N.M. Stat. § 5-10-17 — NM Code / Chapter 5 / Article 10 / Section 5-10-17
§ 5-10-17. Gross receipts tax and compensating tax revenue as public support for certain projects
Status: in_force

A. A qualifying entity that meets the following requirements may receive public support for the qualifying entity's economic development project from funds in the Local Economic Development Act fund pursuant to Subsection B of Section 5-10-14 NMSA 1978 in an amount equal to fifty percent of the net receipts attributable to the state gross receipts tax and state compensating tax imposed on the expenses related to the construction of the qualifying entity's project, as determined by the department, related to the economic development project and the amount dedicated pursuant to Subsection B of this section; provided that the public support shall be provided for a period of no more than ten years, beginning on the date the applicable project participation agreement with the qualifying entity is executed:

(1) the qualifying entity signs a project participation agreement with the governing body of each local government that has jurisdiction of the area in which the qualifying entity's economic development project is located and the local government has passed an ordinance dedicating local government gross receipts tax revenue pursuant to Subsection B of this section;

(2) the qualifying entity signs a project participation agreement with the department; provided that the department shall not sign the agreement unless the applicable local governments have signed a project participation agreement pursuant to Paragraph (1) of this subsection; and provided further that the project participation agreement shall provide that if, at the end of the ten-year period, the economic development project fails to meet the three-hundred-fifty-million-dollar ($350,000,000) requirement pursuant to Paragraph (3) of this subsection, the department shall seek to recover some or all of the public support provided to the qualifying entity and shall transfer any amount recovered to the general fund and to the contributing local government based on each entity's pro rata share of public support to the economic development project;

(3) the economic development project has a reasonable expectation to incur, within ten years of the date the project participation agreement with the local government and the department is executed, at least three hundred fifty million dollars ($350,000,000) in expenses related to the construction and infrastructure of the project in the state;

(4) the qualifying entity and the economic development project meet all other requirements to receive public support pursuant to the Local Economic Development Act; and

(5) prior to the end of each month, the qualifying entity submits the appropriate documents, including tax documents of the qualifying entity and its contractors submitted to the taxation and revenue department, to the department and to the local governments with which the qualifying entity signed a project participation agreement, on forms and in a manner determined by the department, of the taxable expenses related to the construction of the economic development project for the previous month.

B. A local government may dedicate, by ordinance, fifty percent of the tax revenue attributable to the gross receipts and compensating taxes imposed by the local government on the qualifying entity's receipts for expenses related to the construction of the economic development project to the Local Economic Development Act fund for the purposes provided in Subsection B of Section 5-10-14 NMSA 1978 .

C. Within thirty 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 shall identify the qualifying entity intended to receive public support pursuant to this section, the estimated expenses related to the construction of the qualifying entity's project as determined by the department, the location of the project, the amount of public support pledged by the department and each local government for the project pursuant to this section and the amount of any other public support pledged for the project pursuant to the Local Economic Development Act.

D. As soon as practicable, the taxation and revenue department shall implement a rate type to identify gross receipts and compensating taxes reported and paid to the taxation and revenue department for expenses related to the construction of an economic development project. Once implemented, all such gross receipts and compensating taxes shall be reported and paid with that rate type.

E. If the taxation and revenue department has not implemented the rate type provided in Subsection D of this section, 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:

(1) review the documents submitted by a qualifying entity pursuant to Paragraph (5) of Subsection A of this section;

(2) estimate the amount equal to fifty percent of the tax revenue attributable to the gross receipts tax and compensating tax imposed on the taxable expenses related to the construction of the economic development project appropriate to:

(a) the local government's gross receipts and compensating taxes if a local government; and

(b) the state gross receipts and compensating taxes if the department;

(3) if a local government, on the first business day of each month, submit the estimated amount and the supporting documents to the department; and

(4) if the department, on or before the twenty-fifth day of December, March, June and September, provide the estimates and any supporting documentation to the taxation and revenue department, on forms and in a manner determined by that department.

F. The taxation and revenue department shall review the amounts estimated pursuant to Subsection E of this section 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 pursuant to Section 5 of this 2021 act.