SENATE BILL 87

51st legislature - STATE OF NEW MEXICO - second session, 2014

INTRODUCED BY

Steven P. Neville

AN ACT

RELATING TO TAXATION; PROVIDING A DISTRIBUTION OF THE GROSS RECEIPTS TAX TO MUNICIPALITIES AND COUNTIES; REDUCING THE AMOUNT OF A MUNICIPAL OR COUNTY HOLD HARMLESS GROSS RECEIPTS TAX THAT MAY BE IMPOSED; PROVIDING CONDITIONS FOR WHEN A MUNICIPAL OR COUNTY HOLD HARMLESS GROSS RECEIPTS TAX MAY BE IMPOSED.

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] DISTRIBUTION--GROSS RECEIPTS TAX TO MUNICIPALITIES AND COUNTIES.--

          A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the product of the quotient of twenty-five hundredths percent divided by the tax rate imposed by Section 7-9-4 NMSA 1978 multiplied by the net receipts for the month attributable to the gross receipts tax from business locations:

                (1) within that municipality;

                (2) on land owned by the state, commonly known as the "state fairgrounds", within the exterior boundaries of that municipality;

                (3) outside the boundaries of any municipality on land owned by that municipality; and

                (4) on an Indian reservation or pueblo grant in an area that is contiguous to that municipality and in which the municipality performs services pursuant to a contract between the municipality and the Indian tribe or Indian pueblo if:

                     (a) the contract describes an area in which the municipality is required to perform services and requires the municipality to perform services that are substantially the same as the services the municipality performs for itself; and

                     (b) the governing body of the municipality has submitted a copy of the contract to the secretary.

          B. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each county in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the product of the quotient of twenty-five hundredths percent divided by the tax rate imposed by Section 7-9-4 NMSA 1978 multiplied by the net receipts for the month attributable to the gross receipts tax from business locations in the county area not within a municipality.

          C. A distribution pursuant to this section may be adjusted for a distribution made to a tax increment development district with respect to a portion of a gross receipts tax increment dedicated by a municipality or county pursuant to the Tax Increment for Development Act."

     SECTION 2. Section 7-19D-18 NMSA 1978 (being Laws 2013, Chapter 160, Section 11) is amended to read:

     "7-19D-18. MUNICIPAL HOLD HARMLESS GROSS RECEIPTS TAX.--

          A. The majority of the members of the governing body of any municipality may impose by ordinance an excise tax not to exceed a rate of [three-eighths] one-eighth percent of the gross receipts of any person engaging in business in the municipality for the privilege of engaging in business in the municipality if the revenue from the distribution made to a municipality pursuant to Section 1 of this 2014 act is less than one hundred percent of the sum of the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the month by taxpayers from business locations attributable to the municipality multiplied by the sum of the combined rate of all municipal local option gross receipts taxes in effect in the municipality on January 1, 2007 plus one and two hundred twenty-five thousandths percent.

          B. A tax imposed pursuant to this section shall be imposed by the enactment of one or more ordinances, each imposing any number of gross receipts tax rate increments, but the total gross receipts tax rate imposed by all ordinances pursuant to this section shall not exceed an aggregate rate of [three-eighths] one-eighth percent of the gross receipts of a person engaging in business. Municipalities may impose increments of [one-eighth of one] one-sixteenth percent.

          [B.] C. The tax imposed pursuant to Subsection A of this section may be referred to as the "municipal hold harmless gross receipts tax". The imposition of a municipal hold harmless gross receipts tax is not subject to referendum.

          [C.] D. The governing body of a municipality may, at the time of enacting an ordinance imposing the tax authorized in Subsection A of this section, dedicate the revenue for a specific purpose or area of municipal government services, including but not limited to police protection, fire protection, public transportation or street repair and maintenance. If the governing body proposes to dedicate such revenue, the ordinance and any revenue so dedicated shall be used by the municipality for that purpose unless a subsequent ordinance is adopted to change the purpose to which the revenue is dedicated or to place the revenue in the general fund of the municipality.

          [D.] E. Any law that imposes or authorizes the imposition of a municipal hold harmless gross receipts tax or that affects the municipal hold harmless gross receipts tax, or any 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 hold harmless gross receipts tax unless such outstanding revenue bonds have been discharged in full or provision has been fully made therefor."

     SECTION 3. Section 7-20E-28 NMSA 1978 (being Laws 2013, Chapter 160, Section 12) is amended to read:

     "7-20E-28. COUNTY HOLD HARMLESS GROSS RECEIPTS TAX.--

          A. The majority of the members of the governing body of any county may impose by ordinance an excise tax not to exceed a rate of [three-eighths] one-eighth percent of the gross receipts of any person engaging in business in the county area for the privilege of engaging in business in the county area if the revenue from the distribution made to a county pursuant to Section 1 of this 2014 act is less than one hundred percent of the sum of the total deductions claimed pursuant to Sections 7-9-92 and 7-9-93 NMSA 1978 for the month by taxpayers from business locations:

                (1) in the county multiplied by the combined rate of all local county option gross receipts taxes in effect on January 1, 2007 that are imposed throughout the county; and

                (2) in the county but not within a municipality multiplied by the combined rate of all local county option gross receipts taxes in effect on January 1, 2007 that are imposed throughout the county area not within a municipality.

          B. A tax imposed pursuant to this section shall be imposed by the enactment of one or more ordinances, each imposing any number of gross receipts tax rate increments, but the total gross receipts tax rate imposed by all ordinances pursuant to this section shall not exceed an aggregate rate of [three-eighths] one-eighth percent of the gross receipts of a person engaging in business. Counties may impose increments of [one-eighth of one] one-sixteenth percent.

          [B.] C. The tax imposed pursuant to Subsection A of this section may be referred to as the "county hold harmless gross receipts tax". The imposition of a county hold harmless gross receipts tax is not subject to referendum.

          [C.] D. The governing body of a county may, at the time of enacting an ordinance imposing the tax authorized in Subsection A of this section, dedicate the revenue for a specific purpose or area of county government services, including but not limited to police protection, fire protection, public transportation or street repair and maintenance. If the governing body proposes to dedicate such revenue, the ordinance and any revenue so dedicated shall be used by the county for that purpose unless a subsequent ordinance is adopted to change the purpose to which the revenue is dedicated or to place the revenue in the general fund of the county.

          [D.] E. Any law that imposes or authorizes the imposition of a county hold harmless gross receipts tax or that affects the county hold harmless gross receipts tax, or any 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 county hold harmless gross receipts tax unless such outstanding revenue bonds have been discharged in full or provision has been fully made therefor."

     SECTION 4. TEMPORARY PROVISION--MUNICIPAL OR COUNTY HOLD HARMLESS GROSS RECEIPTS TAX IMPOSED PRIOR TO THE EFFECTIVE DATE OF THIS ACT.--An ordinance imposing a municipal hold harmless gross receipts tax or county hold harmless gross receipts tax prior to the effective date of this act shall conform to the provisions of this act. The governing body of a municipality or county that has passed an ordinance imposing a municipal or county hold harmless gross receipts tax that does not conform to the provisions of this act shall repeal such ordinance on or before July 1, 2014.

     SECTION 5. REPEAL.--Sections 7-1-6.46 and 7-1-6.47 NMSA 1978 (being Laws 2004, Chapter 116, Sections 1 and 2, as amended) are repealed.

     SECTION 6. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2014.

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