HOUSE BILL 561
51st legislature - STATE OF NEW MEXICO - first session, 2013
INTRODUCED BY
George Dodge, Jr.
AN ACT
RELATING TO TAXATION; AMENDING THE TAX ADMINISTRATION ACT TO REVISE THE PROCEDURE FOR CORRECTING DISTRIBUTIONS AND TRANSFERS; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-1-6.15 NMSA 1978 (being Laws 1983, Chapter 211, Section 20, as amended) is amended to read:
"7-1-6.15. ADJUSTMENTS OF DISTRIBUTIONS OR TRANSFERS TO MUNICIPALITIES OR COUNTIES.--
A. The provisions of this section apply to:
(1) any distribution to a municipality of gross receipts taxes pursuant to Section 7-1-6.4 NMSA 1978 or of interstate telecommunications gross receipts tax pursuant to Section 7-1-6.36 NMSA 1978;
(2) any transfer to a municipality with respect to any local option gross receipts tax imposed by that municipality;
(3) any transfer to a county with respect to any local option gross receipts tax imposed by that county;
(4) any distribution to a county pursuant to Section 7-1-6.16 NMSA 1978;
(5) any distribution to a municipality or a county of gasoline taxes pursuant to Section 7-1-6.9 NMSA 1978;
(6) any transfer to a county with respect to any tax imposed in accordance with the Local Liquor Excise Tax Act;
(7) any distribution to a municipality or a county of cigarette taxes pursuant to Sections 7-1-6.11,
7-12-15 and 7-12-16 NMSA 1978;
(8) any distribution to a county from the county government road fund pursuant to Section 7-1-6.26 NMSA 1978;
(9) any distribution to a municipality of gasoline taxes pursuant to Section 7-1-6.27 NMSA 1978; and
(10) any distribution to a municipality of compensating taxes pursuant to Section 7-1-6.55 NMSA 1978.
B. If the secretary determines that the amount of any prior distribution or transfer to a political subdivision [was erroneous] is incorrect based on information discovered or presented after the prior distribution or transfer was made, whether the information is derived from the filing of an amended return, approval of a claim for refund, payment of an assessment, processing of an audit adjustment, discovery of a processing error by the department or other cause, the secretary first shall [increase or decrease the next distribution or transfer amount for that political subdivision after the determination, except as provided in Subsection C, D or E of this section, by the amount necessary to correct the error. Subject to the provisions of Subsection E of this section, the secretary shall] notify the political subdivision of the amount of each increase or decrease [C. No] to the prior distribution no later than the date of the next distribution or transfer to that political subdivision following the determination; provided that no notification need be made:
(1) if the amount of the increase or decrease is less than one hundred dollars ($100); and
(2) with respect to an increase or decrease to prior distributions or transfers made before the beginning of the calendar year prior to the calendar year in which the determination of the secretary was made.
C. Except as provided in Subsection D of this section, in the month following the month in which the political subdivision was notified pursuant to Subsection B of this section, the secretary shall increase or decrease the amount of the distribution or transfer made to that political subdivision by the amount determined pursuant to Subsection B of this section; provided that no increase or decrease shall be made to current or future distributions or transfers to a political subdivision for any [excess] increase or decrease determined for a prior distribution or transfer made to that political subdivision more than one year prior to the calendar year in which the determination of the secretary was made. If the amount of decrease, whether resulting from a single determination or more than one, exceeds the amount of the transfer or distribution, the excess may be deducted from future transfers or distributions.
D. The secretary, in lieu of [recovery from the next] decreasing a distribution or transfer amount pursuant to Subsection C of this section, may [recover an excess distribution or transfer of one hundred dollars ($100) or more to the political subdivision in installments from current and future] decrease distributions or transfers to that political subdivision in installments pursuant to an agreement with the officials of the political subdivision whenever the amount of the distribution or transfer decrease for the political subdivision exceeds:
(1) one hundred dollars ($100); or
(2) ten percent of the average distribution or transfer amount for that political subdivision for the twelve months preceding the month in which the secretary's determination is made; provided that for the purposes of this subsection, the "average distribution or transfer amount" shall be the arithmetic mean of the distribution or transfer amounts within the twelve months immediately preceding the month in which the determination is made.
[E. Except for the provisions of this section, if the amount by which a distribution or transfer would be adjusted pursuant to Subsection B of this section is one hundred dollars ($100) or less, no adjustment or notice need be made.
F.] E. The secretary is authorized to decrease a distribution to a municipality or county upon being directed to do so by the secretary of finance and administration pursuant to the State Aid Intercept Act or to redirect a distribution to the New Mexico finance authority pursuant to an ordinance or a resolution passed by the county or municipality and a written agreement of the municipality or county and the New Mexico finance authority. Upon direction to decrease a distribution or notice to redirect a distribution to a municipality or county, the secretary shall decrease or redirect the next designated distribution, and succeeding distributions as necessary, by the amount of the state distributions intercept authorized by the secretary of finance and administration pursuant to the State Aid Intercept Act or by the amount of the state distribution intercept authorized pursuant to an ordinance or a resolution passed by the county or municipality and a written agreement with the New Mexico finance authority. The secretary shall transfer the state distributions intercept amount to the municipal or county treasurer or other person designated by the secretary of finance and administration or to the New Mexico finance authority pursuant to written agreement to pay the debt service to avoid default on qualified local revenue bonds or meet other local revenue bond, loan or other debt obligations of the municipality or county to the New Mexico finance authority.
[G.] F. A decrease to a distribution or transfer pursuant to this subsection takes priority over any decrease pursuant to Subsection C or D of this section. A decrease pursuant to Subsection C or D of this section may be applied only against any amount of a distribution or transfer remaining after application of the decrease pursuant to this subsection. Upon the direction of the secretary of finance and administration pursuant to Section 9-6-5.2 NMSA 1978, the secretary shall temporarily withhold a distribution to a municipality or county that has failed to submit an audit report required by the Audit Act or a financial report required by Subsection F of Section 6-6-2 NMSA 1978. The amount to be withheld, the source of the withheld distribution and the number of months that the distribution is to be withheld shall be as directed by the secretary of finance and administration. A distribution withheld pursuant to this subsection shall remain in the tax administration suspense fund until distributed to the municipality or county and shall not be distributed to the general fund."
SECTION 2. APPLICABILITY.--The provisions of this act apply to determinations of the secretary of taxation and revenue made on or after April 1, 2013.
SECTION 3. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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