirectly modified in such a manner as to impair adversely

any outstanding revenue bonds that may be secured by a pledge

of the municipal infrastructure gross receipts tax unless the

outstanding revenue bonds have been discharged in full or

provision has been fully made for their discharge. As used in

Chapter 3, Article 31 NMSA 1978, "economic development gross

receipts tax revenue bonds" means the bonds authorized in this

subsection, and "municipal infrastructure gross receipts tax

revenue" means any or all of the revenue from the municipal

infrastructure gross receipts tax transferred to the

municipality pursuant to Section 7-1-6.12 NMSA 1978.

J. Municipal higher education facilities gross

receipts tax revenue bonds may be issued for the purpose of

acquisition, construction, renovation or improvement of

facilities of a four-year post-secondary public educational

institution located in the municipality and acquisition of or

improvements to land for those facilities. The municipality

may pledge irrevocably any or all of the revenue received from

HB 374

Page 13

the municipal higher education facilities gross receipts tax

to the payment of the interest on and principal of the

municipal higher education facilities gross receipts tax

revenue bonds. A law that imposes or authorizes the

imposition of a municipal higher education facilities gross

receipts tax or that affects the municipal higher education

facilities gross receipts tax, or a law supplemental to or

otherwise pertaining to the tax, shall not be repealed or

amended or otherwise directly or indirectly modified in such a

manner as to impair adversely any outstanding revenue bonds

that may be secured by a pledge of the municipal higher

education facilities gross receipts tax unless the outstanding

revenue bonds have been discharged in full or provision has

been fully made for their discharge. As used in Chapter 3,

Article 31 NMSA 1978, "municipal higher education facilities

gross receipts tax revenue bonds" means the bonds authorized

in this subsection and "municipal higher education facilities

gross receipts tax revenue" means any or all of the revenue

from the municipal higher education facilities gross receipts

tax transferred to the municipality pursuant to Section

7-1-6.12 NMSA 1978.

K. Except for the purpose of refunding previous

revenue bond issues, no municipality may sell revenue bonds

payable from pledged revenues after the expiration of two

years from the date of the ordinance authorizing the issuance

of the bonds or, for bonds to be issued and sold to the New

Mexico finance authority as authorized in Subsection C of

Section 3-31-4 NMSA 1978, after the expiration of two years

from the date of the resolution authorizing the issuance of

the bonds. However, any period of time during which a

particular revenue bond issue is in litigation shall not be

counted in determining the expiration date of that issue."

Section 3. EFFECTIVE DATE.--The effective date of the

provisions of this act is July 1, 2007.

HB 374

Page 14