SB0584

SENATE BILL 584

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

INTRODUCED BY

Steven P. Neville and John Arthur Smith

AN ACT

RELATING TO TAXATION; CREATING THE LOCAL OPTION FOOD GROSS RECEIPTS TAX ACT; IMPOSING LOCAL OPTION FOOD GROSS RECEIPTS TAXES; ALLOWING FOR THE REPEAL OF A LOCAL OPTION FOOD GROSS RECEIPTS TAX UPON NOTIFICATION FROM A MUNICIPALITY OR COUNTY; REDUCING THE GROSS RECEIPTS TAX RATE AND THE COMPENSATING TAX RATE; REQUIRING MUNICIPALITIES AND COUNTIES TO REPEAL ORDINANCES THAT IMPOSE HOLD HARMLESS GROSS RECEIPTS TAXES ABOVE ONE-EIGHTH PERCENT; PROVIDING THAT BONDS SECURED BY HOLD HARMLESS GROSS RECEIPTS TAXES AND DISTRIBUTIONS SHALL NOT BE IMPAIRED; LIMITING THE HOLD HARMLESS DISTRIBUTIONS TO MUNICIPALITIES AND COUNTIES.

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

SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 6 of this act may be cited as the "Local Option Food Gross Receipts Tax Act".

SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Local Option Food Gross Receipts Tax Act:

A. "engaging in business" means carrying on or causing to be carried on the selling of food at a retail food store with the purpose of direct or indirect benefit;

B. "food" means any food or food product for home consumption that meets the definition of food in 7 USCA 2012(k)(1) for purposes of the federal supplemental nutrition assistance program;

C. "food gross receipts" means the total amount of money or the value of other consideration received from selling food at a retail food store in New Mexico, or, if in an exchange in which the money or other consideration received does not represent the value of the food, "food gross receipts" means the reasonable value of the food. "Food gross receipts" excludes:

(1) cash discounts allowed and taken;

(2) food gross receipts tax payable on transactions for the reporting period;

(3) gross receipts tax payable pursuant to the Gross Receipts and Compensating Tax Act on transactions for the reporting period;

(4) taxes imposed pursuant to the provisions of any local option gross receipts tax, as that term is defined in the Tax Administration Act, that is payable for the reporting period;

(5) a time-price differential; and

(6) any gross receipts or sales taxes imposed by an Indian nation, tribe or pueblo; provided that the tax is approved, if approval is required by federal law or regulation, by the United States secretary of the interior; and provided further that the gross receipts or sales tax imposed by the Indian nation, tribe or pueblo provides a reciprocal exclusion from gross receipts, sales or gross receipts-based excise taxes imposed by the state or its political subdivisions;

D. "governing body" means:

(1) in regard to municipalities, the city council or city commission of a city, the board of trustees of a town or village and the county council of an H class county; and

(2) in regard to counties, the county commission of a county and the county council of an H class county; and

E. "retail food store" means an establishment that sells food for home preparation and consumption and that meets the definition of retail food store in 7 USCA 2012(p)(1) for purposes of the federal supplemental nutrition assistance program, whether or not the establishment participates in the federal supplemental nutrition assistance program.

SECTION 3. [NEW MATERIAL] LOCAL OPTION MUNICIPAL FOOD GROSS RECEIPTS TAX.--

A. Unless a municipality provides notification pursuant to Subsection C of this section, there is imposed an excise tax at a rate determined pursuant to Subsection B of this section on the food gross receipts of any person engaging in business in the municipality for the privilege of engaging in business in the municipality. The tax imposed by this section may be cited as the "local option municipal food gross receipts tax".

B. The rate of the local option municipal food gross receipts tax shall be the total rate imposed by the municipality pursuant to the Municipal Local Option Gross Receipts Taxes Act, plus one and two hundred twenty-five thousandths percent.

C. If a majority of the members of the governing body of a municipality provides written notification to the secretary of taxation and revenue that the municipality does not want to impose a local option municipal food gross receipts tax, the tax shall be repealed effective the next January 1 or July 1, whichever occurs first after thirty days of receipt of the notification.

SECTION 4. [NEW MATERIAL] LOCAL OPTION COUNTY FOOD GROSS RECEIPTS TAX.--

A. Unless a county provides notification pursuant to Subsection C of this section, there is imposed an excise tax at a rate determined pursuant to Subsection B of this section on the food gross receipts of any person engaging in business in the county for the privilege of engaging in business in the county. The tax imposed by this section may be cited as the "local option county food gross receipts tax".

B. The rate of the local option county food gross receipts tax shall be:

(1) for a person engaging in business within that portion of a county located inside the boundaries of any municipality, the total rate imposed by the county pursuant to the County Local Option Gross Receipts Taxes Act on a person engaging in business within that portion of the county; and

(2) for a person engaging in business within that portion of a county located outside the boundaries of any municipality, the total rate imposed by the county pursuant to the County Local Option Gross Receipts Taxes Act on a person engaging in business within that portion of the county.

C. If a majority of the members of the governing body of a county provides written notification to the secretary of taxation and revenue that the county does not want to impose a local option county food gross receipts tax, the tax shall be repealed effective the next January 1 or July 1, whichever occurs first after thirty days of receipt of the notification.

SECTION 5. [NEW MATERIAL] EXEMPTIONS.--Exempted from the taxes imposed pursuant to the Local Option Food Gross Receipts Tax Act are receipts that are exempt from the gross receipts tax or may be deducted from gross receipts pursuant to the Gross Receipts and Compensating Tax Act, except the deduction pursuant to Section 7-9-92 NMSA 1978.

SECTION 6. [NEW MATERIAL] DATE PAYMENT DUE.--The taxes imposed by the Local Option Food Gross Receipts Tax Act are to be paid on or before the twenty-fifth day of the month following the month in which the taxable event occurs.

SECTION 7. Section 7-1-2 NMSA 1978 (being Laws 1965, Chapter 248, Section 2, as amended) is amended to read:

"7-1-2. APPLICABILITY.--The Tax Administration Act applies to and governs:

A. the administration and enforcement of the following taxes or tax acts as they now exist or may hereafter be amended:

(1) Income Tax Act;

(2) Withholding Tax Act;

(3) Venture Capital Investment Act;

(4) Gross Receipts and Compensating Tax Act and any state gross receipts tax;

(5) Liquor Excise Tax Act;

(6) Local Liquor Excise Tax Act;

(7) any municipal local option gross receipts tax;

(8) any county local option gross receipts tax;

(9) Local Option Food Gross Receipts Tax Act;

[(9)] (10) Special Fuels Supplier Tax Act;

[(10)] (11) Gasoline Tax Act;

[(11)] (12) petroleum products loading fee, which fee shall be considered a tax for the purpose of the Tax Administration Act;

[(12)] (13) Alternative Fuel Tax Act;

[(13)] (14) Cigarette Tax Act;

[(14)] (15) Estate Tax Act;

[(15)] (16) Railroad Car Company Tax Act;

[(16)] (17) Investment Credit Act, rural job tax credit, Laboratory Partnership with Small Business Tax Credit Act, Technology Jobs and Research and Development Tax Credit Act, Film Production Tax Credit Act, Affordable Housing Tax Credit Act and high-wage jobs tax credit;

[(17)] (18) Corporate Income and Franchise Tax Act;

[(18)] (19) Uniform Division of Income for Tax Purposes Act;

[(19)] (20) Multistate Tax Compact;

[(20)] (21) Tobacco Products Tax Act; and

[(21)] (22) the telecommunications relay service surcharge imposed by Section 63-9F-11 NMSA 1978, which surcharge shall be considered a tax for the purposes of the Tax Administration Act;

B. the administration and enforcement of the following taxes, surtaxes, advanced payments or tax acts as they now exist or may hereafter be amended:

(1) Resources Excise Tax Act;

(2) Severance Tax Act;

(3) any severance surtax;

(4) Oil and Gas Severance Tax Act;

(5) Oil and Gas Conservation Tax Act;

(6) Oil and Gas Emergency School Tax Act;

(7) Oil and Gas Ad Valorem Production Tax Act;

(8) Natural Gas Processors Tax Act;

(9) Oil and Gas Production Equipment Ad Valorem Tax Act;

(10) Copper Production Ad Valorem Tax Act;

(11) any advance payment required to be made by any act specified in this subsection, which advance payment shall be considered a tax for the purposes of the Tax Administration Act;

(12) Enhanced Oil Recovery Act;

(13) Natural Gas and Crude Oil Production Incentive Act; and

(14) intergovernmental production tax credit and intergovernmental production equipment tax credit;

C. the administration and enforcement of the following taxes, surcharges, fees or acts as they now exist or may hereafter be amended:

(1) Weight Distance Tax Act;

(2) the workers' compensation fee authorized by Section 52-5-19 NMSA 1978, which fee shall be considered a tax for purposes of the Tax Administration Act;

(3) Uniform Unclaimed Property Act (1995);

(4) 911 emergency surcharge and the network and database surcharge, which surcharges shall be considered taxes for purposes of the Tax Administration Act;

(5) the solid waste assessment fee authorized by the Solid Waste Act, which fee shall be considered a tax for purposes of the Tax Administration Act;

(6) the water conservation fee imposed by Section 74-1-13 NMSA 1978, which fee shall be considered a tax for the purposes of the Tax Administration Act; and

(7) the gaming tax imposed pursuant to the Gaming Control Act; and

D. the administration and enforcement of all other laws, with respect to which the department is charged with responsibilities pursuant to the Tax Administration Act, but only to the extent that the other laws do not conflict with the Tax Administration Act."

SECTION 8. Section 7-1-6.15 NMSA 1978 (being Laws 1983, Chapter 211, Section 20, as amended by Laws 2015, Chapter 89, Section 1 and by Laws 2015, Chapter 100, Section 1) 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 pursuant to Section 7-1-6.4, 7-1-6.36 or 7-1-6.46 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 or 7-1-6.47 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 county from the county government road fund pursuant to Section 7-1-6.26 NMSA 1978;

(8) any distribution to a municipality of gasoline taxes pursuant to Section 7-1-6.27 NMSA 1978; [and]

(9) any distribution to a municipality of compensating taxes pursuant to Section 7-1-6.55 NMSA 1978; and

(10) any transfer to a municipality or county with respect to a tax imposed pursuant to the Local Option Food Gross Receipts Tax Act.

B. Before making a distribution or transfer specified in Subsection A of this section to a municipality or county for the month, amounts comprising the net receipts shall be segregated into two mutually exclusive categories. One category shall be for amounts relating to the current month, and the other category shall be for amounts relating to prior periods. The total of each category for a municipality or county shall be reported each month to that municipality or county. If the total of the amounts relating to prior periods is less than zero and its absolute value exceeds the greater of one hundred dollars ($100) or an amount equal to twenty percent of the average distribution or transfer amount for that municipality or county, then the following procedures shall be carried out:

(1) all negative amounts relating to any period prior to the three calendar years preceding the year of the current month, net of any positive amounts in that same time period for the same taxpayers to which the negative amounts pertain, shall be excluded from the total relating to prior periods. Except as provided in Paragraph (2) of this subsection, the net receipts to be distributed or transferred to the municipality or county shall be adjusted to equal the amount for the current month plus the revised total for prior periods; and

(2) if the revised total for prior periods determined pursuant to Paragraph (1) of this subsection is negative and its absolute value exceeds the greater of one hundred dollars ($100) or an amount equal to twenty percent of the average distribution or transfer amount for that municipality or county, the revised total for prior periods shall be excluded from the distribution or transfers and the net receipts to be distributed or transferred to the municipality or county shall be equal to the amount for the current month.

C. The department shall recover from a municipality or county the amount excluded by Paragraph (2) of Subsection B of this section. This amount may be referred to as the "recoverable amount".

D. Prior to or concurrently with the distribution or transfer to the municipality or county of the adjusted net receipts, the department shall notify the municipality or county whose distribution or transfer has been adjusted pursuant to Paragraph (2) of Subsection B of this section:

(1) that the department has made such an adjustment, that the department has determined that a specified amount is recoverable from the municipality or county and that the department intends to recover that amount from future distributions or transfers to the municipality or county;

(2) that the municipality or county has ninety days from the date notice is made to enter into a mutually agreeable repayment agreement with the department;

(3) that if the municipality or county takes no action within the ninety-day period, the department will recover the amount from the next six distributions or transfers following the expiration of the ninety days; and

(4) that the municipality or county may inspect, pursuant to Section 7-1-8.9 NMSA 1978, an application for a claim for refund that gave rise to the recoverable amount, exclusive of any amended returns that may be attached to the application.

E. No earlier than ninety days from the date notice pursuant to Subsection D of this section is given, the department shall begin recovering the recoverable amount from a municipality or county as follows:

(1) the department may collect the recoverable amount by:

(a) decreasing distributions or transfers to the municipality or county in accordance with a repayment agreement entered into with the municipality or county; or

(b) except as provided in Paragraphs (2) and (3) of this subsection, if the municipality or county fails to act within the ninety days, decreasing the amount of the next six distributions or transfers to the municipality or county following expiration of the ninety-day period in increments as nearly equal as practicable and sufficient to recover the amount;

(2) if, pursuant to Subsection B of this section, the secretary determines that the recoverable amount is more than fifty percent of the average distribution or transfer of net receipts for that municipality or county, the secretary:

(a) shall recover only up to fifty percent of the average distribution or transfer of net receipts for that municipality or county; and

(b) may, in the secretary's discretion, waive recovery of any portion of the recoverable amount, subject to approval by the state board of finance; and

(3) if, after application of a refund claim, audit adjustment, correction of a mistake by the department or other adjustment of a prior period, but prior to any recovery of the department pursuant to this section, the total net receipts of a municipality or county for the twelve-month period beginning with the current month are reduced or are projected to be reduced to less than fifty percent of the average distribution or transfer of net receipts, the secretary may waive recovery of any portion of the recoverable amount, subject to approval by the state board of finance.

F. No later than ninety days from the date notice pursuant to Subsection D of this section is given, the department shall provide the municipality or county adequate opportunity to review an application for a claim for refund that gave rise to the recoverable amount, exclusive of any amended returns that may be attached to the application, pursuant to Section 7-1-8.9 NMSA 1978.

G. On or before September 1 of each year beginning in 2016, the secretary shall report to the state board of finance and the legislative finance committee the total recoverable amount waived pursuant to Subparagraph (b) of Paragraph (2) and Paragraph (3) of Subsection E of this section for each municipality and county in the prior fiscal year.

H. The secretary is authorized to decrease a distribution or transfer 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 or transfer 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 transfer or notice to redirect a distribution or transfer to a municipality or county, the secretary shall decrease or redirect the next designated distribution or transfer, and succeeding distributions or transfers 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. A decrease to or redirection of a distribution or transfer pursuant to this subsection that arose:

(1) prior to an adjustment of a distribution or transfer of net receipts creating a recoverable amount owed to the department takes precedence over any collection of any recoverable amount pursuant to Paragraph (2) of Subsection B of this section, which may be made only from the net amount of the distribution or transfer remaining after application of the decrease or redirection pursuant to this subsection; and

(2) after an adjustment of a distribution or transfer of net receipts creating a recoverable amount owed to the department shall be subordinate to any collection of any recoverable amount pursuant to Paragraph (2) of Subsection B of this section.

I. Upon the direction of the secretary of finance and administration pursuant to Section 9-6-5.2 NMSA 1978, the secretary shall temporarily withhold the balance of a distribution to a municipality or county, net of any decrease or redirected amount pursuant to Subsection H of this section and any recoverable amount pursuant to Paragraph (2) of Subsection B of this section, 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. An amount withheld pursuant to this subsection shall be distributed to the municipality or county upon direction of the secretary of finance and administration.

J. As used in this section:

(1) "amounts relating to the current month" means any amounts included in the net receipts of the current month that represent payment of tax due for the current month, correction of amounts processed in the current month that relate to the current month or that otherwise relate to obligations due for the current month;

(2) "amounts relating to prior periods" means any amounts processed during the current month that adjust amounts processed in a period or periods prior to the current month regardless of whether the adjustment is a correction of a department error or due to the filing of amended returns, payment of department-issued assessments, filing or approval of claims for refund, audit adjustments or other cause;

(3) "average distribution or transfer amount" means the following amounts; provided that a distribution or transfer that is negative shall not be used in calculating the amounts:

(a) the annual average of the total amount distributed or transferred to a municipality or county in each of the three twelve-month periods preceding the current month;

(b) if a distribution or transfer to a municipality or county has been made for less than three years, the total amount distributed or transferred in the year preceding the current month; or

(c) if a municipality or county has not received distributions or transfers of net receipts for twelve or more months, the monthly average of net receipts distributed or transferred to the municipality or county preceding the current month multiplied by twelve;

(4) "current month" means the month for which the distribution or transfer is being prepared; and

(5) "repayment agreement" means an agreement between the department and a municipality or county under which the municipality or county agrees to allow the department to recover an amount determined pursuant to Paragraph (2) of Subsection B of this section by decreasing distributions or transfers to the municipality or county for one or more months beginning with the distribution or transfer to be made with respect to a designated month. No interest shall be charged."

SECTION 9. Section 7-1-6.46 NMSA 1978 (being Laws 2004, Chapter 116, Section 1, as amended) is amended to read:

"7-1-6.46. DISTRIBUTION TO MUNICIPALITIES--OFFSET FOR [FOOD DEDUCTION AND] HEALTH CARE PRACTITIONER SERVICES DEDUCTION.--

A. For a municipality that [has not elected to impose] does not have in effect a municipal hold harmless gross receipts tax through an ordinance and that has a population of less than ten thousand according to the most recent federal decennial census, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to a municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to [the sum of:

(1) the total deductions claimed pursuant to Section 7-9-92 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 for the month plus one and two hundred twenty-five thousandths percent; and

(2)] the total deductions claimed pursuant to Section 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 for the month plus one and two hundred twenty-five thousandths percent.

B. For a municipality not described in Subsection A of this section, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to [the] a municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to [the sum of:

(1) the total deductions claimed pursuant to Section 7-9-92 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 in the following percentages:

(a) prior to July 1, 2015, one hundred percent;

(b) on or after July 1, 2015 and prior to July 1, 2016, ninety-four percent;

(d) on or after July 1, 2017 and prior to July 1, 2018, eighty-two percent;

(e) on or after July 1, 2018 and prior to July 1, 2019, seventy-six percent;

(f) on or after July 1, 2019 and prior to July 1, 2020, seventy percent;

(g) on or after July 1, 2020 and prior to July 1, 2021, sixty-three percent;

(h) on or after July 1, 2021 and prior to July 1, 2022, fifty-six percent;

(i) on or after July 1, 2022 and prior to July 1, 2023, forty-nine percent;

(j) on or after July 1, 2023 and prior to July 1, 2024, forty-two percent;

(k) on or after July 1, 2024 and prior to July 1, 2025, thirty-five percent;

(l) on or after July 1, 2025 and prior to July 1, 2026, twenty-eight percent;

(m) on or after July 1, 2026 and prior to July 1, 2027, twenty-one percent;

(n) on or after July 1, 2027 and prior to July 1, 2028, fourteen percent; and

(o) on or after July 1, 2028 and prior to July 1, 2029, seven percent; and

(2)] the total deductions claimed pursuant to Section 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 in the following percentages:

[(a) prior to July 1, 2015, one hundred percent;

(b) on or after July 1, 2015 and prior to July 1, 2016, ninety-four percent;

(d) on or after July 1, 2017 and prior to July 1, 2018, eighty-two percent;

(e) on or after July 1, 2018 and prior to July 1, 2019, seventy-six percent;

(f)] (a) on or after July 1, 2019 and prior to July 1, 2020, seventy percent;

[(g)] (b) on or after July 1, 2020 and prior to July 1, 2021, sixty-three percent;

[(h)] (c) on or after July 1, 2021 and prior to July 1, 2022, fifty-six percent;

[(i)] (d) on or after July 1, 2022 and prior to July 1, 2023, forty-nine percent;

[(j)] (e) on or after July 1, 2023 and prior to July 1, 2024, forty-two percent;

[(k)] (f) on or after July 1, 2024 and prior to July 1, 2025, thirty-five percent;

[(l)] (g) on or after July 1, 2025 and prior to July 1, 2026, twenty-eight percent;

[(m)] (h) on or after July 1, 2026 and prior to July 1, 2027, twenty-one percent;

[(n)] (i) on or after July 1, 2027 and prior to July 1, 2028, fourteen percent; [and

(o)] (j) on or after July 1, 2028 and prior to July 1, 2029, seven percent; and

(k) on or after July 1, 2029, zero percent.

C. The distribution pursuant to [Subsections A and B of] this section is in lieu of revenue that would have been received by the municipality but for the deductions provided by [Sections 7-9-92 and] Section 7-9-93 NMSA 1978. The distribution shall be considered gross receipts tax revenue and shall be used by the municipality in the same manner as gross receipts tax revenue, including payment of gross receipts tax revenue bonds. [A distribution pursuant to this section to a municipality not described in Subsection A of this section or to a municipality that has imposed a gross receipts tax through an ordinance that does not provide a deduction contained in the Gross Receipts and Compensating Tax Act shall not be made on or after July 1, 2029.]

D. If the [reductions] changes made by this [2013] 2019 act to the distributions made pursuant to [Subsections A and B of] this section impair the ability of a municipality to meet its principal or interest payment obligations for revenue bonds that are outstanding prior to July 1, [2013] 2019 and that are secured by the pledge of all or part of the municipality's revenue from the distribution made pursuant to this section, the municipality shall substitute the revenue with other legally available revenue of the municipality that has not been pledged to any other debt. If the municipality does not have other legally available revenue available to pay all or part of the municipality's obligations, then the amount distributed pursuant to this section to that municipality shall be increased by an amount sufficient to meet the required payment; provided that the total amount distributed to that municipality pursuant to this section does not exceed the amount that would have been due that municipality pursuant to this section as it was in effect on June 30, [2013] 2019.

E. For the purposes of this section, "business locations attributable to the municipality" means business locations:

(1) within the municipality;

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

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

(4) on an Indian reservation or pueblo grant in an area that is contiguous to the 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.

F. 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."

SECTION 10. Section 7-1-6.47 NMSA 1978 (being Laws 2004, Chapter 116, Section 2, as amended) is amended to read:

"7-1-6.47. DISTRIBUTION TO COUNTIES--OFFSET FOR [FOOD DEDUCTION AND] HEALTH CARE PRACTITIONER SERVICES DEDUCTION.--

A. For a county that [has not elected to impose] does not have in effect a county hold harmless gross receipts tax through an ordinance and that has a population of less than forty-eight thousand according to the most recent federal decennial census, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to a county in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to: [the sum of:

(1) the total deductions claimed pursuant to Section 7-9-92 NMSA 1978 for the month by taxpayers from business locations within a municipality in the county multiplied by the combined rate of all county local option gross receipts taxes in effect for the month that are imposed throughout the county;

(2) the total deductions claimed pursuant to Section 7-9-92 NMSA 1978 for the month by taxpayers from business locations in the county but not within a municipality multiplied by the combined rate of all county local option gross receipts taxes in effect for the month that are imposed in the county area not within a municipality;

(3)] (1) the total deductions claimed pursuant to Section 7-9-93 NMSA 1978 for the month by taxpayers from business locations within a municipality in the county multiplied by the combined rate of all county local option gross receipts taxes in effect for the month that are imposed throughout the county; and

[(4)] (2) the total deductions claimed pursuant to Section 7-9-93 NMSA 1978 for the month by taxpayers from business locations in the county but not within a municipality multiplied by the combined rate of all county local option gross receipts taxes in effect for the month that are imposed in the county area not within a municipality.

B. For a county not described in Subsection A of this section, a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the county in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to: [the sum of:

(1) the total deductions claimed pursuant to Section 7-9-92 NMSA 1978 for the month by taxpayers from business locations within a municipality in the county multiplied by the combined rate of all county local option gross receipts taxes in effect on January 1, 2007 that are imposed throughout the county in the following percentages:

(a) prior to July 1, 2015, one hundred percent;

(b) on or after July 1, 2015 and prior to July 1, 2016, ninety-four percent;

(d) on or after July 1, 2017 and prior to July 1, 2018 eighty-two percent;