SENATE BILL 113
54th legislature - STATE OF NEW MEXICO - first session, 2019
INTRODUCED BY
Elizabeth "Liz" Stefanics
AN ACT
RELATING TO ECONOMIC DEVELOPMENT; CHANGING A LIMITATION ON THE AMOUNT OF LOCAL OPTION INFRASTRUCTURE GROSS RECEIPTS TAX REVENUE THAT MAY BE USED FOR PROMOTION AND ADMINISTRATION OF OR PROFESSIONAL SERVICES CONTRACTS RELATED TO AN ECONOMIC DEVELOPMENT PLAN PURSUANT TO THE LOCAL ECONOMIC DEVELOPMENT ACT; INCREASING A MUNICIPALITY'S AUTHORITY TO IMPOSE A MUNICIPAL INFRASTRUCTURE GROSS RECEIPTS TAX TO FIVE-EIGHTHS PERCENT; INCREASING A COUNTY'S AUTHORITY TO IMPOSE A COUNTY INFRASTRUCTURE GROSS RECEIPTS TAX TO FIVE-EIGHTHS PERCENT; REQUIRING AN ELECTION ON AN IMPOSITION IN EXCESS OF ONE-EIGHTH PERCENT OF THOSE TAXES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 5-10-4 NMSA 1978 (being Laws 1993, Chapter 297, Section 4, as amended) is amended to read:
"5-10-4. ECONOMIC DEVELOPMENT PROJECTS--RESTRICTIONS ON PUBLIC EXPENDITURES OR PLEDGES OF CREDIT.--
A. No local or regional government shall provide public support for economic development projects as permitted pursuant to Article 9, Section 14 of the constitution of New Mexico except as provided in the Local Economic Development Act or as otherwise permitted by law.
B. The total amount of public money expended and the value of credit pledged in the fiscal year in which that money is expended by a local government for economic development projects pursuant to Article 9, Section 14 of the constitution of New Mexico and the Local Economic Development Act shall not exceed ten percent of the annual general fund expenditures of the local government in that fiscal year. The limits of this subsection shall not apply to:
(1) the value of any land or building contributed to any project pursuant to a project participation agreement;
(2) revenue generated through the imposition of the municipal infrastructure gross receipts tax pursuant to the Municipal Local Option Gross Receipts Taxes Act for furthering or implementing economic development plans and projects as defined in the Local Economic Development Act or projects as defined in the Statewide Economic Development Finance Act; provided that no more than the greater of [fifty thousand dollars ($50,000)] two hundred fifty thousand dollars ($250,000) or [ten] twenty percent of the revenue collected shall be used for promotion and administration of or professional services contracts related to the implementation of any such economic development plan adopted by the governing body;
(3) revenue generated through the imposition of a county infrastructure gross receipts tax pursuant to the County Local Option Gross Receipts Taxes Act for furthering or implementing economic development plans and projects as defined in the Local Economic Development Act or projects as defined in the Statewide Economic Development Finance Act; provided that no more than the greater of [fifty thousand dollars ($50,000)] two hundred fifty thousand dollars $250,000) or [ten] twenty percent of the revenue collected shall be used for promotion and administration of or professional services contracts related to the implementation of any such economic development plan adopted by the governing body;
(4) the proceeds of a revenue bond issue to which municipal infrastructure gross receipts tax revenue is pledged;
(5) the proceeds of a revenue bond issue to which county infrastructure gross receipts tax revenue is pledged; or
(6) funds donated by private entities to be used for defraying the cost of a project.
C. A regional or local government that generates revenue for economic development projects to which the limits of Subsection B of this section do not apply shall create an economic development fund into which such revenues shall be deposited. The economic development fund and income from the economic development fund shall be deposited as provided by law. Money in the economic development fund may be expended only as provided in the Local Economic Development Act or the Statewide Economic Development Finance Act.
D. In order to expend money from an economic development fund for arts and cultural district purposes, cultural facilities or retail businesses, the governing body of a municipality or county that has imposed a municipal or county local option infrastructure gross receipts tax for furthering or implementing economic development plans and projects as defined in the Local Economic Development Act or projects as defined in the Statewide Economic Development Finance Act by referendum of the majority of the voters voting on the question approving the ordinance imposing the municipal or county infrastructure gross receipts tax before July 1, 2013 shall be required to adopt a resolution. The resolution shall call for an election to approve arts and cultural districts as a qualifying purpose and cultural facilities or retail businesses as a qualifying entity before any revenue generated by the municipal or county local option gross receipts tax for furthering or implementing economic development plans and projects as defined in the Local Economic Development Act or projects as defined in the Statewide Economic Development Finance Act can be expended from the economic development fund for arts and cultural district purposes, cultural facilities or retail businesses.
E. The governing body shall adopt a resolution calling for an election within seventy-five days of the date the ordinance is adopted on the question of approving arts and cultural districts as a qualifying purpose and cultural facilities or retail businesses as a qualifying entity eligible to utilize revenue generated by the Municipal Local Option Gross Receipts Taxes Act or the County Local Option Gross Receipts Taxes Act for furthering or implementing economic development plans and projects as defined in the Local Economic Development Act or projects as defined in the Statewide Economic Development Finance Act.
F. The question shall be submitted to the voters of the municipality or county as a separate question at a regular local or county election or at a special election called for that purpose by the governing body. A special local election shall be called, conducted and canvassed as provided in the Local Election Act. A special county election shall be called, conducted and canvassed in substantially the same manner as provided by law for general elections.
G. If a majority of the voters voting on the question approves the ordinance adding arts and cultural districts and cultural facilities or retail businesses as an approved use of the local option municipal or county economic development infrastructure gross receipts tax fund, the ordinance shall become effective on July 1 or January 1, whichever date occurs first after the expiration of three months from the date of the adopted ordinance. The ordinance shall include the effective date."
SECTION 2. Section 7-19D-11 NMSA 1978 (being Laws 1991, Chapter 9, Section 3, as amended) is amended to read:
"7-19D-11. MUNICIPAL INFRASTRUCTURE GROSS RECEIPTS TAX--AUTHORITY BY MUNICIPALITY TO IMPOSE--ORDINANCE REQUIREMENTS--ELECTION.--
A. A majority of the members of the governing body of a municipality may enact an ordinance imposing an excise tax on any person engaging in business in the municipality for the privilege of engaging in business. The rate of the tax shall not exceed [one-fourth of one] five-eighths percent of the gross receipts of the person engaging in business and may be imposed in one-sixteenth [of one] percent increments by separate ordinances. Any ordinance enacting any increment of the first one-eighth [of one] percent of the tax is not subject to a referendum of any kind, notwithstanding any requirement of any charter municipality, except that an increment that is imposed after July 1, 1998 for economic development purposes set forth in Paragraph (5) of Subsection C of this section shall be subject to a referendum as provided in Subsection D of this section.
B. The tax imposed pursuant to Subsection A of this section may be referred to as the "municipal infrastructure gross receipts tax".
C. The governing body of a municipality, at the time of enacting any ordinance imposing the rate of the tax authorized in Subsection A of this section, may dedicate the revenue for:
(1) payment of special obligation bonds issued pursuant to a revenue bond act;
(2) repair, replacement, construction or acquisition of infrastructure improvements, including sanitary sewer lines, storm sewers and other drainage improvements, water, water rights, water lines and utilities, streets, alleys, rights of way, easements, international ports of entry and land within the municipality or within the extraterritorial zone of the municipality;
(3) municipal general purposes;
(4) acquiring, constructing, extending, bettering, repairing or otherwise improving or operating or maintaining public transit systems or regional transit systems or authorities; and
(5) furthering or implementing economic development plans and projects as defined in the Local Economic Development Act or projects as defined in the Statewide Economic Development Finance Act and use of not more than the greater of [fifty thousand dollars ($50,000)] two hundred fifty thousand dollars ($250,000) or [ten] twenty percent of the revenue collected for promotion and administration of or professional services contracts related to implementation of an economic development plan adopted by the governing body pursuant to the Local Economic Development Act and in accordance with law.
D. An ordinance imposing any increment of the municipal infrastructure gross receipts tax in excess of the first one-eighth [of one] percent, or any increment imposed after July 1, 1998 for economic development purposes set forth in Paragraph (5) of Subsection C of this section, shall not go into effect until after an election is held and a majority of the voters of the municipality voting in the election votes in favor of imposing the tax. The governing body shall adopt a resolution calling for an election within seventy-five days of the date the ordinance is adopted on the question of imposing the tax. The question shall be submitted to the voters of the municipality as a separate question at a regular local election or at a special election called for that purpose by the governing body. An election shall be called, conducted and canvassed as provided in the Local Election Act. If a majority of the voters voting on the question approves the ordinance imposing the municipal infrastructure gross receipts tax, then the ordinance shall become effective in accordance with the provisions of the Municipal Local Option Gross Receipts Taxes Act. If the question of imposing the municipal infrastructure gross receipts tax fails, the governing body shall not again propose the imposition of any increment of the tax in excess of the first one-eighth [of one] percent for a period of one year from the date of the election."
SECTION 3. Section 7-20E-19 NMSA 1978 (being Laws 1998, Chapter 90, Section 7, as amended) is amended to read:
"7-20E-19. COUNTY INFRASTRUCTURE GROSS RECEIPTS TAX-- AUTHORITY TO IMPOSE RATE--USE OF FUNDS--ELECTION.--
A. The majority of the members of the governing body of a county may enact an ordinance imposing an excise tax at a rate not to exceed [one-eighth of one] five-eighths percent of the gross receipts of any person engaging in business in the county area for the privilege of engaging in business. The tax may be imposed in increments of one-sixteenth [of one] percent by separate ordinances not to exceed an aggregate rate of [one-eighth of one] five-eighths percent. An ordinance enacting an increment of the first one-eighth percent of the tax is not subject to a referendum, notwithstanding a requirement of a charter county, except that an increment that is imposed after July 1, 1998 for economic development purposes as set forth in Paragraph (7) of Subsection C of this section shall be subject to a referendum as provided in Subsection D of this section.
B. The tax imposed pursuant to Subsection A of this section may be referred to as the "county infrastructure gross receipts tax".
C. The governing body, at the time of enacting an ordinance imposing a rate of tax authorized in Subsection A of this section, may dedicate the revenue for:
(1) county general purposes;
(2) payment of gross receipts tax revenue bonds issued pursuant to Chapter 4, Article 62 NMSA 1978;
(3) repair, replacement, construction or acquisition of any county infrastructure improvements;
(4) acquisition, construction, operation or maintenance of solid waste facilities, water facilities, wastewater facilities, sewer systems and related facilities;
(5) acquiring, constructing, extending, bettering, repairing or otherwise improving or operating or maintaining public transit systems or regional transit systems or authorities;
(6) planning, design, construction, equipping, maintenance or operation of a county jail or juvenile detention facility; planning, assessment, design or operation of a regional system of juvenile services, including secure detention and nonsecure alternatives, that serves multiple contiguous counties; planning, design, construction, maintenance or operation of multipurpose regional adult jails or juvenile detention facilities; housing of county prisoners or juvenile offenders in any county jail or detention facility; or substance abuse, mental health or other programs for county prisoners or other inmates in county jails or for juvenile offenders in county or regional detention facilities; and
(7) furthering or implementing economic development plans and projects as defined in the Local Economic Development Act or projects as defined in the Statewide Economic Development Finance Act and use of not more than the greater of [fifty thousand dollars ($50,000)] two hundred fifty thousand dollars ($250,000) or [ten] twenty percent of the revenue collected for promotion and administration of or professional services contracts related to implementation of an economic development plan adopted by the governing body pursuant to the Local Economic Development Act and in accordance with law.
D. An ordinance imposing the county infrastructure gross receipts tax in excess of the first one-eighth percent, or any increment imposed after July 1, 1998 for economic development purposes set forth in Paragraph (7) of Subsection C of this section, shall not go into effect until after an election is held and a majority of the voters in the county area voting in the election votes in favor of imposing the tax. The governing body shall adopt a resolution calling for an election within seventy-five days of the date the ordinance is adopted on the question of imposing the tax. The question shall be submitted to the voters of the county area as a separate question at a general election or at a special election called for that purpose by the governing body. A special county election shall be called, conducted and canvassed in substantially the same manner as provided by law for general elections. If a majority of the voters voting on the question approves the ordinance imposing the county infrastructure gross receipts tax, then the ordinance shall become effective in accordance with the provisions of the County Local Option Gross Receipts Taxes Act. If the question of imposing the county infrastructure gross receipts tax fails, the governing body shall not again propose the imposition of any increment of the tax in excess of the first one-eighth percent for a period of one year from the date of the election."
SECTION 4. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2019.
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