HOUSE BILL 82

49th legislature - STATE OF NEW MEXICO - second session, 2010

INTRODUCED BY

Eleanor Chavez

AN ACT

RELATING TO TAXATION; 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--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, the interim legislative revenue stabilization and tax policy committee and the legislative finance committee. The tax expenditure budget shall report on tax expenditures with revenue impacts of more than five million dollars ($5,000,000) 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, purpose, year of enactment and date of repeal, if any;

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

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

                (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 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 but not limited to 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, rebate, offset, preferential tax rate, subtraction or allowance or related tax structure 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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