0001| AN ACT | 0002| RELATING TO OCCUPANCY TAX REVENUES; CHANGING AND CLARIFYING THE PURPOSES | 0003| FOR WHICH THE REVENUES FROM THE OCCUPANCY TAX IMPOSED PURSUANT TO THE | 0004| LODGERS' TAX ACT MAY BE USED; CHANGING CERTAIN AUDIT AND REPORTING | 0005| REQUIREMENTS; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978. | 0006| | 0007| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0008| Section 1. Section 3-38-13 NMSA 1978 (being Laws 1969, Chapter | 0009| 199, Section 1) is amended to read: | 0010| "3-38-13. SHORT TITLE.--Sections 3-38-13 through 3-38-24 NMSA | 0011| 1978 may be cited as the "Lodgers' Tax Act"." | 0012| Section 2. Section 3-38-14 NMSA 1978 (being Laws 1969, Chapter | 0013| 199, Section 2) is amended to read: | 0014| "3-38-14. DEFINITIONS.--As used in the Lodgers' Tax Act: | 0015| A. "gross taxable rent" means the total amount of rent paid | 0016| for lodging, not including the state gross receipts tax or local sales | 0017| taxes; | 0018| B. "lodging" means the transaction of furnishing rooms or | 0019| other accommodations by a vendor to a vendee who for rent uses, | 0020| possesses or has the right to use or possess any room or rooms or other | 0021| units of accommodations in or at a taxable premises; | 0022| C. "lodgings" means the rooms or other accommodations fur- | 0023| nished by a vendor to a vendee by a taxable service of lodgings; | 0024| D. "occupancy tax" means the tax on lodging authorized by | 0025| the Lodgers' Tax Act; | 0001| E. "person" means a corporation, firm, other body corporate, | 0002| partnership, association or individual. "Person" includes an executor, | 0003| administrator, trustee, receiver or other representative appointed | 0004| according to law and acting in a representative capacity. "Person" does | 0005| not include the United States of America, the state of New Mexico, any | 0006| corporation, department, instrumentality or agency of the federal | 0007| government or the state government or any political subdivision of the | 0008| state; | 0009| F. "rent" means the consideration received by a vendor in | 0010| money, credits, property or other consideration valued in money for | 0011| lodgings subject to an occupancy tax authorized in the Lodgers' Tax Act; | 0012| G. "taxable premises" means a hotel, apartment, apartment | 0013| hotel, apartment house, lodge, lodging house, rooming house, motor | 0014| hotel, guest house, guest ranch, ranch resort, guest resort, mobile | 0015| home, motor court, auto court, auto camp, trailer court, trailer camp, | 0016| trailer park, tourist camp, cabin or other premises used for lodging; | 0017| H. "tourist" means a person who travels for the purpose of | 0018| business, pleasure or culture to a municipality or county imposing an | 0019| occupancy tax; | 0020| I. "tourist-related events" means events that are planned | 0021| for, promoted to and attended by tourists; | 0022| J. "tourist-related facilities and attractions" means | 0023| facilities and attractions that are intended to be used by or visited by | 0024| tourists; | 0025| K. "tourist-related transportation systems" means | 0001| transportation systems that provide transportation for tourists to and | 0002| from tourist-related facilities, attractions and events; | 0003| L. "vendee" means a natural person to whom lodgings are fur- | 0004| nished in the exercise of the taxable service of lodging; and | 0005| M. "vendor" means a person furnishing lodgings in the exer- | 0006| cise of the taxable service of lodging." | 0007| Section 3. Section 3-38-15 NMSA 1978 (being Laws 1969, Chapter | 0008| 199, Section 3, as amended) is amended to read: | 0009| "3-38-15. AUTHORIZATION OF TAX--LIMITATIONS ON USE OF PROCEEDS.-- | 0010| A. A municipality may impose by ordinance an occupancy tax | 0011| for revenues on lodging within the municipality, and the board of county | 0012| commissioners of a county may impose by ordinance an occupancy tax for | 0013| revenues on lodging within that part of the county outside of the | 0014| incorporated limits of a municipality. | 0015| B. The occupancy tax shall not exceed five percent of the | 0016| gross taxable rent. | 0017| C. Every vendor who is furnishing any lodgings within a mu- | 0018| nicipality or county is exercising a taxable privilege. | 0019| D. The following portions of the proceeds from the occupancy | 0020| tax shall be used only for advertising, publicizing and promoting | 0021| tourist-related attractions, facilities and events: | 0022| (1) if the municipality or county imposes an occupancy | 0023| tax of no more than two percent, not less than one-fourth of the | 0024| proceeds shall be used for those purposes; | 0025| (2) if the occupancy tax imposed is more than two | 0001| percent and the municipality is not located in a class A county or the | 0002| county is not a class A county, not less than one-half of the proceeds | 0003| from the first three percent of the tax and not less than one-fourth of | 0004| the proceeds from the tax in excess of three percent shall be used for | 0005| those purposes; and | 0006| (3) if the occupancy tax imposed is more than two | 0007| percent and the municipality is located in a class A county or the | 0008| county is a class A county, not less than one-half of the proceeds from | 0009| the tax shall be used for those purposes. | 0010| E. The proceeds from the occupancy tax in excess of the | 0011| amount required to be used for advertising, publicizing and promoting | 0012| tourist-related attractions, facilities and events may be used for any | 0013| purpose authorized in Section 3-38-21 NMSA 1978. | 0014| F. The proceeds from the occupancy tax that are required to | 0015| be used to advertise, publicize and promote tourist-related attractions, | 0016| facilities and events shall be used within two years of the close of the | 0017| fiscal year in which they were collected and shall not be accumulated | 0018| beyond that date or used for any other purpose. | 0019| G. Notwithstanding the provisions of Paragraph (2) of | 0020| Subsection D of this section, any use by a municipality or county of | 0021| occupancy tax proceeds on January 1, 1996 may continue to be so used | 0022| after July 1, 1996 in accordance with the provisions of this section and | 0023| Section 3-38-21 NMSA 1978 as they were in effect prior to July 1, 1996; | 0024| provided, any change in the use of those tax proceeds after July 1, 1996 | 0025| is subject to the limitations of that paragraph. | 0001| H. Notwithstanding the provisions of Paragraph (2) of | 0002| Subsection D of this section, the payment of principal and interest on | 0003| outstanding bonds issued prior to January 1, 1996 pursuant to Section | 0004| 3-38-23 or 3-38-24 NMSA 1978 shall be made in accordance with the | 0005| retirement schedules of the bonds established at the time of issuance. | 0006| The amount of expenditures required under Paragraph (2) of Subsection D | 0007| of this section shall be reduced each year, if necessary, to make the | 0008| required payments of principal and interest of all outstanding bonds is- | 0009| sued prior to January 1, 1996." | 0010| Section 4. Section 3-38-17.1 NMSA 1978 (being Laws 1992, Chapter | 0011| 12, Section 2) is amended to read: | 0012| "3-38-17.1. AUDIT OF VENDORS.--The governing body of any | 0013| municipality or county collecting over two hundred fifty thousand | 0014| dollars ($250,000) in occupancy tax proceeds shall select for annual | 0015| random audits one or more vendors to verify the amount of gross rent | 0016| subject to the occupancy tax and to ensure that the full amount of | 0017| occupancy tax on that rent is collected. The governing body of any | 0018| municipality or county collecting less than two hundred fifty thousand | 0019| dollars ($250,000) in receipts, per annum, of occupancy tax proceeds | 0020| shall conduct random audits to verify full payment of occupancy tax | 0021| receipts. Copies of audits completed shall be filed annually with the | 0022| local government division of the department of finance and | 0023| administration." | 0024| Section 5. A new section of the Lodgers' Tax Act, Section | 0025| 3-38-17.2 NMSA 1978, is enacted to read: | 0001| "3-38-17.2. FINANCIAL REPORTING.-- | 0002| A. The governing body of any municipality or county imposing | 0003| and collecting an occupancy tax shall furnish to the advisory board that | 0004| portion of any proposed budget, report or audit filed or received by the | 0005| governing body pursuant to either Chapter 6, Article 6 NMSA 1978 or the | 0006| Audit Act that relates to the expenditure of occupancy tax funds within | 0007| ten days of the filing or receipt of such proposed budget, report or | 0008| audit by the local governing body. | 0009| B. The governing body of any municipality or county imposing | 0010| and collecting an occupancy tax shall report to the local government | 0011| division of the department of finance and administration on a quarterly | 0012| basis any expenditure of occupancy tax funds pursuant to Sections | 0013| 3-38-15 and 3-38-21 NMSA 1978 and shall furnish a copy of this report to | 0014| the advisory board when it is filed with the division." | 0015| Section 6. A new section of the Lodgers' Tax Act, Section | 0016| 3-38-17.3 NMSA 1978, is enacted to read: | 0017| "3-38-17.3. ENFORCEMENT.-- | 0018| A. An action to enforce the Lodgers' Tax Act may be brought | 0019| by: | 0020| (1) the attorney general or the district attorney in | 0021| the county of jurisdiction; or | 0022| (2) a vendor who is collecting the proceeds of an | 0023| occupancy tax in the county of jurisdiction. | 0024| B. A district court may issue a writ of mandamus or order an | 0025| injunction or other appropriate remedy to enforce the provisions of the | 0001| Lodgers' Tax Act. | 0002| C. The court shall award costs and reasonable attorneys' | 0003| fees to the prevailing party in a court action to enforce the provisions | 0004| of the Lodgers' Tax Act." | 0005| Section 7. Section 3-38-21 NMSA 1978 (being Laws 1969, Chapter | 0006| 199, Section 9, as amended) is amended to read: | 0007| "3-38-21. ELIGIBLE USES OF TAX PROCEEDS.--Subject to the | 0008| limitations contained in Section 3-38-15 NMSA 1978, a municipality or | 0009| county imposing an occupancy tax may use the proceeds from the tax to | 0010| defray costs of: | 0011| A. collecting and otherwise administering the tax, including | 0012| the performance of audits required by the Lodgers' Tax Act pursuant to | 0013| guidelines issued by the department of finance and administration; | 0014| B. establishing, operating, purchasing, constructing, | 0015| otherwise acquiring, reconstructing, extending, improving, equipping, | 0016| furnishing or acquiring real property or any interest in real property | 0017| for the site or grounds for tourist-related facilities, attractions or | 0018| transportation systems of the municipality, the county in which the | 0019| municipality is located or the county; | 0020| C. the principal of and interest on any prior redemption | 0021| premiums due in connection with and any other charges pertaining to | 0022| revenue bonds authorized by Section 3-38-23 or 3-38-24 NMSA 1978; | 0023| D. advertising, publicizing and promoting tourist-related | 0024| attractions, facilities and events of the municipality or county and | 0025| tourist facilities or attractions within the area; | 0001| E. providing police and fire protection and sanitation | 0002| service for tourist-related events, facilities and attractions located | 0003| in the respective municipality or county; or | 0004| F. any combination of the foregoing purposes or transactions | 0005| stated in this section, but for no other municipal or county purpose." | 0006| Section 8. A new section of the Lodgers' Tax Act, Section | 0007| 3-38-21.1 NMSA 1978, is enacted to read: | 0008| "3-38-21.1. CONTRACTING FOR SERVICES.-- | 0009| A. The governing body of a municipality or county may | 0010| contract for the management of programs and activities funded with | 0011| revenue from the tax authorized in Section 3-38-15 NMSA 1978. The | 0012| governing body shall require periodic reports to the governing body, at | 0013| least quarterly, listing the expenditures for those periods. Within ten | 0014| days of receiving the reports, the governing body shall furnish copies | 0015| of them to the advisory board. Funds provided to the contracting person | 0016| or governmental agency shall be maintained in a separate account | 0017| established for that purpose and shall not be commingled with any other | 0018| money. | 0019| B. A person or governmental agency with whom a municipality | 0020| contracts under this section to conduct an activity authorized by | 0021| Section 3-38-21 NMSA 1978 shall maintain complete and accurate financial | 0022| records of each expenditure of the tax revenue made and upon request of | 0023| the governing body of the municipality or county shall make such records | 0024| available for inspection. | 0025| C. The occupancy tax revenue spent for a purpose authorized | 0001| by the Lodgers' Tax Act may be spent for day-to-day operations, | 0002| supplies, salaries, office rental, travel expenses and other | 0003| administrative costs only if those administrative costs are incurred | 0004| directly for that purpose. | 0005| D. A person or governmental agency with whom a local | 0006| governmental body contracts under this section may subcontract with the | 0007| approval of the governing body of the municipality or county. A | 0008| subcontractor shall be subject to the same terms and conditions as the | 0009| contractor regarding separate financial accounts, periodic reports and | 0010| inspection of records." | 0011| Section 9. Section 3-38-22 NMSA 1978 (being Laws 1977, Chapter | 0012| 294, Section 2) is amended to read: | 0013| "3-38-22. ADVISORY BOARDS CREATED--DUTIES.-- | 0014| A. The mayor of every municipality that imposes an occupancy | 0015| tax pursuant to the Lodgers' Tax Act shall appoint a five-member | 0016| advisory board that consists of two members who are owners or operators | 0017| of lodgings subject to the occupancy tax within the municipality, two | 0018| members who are owners or operators of industries located within the | 0019| municipality that primarily provide services or products to tourists and | 0020| one member who is a resident of the municipality and represents the | 0021| general public. | 0022| B. The chairman of every county commission that imposes an | 0023| occupancy tax pursuant to the Lodgers' Tax Act shall appoint a | 0024| five-member advisory board that consists of two members who are owners | 0025| or operators of lodgings subject to the occupancy tax within the | 0001| unincorporated area of the county, two members who are owners or | 0002| operators of industries located within the unincorporated area of the | 0003| county that primarily provide services or products to tourists and one | 0004| member who is a resident of the unincorporated area of the county who | 0005| represents the general public. | 0006| C. Members of the boards created under Subsections A and B | 0007| of this section shall serve at the pleasure of the respective appointing | 0008| authorities. The boards shall advise the respective governing bodies on | 0009| the expenditure of funds authorized by Section 3-38-15 NMSA 1978 for | 0010| advertising, publicizing and promoting tourist attractions and | 0011| facilities in the respective counties and municipalities. | 0012| D. The advisory board shall submit to the mayor and council | 0013| or county commission recommendations for the expenditures of funds | 0014| authorized pursuant to the Lodgers' Tax Act for advertising, publicizing | 0015| and promoting tourist-related attractions, facilities and events in the | 0016| respective counties and municipalities." | 0017| Section 10. Section 3-38-23 NMSA 1978 (being Laws 1969, Chapter | 0018| 199, Section 10, as amended) is amended to read: | 0019| "3-38-23. REVENUE BONDS.-- | 0020| A. Revenue bonds may be issued at any time or from time to | 0021| time by a municipality or county to defray wholly or in part the costs | 0022| of any one, all or any combination of purposes authorized in Subsections | 0023| B through E of Section 3-38-21 NMSA 1978. | 0024| B. The revenue bonds may be payable from and such payment | 0025| may be secured by a pledge of and lien on the revenues derived from: | 0001| (1) the proceeds of the occupancy tax of the munic- | 0002| ipality or county after the deduction of those amounts required to be | 0003| expended pursuant to Subsections D and E of Section 3-38-15 NMSA 1978 | 0004| and the administration costs pertaining to the tax in an amount not to | 0005| exceed ten percent of the occupancy tax receipts collected by the | 0006| municipality or county in any fiscal year, excluding from the | 0007| computation of such costs the administration costs ultimately recovered | 0008| from delinquent vendors by civil action as penalties, costs of | 0009| collection and attorneys' fees but not as interest on unpaid principal; | 0010| (2) the tourist-related facilities, attractions or | 0011| transportation systems to which the bonds pertain, after provision is | 0012| made for the payment of the operation and maintenance expenses of such | 0013| facilities, attractions or transportation systems; or | 0014| (3) a combination of such net revenues from both | 0015| sources designated in Paragraphs (1) and (2) of this subsection. | 0016| C. The bonds shall bear interest at a rate or rates as au- | 0017| thorized in the Public Securities Act, and the first interest payment | 0018| may be for any period authorized in the Public Securities Act. | 0019| D. Except as otherwise provided in the Lodgers' Tax Act, | 0020| revenue bonds authorized in the Lodgers' Tax Act shall be issued in ac- | 0021| cordance with the provisions of Sections 3-31-2 through 3-31-6 NMSA | 0022| 1978." | 0023| Section 11. A new section of Chapter 6, Article 6 NMSA 1978 is | 0024| enacted to read: | 0025| " LOCAL GOVERNMENT DIVISION--ADDITIONAL DUTIES--OCCUPANCY TAX | 0001| QUARTERLY REPORTS.--The local government division of the department of | 0002| finance and administration shall promulgate rules and regulations that | 0003| require the governing body of any municipality or county imposing and | 0004| collecting an occupancy tax pursuant to the Lodgers' Tax Act to report | 0005| to the division on a quarterly basis any expenditure of occupancy tax | 0006| funds pursuant to Sections 3-38-15 and 3-38-21 NMSA 1978." | 0007| Section 12. EFFECTIVE DATE.--The effective date of the provisions | 0008| of this act is July 1, 1996. |