NEW MEXICO’S BUSINESS LAWYERS ®

Legislative Update: 2020 Mid-Session Update

February 10, 2020

The 30-day New Mexico legislative session convened January 21, 2020. Since this is a “budget” session, non-budgetary items are limited by the Governor’s call. She has announced her priorities are education, economy, public safety, health, and the environment. The following is a summary of select bills that may be of interest to our business clients and friends. The bills are proceeding through the legislative process and are discussed here as they stood at midsession. Only some bills will receive approval of both houses and the governor and be enacted into law. The session ends February 20 at noon.

SECTIONS

  • Business and Corporate
  • Cannabis
  • Economic Development
  • Employment and Labor
  • Healthcare
  • Taxation

CONTRIBUTING LAWYERS

BUSINESS and CORPORATE

Business and Corporate Bills:

Designation as Benefit Corporation – HB118

HB118 would enact a new section of law titled the Benefit Corporation Act, which would require public benefit corporations to consider the public good in making decisions. The bill would immunize directors and officers from liability for making decisions that do not solely benefit the shareholders of the corporation. Public benefit legislation has been adopted in many other states, including neighboring ones. The House of Representatives passed HB118. It has been referred to two Senate committees.

Escrow Company Surety Bonds – SB259

SB259 substitutes a fidelity bond requirement for the existing surety bond requirement that applies to escrow companies licensed and operating pursuant to the Escrow Company Act. Fidelity bonds are for the benefit of any person damaged by a violation of law or by the negligence of an escrow company, its directors, or officers. The minimum amount for a fidelity bond would be one million dollars ($1,000,000) under SB259, and each bond would be filed with the Regulation and Licensing Board. The bill also authorizes the director of the Financial Institutions Division to revoke the certificate of an escrow company that fails to maintain a bond as required. The bill has been referred to three Senate committees.

 

Tax Incentive Bills:

Expand Rural Health Care Practitioner Credit – HB74

HB74 would make it possible for all eligible practitioners to receive the $5,000 annual Rural Health Care Practitioner Tax Credit. Currently, some practitioners are only eligible for the $3,000 annual credit. Pharmacists, independent social workers, clinical mental health practitioners, marriage and family therapists, and professional art therapists would be added as eligible practitioners. The House Health and Human Services Committee gave the bill a do pass recommendation.

Solar Market Development Income Tax Credit – SB29

SB29 would establish the New Solar Market Development Income Tax Credit which would be available to taxpayers who install a solar thermal or photovoltaic system in a residence, business, or agricultural enterprise. The personal income tax credit is 10% of the cost of equipment and installation for systems installed after January 1, 2020 and prior to January 1, 2030 and is limited to $6,000 per installation. The Senate Corporations and Transportation Committee gave the bill a do pass recommendation.

Reporting Requirements for LEDA Recipients – SB52

SB52 would appropriate $188,000 to the Legislative Finance Committee from the general fund to help the Committee evaluate economic development incentives, including tax expenditures. If any appropriated funds remain by the end of the fiscal year 2021, the funds will revert back to the general fund. Local Economic Development Act award recipients would be required to report certain information to the Economic Development Department on an annual basis. The bill was referred to three Senate committees.

 

Liquor License Bills:

Nontransferable Liquor Dispenser License / Liquor Dispenser Licenses / Local Liquor Dispenser’s License – HB182 / HB235 / HB332

HB182, HB235 and HB332 seek to raise or eliminate the current quota levels on dispenser licenses, although through slightly different approaches. HB182 would make it possible for persons in more rural areas of the State to obtain dispenser’s licenses. HB235 would increase the number of new dispenser licenses issued by the State. HB332 would allow government bodies of local option districts to issue more dispenser’s licenses each year. These bills have been referred to three Senate committees.

 

CANNABIS

The Cannabis Regulation Act – HB160 / SB115

HB160 and its duplicate Senate bill, SB 115, enact the Cannabis Regulation Act (the “CRA”). The CRA legalizes the commercial production, distribution, sale, and consumption of cannabis by establishing regulations and providing licensure procedures. To obtain a license under the CRA, the applicant must, among other things, be at least twenty-one (21) years old.

The CRA would establish the Cannabis Control Division (the “CCD”) within the Regulation and Licensing Department. Under the CRA, the CCD would be responsible for promulgating rules and policies related to the licensing and regulation of the commercial, production, distribution, sale, and consumption of cannabis.

The CRA would also allow local governments to enact reasonable time, place and manner rules to regulate the commercial, production, distribution, sale, and consumption of cannabis under the CRA. These rules, however, cannot completely prohibit such activities.

Unrestricted commercial sales of cannabis would begin on January 1, 2022. However, persons with an existing medical cannabis license can begin selling cannabis to recreational consumers on January 1, 2021, but only if the New Mexico Department of Health (the “DOH”) determines that there is an adequate supply of cannabis for the medical cannabis program.

Notably, the CRA would allow individuals to expunge arrest and conviction records for cannabis offenses. It also would provide mechanisms to recall or dismiss sentences for cannabis related offenses. Relatedly, the CRA would amend the Controlled Substances Act by amending or repealing criminal laws for cannabis related offenses.

HB160 and SB115 also enact the Cannabis Tax Act (the “CTA”). The CTA imposes a 9% excise tax on the purchase price of cannabis. This excise tax, however, does not apply to the retail sale of medical cannabis. The CTA would also allow counties and cities to pass ordinances that impose an excise tax of no more than 4% on the purchase price of cannabis. As the CTA currently reads, the tax imposed by local governments does not exempt medical cannabis sales.

HB160 and SB115 also purport to amend existing law by providing a gross receipts tax deduction for medical cannabis. If passed, Governor Michelle Lujan Grisham is expected to sign this law as the legalization of recreational marijuana has been described as a priority for her administration. The CRA is estimated to create 1,531 new jobs. Still, it is important to remember that cannabis remains unlawful under federal law. The CRA has an effective date of July 1, 2020. HB160 was referred to two House committees. SB115 was given a do pass recommendation by the Senate Public Affairs Committee.

Water Rights for Cannabis Production – HB169

HB169 amends Section 26-2b-6.1 of the Lynn and Erin Compassionate Use Act. HB169 would require cannabis farmers to possess a valid water right to use water for cannabis production. HB169 also requires that cannabis farmers have documentation that demonstrates their water right to the Department of Health. The bill is in committee.

Cannabis Research Act – HB334

HB334 enacts the Cannabis Research Act. The Cannabis Research Act provides for the regulation of the production, testing, manufacturing and transportation of cannabis and cannabis products for research purposes. The Cannabis Research Act creates the Cannabis Control Division (the “CCD”) in the Regulation and Licensing Department.

The CCD would be responsible for regulating and administering the Cannabis Research Act such as by providing licensing procedures for individuals and entities who desire to conduct cannabis research. In order to be licensed under the Cannabis Research Act, an applicant must (1) have resided in New Mexico for the last two years and (2) own a structure located in New Mexico for the past two years that enables year-round plant growth and is equipped to recycle carbon dioxide expelled in exhaust gases generated by natural gas boilers for use by growing crops.

Under the Cannabis Research Act, local governments can adopt reasonable time, place, and manner restrictions so long as these regulations (1) do not conflict with the transportation by licensees of cannabis or cannabis products on public roads and (2) do not completely prohibit conduct authorized by the Cannabis Research Act.

The Cannabis Research Act also establishes the cannabis research regulations fund, which would be replenished by licensing fees collected by the CCD, grants, gifts, and donations. HB334, with amendments, was given a do pass recommendation by the House Commerce and Economic Development Committee.

“Qualified Patient” in Lynn and Erin Compassionate Use Act – SB139

SB139 would limit the definition of “qualified patient” under the Lynn and Erin Compassionate Use Act (the “LECUA”). In 2019, SB 406 amended the LECUA but created an ambiguity regarding the meaning of “qualified patient” that allowed non-New Mexico residents to obtain medical cannabis cards. SB 139 would require a “qualified patient” to be a New Mexico resident. Because SB 139 contains an emergency clause, it would become effective immediately upon the governor’s signature. The bill was given a do pass recommendation by the Senate Public Affairs Committee.

Tribe and Pueblo Medical Marijuana Agreements – SB271

SB271 creates a new section in the Lynn and Erin Compassionate Use Act (the “LECUA”). Specifically, SB271 authorizes the DOH to enter into intergovernmental agreements with Indian Nations, Tribes, and Pueblos relating to the implementation of and compliance with the LECUA. SB271 applies to any sovereign Indian nation, tribe, or pueblo located in New Mexico that elects to implement LECUA’s provisions related to the medical cannabis program. These agreements will allow the DOH, upon request, to assist any Indian nation, tribe, or pueblo to implement the LECUA’s medical cannabis program. The agreements will also provide for guidelines to comply with DOH rules and the agreements’ provision when any Indian nation, tribe, or pueblo decides to transport or sell medical cannabis outside of their jurisdiction. The bill received a do pass recommendation from the Senate Public Affairs Committee.

Medical Cannabis in Schools – SB276

SB276 requires local school boards and the governing bodies of charter schools to adopt policies and procedures consistent with four requirements to authorize parents, legal guardians, and designated school personnel to possess, store, and administer medical cannabis to qualified students for use in school settings.

SB276 exempts schools from the bill’s requirement if they receive written notice from a federal agency that threatens the schools with loss of federal funds. Further, Senate Bill276 prohibits schools from taking certain adverse actions against any qualified student who uses medical cannabis or against any school personnel who volunteers to administer medical cannabis. SB276 has been referred to three Senate committees.

 

ECONOMIC DEVELOPMENT

Electric Generating Facility Econ Districts – HB8

HB8 authorizes counties to create an electric generating facility economic district. Districts must include a currently operating coal-fired electric generating facility owned by a non-investor-owned electric utility. Districts may borrow money, issue bonds, own land, exercise the power of eminent domain, and impose a gross receipts tax increment. The bill does not describe the purpose of a district or the goals one would be created to achieve, however. HB8 is currently in committee.

Amending the Industrial Revenue Bond Act / Electric Transmission Facilities IRB Eligible – HB50 / SB6

HB50 and SB6 amend the Industrial Revenue Bond Act and County Industrial Revenue Bond Act to make electric transmission facilities eligible projects. The bills require the state to receive 5% of payments in lieu of tax to counties, municipalities, and other local entities that tax the property. HB50 has passed the House of Representatives and now moves to the Senate. SB6 was given a do pass recommendation by the Senate Corporations and Transportation Committee.

Investment Credit Act Changes – HB149 / SB184

HB149 and SB184 amend the investment credit for manufacturers to allow a credit on qualified equipment purchased or brought into the state equal to the effective gross receipts or compensating tax rate. The bills also delay by 10 years two provisions that would otherwise take effect beginning July 1, 2020 to make the credit more restrictive. First, an annual cap of $2 million per taxpayer claiming the credit would be delayed until July 1, 2030. Second, the more restrictive employment requirement of one new full time employee (“FTE”) per $100,000 in value of qualified equipment would be delayed until July 1, 2030, leaving in place the current requirement of one new FTE per $750,000 of equipment, up to $30 million, and one new FTE per $1 million of equipment over $30 million. HB149 received a do pass recommendation from the House Commerce and Economic Development Committee. SB184 was reported by committee with a do not pass recommendation, but received a do pass recommendation on the committee substitution.

Transfer Angel Investment Credit Review – HB158

This bill would make the State’s Taxation and Revenue Department responsible for reviewing, approving, and reporting the angel investment tax credit instead of the Economic Development Department, which is currently charged with the responsibility. Those applying for the credit would still need to send the same information to the Economic Development Department that it sends to the Taxation and Revenue Department. Both the House Commerce and Economic Development Committee and the House Taxation and Revenue Committee recommended that the bill pass.

Renewable Energy Project Financing – HB303

HB303 amends the Renewable Energy Financing District Act to authorize alternative means of financing renewable energy projects. The bill has not yet been deemed germane and, absent a message from Governor Lujan Grisham, will not be considered during this session.

Reporting Requirements for LEDA Recipients – SB52

SB52 requires recipients of funding through the LEDA to annually report to the Economic Development Department the number of new full-time economic base jobs created in the previous calendar year, the total annual wages and salaries for those jobs, and any capital investments made in the previous calendar year. The bill has been referred to three committees.

Local and Regional Economic Development Support – SB118

SB118 amends the LEDA to create a Local and Regional Economic Development Support Fund, into which funds will be appropriated for LEDA projects. The bill changes the definition of “economic base job” to that used in the Tax Increment for Development Act. The bill also allows funds to be expended through LEDA on retail projects in communities with populations less than 15,000, up from the current 10,000, but requires the Economic Development Department to determine that the project does not compete with existing retail businesses. The Senate passed the bill, which moves to the House.

Investment in New Mexico Funds and Businesses – SB136

SB136 increases the cap on investments from the Severance Tax Permanent Fund in New Mexico private equity and business from the existing 9% to 11%. The bill also clarifies that the existing allowable 2% small business investment corporation allocation is wholly separate from the existing authorization for private equity funds. The bill received a do pass recommendation from the Senate Corporations and Transportation Committee.

Public Improvement District Act Changes – SB246

SB246 amends the Public Improvement District (“PID”) Act and Tax Increment for Development (“TIDD”) Act in a number of ways. The bill changes the composition and appointment procedures of PID and TIDD boards, requires an election on the question of imposing property tax or the use of property tax financing in PIDs and TIDDs, and limits property taxes imposed for the operation and maintenance of a PID to $3 per $1,000 of net taxable value and of a TIDD to $5 per $1,000 of net taxable value. Most dramatically, the bill grants PIDs and TIDDs the power of eminent domain. SB246 was reported by committee to fall within the purview of the 30-day session; it is currently with the Senate Corporations and Transportation Committee.

 

EMPLOYMENT AND LABOR

Prohibit NDA for Sexual Harassment Cases – HB21

HB21 would prohibit both private and public employers from requiring an employee to sign a nondisclosure provision in a settlement agreement relating to sexual harassment or sexual assault claims in the workplace. The bill would not affect confidentiality provisions related to monetary amounts of the settlement, or if the employee requests a nondisclosure provision to prevent disclosure of facts of the claim. The bill would apply to settlement agreements entered into on or after May 20, 2020. The House Labor, Veterans’ And Military Affairs Committee referred the bill to the Judiciary Committee with a do pass recommendation, with an amendment that makes the law applicable only to private employers.

Pregnant Worker Accommodation – HB 25

HB25 adds as a protected class pregnancy, childbirth or any condition related to pregnancy or childbirth to the New Mexico Human Rights Act. As with other protected classes, the bill would make it unlawful for an employer to use such condition as a basis for discriminatory practice. The bill would require employers to make reasonable accommodations for employees for needs related to pregnancy, childbirth or any condition related to pregnancy or childbirth. Further, employers would be prohibited from requiring an employee to take paid, or unpaid leave if another reasonable accommodation is available. The bill defines “reasonable accommodation” and “undue hardship.” The bill was unanimously passed by the House of Representatives.

Contract Provisions for Certain College Staff – HB37

HB37 would change the requirements for employment contracts between post-secondary educational institutions and presidents, athletic program directors, and athletic program staff of said institutions. The bill specifies certain contract terms to be included and requires all contracts to be written public record. The bill is currently in House Rules and Order of Business Committee.

New Mexico Work and Save Act – HB44

HB44 would essentially create a market place for retirement plans, allowing private sector and nonprofit employees to participate in retirement savings plans. The House Labor, Veterans’ and Military Affairs Committee referred the bill to the House State Government, Elections and Indian Affairs Committee with a do pass recommendation as amended.

Increase Minimum Wage – HB82

HB82 proposes to raise New Mexico’s minimum wage to $9.00 an hour. Then to $10.50 an hour in 2021, $12.00 an hour in 2022, and $15.00 an hour by 2024. Then, beginning January 1, 2025, minimum wage would increase by a percentage equal to the percentage increase in the cost of living. The bill proposes to remove the reduced minimum wage exception for employees that receive more than $30.00 a month in tips. The bill would become effective July 1, 2020 if enacted. The bill is currently in House Rules and Order of Business Committee.

Criminal Records Considered For Employment – HB325

HB325 expands the Criminal Offender Employment Act to require employers or licensing authorities to develop a list of disqualifying criminal convictions for potential employees. The bill would allow public employers to consider misdemeanor convictions that did not involve moral turpitude as a bar to employment. However, it adds other categories of convictions that may not be considered in an application. The bill is currently in House Rules and Order of Business Committee.

Changes to Educational Retirement – SB111

SB111 proposes to amend the Educational Retirement Act as it relates to provisions for retired members of the Educational Retirement Board to return to employment. The bill would allow for retired members to return to work without losing their pension within 90 days of date of retirement if the retired member earns less than $15,000.00 per year and there was no agreement prior to retirement to return to work. The Senate Education and Finance Committees gave it a do pass recommendation.

 

HEALTHCARE

 Pharmaceutical Service Reimbursement Parity – HB42

HB42 would require all insurance programs to reimburse certified pharmacists clinicians and pharmacists certified to prescribe medications for providing medical services, at the same level as other covered providers such as physicians or physician assistants. Currently, pharmacists with prescriptive authority are able to provide, and get reimbursed by Medicaid for, naloxone kits (to treat overdoses) and immunizations, but other services they are certified to perform are not currently reimbursed by Medicaid. This bill was passed by the House of Representatives. It now moves to the Senate.

Behavioral Health Licensure Study – HB56

HB56 would require the New Mexico Regulation and Licensing Department (“RLD”) to conduct a study of licensure requirements for behavioral-health professionals by the four RLD boards that license such professionals. The purpose of the bill is to have those boards evaluate their licensure requirements in light of the requirements for similar licenses in other states to improve the licensing and renewal process. This bill was reported by the House Health and Human Services Committee with a do pass recommendation.

Coverage for Health Artery Calcium Scan – HB126

HB126 would require all types of health insurance plans sold in New Mexico to cover coronary artery calcium scans for patients between the ages of 45 and 65, who have immediate risk of coronary artery disease. Patients would be eligible for repeat scanning every 10 years as long as their calcium scan score remains zero. If passed and signed, this bill could give providers more options for preventative monitoring of patients who are at risk of coronary artery disease or of suffering heart attacks. This bill, as amended, was reported by the House Health and Human Services Committee with a do pass recommendation.

UNM Med Students in Underserved Areas – HB159 / SB58

HB159 would appropriate $500,000 to the University of New Mexico for a program to prepare medical students to practice medicine in underserved areas. If passed and signed, this bill could help create more, and better prepared, young physicians to practice in New Mexico’s many rural and underserved areas. SB58 is similar to HB 159, but would appropriate $250,000 from the general fund to the medical school at UNM Health Sciences Center for the purpose of preparing medical students for practicing in underserved communities. HB159 is still in committee as of February 9, 2020. SB58 was reported by the Senate Education Committee with a do pass recommendation.

UNM Children’s Psychiatric Hospital Program – HB338

HB338 would appropriate $1.75 million to the University of New Mexico, for expenditure in fiscal year 2021, for intensive outpatient programs and partial hospitalizations for adolescents, already being treated at the University of New Mexico’s children’s psychiatric hospital, to treat behavioral health and substance abuse issues. This bill is still in committee as of February 9, 2020.

Wholesale Prescription Drug Importation Act – SB1

SB1 would enact the “Wholesale Prescription Drug Importation Act”. The Wholesale Prescription Drug Importation Act would appropriate $350,000 from the general fund to the Department of Health for the purpose of setting up a program whereby the state would import prescription medications from Canada (and perhaps other countries) through a wholesaler or wholesalers for resale to New Mexico consumers. Such a program depends on federal implementation of a law passed by Congress in 2003 to allow drug importation from Canada. Implementation of the plan would require approval by the secretary of the federal Department of Health and Human Services. This bill passed the Senate 35-0 on February 4, 2020 and was reported by the House Health and Human Services Committee with a do pass recommendation.

Behavior Health Community Integration Act – SB 54 / SB 182

SB54 would enact the “Behavioral Health Community Integration Act.” The bill would provide community-based support services for adults diagnosed with serious mental illness and youth diagnosed with serious emotional disturbance. The bill would require the Behavioral Health Services Division (BHSD) of the Human Services Department (HSD) to design and implement a comprehensive community-based mental health system in communities throughout the state that provides support services. This bill is identical to SB182, except that SB54 provides for $7,000,000 in appropriation. SB54 is still in committee as of February 9, 2020. The Senate Finance Committee gave SB182, as amended, a do pass recommendation.

 

TAXATION

Tax Changes – HB326

In 2019 the Legislature enacted sweeping changes to the New Mexico tax code through HB6. Due to the broad scope of changes enacted by HB6 in 2019, the Legislature delayed the effective date of most of the changes to allow time for technical corrections in the 2020 Legislative Session and New Mexico Taxation and Revenue Department rulemaking. HB326 makes these anticipated corrections to those portions of the tax code requiring the same. However, all changes made to the tax code by HB6 in 2019, including the market-based sourcing rules, will go into effect on their respective effective dates, unless specifically modified by HB326 or another law enacted by the Legislature. HB326 will make the following changes to the tax code:

  • Reporting Business Location for Gross Receipts and Compensating Tax Purposes

HB326 makes changes to how taxpayers report their business location for purposes of gross receipts tax and compensating tax as follows:

  • Sale or license of tangible personal property is reported to either (a) the location of the seller if the property is received by the purchaser at a New Mexico location of the seller, (b) the location the property is to be delivered, if not received at a seller’s New Mexico location, (c) if neither of the first two apply, then the location of the purchaser, or (d) if the location of the purchaser is unknown, then to the location where the property was shipped or transmitted. The prior version of the law which would have gone into effect on July 1, 2021 stated that such receipts were to be reported to the place of delivery to the customer.
  • Sales from leasing tangible personal property, including leasing vehicles, are reported to the location of primary use of the property as indicated on the address provided by the lessee. The prior version of the law which would have gone into effect on July 1, 2021 stated that receipts from leasing vehicles were to be reported to the place of first use.
  • Sales, leases, or licenses of franchises are to be reported at the location where the franchise is used. The prior version of the law which would have gone into effect on July 1, 2021 had no specific provision relating to franchises.
  • Receipts from the transportation of persons or property in, into or from New Mexico, are to be reported at the location where the person or property enters the vehicle.
  • Professional services are still to be reported at the location of the performer of the service or seller of the product of the service. HB326 provides a definition of professional services, as a service, other than an in-person service, that requires either an advanced degree from an accredited post-secondary educational institution or a license from the state to perform. An “in-person service” is also defined as a service physically provided in person by the service provider, where the customer or the customer’s real or tangible personal property upon which the service is performed is in the same location as the service provider at the time the service is performed.
  • All other services are to be reported at the location where the product of the service is delivered.

If passed, these location reporting changes will be effective July 1, 2021.

  • Gross Receipts Tax Credit for Compensating Tax Paid by Purchaser

Permits the Taxation and Revenue Department to credit a taxpayer who, as a result of an audit or a managed audit, owes gross receipts tax, an amount equal to the compensating tax paid by a purchaser if the taxpayer can demonstrate that the purchaser timely paid the compensating tax on the same property or services subjected to the gross receipts tax. If passed, this credit would be available effective July 1, 2021.

  • Corporate Income Tax – Apportionment of Business Income

Allows a modified apportionment formula for persons operating computer data processing facilities. If passed, this modified formula will apply to taxable years beginning July 1, 2020.

  • Local Option Gross Receipts and Compensating Taxes

Changes the minimum increment for local option gross receipts taxes that municipalities and counties may impose from one eighth of 1% to one hundredth of 1%. If passed, this change will take effect July 1, 2021.

  • Repeal of World Wide Web Sales Gross Receipts Deduction

Repeals the deduction provided by Section 7-9-57.1, which allowed taxpayers to deduct from their gross receipts any receipts derived from the sale of a service or property made through a World Wide Web site to a person with a billing address outside New Mexico. This repeal is due to the market based sourcing changes made by HB6 in 2019 in response to the United States Supreme Court’s decision in South Dakota v. Wayfair. If passed, the repeal of this deduction would be effective July 1, 2020.

  • Repeal of Gross Receipts Tax Credit for Certain Sales of Services for Resale

Repeals the tax credit provided by Section 7-9-96, which provided a tax credit for sales of services for resale where the resale of the service is not taxable. If passed, the repeal of this deduction would be effective July 1, 2020.

This bill received a do pass recommendation from the House Taxation and Revenue Committee.

Limit Property Tax Increases – HB91

HB91 would increase the valuation limit for non-owner occupied homes to 10% per year, or 20.1% every two years. The valuation increases for owner-occupied residences will remain at 3% per year, or 6.1% every two years. This bill is still in committee.

County Road Fund Donation Tax Credit – HB104 / HB276

HB104 proposes to create a credit against income tax liability for both individual and corporate taxpayers in the amount of 50% of a donation made by the taxpayer to a county road fund not to exceed $1 million. If passed, the donations could only occur between January 1, 2020 and January 1, 2025. A donation would be returned if a beneficiary county does not agree to apply the donated amount to a road or bridge specified by a donor. HB276 mirrors the concept of HB104, but offers a 50% deduction rather than a credit. HB104 is still in committee. HB276 was reported by the House Transportation and Public Works Committee with a do pass recommendation.

Lodgers Tax Exemption – HB105 / HB117

HB105 and HB117 would expand the lodgers tax to include all motel-like rentals in excess of 30 days and to rentals of homes and apartments. HB105 is still in committee. HB117 was reported by the House Taxation and Revenue Committee with a do not pass recommendation; however, it gave it a do pass recommendation on the committee substitution.

Tax Deduction For Medical Equipment – HB109 / SB39

Receipts from the sale or rental of durable medical equipment (such as walkers, wheelchairs, and oxygen tanks) are currently deductible from gross receipts for purposes of gross receipts tax. The deduction is set to expire on July 1, 2020. HB109 and duplicate SB39 propose to extend the deduction to July 1, 2030. HB109 received a do pass recommendation from the House Taxation and Revenue Committee. SB39 also received a do pass recommendation from its committee.

Custodial Memory Care Facility Gross Receipts Exemption – HB174

HB174 creates an exemption from gross receipts for receipts of health care providers for providing custodial care for people living with advanced dementia and persons attributable to the operation of residential facilities designed and used for providing custodial care for people living with advanced dementia. The bill was reported by the House Health and Human Services Committee with a do pass recommendation.

Sales Of Construction Materials To Certain 501(C)(3) Organizations – HB179

HB179 would expand the gross receipts deduction for sales to 501(c)(3) nonprofit organizations to include receipts from selling construction material or metalliferous mineral ore to a 501(c)(3) organization that is organized for the purpose of providing housing opportunities to low-income and moderate-income families. The bill was reported by the House Health and Human Services Committee with a do pass recommendation.

Technology Readiness Gross Receipts Tax Credit – HB255

HB255 would create a gross receipts tax credit that would apply only to national laboratories. If passed, national laboratories would be able to claim a credit for qualified expenditures, including salaries, wages, benefits, and employer payroll taxes, incurred in assisting businesses to license laboratory technology or participate in research and development. The credit is capped at $500,000 per national laboratory beginning on July 1, 2020, with an annual increase of $250,000 every year until July 1, 2024 when the credit reaches $1,500,000. However, national laboratories cannot claim both the Technology Readiness Gross Receipts Tax Credit and the credit allowed under the Small Business Tax Credit Act in the same taxable period. The bill received a do pass recommendation from the House Commerce and Economic Development Committee.

Increase Health Insurance Premiums Surtax – HB278

HB278 would raise the health insurance premium surtax from 1% to 3.25%, effective July 1, 2020, and create the “health care affordability fund” which would receive slightly more than half of the total revenue generated by the health insurance premium surtax, and would be used for initiatives to reduce the cost of health care coverage. HB278 was reported by the House Health and Human Services Committee with a do not pass recommendation; however, it gave it a do pass recommendation on the committee substitution.

Health Care Practitioner Deduction Changes – HB282 / SB227

HB282 and SB227 would allow businesses that are majority-owned by health care practitioners, not just individual health care practitioners, to take the deductions specified by Section 7-9-77.1 and 7-9-93. This bill, if passed, will bring more clarity to the persons permitted to claim these deductions, a topic which has heretofore been the subject of many controversies between taxpayers and the Department. HB282 was reported by the House Health and Human Services Committee with a do pass recommendation. SB227 was reported by the Senate Corporations and Transportation Committee with a do pass recommendation.

Gross Receipts Deduction For Broadband Infrastructure – SB17

SB17 proposes a deduction from gross receipts for the value of broadband telecommunications network infrastructure (for example, transmission facilities or fiber-optic cables). The purpose of the deduction is to promote the growth of broadband telecommunications services throughout the state. The Senate Corporations and Transportation Committee recommended the bill pass.

Renewable Energy Production Tax – SB18

SB18 creates the new Renewable Energy Production Tax Act to tax renewable energy production from resources including solar, wind, hydropower, geothermal or biomass. The Act would impose an excise tax at a rate of 2.5% of the taxable value of each mega-watt hour generated in New Mexico. The bill has been criticized for the potential negative impact it may have on the renewable energy industry which has been booming in New Mexico as of late, and because the tax may be largely avoided by the use of Industrial Revenue Bonds by providers. The bill has been referred to four Senate committees.

Tenancy Tax Act – SB63

SB63 would permit counties and municipalities to impose a tenancy tax of 5% or less of gross taxable rent. SB63 defines taxable lodging units more broadly than the existing Lodger’s Tax Act, e.g., by including rented rooms, houses, guest houses, mobile homes, and trailer parks. The tax would only apply after the first 30 days of rental, thereby affecting long-term renters, a feature of particular importance to the southeast part of the state due to the oil boom. The bill has been referred to three Senate Committees.

Local Liquor Excise Tax Changes – SB85

SB85 would authorize all counties to impose a local liquor excise tax if a majority of voters in the county approve the imposition of such a tax, and the bill would increase the amount of time for which any such tax may be imposed before requiring reauthorization from three years to four years. The bill has been referred to three Senate Committees.

Manufacturing Definition For Apportionment Purposes – SB256

SB256 would amend the definition of “Manufacturing” found in the Uniform Division of Income for Tax Purposes Act (UDITPA) to exclude electric power generation for which both location approval and a certificate of convenience and necessity are required prior to commencing construction or operation of the facility pursuant to the Public Utility Act. This change clarifies that those taxpayers involved in electric power generation for which both location approval and a certificate of convenience and necessity are required prior to commencing construction or operation of the facility pursuant to the Public Utility Act from using the modified apportionment formula provided to manufacturers under the UDITPA. The bill has been referred to three Senate Committees.

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