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AN ACT

RELATING TO TAXATION; PROVIDING FOR DEDUCTIONS FROM THE NEW

MEXICO GASOLINE TAX AND SPECIAL FUEL EXCISE TAX PAID BY

OUT-OF-STATE TERMINALS AT WHICH THE GASOLINE OR SPECIAL FUEL

TO BE IMPORTED INTO NEW MEXICO WAS LOADED; REQUIRING SURETY

BONDS FROM CERTAIN WEIGHT DISTANCE TAX TAXPAYERS AND SPECIAL

FUEL USERS; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978.

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

Section 1. Section 7-13-4 NMSA 1978 (being Laws 1991,

Chapter 9, Section 32, as amended) is amended to read:

"7-13-4. DEDUCTIONS--GASOLINE TAX.--In computing the

gasoline tax due, the following amounts of gasoline may be

deducted from the total amount of gasoline received in New

Mexico during the tax period, provided satisfactory proof

thereof is furnished to the department:

A. gasoline received in New Mexico, but exported

from this state by a rack operator, distributor or wholesaler

other than in the fuel supply tank of a motor vehicle or sold

for export by a rack operator or distributor; provided that,

in either case:

(1) the person exporting the gasoline is

registered in or licensed by the destination state to pay

that state's gasoline or equivalent fuel tax;

(2) proof is submitted that the destination

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state's gasoline or equivalent fuel tax has been paid or is

not due with respect to the gasoline; or

(3) the destination state's gasoline or

equivalent fuel tax is paid to New Mexico in accordance with

the terms of an agreement entered into pursuant to Section

9-11-12 NMSA 1978 with the destination state;

B. gasoline received in New Mexico sold to the

United States or an agency or instrumentality thereof for the

exclusive use of the United States or an agency or

instrumentality thereof. Gasoline sold to the United States

includes gasoline delivered into the supply tank of a

government-licensed vehicle of the United States;

C. gasoline received in New Mexico sold to an

Indian nation, tribe or pueblo or a political subdivision,

agency or instrumentality of that Indian nation, tribe or

pueblo for the exclusive use of the Indian nation, tribe or

pueblo or a political subdivision, agency or instrumentality

thereof. Gasoline sold to an Indian nation, tribe or pueblo

includes gasoline delivered into the supply tank of a

government-licensed vehicle of the Indian nation, tribe or

pueblo;

D. gasoline received in New Mexico, dyed in

accordance with department regulations and used in a manner

other than for propulsion of motor vehicles on the highways

of this state or motorboats or activities ancillary to that

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propulsion;

E. gasoline received in New Mexico and sold at

retail by a registered Indian tribal distributor if:

(1) the sale occurs on the Indian

reservation, pueblo grant or trust land of the distributor's

Indian nation, tribe or pueblo;

(2) the gasoline is placed into the fuel

supply tank of a motor vehicle on that reservation, pueblo

grant or trust land; and

(3) the Indian nation, tribe or pueblo has

certified to the department that it has in effect an excise,

privilege or similar tax on the gasoline; provided that the

volume of gasoline deducted pursuant to this subsection shall

be the total gallons sold in accordance with the provisions

of this subsection multiplied by a fraction the numerator of

which is the rate of the tribal tax certified to the

department by the Indian nation, tribe or pueblo and the

denominator of which is the rate of the gasoline tax imposed

pursuant to the Gasoline Tax Act, but if the fraction exceeds

one, it shall be one for purposes of determining the

deduction;

F. gasoline received in New Mexico and sold by a

registered Indian tribal distributor from a nonmobile storage

container located within that distributor's Indian

reservation, pueblo grant or trust land for resale outside

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that distributor's Indian reservation, pueblo grant or trust

land; provided the department certifies that the distributor

claiming the deduction sold no less than one million gallons

of gasoline from a nonmobile storage container located within

that distributor's Indian reservation, pueblo grant or trust

land for resale outside that distributor's Indian

reservation, pueblo grant or trust land during the period of

May through August 1998; and provided further that the amount

of gasoline deducted by a registered Indian tribal

distributor pursuant to this subsection shall not exceed two

million five hundred thousand gallons per month, calculated

as a monthly average during the calendar year. Volumes

deducted pursuant to Subsection E of this section shall not

be deducted pursuant to this subsection; and

G. gasoline received in New Mexico on which New

Mexico gasoline tax was paid by the out-of-state terminal at

which the gasoline was loaded, provided that documentation

that the gasoline was to be imported into New Mexico was

provided to the terminal operator by the person receiving the

fuel."

Section 2. A new section of the Weight Distance Tax Act

is enacted to read:

"TAXPAYERS OF WEIGHT DISTANCE TAX--SURETY BOND

REQUIRED--EXCEPTIONS.--

A. Except as required in Subsection H of this

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section, every taxpayer with a commercial domicile not

located in an International Fuel Tax Agreement jurisdiction

shall file with the department a bond on a form approved by

the attorney general with a surety company authorized by the

public regulation commission to transact business in New

Mexico as a surety and upon which bond the taxpayer is the

principal obligor and the state the obligee. The bond shall

be conditioned upon the prompt filing of true reports and the

payment by the taxpayer to the department of all taxes levied

by the Weight Distance Tax Act, together with all applicable

penalties and interest on the taxes.

B. In lieu of the bond, the taxpayer may elect to

file with the department cash or bonds of the United States

or New Mexico or of any political subdivision of the state.

C. The total amount of the bond, cash or

securities required of a taxpayer shall be fixed by the

department and may be increased or reduced by the department

at any time, subject to the limitations provided in this

section.

D. In fixing the total amount of the bond, cash or

securities required of a taxpayer required to post a bond,

the department shall require an amount equivalent to the

total estimated tax due for two quarters; provided, however,

that the total amount of bond, cash or securities required of

a taxpayer shall never be less than five hundred dollars

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($500) per motor vehicle on which the weight distance tax is

imposed.

E. In the event the department determines that the

amount of the existing bond, cash or securities is

insufficient to ensure payment to New Mexico of the amount of

the weight distance tax and penalties and interest for which

a taxpayer is or may at any time become liable, the taxpayer,

upon written demand from the department mailed to the last

known address of the taxpayer as shown on the records of the

department, shall file an additional bond, cash or securities

in the manner, form and amount determined by the department

to be necessary to secure at all times the payment by the

taxpayer of all taxes, penalties and interest due pursuant to

the Weight Distance Tax Act.

F. A surety on a bond furnished by a taxpayer as

required by this section shall be released and discharged

from all liability accruing on the bond after the expiration

of ninety days from the date upon which the surety files with

the department a written request to be released and

discharged; provided, however, that the request shall not

operate to release or discharge the surety from liability

already accrued or that shall accrue before the expiration of

the ninety-day period, unless a new bond is filed during the

ninety-day period, in which case the previous bond may be

canceled as of the effective date of the new bond. On

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receipt of notice of the request to cancel the bond due to

filing of a new bond, the department shall promptly notify

the taxpayer who furnished the bond that the taxpayer, on or

before the expiration of the ninety-day period, shall file

with the department a new bond with a surety satisfactory to

the department in the amount and form required in this

section.

G. A taxpayer who is required to file a bond with

or provide cash or securities to the department in accordance

with this section and who is required by another state law to

file another bond with or provide cash or securities to the

department may elect to file a combined bond or provide cash

or securities applicable to the provision of both this

section and the other law, with the approval of the

secretary. The amount of the combined bond, cash or

securities shall be determined by the department, and the

form of the combined bond shall be approved by the attorney

general.

H. A taxpayer who is required to file a bond

pursuant to the provisions of this section and who for the

eight consecutive quarters preceding the date of request has

not been a delinquent taxpayer pursuant to the Weight

Distance Tax Act may request to be exempt from the

requirement to file a bond beginning with the first day of

the first quarter following the end of the eight-quarter

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period. If a taxpayer exempted pursuant to this subsection

subsequently becomes a delinquent taxpayer, the department

may terminate the exemption and require the filing of a bond

in accordance with this section. If the department

terminates the exemption, the termination shall not be

effective any earlier than ten days after the date the

department notifies the taxpayer in writing of the

termination.

I. As used in this section, "taxpayer" means a

registrant, owner or operator of a motor vehicle on whom the

weight distance tax is imposed."

Section 3. Section 7-16A-10 NMSA 1978 (being Laws 1992,

Chapter 51, Section 10, as amended) is amended to read:

"7-16A-10. DEDUCTIONS--SPECIAL FUEL EXCISE TAX--SPECIAL

FUEL SUPPLIERS.--In computing the tax due, the following

amounts of special fuel may be deducted from the total amount

of special fuel received in New Mexico during the tax period,

provided that satisfactory proof thereof is furnished to the

department:

A. special fuel received in New Mexico, but

exported from this state by a rack operator, special fuel

supplier or dealer, other than in the fuel supply tank of a

motor vehicle or sold for export by a rack operator or

distributor; provided that, in either case:

(1) the person exporting the special fuel is

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registered in or licensed by the destination state to pay

that state's special fuel or equivalent fuel tax;

(2) proof is submitted that the destination

state's special fuel or equivalent fuel tax has been paid or

is not due with respect to the special fuel; or

(3) the destination state's special fuel or

equivalent fuel tax is paid to New Mexico in accordance with

the terms of an agreement entered into pursuant to Section

9-11-12 NMSA 1978 with the destination state;

B. special fuel sold to the United States or any

agency or instrumentality thereof for the exclusive use of

the United States or any agency or instrumentality thereof.

Special fuel sold to the United States includes special fuel

delivered into the supply tank of a government-licensed

vehicle;

C. special fuel sold to the state of New Mexico or

any political subdivision, agency or instrumentality thereof

for the exclusive use of the state of New Mexico or any

political subdivision, agency or instrumentality thereof.

Special fuel sold to the state of New Mexico includes special

fuel delivered into the supply tank of a government-licensed

vehicle;

D. special fuel sold to an Indian nation, tribe or

pueblo or any agency or instrumentality thereof for the

exclusive use of the Indian nation, tribe or pueblo or any

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agency or instrumentality thereof. Special fuel sold to an

Indian nation, tribe or pueblo includes special fuel

delivered into the supply tank of a government-licensed

vehicle;

E. special fuel dyed in accordance with federal

regulations;

F. special fuel that is number 2 diesel fuel sold

for the generation of power to propel a vehicle authorized by

contract with the public education department as a school

bus; provided that the fuel has a distillation temperature of

five hundred degrees Fahrenheit at a ten percent recovery

point and six hundred forty degrees Fahrenheit at a ninety

percent recovery point; and

G. special fuel received in New Mexico on which

New Mexico special fuel excise tax was paid by the

out-of-state terminal at which the special fuel was loaded,

provided that documentation that the special fuel was to be

imported into New Mexico was provided to the terminal

operator by the person receiving the fuel."

Section 4. A new section of the Special Fuels Supplier

Tax Act is enacted to read:

"SPECIAL FUEL USERS--SURETY BOND REQUIRED--EXCEPTIONS.--

A. Except as required in Subsection H of this

section, every special fuel user with a commercial domicile

not located in an International Fuel Tax Agreement

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jurisdiction shall file with the department a bond on a form

approved by the attorney general with a surety company

authorized by the public regulation commission to transact

business in New Mexico as a surety and upon which bond the

special fuel user is the principal obligor and the state the

obligee. The bond shall be conditioned upon the prompt

filing of true reports and the payment by the special fuel

user to the department of all taxes levied by the Special

Fuels Supplier Tax Act, together with all applicable

penalties and interest on the taxes.

B. In lieu of the bond, the special fuel user may

elect to file with the department cash or bonds of the United

States or New Mexico or of any political subdivision of the

state.

C. The total amount of the bond, cash or

securities required of a special fuel user shall be fixed by

the department and may be increased or reduced by the

department at any time, subject to the limitations provided

in this section.

D. In fixing the total amount of the bond, cash or

securities required of a special fuel user required to post a

bond, the department shall require an amount equivalent to

the total estimated tax due for two quarters; provided,

however, that the total amount of bond, cash or securities

required of a special fuel user shall never be less than five

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hundred dollars ($500).

E. In the event the department determines that the

amount of the existing bond, cash or securities is

insufficient to ensure payment to New Mexico of the amount of

the special fuel excise tax and penalties and interest for

which a special fuel user is or may at any time become

liable, the special fuel user, upon written demand from the

department mailed to the last known address of the special

fuel user as shown on the records of the department, shall

file an additional bond, cash or securities in the manner,

form and amount determined by the department to be necessary

to secure at all times the payment by the special fuel user

of all taxes, penalties and interest due pursuant to the

Special Fuels Supplier Tax Act.

F. A surety on a bond furnished by a special fuel

user as required by this section shall be released and

discharged from all liability accruing on the bond after the

expiration of ninety days from the date upon which the surety

files with the department a written request to be released

and discharged; provided, however, that the request shall not

operate to release or discharge the surety from liability

already accrued or that shall accrue before the expiration of

the ninety-day period, unless a new bond is filed during the

ninety-day period, in which case the previous bond may be

canceled as of the effective date of the new bond. On

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receipt of notice of the request to cancel the bond due to

filing of a new bond, the department shall promptly notify

the special fuel user who furnished the bond that the special

fuel user, on or before the expiration of the ninety-day

period, shall file with the department a new bond with a

surety satisfactory to the department in the amount and form

required in this section.

G. A special fuel user who is required to file a

bond with or provide cash or securities to the department in

accordance with this section and who is required by another

state law to file another bond with or provide cash or

securities to the department may elect to file a combined

bond or provide cash or securities applicable to the

provision of both this section and the other law, with the

approval of the secretary. The amount of the combined bond,

cash or securities shall be determined by the department, and

the form of the combined bond shall be approved by the

attorney general.

H. A special fuel user who is required to file a

bond pursuant to the provisions of this section and who for

the eight consecutive quarters preceding the date of request

has not been delinquent filing reports or paying special fuel

excise taxes pursuant to the Special Fuels Supplier Tax Act

may request to be exempt from the requirement to file a bond

beginning with the first day of the first quarter following

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the end of the eight-quarter period. If a special fuel user

exempted pursuant to this subsection subsequently becomes

delinquent, the department may terminate the exemption and

require the filing of a bond in accordance with this section.

If the department terminates the exemption, the termination

shall not be effective any earlier than ten days after the

date the department notifies the special fuel user in writing

of the termination."