HOUSE BILL 602

54th legislature - STATE OF NEW MEXICO - first session, 2019

INTRODUCED BYDavid M. Gallegos and Cathrynn N. Brown and

James R. J. Strickler and Rod Montoya

AN ACT

RELATING TO TAXATION; DISTRIBUTING TWO PERCENT OF OIL AND GAS EMERGENCY SCHOOL TAX REVENUES TO OIL- AND GAS-PRODUCING COUNTIES AND MUNICIPALITIES.

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

     SECTION 1. Section 7-1-6.20 NMSA 1978 (being Laws 1985, Chapter 65, Section 6, as amended) is amended to read:

     "7-1-6.20. IDENTIFICATION OF MONEY IN EXTRACTION TAXES SUSPENSE FUND--DISTRIBUTION.--

          A. Except as provided in Subsection B of this section, after the necessary disbursements have been made from the extraction taxes suspense fund, the money remaining in the suspense fund as of the last day of the month shall be identified by tax source and distributed or transferred in accordance with the provisions of Sections 7-1-6.21 through 7-1-6.23 NMSA 1978 and Section [3 of this 2017 act] 7-1-6.61 NMSA 1978. After the necessary distributions and transfers, any balance, except for remittances unidentified as to source or disposition, shall be transferred to the general fund.

          B. Payments on assessments issued by the department pursuant to the Oil and Gas Conservation Tax Act, the Oil and Gas Emergency School Tax Act, the Oil and Gas Ad Valorem Production Tax Act and the Oil and Gas Severance Tax Act shall be held in the extraction taxes suspense fund until the secretary determines that there is no substantial risk of protest or other litigation, whereupon after the necessary disbursements have been made from the extraction taxes suspense fund, the money remaining in the suspense fund as of the last day of the month attributed to these payments shall be identified by tax source and distributed or transferred in accordance with the provisions of Sections 7-1-6.21 through 7-1-6.23 and 7-1-6.61 NMSA 1978 and Section [3 of this 2017 act] 2 of this 2019 act. After the necessary distributions and transfers, any balance, except for remittance unidentified as to source or disposition, shall be transferred to the general fund."

     SECTION 2. A new section of the Tax Administration Act is enacted to read:

     "[NEW MATERIAL] DISTRIBUTION--OIL AND GAS EMERGENCY SCHOOL TAX--CERTAIN MUNICIPALITIES AND COUNTIES.--

          A. A distribution pursuant to Section 7-1-6.20 NMSA 1978 shall be made to a county equal to one percent of the net receipts attributable to that county from the oil and gas emergency school tax. Revenue from the distribution shall be used for the construction, reconstruction, improvement, maintenance or repair of streets, roads or bridges.

          B. A distribution pursuant to Section 7-1-6.20 NMSA 1978 of one percent of the net receipts attributable to the oil and gas emergency school tax in a county shall be distributed to eligible municipalities in that county, on a pro rata basis of the total municipal roadway miles in that county, certified by the secretary of transportation pursuant to Subsection C of this section. Revenue from the distribution shall be used for the construction, reconstruction, improvement, maintenance or repair of streets, roads or bridges.

          C. On or before April 1 each year, the secretary of transportation shall determine and certify to the taxation and revenue department and to each eligible municipality the total municipal roadway miles for which a distribution pursuant to Subsection B of this section is based.

          D. As used in this section, "eligible municipality" means a municipality in a county for which receipts are attributable to the oil and gas emergency school tax."

     SECTION 3. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2019.