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SB 1 LEDA CHANGES

Current Location: SGND
Referrals: STBTC/HTRC

[1] STBTC-STBTC- DP [2] PASSED/S (28-10)- HTRC-HTRC [4] DP - PASSED/H (59-8)

SB 1 PDF  |  SB 1 FIR


Scheduled on - Date:  Time:   Location:

3/31/2021 [2]HINT - Sent to location House Taxation and Revenue (HTRC)
3/31/2021 [4]HTRC - Do Pass House Calendar (HCal)
3/30/2021 [1] - Sent to location Senate Tax, Business and Transportation (STBTC)
3/30/2021 [1]STBTC - Do Pass Senate Calendar (SCal)
3/30/2021 [2]SCal - Passed the Senate House Introduction (HINT)
2/16/2021 [4]HTRC - Do Pass - Temporary Calendar House Temporary Calendar (HCAT)
2/11/2021 [3]HINT - Sent to location House Taxation and Revenue (HTRC)
2/10/2021 [3]HAFC - Do Pass as Amended Senate Calendar (SCal)
2/10/2021 [5]SCal - Floor amended Senate Calendar (SCal)
2/10/2021 [5]SCal - Passed the Senate House Introduction (HINT)
2/01/2021 [3]STBTC - Do Pass Senate Finance (SFC)
Synopsis:

 Senate Bill 1 Special Session (SB 1) provides that a portion of state and local gross receipts and compensating tax revenue imposed on certain economic development projects may be provided as public support for the projects pursuant to the Local Economic Development Act (LEDA). SB 1provides transfers and distributions of the portion of state and local gross receipts and compensating tax revenue. Declares an emergency.

Analysis:

 Senate Bill 1 (SB 1) provides that a portion of state and local gross receipts and compensating tax revenue imposed on certain economic development projects may be provided as public support for the projects pursuant to the Local Economic Development Act (LEDA). SB 1 provides transfers and distributions of the portion of state and local gross receipts and compensating tax revenue. Declares an emergency.

Section 1 amends Section 5-10-14 NMSA to create the Local Economic Development Act (LEDA) fund. Subsection B specifies 50 percent of the tax revenue attributable to the state gross receipts tax and the state compensating tax and that portion of the tax revenue attributable to the local option gross receipts tax and county compensating tax imposed by a county and local option gross receipts tax and municipal compensating tax imposed by a municipality may be used to provide public support for certain economic development projects.

Section 2 adds a new section of the LEDA titled Gross Receipts Tax and Compensating Tax Revenue as Public Support for Certain Projects.
A.  Limits the public support funds for a qualifying entity to 50 percent of the net receipts and also specifies a limit of no more than 10 years for the public support. It also requires the entity to sign a project participation agreement with the department and the project incurs at least $350,000,000 in exposes related to construction and infrastructure in the state and appropriate documents are submitted monthly.
B. Allows local government to dedicate, by ordinance, 50 percent of the gross receipts tax and compensating tax revenue imposed by the local government on the qualifying entity's receipts for expenses related to the construction of the economic development project to the LEDA fund.
C. Within 30 days after execution of a project participation agreement with a qualifying entity, the department shall issue a report to the Department of Finance and Administration and the Legislative Finance Committee that provides the information as specified in this Subsection.  
D. As soon as practicable, the Taxation and Revenue Department (TRD) shall implement a rate type to identify gross receipts and compensating taxes reported and paid for expenses related to the construction of an economic development project. 
E. If the TRD has not implemented the rate type, and if the requirements of Subsection A of this section have been met, the Economic Development Department and the local governments that signed a project participation agreement with the qualifying entity shall estimate the amount equal to 50 percent of the tax revenue attributable to gross receipts tax and compensating tax.
F. The TRD shall review the amounts estimated for accuracy and computation, make any necessary corrections or adjustments and make a final determination of the amounts to be distributed from the relevant tax revenue.

SECTION 3. Amends Section 7-1-6.12 NMSA 1978 (being Laws 1983, Chapter 211, Section 17, as amended) TRANSFER--REVENUES FROM MUNICIPAL LOCAL OPTION GROSS RECEIPTS AND COMPENSATING TAXES to insert Subsection C that provides a transfer shall be adjusted for a distribution made to the LEDA fund and with respect to the amount dedicated by a municipality.

SECTION 4. Amends Section 7-1-6.13 NMSA 1978 (being Laws 1983, Chapter 211, Section 18, as amended) TRANSFER--REVENUES FROM COUNTY LOCAL OPTION GROSS RECEIPTS AND COMPENSATING TAXES to provide that a transfer shall be adjusted for a distribution made to the LEDA fund and with respect to the amount dedicated by a county.

SECTION 5. A new section of the Tax Administration Act provides that distribution shall be made to the LEDA fund equal to the following amounts of the taxes imposed and paid on expenses related to the construction of the qualifying entity’s economic development project: 
                (1) 50 percent of the net receipts attributable to state gross receipts tax and the state compensating tax; and
                (2) 50 percent of the net receipts attributable to the local option gross receipts tax and county compensating tax imposed by a county and local option gross receipts tax and municipal compensating tax imposed by a municipality.

Amendments:

Current Law:SB1 amends Section 5-10-14 NMSA 1978 (being Laws 2020, Chapter 74, Section 1, as amended) and Section 7-1-6.12 NMSA 1978 (being Laws 1983, Chapter 211, Section 17, as amended.