SB 375 — CREATE TENANCY TAX

The following portions of the proceeds from the occupancy tax shall be used only for advertising, publicizing and promoting tourist-related facilities and attractions [facilities][facilities ] and tourist-related events:

(1) if the municipality or county imposes an h occupancy tax of no more than two percent, not less than one- g o fourth of the proceeds shall be used for those purposes;

t hr g e i k (2) if the occupancy tax imposed is more than eh er 17i s two percent and the municipality is not located in a class A eh e, nt, d 18 county or the county is not a class A county, not less than =e =u g e b l ]e 19e h one-half of the proceeds from the first three percent of the an ld rd i 20= = o h occupancy tax and not less than one-fourth of the proceeds from tl e] b ,d i a tº e the occupancy tax in excess of three percent shall be used for mr mi 21= r t e w d those purposes;

and rm e 22 c e r c 23 (3) if the occupancy tax imposed is more than e a n bo 24d twom percent: and the municipality is located in a class A county u [ or the county is a class A county, not less than one-half of .214898.4 - 4 - SFl/SCORC/SB 375 the proceeds from the occupancy tax shall be used for those purposes.

b e d s º o t n = .214898.4 s k m e - 4 - e a n e d r e l u [ A d (3) if the occupancy tax imposed is more than two percent and the municipality is located in a class A county or the county is a class A county, not less than one-half of the proceeds from the occupancy tax shall be used for those purposes.

The proceeds from the occupancy tax in excess of the amount required to be used for advertising, publicizing and promoting tourist-related facilities and attractions [facilities][facilities ] and tourist-related events may be used for any purpose authorized in Section 3-38-21 NMSA 1978.

Notwithstanding the provisions of Paragraph (2) of Subsection D of this section, any use by a municipality or eh e 17 county of occupancy tax proceeds on January 1, 1996 may eg eo n d 18 continue to be so used after July 1, 1996 in accordance with =t =hr lg ]e 19i k the provisions of this section and Section 3-38-21 NMSA 1978 as ah l r i 20s they were in effect prior to July 1, 1996;

provided, any change th e, at, t in the use of those occupancy tax proceeds after July 1, 1996 me mu 21g e db l is subject to the limitations of that paragraph.

re e 22h cn ed rd ci 23= = o h H.

Notwithstanding the provisions of Paragraph (2) el a] n b 24,d i a º e of Subsection D of this section, the payment of principal and ur [i = r t e w d interest on outstanding bonds issued prior to January 1, 1996 .214898.4m -a 5n -o SFl/SCORC/SBd 375m pursuant: to Section 3-38-23 or 3-38-24 NMSA 1978 shall be made in accordance with the retirement schedules of the bonds established at the time of issuance.

b e d s º o t n = .214898.4 s k m e - 5 - e a n e d r e l u [ A d SFl/SCORC/SB 375 pursuant to Section 3-38-23 or 3-38-24 NMSA 1978 shall be made in accordance with the retirement schedules of the bonds established at the time of issuance.

A municipality in a class B county having a net taxable value, as that term is defined in the Property Tax Code, of more than four billion five hundred million dollars ($4,500,000,000) but less than five billion five hundred million dollars ($5,500,000,000) may impose by ordinance a eh e 17 tenancy tax for revenues on lodging within the municipality, eu e» nr d 18 and the board of county commissioners of a class B county =t =h lg ]e 19 having a net taxable value, as that term is defined in the a l i h r i 20s Property Tax Code, of more than four billion five hundred th , e ah t million dollars ($4,500,000,000) but less than five billion mt mu 21g e db l five hundred million dollars ($5,500,000,000) may impose by re e 22, cgh en rd cd 23i = = o h ordinance a tenancy tax for revenues on lodging within that el a] n b 24,d i a º r part of the county outside of the incorporated limits of a ue [r = t e w d municipality.

.214898.4m -a 6n -o SFl/SCORC/SBd 375m B.:

b r e t º o t n = .214898.4 s k m e - 6 - e a n e d r e l u [ A d B.

if the rent paid by a vendee is less than HLLCº two dollars ($2.00) twenty dollars ($20.00)»HLLC a day;

HTRCº B.

forif the firstrent thirtypaid daysby thea vendee rentsis theset taxableby premises;law to benefit a low-income person;»HTRC HTRCº B.

eC.»HTRC efor 17the C.first thirty days the vendee rents the taxable premises;

toHTRCºC. lodging accommodations at institutions of the e e n d 18 federal government, the state or any political subdivision = = l ] 19 thereof;

aD.»HTRC lto rlodging iaccommodations 20at D.h institutions of the federal government, the state or any g o political subdivision thereof;

to lodging accommodations at religious, t ehr ag t charitable, educational or philanthropic institutions, m m 21 e di includingk accommodationsHTRCºD. at summer camps operated by such r e 22 c e r c 23 institutions;

E.»HTRC to lodging accommodations at h r i s religious, charitable, educational or philanthropic h , t, institutions, including accommodations at summer camps operated e au ng e b 24l E.e e h by such institutions;

ton clinics,d hospitalsd ori other= medical= uo [h facilities;HTRCº E.

F.»HTRC to clinics, hospitals or .214898.4other -l 7] -b SFl/SCORC/SB,d 375i F.a º e medical facilities;

toor privatelyr ownedi and= operatedr convalescentt homese orw homesd form thea aged,n infirm,o indigentHTRCºF. or chronically ill." SECTION 5.

G.»HTRC to privately owned and operated d m :

b e d s º o t n = .214898.4 s k m e - 7 - e a n e d r e l u [ A d SFl/SCORC/SB 375 convalescent homes or homes for the aged, infirm, indigent or chronically ill." SECTION 5.

The [tax[tax] ] taxes shall be collected from vendees in accordance with the ordinance imposing the tax and shall be charged separately from the rent fixed by the vendor for the lodgings." SECTION 6.

e e 17 "3-38-17.1.

AUDIT OF VENDORS.--The governing body of any eh e n d 18 municipality or county collecting over two hundred fifty =g =o l ] 19 thousand dollars ($250,000) in occupancy tax or tenancy tax at lhr rg e i 20k proceeds shall select for annual random audits one or more th er ai ts vendors to verify the amount of gross rent subject to the mh m, 21t, e d r e 22 occupancy tax or tenancy tax and to ensure that the full amount ce u g e rb cl 23e e h of occupancy tax or tenancy tax on that rent is collected.

The en ad nd bi 24= = o h governing body of any municipality or county collecting less ul [] b ,d i a º e than two hundred fifty thousand dollars ($250,000) in receipts, .214898.4r -i 8= -r SFl/SCORC/SBt 375e w d m a n o per annum, of occupancy tax or tenancy tax proceeds shall conductd randomm audits: to verify full payment of occupancy tax or tenancy tax receipts.

b e d s º o t n = .214898.4 s k m e - 8 - e a n e d r e l u [ A d conduct random audits to verify full payment of occupancy tax or tenancy tax receipts.

e e 17 B.

The governing body of any municipality or county e e n d 18 imposing and collecting an occupancy tax or tenancy tax shall = = l ] 19 report to the local government division of the department of a l r i 20 finance and administration on a quarterly basis any expenditure th e a t of occupancy tax or tenancy tax funds pursuant to Sections mg mo 21 e d 3-38-15, 3-38-15.1 and 3-38-21 NMSA 1978 and shall furnish a rt ehr 22g c e ri ck 23 copy of this report to the advisory board created pursuant to eh ar ni bs 24 Section 3-38-22 NMSA 1978 when it is filed with the division." uh [, t, SECTION 8.

Section 3-38-17.3 NMSA 1978 (being Laws 1996, .214898.4e -u 9g -e SFl/SCORC/SBb 375l e e h Chapter 58, Section 6) is amended to read:

n d d i = = o h "3-38-17.3.

ENFORCEMENT.-- l ] b ,d i a º e A.

An action to enforce the provisions of the r i = r t e w d Lodgers' Tax Act may be brought by:

(1)m thea attorneyn generalo ord them district: attorney in the county of jurisdiction;

b e d s º o t n = .214898.4 s k m e - 9 - e a n e d r e l u [ A d SFl/SCORC/SB 375 (1) the attorney general or the district attorney in the county of jurisdiction;

The court shall award costs and reasonable [attorneys'][attorneys' ] attorney fees to the prevailing party in a court action to enforce the provisions of the Lodgers' Tax Act." SECTION 9.

e e 17 "3-38-18.

COLLECTION OF DELINQUENCIES.-- e e n d 18 A.

The governing body of [the ] a municipality or = = l ] 19 county shall, by ordinance, provide that a vendor is liable for a l r i 20 the payment of the proceeds of any occupancy tax or tenancy tax th e a t that the vendor failed to remit to the municipality or county, mg mo 21 e d due to [his][his ] the vendor's failure to collect the tax, or rt ehr 22g c e ri ck 23 otherwise, and shall provide for a civil penalty for any such eh ar ni bs 24 failure in an amount equal to the greater of ten percent of the uh [, t, amount that was not duly remitted to the municipality or county .214898.4e -u 10g -e SFl/SCORC/SBb 375l e e h or one hundred dollars ($100).

n d d i = = o h B.

[The[The] ] A municipality or county may bring an l ] b ,d i a º e action in law or equity in the district court for the collectionr ofi any= amountsr due,t includinge withoutw limitationd penaltiesm thereon, interest on the unpaid principal at a raten [of]o notcollection exceeding one percent a month, the costs of collectionany andamounts reasonabledue, [attorneys'including ]without attorneylimitation feesd incurredm in: connection therewith." SECTION 10.

b e d s º o t n = .214898.4 s k m e - 10 - e a n e d r e l u [ A d penalties thereon, interest on the unpaid principal at a rate [of] not exceeding one percent a month, the costs of collection and reasonable [attorneys' ] attorney fees incurred in connection therewith." SECTION 10.

The occupancy tax and tenancy tax imposed by a municipality or county [constitutes ] constitute a lien in favor of that municipality or county upon the personal and real property of the vendor providing lodgings in that municipality e e 17 or county.

The lien may be enforced as provided in Sections e e n d 18 3-36-1 through 3-36-7 NMSA 1978.

Priority of the lien shall be = = l ] 19 determined from the date of filing.

a l r i 20 B.

Under process or order of court, no person shall t e a t sell the property of any vendor without first ascertaining from m m 21 e d the clerk or treasurer of the municipality or county in which r e 22 c e r c 23 the vendor is located the amount of any occupancy tax or eh a n b 24 tenancy tax due the municipality or county.

Any occupancy tax ug [o or tenancy tax due the municipality or county shall be paid .214898.4t -hr 11g -e SFl/SCORC/SBi 375k from the proceeds of the sale before payment is made to the h r i s judgment creditor or any other person with a claim on the sale h , t, proceeds.

e u g e b l C.

The clerk or treasurer of [the ] a municipality e e h n d d i = = o h or county shall furnish to any person applying for such a l ] b ,d i a º e certificate a certificate showing the amount of all liens in r i = r t e w d the records of the municipality or county against any vendor pursuantm toa Chaptern 3,o Articled 38m NMSA: 1978." SECTION 11.

b e d s º o t n = .214898.4 s k m e - 11 - e a n e d r e l u [ A d SFl/SCORC/SB 375 pursuant to Chapter 3, Article 38 NMSA 1978." SECTION 11.

PENALTIES.--The governing body of [the ] a municipality or county shall, by ordinance, provide for penalties by creating a misdemeanor and imposing a fine of not more than five hundred dollars ($500) or imprisonment for not more than ninety days or both for a violation by any person of the provisions of the occupancy tax ordinance or the tenancy e e 17 tax ordinance for a failure to pay the tax, to remit the e e n d 18 proceeds thereof to the municipality or county or to account = = l ] 19 properly for any lodging and the tax proceeds pertaining a l r i 20 thereto." t e a t SECTION 12.

Section 3-38-20 NMSA 1978 (being Laws 1969, m m 21 e d r e 22 Chapter 199, Section 8, as amended) is amended to read:

c e r c 23 "3-38-20.

ORDINANCE REQUIREMENTS.--The ordinance imposing eh a n b 24 an occupancy tax or a tenancy tax or any ordinance amendatory ug [o thereof or supplemental thereto, except as limited by or .214898.4t -hr 12g -e SFl/SCORC/SBi 375k otherwise provided in the Lodgers' Tax Act, shall:

h r i s A.

provide a procedure for licensing each vendor h , t, and for refusing a vendor a license after an opportunity has e u g e b l e e h been given to the vendor of a public hearing thereon by the n d d i = = o h governing body of the municipality or county, as the case may l ] b ,d i a º e be;

r i = r t e w d m a n o B.

state the rate or other amount of the occupancy taxd orm tenancy: tax ;

b e d s º o t n = .214898.4 s k m e - 12 - e a n e d r e l u [ A d tax or tenancy tax;

applicable civil and criminal e e 17 penalties;

and a procedure of liens, distraint and sales to e e n d 18 satisfy such liens;

and = = l ] 19 C.

provide other rights, privileges, powers, a l r i 20 immunities and other details relating to any such vendor t e a t licenses, the collection of the occupancy tax or tenancy tax m m 21 e d and the remittance of the proceeds thereof to the municipality r e 22 c e r c 23 or county." e a n b 24 SECTION 13.

Section 3-38-21.1 NMSA 1978 (being Laws 1996, u [ Chapter 58, Section 8) is amended to read:

.214898.4 - 13 - SFl/SCORC/SB 375 "3-38-21.1.

CONTRACTING FOR SERVICES.-- h A.

The governing body of a municipality or county g o may contract for the management of programs and activities t hr g e i k funded with revenue from the occupancy tax [authorized in h r i s Section 3-38-15 NMSA 1978] or the tenancy tax.

The governing h , t, body shall require periodic reports to the governing body, at e u g e b l least quarterly, listing the expenditures for those periods.

e e h n d d i = = o h Within ten days of receiving the reports, the governing body l ] b ,d i a º e shall furnish copies of them to the advisory board.

Funds r i = r t e w d provided to the contracting person or governmental agency shall bem maintained in a separaten accounto establishedd form that: purpose and shall not be commingled with any other money.

b e d s º o t n = .214898.4 s k m e - 13 - e a n e d r e l u [ A d SFl/SCORC/SB 375 be maintained in a separate account established for that purpose and shall not be commingled with any other money.

A person or governmental agency with whom a municipality contracts under this section to conduct an activity authorized by Section 3-38-21 NMSA 1978 shall maintain complete and accurate financial records of each expenditure of e e 17 the tax revenue made and upon request of the governing body of e e n d 18 the municipality or county shall make such records available = = l ] 19 for inspection.

a l r i 20 C.

The occupancy tax or tenancy tax revenue spent t e a t for a purpose authorized by the Lodgers' Tax Act may be spent m m 21 e d for day-to-day operations, supplies, salaries, office rental, r e 22 c e r c 23 travel expenses and other administrative costs only if those e a n b 24 administrative costs are incurred directly for that purpose.

u [ D.

A person or governmental agency with whom a .214898.4 - 14 - SFl/SCORC/SB 375 local governmental body contracts under this section may subcontract with the approval of the governing body of the municipality or county.

A subcontractor shall be subject to the same terms and conditions as the contractor regarding separate financial accounts, periodic reports and inspection of records." SECTION 14.

Section 3-38-22 NMSA 1978 (being Laws 1977, Chapter 294, Section 2, as amended) is amended to read:

"3-38-22.

ADVISORY BOARDS CREATED--DUTIES.-- A.

The mayor of every municipality that imposes an occupancy tax or tenancy tax pursuant to the Lodgers' Tax Act shall appoint a five-member advisory board that consists of two members who are owners or operators of lodgings subject to the occupancy tax or tenancy tax within the municipality, two members who are owners or operators of industries located within the municipality that primarily provide services or e e 17 products to tourists and one member who is a resident of the e e n d 18 municipality and represents the general public.

= = l ] 19 B.

The [chairman ] chair of every board of county a l r i 20 [commission] commissioners that imposes an occupancy tax or t e a t tenancy tax pursuant to the Lodgers' Tax Act shall appoint a m m 21 e d five-member advisory board that consists of two members who are r e 22 c e r c 23 owners or operators of lodgings subject to the occupancy tax or e a n b 24 tenancy tax within the unincorporated area of the county, two u [ members who are owners or operators of industries located .214898.4 - 15 - SFl/SCORC/SB 375 within the unincorporated area of the county that primarily provide services or products to tourists and one member who is a resident of the unincorporated area of the county who represents the general public.

MembersThe ofoccupancy tax or tenancy tax revenue spent for a purpose authorized by the advisoryLodgers' boardsTax createdAct undermay Subsectionsbe Aspent for day-to-day operations, supplies, salaries, office rental, travel expenses and Bother ofadministrative thiscosts sectiononly shallif servethose atadministrative thecosts pleasureare ofincurred thedirectly respectivefor appointingthat authorities.purpose.

The boards shall advise the respective governing bodies on the expenditure of funds authorized by Section 3-38-15 or 3-38-15.1 NMSA 1978 for advertising, publicizing and promoting [tourist attractions and] tourist-related facilities and attractions in the respective counties and municipalities.

TheA advisoryperson boardor shallgovernmental submitagency towith thewhom mayora andlocal councilgovernmental orbody countycontracts commissionunder recommendationsthis forsection themay expendituresh ofsubcontract fundswith authorizedthe pursuantapproval toof the Lodgers'governing Taxbody Actof for advertising, publicizing and promoting tourist-related e e 17 [attractions] facilities and attractions and tourist-related e e n d 18 events in the respectiveg countieso andmunicipality municipalities."or =county. = l ] 19 SECTION 15.

EFFECTIVEA DATE.--Thesubcontractor effectiveshall datebe ofsubject to t hr g e i k the asame lterms and conditions as the contractor regarding h r i 20s provisionsseparate financial accounts, periodic reports and inspection of thish act, ist, Julyrecords." 1,e 2019.u g e b l e e h SECTION 14.

tSection e3-38-22 aNMSA t1978 -(being 16Laws -1977, mn md 21 e d ri e= 22= co eh rChapter c294, 23Section e2, aas namended) bis 24amended uto [read: .214898.4

l ] b ,d i a º e "3-38-22.

ADVISORY BOARDS CREATED--DUTIES.-- r i = r t e w d m a n o A.

The mayor of every municipality that imposes an d m :

b e d s º o t n = .214898.4 s k m e - 14 - e a n e d r e l u [ A d occupancy tax or tenancy tax pursuant to the Lodgers' Tax Act shall appoint a five-member advisory board that consists of two members who are owners or operators of lodgings subject to the occupancy tax or tenancy tax within the municipality, two members who are owners or operators of industries located within the municipality that primarily provide services or products to tourists and one member who is a resident of the municipality and represents the general public.

B.

The [chairman] chair of every board of county [commission ] commissioners that imposes an occupancy tax or tenancy tax pursuant to the Lodgers' Tax Act shall appoint a five-member advisory board that consists of two members who are owners or operators of lodgings subject to the occupancy tax or tenancy tax within the unincorporated area of the county, two members who are owners or operators of industries located within the unincorporated area of the county that primarily provide services or products to tourists and one member who is a resident of the unincorporated area of the county who represents the general public.

h C.

Members of the advisory boards created under g o Subsections A and B of this section shall serve at the pleasure t hr g e i k of the respective appointing authorities.

The boards shall h r i s advise the respective governing bodies on the expenditure of h , t, funds authorized by Section 3-38-15 or 3-38-15.1 NMSA 1978 for e u g e b l advertising, publicizing and promoting [tourist attractions e e h n d d i = = o h and] tourist-related facilities and attractions in the l ] b ,d i a º e respective counties and municipalities.

r i = r t e w d D.

The advisory board shall submit to the mayor and m a n o d m :

b e d s º o t n = .214898.4 s k m e - 15 - e a n e d r e l u [ A d SFl/SCORC/SB 375 council or county commission recommendations for the expenditures of funds authorized pursuant to the Lodgers' Tax Act for advertising, publicizing and promoting tourist-related [attractions ] facilities and attractions and tourist-related events in the respective counties and municipalities." SECTION 15.

EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2019.

- 16 - » g o » r h t i k l i g t h s , e h t l i w l b l e e , gh n d l h = = b , a l º d i a r e r = , a t e d m a n o d m :

b r e t º o t n = .214898.4 s k m e e a n e d r e l u [ A d