SENATE TAX, BUSINESS AND TRANSPORTATION

COMMITTEE SUBSTITUTE FOR

SENATE BILL 372

55th legislature - STATE OF NEW MEXICO - first session, 2021

 

 

 

 

 

 

 

AN ACT

RELATING TO REGIONAL TRANSIT DISTRICTS; PROVIDING THAT REVENUE FROM A REGIONAL TRANSIT GROSS RECEIPTS TAX IMPOSED BY A COUNTY BE DISTRIBUTED DIRECTLY TO THE DISTRICT RATHER THAN TRANSFERRED FROM THE COUNTY TO THE DISTRICT.

 

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

         SECTION 1. A new section of the Tax Administration Act is enacted to read:

         "[NEW MATERIAL] DISTRIBUTION--REGIONAL TRANSIT DISTRICT.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each regional transit district created pursuant to the Regional Transit District Act in a county for which the department is collecting a regional transit gross receipts tax imposed by that county in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the net receipts attributable to the county regional transit gross receipts tax by that county, less any deduction for administrative cost pursuant to Section 7-1-6.41 NMSA 1978."

         SECTION 2. Section 7-1-6.13 NMSA 1978 (being Laws 1983, Chapter 211, Section 18, as amended) is amended to read:

         "7-1-6.13. TRANSFER--REVENUES FROM COUNTY LOCAL OPTION GROSS RECEIPTS AND COMPENSATING TAXES.--

                   A. Except as provided in Subsection B of this section and Section 1 of this 2021 act, a transfer pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each county for which the department is collecting a local option gross receipts tax and county compensating tax imposed by that county in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the net receipts attributable to the local option gross receipts tax and county compensating tax imposed by that county, less any deduction for administrative cost determined and made by the department pursuant to the provisions of the act authorizing imposition by that county of the local option gross receipts tax and county compensating tax and any additional administrative fee withheld pursuant to Section 7-1-6.41 NMSA 1978.

                   B. A transfer 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 county pursuant to the Tax Increment for Development Act."

         SECTION 3. 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 OR REGIONAL TRANSIT DISTRICTS.--

                   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 distribution to a regional transit district pursuant to Section 1 of this 2021 act.

                   B. Before making a distribution or transfer specified in Subsection A of this section to a municipality, [or] county or regional transit district 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 or regional transit district shall be reported each month to that municipality, [or] county or regional transit district. 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 or regional transit district, 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 or regional transit district 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 or regional transit district, 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 or regional transit district shall be equal to the amount for the current month.

                   C. The department shall recover from a municipality, [or] county or regional transit district 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 or regional transit district of the adjusted net receipts, the department shall notify the municipality, [or] county or regional transit district 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 or regional transit district and that the department intends to recover that amount from future distributions or transfers to the municipality, [or] county or regional transit district;

                               (2) that the municipality, [or] county or regional transit district 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 or regional transit district 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, and that the regional transit district may inspect pursuant to Section 7-1-8.11 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 or regional transit district as follows:

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

                                         (a) decreasing distributions or transfers to the municipality, [or] county or regional transit district in accordance with a repayment agreement entered into with the municipality, [or] county or regional transit district; or

                                         (b) except as provided in Paragraphs (2) and (3) of this subsection, if the municipality, [or] county or regional transit district fails to act within the ninety days, decreasing the amount of the next six distributions or transfers to the municipality, [or] county or regional transit district 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 or regional transit district, the secretary:

                                         (a) shall recover only up to fifty percent of the average distribution or transfer of net receipts for that municipality, [or] county or regional transit district; 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 or regional transit district 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 or regional transit district 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 and regional transit district in the prior fiscal year.

                   H. The secretary is authorized to decrease a distribution or transfer to a municipality, [or] county or regional transit district 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 or regional transit district and a written agreement of the municipality, [or] county or regional transit district 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 or regional transit district, 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 or regional transit district 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 or regional transit district to the New Mexico finance authority. A decrease to or redirection of a distribution or transfer pursuant to this subsection that arose: