0001| HOUSE BILL 185
|
0002| 43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998
|
0003| INTRODUCED BY
|
0004| JERRY W. SANDEL
|
0005|
|
0006|
|
0007|
|
0008|
|
0009|
|
0010| AN ACT
|
0011| RELATING TO TAXATION; AMENDING THE NATURAL GAS PROCESSORS TAX
|
0012| ACT TO CHANGE THE BASIS ON WHICH THE TAX IS IMPOSED; AMENDING
|
0013| AND REPEALING SECTIONS OF THE NMSA 1978.
|
0014|
|
0015| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
|
0016| Section 1. Section 7-33-2 NMSA 1978 (being Laws 1963,
|
0017| Chapter 179, Section 2, as amended) is amended to read:
|
0018| "7-33-2. DEFINITIONS.--As used in the Natural Gas
|
0019| Processors Tax Act:
|
0020| A. "average annual taxable value" means the
|
0021| average of the taxable value per mcf, determined pursuant to
|
0022| Section 7-31-5 NMSA 1978, of all natural gas produced in New
|
0023| Mexico for the specified calendar year as determined by the
|
0024| department;
|
0025| [A. "commission"] B. "department"
|
- 1 -
0001| ["division" or "oil and gas accounting division"] means the
|
0002| taxation and revenue department, the secretary of taxation and
|
0003| revenue or any employee of the department exercising authority
|
0004| lawfully delegated to that employee by the secretary;
|
0005| [B. "processor" means a person who:
|
(1) processes natural gas or processes
|
hydrocarbons incidental to the processing of natural gas; or
|
(2) extracts by-products from natural gas or
|
other hydrocarbons incidental to the processing of natural
|
gas, individually or any combination thereof. "Processor"
|
does not mean a person who refines or processes oil, natural
|
gas or liquid hydrocarbons or extracts by-products therefrom
|
through a process which is commonly considered a field or
|
lease operation, such as well-head separation, dehydration,
|
purification, desulfurization, compression or trapping;
|
C. "product" means natural gas or liquid
|
hydrocarbons, individually or any combination thereof, which
|
has been processed by the processor or any by-product which
|
has been derived therefrom by the processor. "Product" does
|
not include distinct petrochemicals produced from hydrocarbons
|
by chemical conversion in a petrochemical plant;
|
D. "value" means the actual price received for
|
products by the processor at his plant; and]
|
0024| C. "fiscal year" means the period starting July 1
|
0025| and ending June 30 of the succeeding calendar year;
|
- 2 -
0001| D. "mcf" means one thousand cubic feet;
|
0002| E. "mmbtu" means one million British thermal
|
0003| units;
|
0004| F. "natural gas" means any hydrocarbon that at
|
0005| atmospheric conditions of temperature and pressure is in a
|
0006| gaseous state, and includes non-hydrocarbon gases that are in
|
0007| combination with hydrocarbon gases;
|
0008| G. "natural gas processing plant" means a facility
|
0009| used to extract liquid hydrocarbons and non-hydrocarbon
|
0010| gaseous or liquid substances, individually or in any
|
0011| combination, from natural gas, but does not include a facility
|
0012| that refines or processes oil, natural gas or liquid
|
0013| hydrocarbons or that extracts substances from natural gas
|
0014| through a field or lease operation;
|
0015| [E.] H. "person" means any individual, estate,
|
0016| trust, receiver, business trust, corporation, firm,
|
0017| copartnership, cooperative, joint venture, association or
|
0018| other group or combination acting as a unit;
|
0019| I. "processor" means a person who operates a
|
0020| natural gas processing plant; and
|
0021| J. "tax" means the natural gas processors tax."
|
0022| Section 2. Section 7-33-4 NMSA 1978 (being Laws 1963,
|
0023| Chapter 179, Section 4, as amended) is amended to read:
|
0024| "7-33-4. PRIVILEGE TAX LEVIED--COLLECTED BY [OIL AND
|
GAS ACCOUNTING DIVISION OF THE TAXATION AND REVENUE]
|
- 3 -
0001| DEPARTMENT--RATE.--
|
0002| A. There is levied and shall be collected by the
|
0003| [oil and gas accounting division of the taxation and
|
revenue] department a privilege tax on processors for the
|
0005| privilege of [engaging in the business of processing based on
|
the value of their products. The measure of the tax shall be
|
forty-five one-hundredths of one percent of the value of the
|
products.
|
B. This tax does not apply to the value of
|
products:
|
(1) used for plant fuel by the processor;
|
(2) which are returned to the lease from
|
which produced; or
|
(3) sold to:
|
(a) the government of the United
|
States, its departments or agencies;
|
(b) the state of New Mexico or any of
|
its political subdivisions; or
|
(c) nonprofit hospitals, religious or
|
charitable organizations, when the products are used in the
|
conduct of their regular functions.
|
C. Every interest owner is liable for this tax to
|
the extent of his interest in the value of such products or to
|
the extent of his interest as may be measured by the value of
|
such products] operating a natural gas processing plant in
|
- 4 -
0001| New Mexico. This tax may be referred to as the "natural gas
|
0002| processors tax".
|
0003| B. The tax shall be imposed on the amount of
|
0004| mmbtus of natural gas delivered to the processor at the inlet
|
0005| of the natural gas processing plant after subtracting the
|
0006| mmbtu deductions authorized in Subsection E of this section.
|
0007| The tax shall be imposed at the rate per mmbtu determined in
|
0008| Subsection C or D of this section, as applicable.
|
0009| C. The tax rate for the six-month period beginning
|
0010| on January 1, 1999 shall be determined by multiplying the rate
|
0011| of sixty-five hundredths of one cent ($.0065) per mmbtu by a
|
0012| fraction, the numerator of which is the annual average taxable
|
0013| value per mcf of natural gas produced in New Mexico during the
|
0014| 1997 calendar year and the denominator of which is one dollar
|
0015| fifty cents ($1.50) per mcf. The resulting tax rate shall be
|
0016| rounded to the nearest one-hundredth of one cent per mmbtu.
|
0017| D. The tax rate for each fiscal year beginning on
|
0018| or after July 1, 1999 shall be determined by multiplying the
|
0019| rate of sixty-five hundredths of one cent ($.0065) per mmbtu
|
0020| by a fraction, the numerator of which is the annual average
|
0021| taxable value per mcf of natural gas produced in New Mexico
|
0022| during the preceding calendar year and the denominator of
|
0023| which is one dollar fifty cents ($1.50) per mcf. The
|
0024| resulting tax rate shall be rounded to the nearest one-
|
0025| hundredth of one cent per mmbtu.
|
- 5 -
0001| E. A processor may deduct from the amount of
|
0002| mmbtus of natural gas subject to the tax the mmbtus of natural
|
0003| gas that are:
|
0004| (1) used for natural gas processing by the
|
0005| processor;
|
0006| (2) returned to the lease from which it is
|
0007| produced;
|
0008| (3) legally flared by the processor; or
|
0009| (4) lost as a result of natural gas
|
0010| processing plant malfunctions or other incidences of force
|
0011| majeur.
|
0012| F. On or before June 15, 1999 and June 15 of each
|
0013| succeeding year, the department shall inform each processor in
|
0014| writing of the tax rate applicable for the succeeding fiscal
|
0015| year.
|
0016| G. Any Indian nation, tribe [Indian] or
|
0017| pueblo or Indian is liable for [this] the tax to the
|
0018| extent authorized or permitted by law."
|
0019| Section 3. Section 7-33-6 NMSA 1978 (being Laws 1963,
|
0020| Chapter 179, Section 6, as amended) is amended to read:
|
0021| "7-33-6. [PRICE INCREASE SUBJECT TO APPROVAL OF AGENCY
|
OF UNITED STATES OF AMERICA, STATE OF NEW MEXICO OR COURT]
|
0023| REFUND.--[When an increase in the value of any product is
|
subject to the approval of any agency of the United States of
|
America or the state of New Mexico or any court, the increased
|
- 6 -
value is subject to this tax. In the event the increase in
|
value is disapproved, either in whole or in part, then the
|
amount of tax which has been paid on the disapproved part of
|
the value shall be considered excess tax.] Any person who
|
0005| has [paid any such excess tax] overpaid the tax may apply
|
0006| for a refund of that [excess tax] overpayment in
|
0007| accordance with the provisions of Section 7-1-26 NMSA 1978."
|
0008| Section 4. Section 7-33-7 NMSA 1978 (being Laws 1963,
|
0009| Chapter 179, Section 7) is amended to read:
|
0010| "7-33-7. [PRODUCTS] NATURAL GAS ON WHICH TAX HAS
|
0011| BEEN LEVIED--REGULATION BY [COMMISSION] DEPARTMENT.--
|
0012| [This] The tax shall not be levied more than once on the
|
0013| same [product] natural gas. Reporting of [products]
|
0014| natural gas on which [this] the tax has been paid is
|
0015| subject to the regulation of the [commission] department."
|
0016| Section 5. Section 7-33-8 NMSA 1978 (being Laws 1963,
|
0017| Chapter 179, Section 8, as amended) is amended to read:
|
0018| "7-33-8. TAX [REPORT] RETURN--TAX REMITTANCE--
|
0019| ADDITIONAL INFORMATION.--[Within twenty-five days following
|
the end of each calendar month, each processor shall in the
|
form and manner required by the commission make a return to
|
the commission showing the value, volume and kind of products
|
sold from each plant for the calendar month. All taxes due or
|
to be remitted by the processor shall accompany this return.
|
Any additional report or information the commission may deem
|
- 7 -
necessary for the proper administration of the Natural Gas
|
Processors Tax Act may be required.]
|
0003| A. Each processor shall submit a return monthly
|
0004| to the department in the form and manner required by the
|
0005| department showing for the month the total mmbtus of natural
|
0006| gas received by the processor at the inlet of the natural gas
|
0007| processing plant and the total mmbtus of natural gas deducted
|
0008| pursuant to the Natural Gas Processors Tax Act. All tax due
|
0009| or to be remittted by the processor shall accompany the
|
0010| return.
|
0011| B. The return required by this section shall be
|
0012| filed on or before the twenty-fifth day of the month after the
|
0013| calendar month for which the return is required.
|
0014| C. The department may require additional reports
|
0015| or information as necessary for the proper administration of
|
0016| the Natural Gas Processors Tax Act."
|
0017| Section 6. TEMPORARY PROVISION--NOTICE.--On or before
|
0018| November 30, 1998, the taxation and revenue department shall
|
0019| inform each processor in writing of the natural gas processors
|
0020| tax rate applicable pursuant to the Natural Gas Processors Tax
|
0021| Act for the six-month period beginning January 1, 1999.
|
0022| Section 7. REPEAL.--Section 7-33-5 NMSA 1978 (being Laws
|
0023| 1963, Chapter 179, Section 5, as amended) is repealed.
|
0024| Section 8. EFFECTIVE DATE.--The effective date of the
|
0025| provisions of Sections 1 through 5 and 7 of this act is
|
- 8 -
0001| January 1, 1999.
|