0001| HOUSE BILL 735
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0002| 43rd legislature - STATE OF NEW MEXICO - first session, 1997
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0003| INTRODUCED BY
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0004| JAMES ROGER MADALENA
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0005|
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0006|
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0007|
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0008|
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0009|
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0010| AN ACT
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0011| RELATING TO INCOME TAX; AMENDING SECTIONS OF THE NMSA 1978;
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0012| DECLARING AN EMERGENCY.
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0013|
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0014| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0015| Section 1. Section 7-2-2 NMSA 1978 (being Laws 1986,
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0016| Chapter 20, Section 26, as amended) is amended to read:
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0017| "7-2-2. DEFINITIONS.--For the purpose of the Income Tax
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0018| Act and unless the context requires otherwise:
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0019| A. "adjusted gross income" means adjusted gross
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0020| income as defined in Section 62 of the Internal Revenue Code,
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0021| as that section may be amended or renumbered;
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0022| B. "base income":
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0023| (1) means, for estates and trusts, that part
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0024| of the estate's or trust's income defined as taxable income and
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0025| upon which the federal income tax is calculated in the Internal
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0001| Revenue Code for income tax purposes plus, for taxable years
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0002| beginning on or after January 1, 1991, the amount of the net
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0003| operating loss deduction allowed by Section 172(a) of the
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0004| Internal Revenue Code, as that section may be amended or
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0005| renumbered, and taken by the taxpayer for that year;
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0006| (2) means, for taxpayers other than estates or
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0007| trusts, that part of the taxpayer's income defined as adjusted
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0008| gross income plus, for taxable years beginning on or after
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0009| January 1, 1991, the amount of the net operating loss deduction
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0010| allowed by Section 172(a) of the Internal Revenue Code, as that
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0011| section may be amended or renumbered, and taken by the taxpayer
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0012| for that year; and
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0013| (3) includes, for all taxpayers, any other
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0014| income of the taxpayer not included in adjusted gross income
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0015| but upon which a federal tax is calculated pursuant to the
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0016| Internal Revenue Code for income tax purposes, except amounts
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0017| for which a calculation of tax is made pursuant to Section 55
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0018| of the Internal Revenue Code, as that section may be amended or
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0019| renumbered; "base income" also includes interest received on a
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0020| state or local bond;
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0021| C. "compensation" means wages, salaries,
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0022| commissions and any other form of remuneration paid to
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0023| employees for personal services;
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0024| D. "department" means the taxation and revenue
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0025| department, the secretary of taxation and revenue or any
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0001| employee of the department exercising authority lawfully
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0002| delegated to that employee by the secretary;
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0003| E. "fiduciary" means a guardian, trustee, executor,
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0004| administrator, committee, conservator, receiver, individual or
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0005| corporation acting in any fiduciary capacity;
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0006| F. "filing status" means "married filing joint
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0007| returns", "married filing separate returns", "head of
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0008| household", "surviving spouse" and "single", as those terms are
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0009| generally defined for federal tax purposes;
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0010| G. "fiscal year" means any accounting period of
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0011| twelve months ending on the last day of any month other than
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0012| December;
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0013| H. "head of household" means "head of household" as
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0014| generally defined for federal income tax purposes;
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0015| I. "individual" means a natural person, an estate,
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0016| a trust or a fiduciary acting for a natural person, trust or
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0017| estate;
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0018| J. "Internal Revenue Code" means the United States
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0019| Internal Revenue Code of 1986, as amended;
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0020| K. "lump-sum amount" means an amount that, for the
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0021| purpose of determining liability for federal income tax, was
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0022| not included in adjusted gross income but upon which the five-
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0023| year-averaging or the ten-year-averaging method of tax
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0024| computation provided in Section 402 of the Internal Revenue
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0025| Code, as that section may be amended or renumbered, was
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0001| applied;
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0002| L. "modified gross income" means all income of the
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0003| taxpayer and, if any, the taxpayer's spouse and dependents,
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0004| undiminished by losses and from whatever source derived,
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0005| including:
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0006| (1) compensation;
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0007| (2) net profit derived from business;
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0008| (3) gains derived from dealings in property;
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0009| (4) interest;
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0010| (5) net rents;
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0011| (6) royalties;
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0012| (7) dividends;
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0013| (8) alimony and separate maintenance payments;
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0014| (9) annuities;
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0015| (10) income from life insurance and endowment
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0016| contracts;
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0017| (11) pensions;
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0018| (12) discharge of indebtedness;
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0019| (13) distributive share of partnership income;
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0020| (14) income in respect of a decedent;
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0021| (15) income from an interest in an estate or
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0022| trust;
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0023| (16) social security benefits;
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0024| (17) unemployment compensation benefits;
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0025| (18) workers' compensation benefits;
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0001| (19) public assistance and welfare benefits;
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0002| (20) cost-of-living allowances; and
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0003| (21) gifts;
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0004| M. "modified gross income" does not include:
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0005| (1) payments for hospital, dental, medical or
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0006| drug expenses whether made to or on behalf of the taxpayer;
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0007| (2) the value of room and board provided by
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0008| federal, state or local governments or by private individuals
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0009| or agencies based upon financial need and not as a form of
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0010| compensation;
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0011| (3) payments made pursuant to a federal, state
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0012| or local government program directly or indirectly to a third
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0013| party on behalf of the taxpayer when identified to a particular
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0014| use or invoice by the payer; or
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0015| (4) payments made pursuant to Sections
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0016| 7-2-14, [7-2-14.1] 7-2-18, 7-2-18.1 and 7-3-9 NMSA 1978;
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0017| N. "net income" means, for estates and trusts, base
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0018| income adjusted to exclude amounts that the state is prohibited
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0019| from taxing because of the laws or constitution of this state
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0020| or the United States and means, for taxpayers other than
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0021| estates or trusts, base income adjusted to exclude:
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0022| (1) an amount equal to the standard deduction
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0023| allowed the taxpayer for the taxpayer's taxable year by Section
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0024| 63 of the Internal Revenue Code, as that section may be amended
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0025| or renumbered;
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0001| (2) an amount equal to the itemized
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0002| deductions, as defined in Section 63 of the Internal Revenue
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0003| Code, as that section may be amended or renumbered, allowed the
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0004| taxpayer for the taxpayer's taxable year less the amount
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0005| excluded pursuant to Paragraph (1) of this subsection;
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0006| (3) an amount equal to the product of the
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0007| exemption amount allowed for the taxpayer's taxable year by
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0008| Section 151 of the Internal Revenue Code, as that section may
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0009| be amended or renumbered, multiplied by the number of personal
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0010| exemptions allowed for federal income tax purposes;
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0011| (4) income from obligations of the United
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0012| States of America less expenses incurred to earn that income;
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0013| (5) other amounts that the state is prohibited
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0014| from taxing because of the laws or constitution of this state
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0015| or the United States;
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0016| (6) for taxable years that began prior to
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0017| January 1, 1991, an amount equal to the sum of:
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0018| (a) net operating loss carryback
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0019| deductions to that year from taxable years beginning prior to
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0020| January 1, 1991 claimed and allowed, as provided by the
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0021| Internal Revenue Code; and
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0022| (b) net operating loss carryover
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0023| deductions to that year claimed and allowed; and
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0024| (7) for taxable years beginning on or after
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0025| January 1, 1991, an amount equal to the sum of any net
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0001| operating loss carryover deductions to that year claimed and
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0002| allowed, provided that the amount of any net operating loss
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0003| carryover from a taxable year beginning on or after January 1,
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0004| 1991 may be excluded only as follows:
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0005| (a) in the case of a timely filed
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0006| return, in the taxable year immediately following the taxable
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0007| year for which the return is filed; or
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0008| (b) in the case of amended returns or
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0009| original returns not timely filed, in the first taxable year
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0010| beginning after the date on which the return or amended return
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0011| establishing the net operating loss is filed; and
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0012| (c) in either case, if the net operating
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0013| loss carryover exceeds the amount of net income exclusive of
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0014| the net operating loss carryover for the taxable year to which
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0015| the exclusion first applies, in the next four succeeding
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0016| taxable years in turn until the net operating loss carryover is
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0017| exhausted; in no event shall a net operating loss carryover be
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0018| excluded in any taxable year after the fourth taxable year
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0019| beginning after the taxable year to which the exclusion first
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0020| applies;
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0021| O. "net operating loss" means any net operating
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0022| loss, as defined by Section 172(c) of the Internal Revenue
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0023| Code, as that section may be amended or renumbered, for a
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0024| taxable year as further increased by the income, if any, from
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0025| obligations of the United States for that year less related
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0001| expenses;
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0002| P. "net operating loss carryover" means the amount,
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0003| or any portion of the amount, of a net operating loss for any
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0004| taxable year that, pursuant to Paragraph (6) or (7) of
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0005| Subsection N of this section, may be excluded from base income;
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0006| Q. "nonresident" means every individual not a
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0007| resident of this state;
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0008| R. "person" means any individual, estate, trust,
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0009| receiver, cooperative association, club, corporation, company,
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0010| firm, partnership, limited liability company, joint venture,
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0011| syndicate or other association; "person" also means, to the
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0012| extent permitted by law, any federal, state or other
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0013| governmental unit or subdivision or agency, department or
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0014| instrumentality thereof;
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0015| S. "resident" means an individual who is domiciled
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0016| in this state during any part of the taxable year; but any
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0017| individual who, on or before the last day of the taxable year,
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0018| changed his place of abode to a place without this state with
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0019| the bona fide intention of continuing actually to abide
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0020| permanently without this state is not a resident for the
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0021| purposes of the Income Tax Act;
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0022| T. "secretary" means the secretary of taxation and
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0023| revenue or the secretary's delegate;
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0024| U. "state" means any state of the United States,
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0025| the District of Columbia, the commonwealth of Puerto Rico, any
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0001| territory or possession of the United States or any political
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0002| subdivision of a foreign country;
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0003| V. "state or local bond" means a bond issued by a
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0004| state other than New Mexico, [or] by a local government other
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0005| than one of New Mexico's political subdivisions or by a tribal
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0006| government other than an Indian nation, tribe or pueblo located
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0007| in whole or in part in New Mexico, the interest from which is
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0008| excluded from income for federal income tax purposes under
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0009| Section 103 of the Internal Revenue Code, as that section may
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0010| be amended or renumbered;
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0011| W. "surviving spouse" means "surviving spouse" as
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0012| generally defined for federal income tax purposes;
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0013| X. "taxable income" means net income less any lump-
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0014| sum amount;
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0015| Y. "taxable year" means the calendar year or fiscal
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0016| year upon the basis of which the net income is computed under
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0017| the Income Tax Act and includes, in the case of the return made
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0018| for a fractional part of a year under the provisions of the
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0019| Income Tax Act, the period for which the return is made; and
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0020| Z. "taxpayer" means any individual subject to the
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0021| tax imposed by the Income Tax Act."
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0022| Section 2. Section 7-2A-2 NMSA 1978 (being Laws 1986,
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0023| Chapter 20, Section 33, as amended) is amended to read:
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0024| "7-2A-2. DEFINITIONS.--For the purpose of the Corporate
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0025| Income and Franchise Tax Act and unless the context requires
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0001| otherwise:
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0002| A. "affiliated group" means that term as it is used
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0003| in the Internal Revenue Code;
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0004| B. "bank" means any national bank, national banking
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0005| association, state bank or bank holding company;
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0006| C. "base income" means that part of the taxpayer's
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0007| income defined as taxable income and upon which the federal
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0008| income tax is calculated in the Internal Revenue Code for
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0009| income tax purposes plus, for taxable years beginning on or
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0010| after January 1, 1991, the amount of the net operating loss
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0011| deduction allowed by Section 172(a) of the Internal Revenue
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0012| Code, as that section may be amended or renumbered, and claimed
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0013| by the taxpayer for that year; "base income" also includes
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0014| interest received on a state or local bond;
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0015| D. "corporation" means corporations, joint stock
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0016| companies, real estate trusts organized and operated under the
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0017| Real Estate Trust Act, financial corporations and banks, other
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0018| business associations and, for corporate income tax purposes,
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0019| partnerships and limited liability companies taxed as
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0020| corporations under the Internal Revenue Code;
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0021| E. "department" means the taxation and revenue
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0022| department, the secretary of taxation and revenue or any
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0023| employee of the department exercising authority lawfully
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0024| delegated to that employee by the secretary;
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0025| F. "financial corporation" means any savings or
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0001| building and loan association or any incorporated savings and
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0002| loan company, trust company, mortgage banking company, consumer
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0003| finance company or other financial corporation;
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0004| G. "fiscal year" means any accounting period of
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0005| twelve months ending on the last day of any month other than
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0006| December;
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0007| H. "Internal Revenue Code" means the United States
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0008| Internal Revenue Code of 1986, as amended;
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0009| I. "net income" means base income adjusted to
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0010| exclude:
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0011| (1) amounts that have been taxed as income
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0012| under the Banking and Financial Corporations Tax Act;
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0013| (2) income from obligations of the United
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0014| States less expenses incurred to earn that income;
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0015| (3) other amounts that the state is prohibited
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0016| from taxing because of the laws or constitution of this state
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0017| or the United States;
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0018| (4) for taxable years that began prior to
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0019| January 1, 1991, an amount equal to the sum of:
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0020| (a) net operating loss carryback
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0021| deductions to that year from taxable years beginning prior to
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0022| January 1, 1991 claimed and allowed, as provided by the
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0023| Internal Revenue Code; and
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0024| (b) net operating loss carryover
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0025| deductions to that year claimed and allowed; and
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0001| (5) for taxable years beginning on or after
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0002| January 1, 1991, an amount equal to the sum of any net
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0003| operating loss carryover deductions to that year claimed and
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0004| allowed, provided that the amount of any net operating loss
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0005| carryover from a taxable year beginning on or after January 1,
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0006| 1991 may be excluded only as follows:
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0007| (a) in the case of a timely filed
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0008| return, in the taxable year immediately following the taxable
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0009| year for which the return is filed; or
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0010| (b) in the case of amended returns or
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0011| original returns not timely filed, in the first taxable year
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0012| beginning after the date on which the return or amended return
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0013| establishing the net operating loss is filed; and
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0014| (c) in either case, if the net operating
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0015| loss carryover exceeds the amount of net income exclusive of
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0016| the net operating loss carryover for the taxable year to which
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0017| the exclusion first applies, in the next four succeeding
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0018| taxable years in turn until the net operating loss carryover is
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0019| exhausted; in no event may a net operating loss carryover be
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0020| excluded in any taxable year after the fourth taxable year
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0021| beginning after the taxable year to which the exclusion first
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0022| applies;
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0023| J. "net operating loss" means any net operating
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0024| loss, as defined by Section 172(c) of the Internal Revenue
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0025| Code, as that section may be amended or renumbered, for a
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0001| taxable year as further increased by the income, if any, from
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0002| obligations of the United States for that year less related
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0003| expenses;
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0004| K. "net operating loss carryover" means the amount,
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0005| or any portion of the amount, of a net operating loss for any
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0006| taxable year that, pursuant to Paragraph (4) or (5) of
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0007| Subsection I of this section, may be excluded from base income;
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0008| L. "person" means any individual, estate, trust,
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0009| receiver, cooperative association, club, corporation, company,
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0010| firm, partnership, limited liability company, joint venture,
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0011| syndicate or other association; "person" also means, to the
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0012| extent permitted by law, any federal, state or other
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0013| governmental unit or subdivision or agency, department or
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0014| instrumentality thereof;
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0015| M. "secretary" means the secretary of taxation and
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0016| revenue or the secretary's delegate;
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0017| N. "state" means any state of the United States,
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0018| the District of Columbia, the commonwealth of Puerto Rico, any
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0019| territory or possession of the United States or political
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0020| subdivision thereof or any political subdivision of a foreign
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0021| country;
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0022| O. "state or local bond" means a bond issued by a
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0023| state other than New Mexico, [or] by a local government other
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0024| than one of New Mexico's political subdivisions or by a tribal
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0025| government other than an Indian nation, tribe or pueblo located
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0001| in whole or in part in New Mexico, the interest from which is
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0002| excluded from income for federal income tax purposes under
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0003| Section 103 of the Internal Revenue Code, as that section may
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0004| be amended or renumbered;
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0005| P. "taxable year" means the calendar year or fiscal
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0006| year upon the basis of which the net income is computed under
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0007| the Corporate Income and Franchise Tax Act and includes, in the
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0008| case of the return made for a fractional part of a year under
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0009| the provisions of that act, the period for which the return is
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0010| made;
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0011| Q. "taxpayer" means any corporation subject to the
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0012| taxes imposed by the Corporate Income and Franchise Tax Act;
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0013| and
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0014| R. "unitary corporations" means two or more
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0015| integrated corporations, other than any foreign corporation
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0016| incorporated in a foreign country and not engaged in trade or
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0017| business in the United States during the taxable year, that are
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0018| owned in the amount of more than fifty percent and controlled
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0019| by the same person and for which at least one of the following
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0020| conditions exists:
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0021| (1) there is a unity of operations evidenced
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0022| by central purchasing, advertising, accounting or other
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0023| centralized services;
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0024| (2) there is a centralized management or
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0025| executive force and centralized system of operation; or
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0001| (3) the operations of the corporations are
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0002| dependent upon or contribute property or services to one
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0003| another individually or as a group."
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0004| Section 3. EMERGENCY.--It is necessary for the public
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0005| peace, health and safety that this act take effect immediately.
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0006| State of New Mexico
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0007| House of Representatives
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0008|
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0009| FORTY-THIRD LEGISLATURE
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0010| FIRST SESSION, 1997
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0011|
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0012|
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0013| March 17, 1997
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0014|
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0015|
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0016| Mr. Speaker:
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0017|
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0018| Your TAXATION AND REVENUE COMMITTEE, to whom has
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0019| been referred
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0020|
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0021| HOUSE BILL 735
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0022|
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0023| has had it under consideration and reports same with
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0024| recommendation that it DO PASS, amended as follows:
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0025|
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0001| 1. On page 9, line 5, after "New Mexico" insert "or other
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0002| than a council of several Indian nations, tribes or pueblos
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0003| located within New Mexico".,
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0004|
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0005| and thence referred to the APPROPRIATIONS AND FINANCE
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0006| COMMITTEE.
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0007|
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0008| Respectfully submitted,
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0009|
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0010|
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0011|
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0012|
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0013|
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0014| Jerry W. Sandel, Chairman
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0015|
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0016|
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0017| Adopted Not Adopted
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0018|
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0019| (Chief Clerk) (Chief Clerk)
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0020|
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0021| Date
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0022|
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0023| The roll call vote was 10 For 0 Against
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0024| Yes: 10
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0025| Excused: Russell, Sandoval, Sandel
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0001| Absent: None
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0002|
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0003|
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0004| .118951.1
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0005| G:\BILLTEXT\BILLW_97\H0735 State of New Mexico
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0006| House of Representatives
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0007|
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0008| FORTY-THIRD LEGISLATURE
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0009| FIRST SESSION, 1997
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0010|
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0011|
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0012| March 19. 1997
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0013|
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0014|
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0015| Mr. Speaker:
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0016|
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0017| Your APPROPRIATIONS AND FINANCE COMMITTEE, to
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0018| whom has been referred
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0019|
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0020| HOUSE BILL 735, as amended
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0021|
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0022| has had it under consideration and reports same with
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0023| recommendation that it DO PASS.
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0024|
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0025| Respectfully submitted,
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0001|
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0002|
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0003|
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0004|
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0005|
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0006| Max Coll, Chairman
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0007|
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0008|
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0009| Adopted Not Adopted
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0010|
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0011| (Chief Clerk) (Chief Clerk)
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0012|
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0013| Date
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0014|
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0015| The roll call vote was 16 For 0 Against
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0016| Yes: 16
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0017| Excused: Watchman
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0018| Absent: None
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0019|
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0020|
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0021| G:\BILLTEXT\BILLW_97\H0735
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0022|
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0023| FORTY-THIRD LEGISLATURE
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0024| FIRST SESSION, 1997
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0025|
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0001|
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0002| March 20, 1997
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0003|
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0004| Mr. President:
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0005|
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0006| Your WAYS AND MEANS COMMITTEE, to whom has been
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0007| referred
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0008|
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0009| HOUSE BILL 735, as amended
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0010|
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0011| has had it under consideration and reports same with
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0012| recommendation that it DO PASS.
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0013|
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0014| Respectfully submitted,
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0015|
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0016|
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0017|
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0018|
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0019| __________________________________
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0020| Carlos R. Cisneros, Chairman
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0021|
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0022|
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0023|
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0024| Adopted_______________________ Not
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0025| Adopted_______________________
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0001| (Chief Clerk) (Chief Clerk)
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0002|
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0003|
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0004| Date ________________________
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0005|
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0006|
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0007| The roll call vote was 9 For 0 Against
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0008| Yes: 9
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0009| No: 0
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0010| Excused: None
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0011| Absent: None
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0012|
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0013|
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0014| H0735WM1
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