SB0433

SENATE BILL 433

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Carlos R. Cisneros

AN ACT

RELATING TO TAXATION; IMPOSING THE STATE GROSS RECEIPTS TAX AND THE GOVERNMENTAL GROSS RECEIPTS TAX ON ALL HOSPITALS, INCLUDING GOVERNMENT AND NONPROFIT HOSPITALS, ON A TEMPORARY BASIS; ALLOWING HOSPITALS TO TAKE CREDITS AGAINST GROSS RECEIPTS TAX AND GOVERNMENTAL GROSS RECEIPTS TAX LIABILITIES; DISTRIBUTING THE REVENUE FROM THE STATE GROSS RECEIPTS TAX AND THE GOVERNMENTAL GROSS RECEIPTS TAX ON HOSPITALS TO THE MEDICAID TRUST FUND; CREATING THE MEDICAID TRUST FUND TO RESTORE MEDICAID PAYMENT RATES TO HOSPITALS AND PHYSICIANS AND TO SUPPORT THE STATE MEDICAID PROGRAM; MAKING AN APPROPRIATION.

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

SECTION 1. Section 7-1-6.4 NMSA 1978 (being Laws 1983, Chapter 211, Section 9, as amended) is amended to read:

"7-1-6.4. DISTRIBUTION--MUNICIPALITY FROM GROSS RECEIPTS TAX.--

A. Except as provided in Subsection B of this section, 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 one and two hundred twenty-five thousandths percent divided by the tax rate imposed by Section 7-9-4 NMSA 1978 multiplied by the net receipts, except net receipts attributable to a hospital licensed by the department of health, 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. If the reduction made by Laws 1991, Chapter 9, Section 9 to the distribution under this section impairs the ability of a municipality to meet its principal or interest payment obligations for revenue bonds outstanding prior to July 1, 1991 that are secured by the pledge of all or part of the municipality's revenue from the distribution made under this section, then the amount distributed pursuant to this section to that municipality shall be increased by an amount sufficient to meet any required payment; provided that the distribution amount does not exceed the amount that would have been due that municipality under this section as it was in effect on June 30, 1992.

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 pursuant to the Tax Increment for Development Act.

D. As used in this section, "hospital" means a facility providing emergency or urgent care, inpatient medical care and nursing care for acute illness, injury, surgery or obstetrics and includes a facility licensed by the department of health as a critical access hospital, general hospital, long-term acute care hospital, psychiatric hospital, rehabilitation hospital, limited services hospital and special hospital."

SECTION 2. Section 7-1-6.4 NMSA 1978 (being Laws 1983, Chapter 211, Section 9, as amended by Section 1 of this act) is repealed and a new Section 7-1-6.4 NMSA 1978 is enacted to read:

"7-1-6.4. [NEW MATERIAL] DISTRIBUTION--MUNICIPALITY FROM GROSS RECEIPTS TAX.--

A. Except as provided in Subsection B of this section, 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 one and two hundred twenty-five thousandths 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

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

SECTION 3. Section 7-1-6.38 NMSA 1978 (being Laws 1994, Chapter 145, Section 1, as amended) is amended to read:

"7-1-6.38. DISTRIBUTION--GOVERNMENTAL GROSS RECEIPTS TAX.--

A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made in amounts equal to the following percentages of the net receipts attributable to the governmental gross receipts tax, less the net receipts attributable to a hospital licensed by the department of health:

(1) seventy-five percent to the public project revolving fund administered by the New Mexico finance authority; [in an amount equal to seventy-five percent of the net receipts attributable to the governmental gross receipts tax.

B. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made]

(2) twenty-four percent to the energy, minerals and natural resources department [in an amount equal to twenty-four percent of the net receipts attributable to the governmental gross receipts tax]; provided that forty-one and two-thirds percent of the distribution is appropriated to the energy, minerals and natural resources department to implement the provisions of the New Mexico Youth Conservation Corps Act and fifty-eight and one-third percent of the distribution is appropriated to the energy, minerals and natural resources department for state park and recreation area capital improvements, including the costs of planning, engineering, design, construction, renovation, repair, equipment and furnishings; and

[C. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made]

(3) one percent to the [office of] cultural affairs [in an amount equal to one percent of the net receipts attributable to the governmental gross receipts tax] department for capital improvements at state museums and monuments administered by the [office of] cultural affairs department.

[D.] B. The state pledges to and agrees with the holders of any bonds or notes issued by the New Mexico finance authority or by the energy, minerals and natural resources department and payable from the net receipts attributable to the governmental gross receipts tax distributed to the New Mexico finance authority or the energy, minerals and natural resources department pursuant to this section that the state will not limit, reduce or alter the distribution of the net receipts attributable to the governmental gross receipts tax to the New Mexico finance authority or the energy, minerals and natural resources department or limit, reduce or alter the rate of imposition of the governmental gross receipts tax until the bonds or notes together with the interest thereon are fully met and discharged. The New Mexico finance authority and the energy, minerals and natural resources department are authorized to include this pledge and agreement of the state in any agreement with the holders of the bonds or notes.

C. As used in this section, "hospital" means a facility providing emergency or urgent care, inpatient medical care and nursing care for acute illness, injury, surgery or obstetrics and includes a facility licensed by the department of health as a critical access hospital, general hospital, long-term acute care hospital, psychiatric hospital, rehabilitation hospital, limited services hospital and special hospital."

SECTION 4. Section 7-1-6.38 NMSA 1978 (being Laws 1994, Chapter 145, Section 1, as amended by Section 3 of this act) is repealed and a new Section 7-1-6.38 NMSA 1978 is enacted to read:

"7-1-6.38. [NEW MATERIAL] DISTRIBUTION--GOVERNMENTAL GROSS RECEIPTS TAX.--

A. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the public project revolving fund administered by the New Mexico finance authority in an amount equal to seventy-five percent of the net receipts attributable to the governmental gross receipts tax.

B. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the energy, minerals and natural resources department in an amount equal to twenty-four percent of the net receipts attributable to the governmental gross receipts tax. Forty-one and two-thirds percent of the distribution is appropriated to the energy, minerals and natural resources department to implement the provisions of the New Mexico Youth Conservation Corps Act and fifty-eight and one-third percent of the distribution is appropriated to the energy, minerals and natural resources department for state park and recreation area capital improvements, including the costs of planning, engineering, design, construction, renovation, repair, equipment and furnishings.

C. A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the cultural affairs department in an amount equal to one percent of the net receipts attributable to the governmental gross receipts tax for capital improvements at state museums and monuments administered by the cultural affairs department.

D. The state pledges to and agrees with the holders of any bonds or notes issued by the New Mexico finance authority or by the energy, minerals and natural resources department and payable from the net receipts attributable to the governmental gross receipts tax distributed to the New Mexico finance authority or the energy, minerals and natural resources department pursuant to this section that the state will not limit, reduce or alter the distribution of the net receipts attributable to the governmental gross receipts tax to the New Mexico finance authority or the energy, minerals and natural resources department or limit, reduce or alter the rate of imposition of the governmental gross receipts tax until the bonds or notes together with the interest thereon are fully met and discharged. The New Mexico finance authority and the energy, minerals and natural resources department are authorized to include this pledge and agreement of the state in any agreement with the holders of the bonds or notes."

SECTION 5. A new section of the Tax Administration Act is enacted to read:

"[NEW MATERIAL] DISTRIBUTION--GROSS RECEIPTS TAX AND GOVERNMENTAL GROSS RECEIPTS TAX ON HOSPITALS TO THE MEDICAID TRUST FUND.--

A. Beginning July 1, 2017 and prior to July 1, 2019, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the medicaid trust fund in an amount equal to the net receipts attributable to the gross receipts tax and the governmental gross receipts tax on hospitals.

B. As used in this section, "hospital" means a facility providing emergency or urgent care, inpatient medical care and nursing care for acute illness, injury, surgery or obstetrics and includes a facility licensed by the department of health as a critical access hospital, general hospital, long-term acute care hospital, psychiatric hospital, rehabilitation hospital, limited services hospital and special hospital."

SECTION 6. Section 7-9-4.3 NMSA 1978 (being Laws 1991, Chapter 8, Section 2, as amended by Laws 1993, Chapter 332, Section 1 and by Laws 1993, Chapter 352, Section 1) is amended to read:

"7-9-4.3. IMPOSITION AND RATE OF TAX--DENOMINATION AS "GOVERNMENTAL GROSS RECEIPTS TAX".--

A. For the privilege of engaging in certain activities by governments, there is imposed on every agency, institution, instrumentality or political subdivision of the state [except any school district and any entity licensed by the department of health that is principally engaged in providing health care services] an excise tax of five percent of governmental gross receipts, except on activities engaged in by:

(1) any school district;

(2) beginning July 1, 2017 and prior to July 1, 2019, any entity licensed by the department of health that is not a hospital; and

(3) prior to July 1, 2017 and on and after July 1, 2019, any entity licensed by the department of health that is principally engaged in providing health care services.

B. The tax imposed by this section shall be referred to as the "governmental gross receipts tax".

SECTION 7. Section 7-9-29 NMSA 1978 (being Laws 1970, Chapter 12, Section 3, as amended) is amended to read:

"7-9-29. EXEMPTION--GROSS RECEIPTS TAX--CERTAIN ORGANIZATIONS.--

A. Except as provided in Subsection B of this section, exempted from the gross receipts tax are the receipts of organizations that demonstrate to the department that they have been granted exemption from the federal income tax by the United States commissioner of internal revenue as organizations described in Section 501(c)(3) of the United States Internal Revenue Code of [1954] 1986, as that section may be amended or renumbered.

B. Prior to July 1, 2017 and on and after July 1, 2019, exempted from the gross receipts tax are the receipts of a hospital licensed by the department of health that demonstrates to the taxation and revenue department that the hospital has been granted exemption from the federal income tax by the United States commissioner of internal revenue as an organization described in Section 501(c)(3) of the United States Internal Revenue Code of 1986, as that section may be amended or renumbered.

[B.] C. Exempted from the gross receipts tax are the receipts from carrying on chamber of commerce, visitor bureau and convention bureau functions of organizations that demonstrate to the department that they have been granted exemption from the federal income tax by the United States commissioner of internal revenue as organizations described in Section 501(c)(6) of the United States Internal Revenue Code of [1954] 1986, as that section may be amended or renumbered.

[C.] D. This section does not apply to receipts derived from an unrelated trade or business as defined in Section 513 of the United States Internal Revenue Code of [1954] 1986, as that section may be amended or renumbered.

E. As used in this section, "hospital" means a facility providing emergency or urgent care, inpatient medical care and nursing care for acute illness, injury, surgery or obstetrics and includes a facility licensed by the department of health as a critical access hospital, general hospital, long-term acute care hospital, psychiatric hospital, rehabilitation hospital, limited services hospital and special hospital."

SECTION 8. Section 7-9-73.1 NMSA 1978 (being Laws 1991, Chapter 8, Section 3, as amended) is amended to read:

"7-9-73.1. DEDUCTION--GROSS RECEIPTS--HOSPITALS.--Prior to July 1, 2017 and on and after July 1, 2019, fifty percent of the receipts of hospitals licensed by the department of health may be deducted from gross receipts; provided that this deduction may be applied only to the taxable gross receipts remaining after all other appropriate deductions have been taken."

SECTION 9. Section 7-9-96.1 NMSA 1978 (being Laws 2007, Chapter 361, Section 7) is amended to read:

"7-9-96.1. CREDIT--GROSS RECEIPTS TAX--RECEIPTS OF CERTAIN HOSPITALS.--

A. Prior to July 1, 2017 and on and after July 1, 2019, a hospital licensed by the department of health may claim a credit for each reporting period against the gross receipts tax due for that reporting period as follows:

(1) for a hospital located in a municipality,

[(a) on or after July 1, 2007 but before July 1, 2008, in an amount equal to seven hundred fifty-five thousandths percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken;

(b) on or after July 1, 2008 but before July 1, 2009, in an amount equal to one and fifty-one hundredths percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken;

(c) on or after July 1, 2009 but before July 1, 2010, in an amount equal to two and two hundred sixty-five thousandths percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken;

(d) on or after July 1, 2010 but before July 1, 2011, in an amount equal to three and two hundredths percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken; and

(e) on or after July 1, 2011] in an amount equal to three and seven hundred seventy-five thousandths percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken; and

(2) for a hospital located in the unincorporated area of a county,

[(a) on or after July 1, 2007 but before July 1, 2008, in an amount equal to one percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken;

(b) on or after July 1, 2008, but before July 1, 2009, in an amount equal to two percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken;

(c) on or after July 1, 2009 but before July 1, 2010, in an amount equal to three percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken;

(d) on or after July 1, 2010 but before July 1, 2011, in an amount equal to four percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken; and

(e) on or after July 1, 2011] in an amount equal to five percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken.

B. For the purposes of this section, "hospital" means a facility providing emergency or urgent care, inpatient medical care and nursing care for acute illness, injury, surgery or obstetrics and includes a facility licensed by the department of health as a critical access hospital, general hospital, long-term acute care hospital, psychiatric hospital, rehabilitation hospital, limited services hospital and special hospital."

SECTION 10. A new section of the Gross Receipts and Compensating Tax is enacted to read:

"[NEW MATERIAL] CREDIT--GROSS RECEIPTS TAX AND GOVERNMENTAL GROSS RECEIPTS ACT--PORTION OF TAX PAID--INTERGOVERNMENTAL TRANSFERS.--

A. Beginning July 1, 2017 and prior to July 1, 2019, a hospital licensed by the department of health may claim a credit for each reporting period against the gross receipts tax due for that reporting period in an amount equal to four and one hundred twenty-five thousandths percent of the entity's taxable gross receipts for that reporting period after all applicable deductions have been taken.

B. Beginning July 1, 2017 and prior to July 1, 2019, a hospital licensed by the department of health may claim a credit for each reporting period against the governmental gross receipts tax due for that reporting period in an amount equal to four percent of the entity's taxable gross receipts for that reporting period after all applicable deductions have been taken.

C. Beginning July 1, 2017 and prior to July 1, 2019, a hospital licensed by the department of health that has been determined by the human services department to be capable of making intergovernmental transfers to the medicaid trust fund in compliance with federal law, may claim a credit for each reporting period, after all applicable deductions have been taken, against the gross receipts tax or governmental gross receipts tax due for that reporting period in an amount equal to the amount transferred. Any portion of the credit that remains unused at the end of the reporting period may be carried forward and credited against the entity's gross receipts tax or governmental gross receipts tax liability in succeeding years, until July 1, 2019.

SECTION 11. Section 7-19D-2 NMSA 1978 (being Laws 1993, Chapter 346, Section 2) is amended to read:

"7-19D-2. DEFINITIONS.--As used in the Municipal Local Option Gross Receipts Taxes Act:

A. "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;

B. "governing body" means the city council or city commission of a city, the board of trustees of a town or village and the board of county commissioners of H-class counties;

C. "gross receipts" means "gross receipts" as that term is used in the Gross Receipts and Compensating Tax Act, except "gross receipts" does not include the receipts of a hospital;

D. "hospital" means a facility licensed by the department of health that provides emergency or urgent care, inpatient medical care and nursing care for acute illness, injury, surgery or obstetrics and includes a facility licensed as a critical access hospital, general hospital, long-term acute care hospital, psychiatric hospital, rehabilitation hospital, limited services hospital and special hospital;

[C.] E. "municipality" means any incorporated city, town or village, whether incorporated under general act, special act or special charter, and an H-class county;

[D.] F. "person" means an individual or any other legal entity; and

[E.] G. "state gross receipts tax" means the gross receipts tax imposed [under] pursuant to the provisions of the Gross Receipts and Compensating Tax Act."

SECTION 12. Section 7-19D-2 NMSA 1978 (being Laws 1993, Chapter 346, Section 2, as amended by Section 11 of this act) is repealed and a new Section 7-19D-2 NMSA 1978 in enacted to read:

"7-19D-2. [NEW MATERIAL] DEFINITIONS.--As used in the Municipal Local Option Gross Receipts Taxes Act:

B. "governing body" means the city council or city commission of a city, the board of trustees of a town or village and the board of county commissioners of H-class counties;

C. "municipality" means any incorporated city, town or village, whether incorporated under general act, special act or special charter, and an H-class county;

D. "person" means an individual or any other legal entity; and

E. "state gross receipts tax" means the gross receipts tax imposed pursuant to the provisions of the Gross Receipts and Compensating Tax Act."

SECTION 13. Section 7-19D-4 NMSA 1978 (being Laws 1993, Chapter 346, Section 4) is amended to read:

"7-19D-4. ORDINANCE SHALL CONFORM TO CERTAIN PROVISIONS OF THE GROSS RECEIPTS AND COMPENSATING TAX ACT AND REQUIREMENTS OF THE DEPARTMENT.--

A. An ordinance imposing a tax [under] pursuant to the provisions of the Municipal Local Option Gross Receipts Taxes Act shall adopt by reference the same definitions, except the definition of "gross receipts", and the same provisions relating to exemptions and deductions as are contained in the Gross Receipts and Compensating Tax Act then in effect and as it may be amended from time to time.

B. The governing body of any municipality imposing a tax [under] pursuant to the provisions of the Municipal Local Option Gross Receipts Taxes Act shall impose the tax by adopting the model ordinance with respect to the tax furnished to the municipality by the department. An ordinance that does not conform substantially to the model ordinance of the department is not valid."

SECTION 14. Section 7-19D-4 NMSA 1978 (being Laws 1993, Chapter 346, Section 4, as amended by Section 13 of this act) is repealed and a new Section 7-19D-4 NMSA 1978 is enacted to read:

"7-19D-4. [NEW MATERIAL] ORDINANCE SHALL CONFORM TO CERTAIN PROVISIONS OF THE GROSS RECEIPTS AND COMPENSATING TAX ACT AND REQUIREMENTS OF THE DEPARTMENT.--

A. An ordinance imposing a tax pursuant to the provisions of the Municipal Local Option Gross Receipts Taxes Act shall adopt by reference the same definitions and the same provisions relating to exemptions and deductions as are contained in the Gross Receipts and Compensating Tax Act then in effect and as it may be amended from time to time.

B. The governing body of any municipality imposing a tax pursuant to the provisions of the Municipal Local Option Gross Receipts Taxes Act shall impose the tax by adopting the model ordinance with respect to the tax furnished to the municipality by the department. An ordinance that does not conform substantially to the model ordinance of the department is not valid."

SECTION 15. Section 7-20E-2 NMSA 1978 (being Laws 1993, Chapter 354, Section 2, as amended by Laws 1994, Chapter 93, Section 1 and also by Laws 1994, Chapter 97, Section 1) is amended to read:

"7-20E-2. DEFINITIONS.--As used in the County Local Option Gross Receipts Taxes Act:

A. "county" means, unless specifically defined otherwise in the County Local Option Gross Receipts Taxes Act, a county, including an H class county;

B. "county area" means that portion of a county located outside the boundaries of any municipality, except that for H class counties, "county area" means the entire county;

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. "gross receipts" means "gross receipts" as that term is used in the Gross Receipts and Compensating Tax Act, except "gross receipts" does not include the receipts of a hospital;

E. "hospital" means a facility licensed by the department of health that provides emergency or urgent care, inpatient medical care and nursing care for acute illness, injury, surgery or obstetrics and includes a facility licensed as a critical access hospital, general hospital, long-term acute care hospital, psychiatric hospital, rehabilitation hospital, limited services hospital and special hospital;

[D.] F. "governing body" means the county commission of the county or the county council of an H class county;

[E.] G. "person" means an individual or any other legal entity; and

[F.] H. "state gross receipts tax" means the gross receipts tax imposed [under] pursuant to the Gross Receipts and Compensating Tax Act."

SECTION 16. Section 7-20E-2 NMSA 1978 (being Laws 1993, Chapter 354, Section 2, as amended by Section 15 of this act) is repealed and a new Section 7-20E-2 NMSA 1978 is enacted to read:

"7-20E-2. [NEW MATERIAL] DEFINITIONS.--As used in the County Local Option Gross Receipts Taxes Act:

A. "county" means, unless specifically defined otherwise in the County Local Option Gross Receipts Taxes Act, a county, including an H class county;

B. "county area" means that portion of a county located outside the boundaries of any municipality, except that for H class counties, "county area" means the entire county;

D. "governing body" means the county commission of the county or the county council of an H class county;

E. "person" means an individual or any other legal entity; and

F. "state gross receipts tax" means the gross receipts tax imposed pursuant to the Gross Receipts and Compensating Tax Act."

SECTION 17. Section 7-20E-4 NMSA 1978 (being Laws 1993, Chapter 354, Section 4) is amended to read:

"7-20E-4. ORDINANCE SHALL CONFORM TO CERTAIN PROVISIONS OF THE GROSS RECEIPTS AND COMPENSATING TAX ACT AND REQUIREMENTS OF THE DEPARTMENT.--

A. An ordinance imposing a tax [under] pursuant to the provisions of the County Local Option Gross Receipts Taxes Act shall adopt by reference the same definitions, except the definition of "gross receipts", and the same provisions relating to exemptions and deductions as are contained in the Gross Receipts and Compensating Tax Act then in effect and as it may be amended from time to time.

B. The governing body of any county imposing a tax [under] authorized by the County Local Option Gross Receipts Taxes Act shall impose the tax by adopting the model ordinance with respect to the tax furnished to the county by the department. An ordinance that does not conform substantially to the model ordinance of the department is not valid."

SECTION 18. Section 7-20E-4 NMSA 1978 (being Laws 1993, Chapter 354, Section 4, as amended by Section 17 of this act) is repealed and a new Section 7-20E-4 NMSA 1978 is enacted to read:

"7-20E-4. [NEW MATERIAL] ORDINANCE SHALL CONFORM TO CERTAIN PROVISIONS OF THE GROSS RECEIPTS AND COMPENSATING TAX ACT AND REQUIREMENTS OF THE DEPARTMENT.--

A. An ordinance imposing a tax pursuant to the provisions of the County Local Option Gross Receipts Taxes Act shall adopt by reference the same definitions and the same provisions relating to exemptions and deductions as are contained in the Gross Receipts and Compensating Tax Act then in effect and as it may be amended from time to time.

B. The governing body of any county imposing a tax authorized by the County Local Option Gross Receipts Taxes Act shall impose the tax by adopting the model ordinance with respect to the tax furnished to the county by the department. An ordinance that does not conform substantially to the model ordinance of the department is not valid."

SECTION 19. [NEW MATERIAL] MEDICAID TRUST FUND CREATED TO SUPPORT HOSPITALS AND THE STATE MEDICAID PROGRAM.--

A. The "medicaid trust fund" is created in the state treasury. The fund shall consist of distributions, appropriations, intergovernmental transfers to the medicaid trust fund in compliance with federal law, as determined by the human services department, gifts, grants, donations and bequests made to the fund. All income earned on investment of the fund shall be credited to the fund, and money in the fund shall not revert to any other fund at the end of a fiscal year. Money in the fund may be appropriated by the legislature to restore medicaid payment rates to hospitals and physicians and to support the state medicaid program. Money appropriated from the medicaid trust fund to the state medicaid program shall be supplemental to any general fund appropriations to the state medicaid program.

B. Money appropriated from the medicaid trust fund shall be used as follows and in the following priority:

(1) to increase and maintain inpatient and outpatient medicaid reimbursement payments to hospitals to levels of at least one hundred five percent of the levels in effect on June 30, 2016;

(2) to maintain payments from the safety net care pool for uncompensated care based on enhanced medicaid base rates to the levels in effect on June 30, 2016; and

(3) to support the state medicaid program.

SECTION 20. TEMPORARY PROVISION--GENERAL FUND APPROPRIATIONS TO SUPPORT THE STATE MEDICAID PROGRAM.--General fund appropriations to the state medicaid program for fiscal years 2018 and 2019, excluding appropriations made from the medicaid trust fund, shall not be lower than the general fund appropriations to the state medicaid program for fiscal year 2016.

SECTION 21. EFFECTIVE DATE.--

A. The effective date of the provisions of Sections 1, 3 and 5 through 10, 11, 13, 15, 17, 19 and 20 of this act is July 1, 2017.

B. The effective date of the provisions of Sections 2, 4, 12, 14, 16 and 18 of this act is July 1, 2019.

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