SENATE BILL 551
50th legislature - STATE OF NEW MEXICO - first session, 2011
INTRODUCED BY
Pete Campos
AN ACT
RELATING TO LIQUOR EXCISE TAXES; INCREASING THE PRODUCTION CAPACITY ALLOWED FOR CLASSIFICATION AS A SMALL WINERY; AUTHORIZING COUNTIES TO IMPOSE A LOCAL LIQUOR EXCISE TAX; LIMITING RATES OF LOCAL LIQUOR EXCISE TAXES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-17-2 NMSA 1978 (being Laws 1966, Chapter 49, Section 2, as amended) is amended to read:
"7-17-2. DEFINITIONS.--As used in the Liquor Excise Tax Act:
A. "alcoholic beverages" means distilled or rectified spirits, potable alcohol, brandy, whiskey, rum, gin, aromatic bitters or any similar beverage, including blended or fermented beverages, dilutions or mixtures of one or more of the foregoing containing more than one-half of one percent alcohol by volume, but "alcoholic beverages" does not include medicinal bitters;
B. "beer" means an alcoholic beverage obtained by the fermentation of any infusion or decoction of barley, malt and hops or other cereals in water and includes porter, beer, ale and stout;
C. "cider" means an alcoholic beverage made from the normal alcoholic fermentation of the juice of sound, ripe apples that contains not less than one-half of one percent of alcohol by volume and not more than seven percent of alcohol by volume;
D. "department" means the taxation and revenue department, the secretary of taxation and revenue or any employee of the department exercising authority lawfully delegated to that employee by the secretary;
E. "fortified wine" means wine containing more than fourteen percent alcohol by volume when bottled or packaged by the manufacturer, but "fortified wine" does not include:
(1) wine that is sealed or capped by cork closure and aged two years or more;
(2) wine that contains more than fourteen percent alcohol by volume solely as a result of the natural fermentation process and that has not been produced with the addition of wine spirits, brandy or alcohol; or
(3) vermouth and sherry;
F. "microbrewer" means a person who produces fewer than five thousand barrels of beer in a year;
G. "person" includes, to the extent permitted by law, a federal, state or other governmental unit or subdivision or an agency, department, institution or instrumentality thereof;
H. "small winegrower" means a winegrower who produces fewer than [nine hundred fifty] one million two hundred thousand liters of wine in a year;
I. "spirituous liquor" means alcoholic beverages, except fermented beverages such as wine, beer, cider and ale;
J. "wholesaler" means a person holding a license issued under Section 60-6A-1 NMSA 1978 or a person selling alcoholic beverages that were not purchased from a person holding a license issued under Section 60-6A-1 NMSA 1978;
K. "wine" means an alcoholic beverage other than cider that is obtained by the fermentation of the natural sugar contained in fruit or other agricultural products, with or without the addition of sugar or other products, and that does not contain more than twenty-one percent alcohol by volume; and
L. "winegrower" means a person licensed pursuant to Section 60-6A-11 NMSA 1978."
SECTION 2. Section 7-17-5 NMSA 1978 (being Laws 1993, Chapter 65, Section 8, as amended) is amended to read:
"7-17-5. IMPOSITION AND RATE OF LIQUOR EXCISE TAX.--
A. There is imposed on a wholesaler who sells alcoholic beverages on which the tax imposed by this section has not been paid an excise tax, to be referred to as the "liquor excise tax", at the following rates on alcoholic beverages sold:
(1) on spirituous liquors, one dollar sixty cents ($1.60) per liter;
(2) on beer, except as provided in Paragraph
(5) of this subsection, forty-one cents ($.41) per gallon;
(3) on wine, except as provided in Paragraphs (4) and (6) of this subsection, forty-five cents ($.45) per liter;
(4) on fortified wine, one dollar fifty cents ($1.50) per liter;
(5) on beer manufactured or produced by a microbrewer and sold in this state, provided that proof is furnished to the department that the beer was manufactured or produced by a microbrewer, eight cents ($.08) per gallon;
(6) on wine manufactured or produced by a small winegrower and sold in this state, provided that proof is furnished to the department that the wine was manufactured or produced by a small winegrower, ten cents ($.10) per liter on the first eighty thousand liters sold and twenty cents ($.20) per liter on all liters sold over eighty thousand liters but less than [nine hundred fifty] one million two hundred thousand liters; and
(7) on cider, forty-one cents ($.41) per gallon.
B. The volume of wine transferred from one winegrower to another winegrower for processing, bottling or storage and subsequent return to the transferor shall be excluded pursuant to Section 7-17-6 NMSA 1978 from the taxable volume of wine of the transferee. Wine transferred from an initial winegrower to a second winegrower remains a tax liability of the transferor, provided that if the wine is transferred to the transferee for the transferee's use or for resale, the transferee then assumes the liability for the tax due pursuant to this section.
C. A transfer of wine from a winegrower to a wholesaler for distribution of the wine transfers the liability for payment of the liquor excise tax to the wholesaler upon the sale of the wine by the wholesaler."
SECTION 3. Section 7-24-9 NMSA 1978 (being Laws 1989, Chapter 326, Section 2) is amended to read:
"7-24-9. DEFINITIONS.--As used in the Local Liquor Excise Tax Act:
A. "alcoholic beverages" means distilled or rectified spirits, potable alcohol, brandy, whiskey, rum, gin and aromatic bitters or any similar alcoholic beverage, including blended or fermented beverages, dilutions or mixtures of one or more of the foregoing containing more than one-half of one percent alcohol, but excluding medicinal bitters;
B. "county" means:
(1) a class B county having a population of more than fifty-six thousand but less than seventy-five thousand, according to the most recent federal decennial census or any subsequent decennial census, and having a net taxable value for rate-setting purposes for the 1988 or any subsequent property tax year of more than five hundred million dollars ($500,000,000) but less than seven hundred million dollars ($700,000,000); or
(2) a county other than a class B county defined in Paragraph (1) of this subsection;
C. "department" means the taxation and revenue department, the secretary of taxation and revenue or any employee of the department exercising authority lawfully delegated to that employee by the secretary;
D. "governing body" means the board of county commissioners of a county;
E. "microbrewer" means a person who is licensed as a small brewer pursuant to Section 60-6A-26.1 NMSA 1978 to produce beer in New Mexico and who produces less than five thousand barrels of beer in a calendar year;
[E.] F. "person" means any individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, joint venture, syndicate or other association; "person" also means, to the extent permitted by law, any federal, state or other governmental unit or subdivision or agency, department or instrumentality thereof;
[F.] G. "price" means the total amount of money or the reasonable value of other consideration or both paid for alcoholic beverages, inclusive of the amount of any tax paid pursuant to the Liquor Excise Tax Act; [and
G.] H. "retailer" means any person having a place of business within the county who sells, offers for sale or possesses for the purpose of selling alcoholic beverages within the county;
I. "small winegrower" means a winegrower who is licensed pursuant to Section 60-6A-11 NMSA 1978 and who produces fewer than one million two hundred thousand liters of wine in a year; and
J. "tribe" means a federally recognized Indian nation, tribe or pueblo that is located wholly or partly within New Mexico."
SECTION 4. Section 7-24-10 NMSA 1978 (being Laws 1989, Chapter 326, Section 3) is amended to read:
"7-24-10. AUTHORIZATION TO IMPOSE LOCAL LIQUOR EXCISE TAX--RATE--USE OF PROCEEDS--ELECTION REQUIRED.--
A. The majority of the members elected to the governing body of a county identified in Paragraph (1) of Subsection B of Section 7-24-9 NMSA 1978 may enact an ordinance imposing on any retailer an excise tax on the price paid by the retailer for alcoholic beverages purchased by the retailer upon which the tax imposed by this section has not been paid. The tax may be imposed at a rate not to exceed five percent, provided that any lower rate shall be an even multiple of one percent. The tax imposed under this [section] subsection may be referred to as the "local liquor excise tax". Any tax imposed under this [section] subsection shall be imposed for a period of not more than three years from the effective date of the ordinance imposing the tax. Beginning with the general election in 2012, a local liquor excise tax imposed or reimposed in a county identified in Paragraph (1) of Subsection B of Section 7-24-9 NMSA 1978 shall be imposed for a four-year period. An ordinance imposing a local liquor excise tax pursuant to this subsection shall become effective only if approved by the voters in an election held pursuant to Subsection F of this section.
B. The majority of the members elected to the governing body of a county described in Paragraph (2) of Subsection B of Section 7-24-9 NMSA 1978 may enact an ordinance, to become effective only if approved by the voters in an election held pursuant to Subsection F of this section, that imposes on all wholesalers distributing alcoholic beverages to retailers in that county, including tribes or tribally licensed retailers seeking a state license to purchase alcoholic beverages for resale on the tribe's land, a tax that may be referred to as a "local liquor excise tax" at a rate not to exceed:
(1) on spirituous liquors, ninety-nine cents ($.99) per liter;
(2) on beer, except as provided in Paragraph (5) of this subsection, twenty-five cents ($.25) per gallon;
(3) on wine, except as provided in Paragraphs (4) and (6) of this subsection, twenty-eight cents ($.28) per liter;
(4) on fortified wine, ninety-three cents ($.93) per liter;
(5) on beer manufactured or produced by a microbrewer, provided that the beer is sold in this state and that proof is furnished to the county governing body and the department that the beer was manufactured or produced by a microbrewer, five cents ($.05) per gallon;
(6) on wine manufactured or produced by a small winegrower, provided that the wine is sold in this state and that proof is furnished to the county governing body and the department that the wine was manufactured or produced by a small winegrower, no local liquor excise tax may be imposed; and
(7) on cider, twenty-five cents ($.25) per gallon.
C. A tax imposed pursuant to Subsection B of this section shall be imposed for a period of not more than four years from the effective date of the tax.
D. Within the final year that a local liquor excise tax is in effect pursuant to either Subsection A or B of this section, the governing body may enact an ordinance to extend the term of the tax, to begin immediately following the termination of the tax currently in effect, and submit the question of the tax to the voters of the county in the same manner as required by Subsection F of this section to approve the original tax. The governing body may impose a local liquor excise tax pursuant to this section for a period of up to four years. The question submitted to the voters shall include the proposed term of the local liquor excise tax.
[B. The] E. A governing body at the time of enacting an ordinance imposing [the] a tax authorized in [Subsection A of] this section shall dedicate the revenue to fund [educational programs and] direct program services, excluding indirect costs, for the prevention and treatment of alcoholism and drug abuse within the county and for no other purpose. After approval of the imposition of a local liquor excise tax by the voters but before the effective date of the ordinance, the governing body shall hold a public meeting for the purpose of inviting comment on and suggestions for the most appropriate programs on which to expend the revenue produced by the tax. The governing body shall invite representatives from the appropriate [Indian] tribes [nations and pueblos] located in that county to the meeting. If the governing body awards [any] a contract using funds derived from the local liquor excise tax, it shall do so only through a selection process requiring submission of sealed bids or proposals after public notice of the opportunity to submit the sealed bids or proposals.
[C.] F. The governing body enacting an ordinance imposing [the] a local liquor excise tax shall submit the question of imposing the tax to the qualified voters of the county at a [regular or special] general election.
[D. Only those voters who are registered within the county shall be permitted to vote.]
G. In a county that has, within the county:
(1) no incorporated municipality that extends across the county boundary into a second county in New Mexico, only the voters registered within the county shall vote on the question of imposing a local liquor excise tax; or
(2) at least one incorporated municipality that extends across the county's exterior boundaries into a second county in New Mexico, all of the voters of that municipality shall be allowed to vote on the question of imposing a local liquor excise tax in the first county; provided that, once the first county implements a local liquor excise tax that the voters of the incorporated municipality that extends across the county boundary have approved, that local liquor excise tax shall be imposed in the entire municipality and the municipality shall be excluded from the imposition of an additional local liquor excise tax that the second county in which the municipality is located may subsequently impose. All voters of the municipality that extends across the county boundary would be ineligible to vote on the question of imposing a local liquor excise tax adopted by the governing body of the second county.
H. Two counties that share a municipality that extends across the counties' common boundary may enter into a joint powers agreement to share the revenue from a local liquor excise tax imposed within the shared municipality.
I. The election shall be called, conducted and canvassed in substantially the same manner as provided by law for general elections.
[E.] J. If at an election called pursuant to this section a majority of the voters voting on the question [vote] votes in the affirmative on the question, then the ordinance imposing the local liquor excise tax shall be approved. If at such an election a majority of the voters voting on the question [fail] fails to approve the question, then the ordinance shall be disapproved and the question required to be submitted by [Subsection B of] this section shall not be submitted to the voters for a period of at least [one year] two years from the date of the election.
[F. Any] K. An ordinance enacted under the provisions of this section [which] that imposes a local liquor excise tax or changes the rate of tax imposed shall include an effective date [which] that is the first day of any month [which] that begins no earlier than ninety days after the date of the election. A certified copy of [any] an ordinance imposing a local liquor excise tax shall be mailed or personally delivered to the department within five days after the ordinance is certified to have been approved by the voters.
[G. Any] L. An ordinance repealing the imposition of a tax under the provisions of this section shall contain an effective date [which] that is the first day of any month beginning no earlier than sixty days from the date the ordinance repealing the tax is adopted by the governing body. A certified copy of [any] an ordinance repealing a local liquor excise tax shall be mailed or personally delivered to the department within five days of the date the ordinance is adopted."
SECTION 5. Section 7-24-15 NMSA 1978 (being Laws 1989, Chapter 326, Section 8) is amended to read:
"7-24-15. [ADMINISTRATIVE CHARGE] ADMINISTRATION.--The department [may deduct an amount not to exceed five percent of the proceeds of a local liquor excise tax as a charge for the administrative costs of collection, which amount shall be retained by the department for use in administration of] shall collect the net proceeds of the taxes imposed pursuant to the Local Liquor Excise Tax Act and distribute those receipts pursuant to Section 7-1-6.1 NMSA 1978 to the county from which the local liquor excise tax revenue was remitted."
SECTION 6. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2011.
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