SB 129 — TAX PROTESTS & ADMIN HEARINGS OFFICE

b(2) ethe dmailing sof ºthe oother tperemptory nnotice =or .214260.7demand; s k m e - 5 - e a n e d r e l u [ A d SJC/SCORC/SB 129 filed] HTRCºA protest by a taxpayer shall be filed ;

and»HTRC(3) HTRCºthe (2)»HTRCdate withinof ninetythe daysapplication [of]to after:the taxpayer of the applicable provision of the Tax Administration Act;

HTRCº(a)or (1)»HTRC(4) the date of thedenial mailingof toa [orclaim servicepursuant upon]to theSection taxpayer7-1-26 byNMSA the1978 departmentor of the noticelast ofdate assessmentupon [orwhich ]the anddepartment demandwas forrequired paymentto astake providedaction inon Subsectionthe Aclaim orbut Dfailed ofto Sectiontake 7-1-17action. NMSA 1978;

HTRCº(b)F. (2)»HTRC the mailing of the other peremptory notice or demand [the date of mailing or filing a return];

HTRCº(c)If (3)»HTRCa thetaxpayer datefails of the application to thetimely taxpayerprotest ofan theassessment applicable provision of thetax, Taxpenalty Administrationor Act;interest:

or(1) HTRCº(d) (4)»HTRC the dateundisputed ofamount denial of atax claimassessed pursuantand tonot Sectionprotested 7-1-26becomes NMSAfinal; 1978 or the last date upon which the department was required to take action on the claim but failed to take action.

h(2) HTRCºthe E.taxpayer is deemed to have waived the right to protest the assessment, unless the taxpayer pays the tax and claims a refund of the tax pursuant to Section 7-1-26 NMSA 1978;

F.»HTRCand If(3) athe taxpayersecretary failsmay proceed to timelyenforce gcollection oof tthe hrtax protestif [to a notice of] an assessment [is not filed within the gtaxpayer eis idelinquent kas timedefined required]by ofSection tax,7-1-16 penaltyNMSA or1978. interest:

hG. r i s (1) the undisputed amount of tax [determined h , t, e u g to be due] assessed and not protested becomes final;

eThe bfact lthat e e h (2) the taxpayerdepartment isdid deemednot tomail have waived [and n d d i = = o h abandoned] the rightassessment toor [questionother theperemptory amountnotice ofor taxdemand determinedby lcertified ]or bregistered ,dmail ior aotherwise ºdemand eand toreceive beacknowledgment due]of protestreceipt theby assessment, unless the taxpayer paysshall thenot rbe ideemed =SJC/SCORC/SB r129 tPage e5 wto ddemonstrate m a n o tax and claims a refund of the taxtaxpayer's pursuantinability to Sectionprotest dwithin mthe :required time.

bH. e d s º o t n = .214260.7 s k m e - 6 - e a n e d r e l u [ A d SJC/SCORC/SB 129 7-1-26 NMSA 1978;

andA (3)proceeding theother secretarythan mayone proceed to enforce collection of [anyan ]amount theassessed as tax ifand theto taxpayerprotect isthe delinquentinterest [withinof the meaningstate ofby ]injunction, as definedprovided by SectionSections 7-1-167-1-31, 7-1-33, 7-1-34, 7-1-40, 7-1-53, 7-1-56 and 7-1-58 NMSA 1978.1978, is not stayed by timely filing of a protest in accordance with this section.

HTRCºF.I.

G.»HTRCNothing Thein factthis thatsection theshall departmentbe didconstrued notto mailauthorize thea assessmentcriminal orproceeding other peremptory notice or demandto byauthorize certifiedan oradministrative registeredprotest mail or otherwise demand and receive acknowledgment of receipt by the taxpayerissuance shallof nota besubpoena deemedor tosummons." demonstrateSECTION the4. taxpayer's inability to protest within the required time.

HTRCºSection G.7-1-26 NMSA 1978 (being Laws 1965, Chapter 248, Section 28, as amended) is amended to read:

H.»HTRC"7-1-26. [No proceedings] A proceeding other than [those] one to enforce collection of an amount assessed as tax and to protect the interest of the state by injunction, as provided [in ] by Sections 7-1-31, 7-1-33, 7-1-34, 7-1-40, 7-1-53, 7-1-56 and 7-1-58 NMSA 1978, [are ] is not stayed by timely filing of a protest [pursuant to the provisions of ] in h accordance with this section.

gDISPUTING oLIABILITIES--CLAIM HTRCºH.FOR CREDIT, REBATE OR REFUND.-- A.

I.»HTRCA Nothingperson who believes that an amount of tax has been paid by or withheld from that person in thisexcess sectionof shallthat befor twhich hrthe gperson ewas iliable, kwho construedhas tobeen authorizedenied a criminalcredit proceedingor rebate claimed or who claims a prior right to authorizeproperty anin hthe rpossession iof sthe administrativedepartment protestpursuant to a levy made under authority of Sections 7-1-31 through 7-1-34 NMSA 1978 may claim a refund by directing to the issuancesecretary, within the time limitations provided by Subsections F and G of this section, a subpoenawritten orclaim hfor ,refund t,that, summons."except eas uprovided gSJC/SCORC/SB e129 bPage l6 ein eSubsection hK SECTIONof 4.this section, includes:

Section 7-1-26 NMSA 1978 (being Laws 1965, n d d i = = o h Chapter 248, Section 28, as amended) is amended to read:

l ] b ,d i a º e "7-1-26.

DISPUTING LIABILITIES--CLAIM FOR CREDIT, REBATE r i = r t e w d OR REFUND.-- m a n o d m :

b e d s º o t n = .214260.7 s k m e - 7 - e a n e d r e l u [ A d SJC/SCORC/SB 129 A.

A person who believes that an amount of tax has been paid by or withheld from that person in excess of that for which the person was liable, who has been denied [any ] a credit or rebate claimed or who claims a prior right to property in the possession of the department pursuant to a levy made under authority of Sections 7-1-31 through 7-1-34 NMSA 1978 may claim a refund by directing to the secretary, within the time [limited by the provisions of ] limitations provided by Subsections F and G of this section, a written claim for refund [At the time the written claim is submitted ] that, except as provided in Subsection K of this section, [a refund claim shall include] includes:

(2) the type of tax for which a refund is being claimed, the credit or rebate denied or the property h levied upon;

g o (3) the sum of money or other property being t hr g e i k claimed;

h r i s (4) with respect to a refund, the period for h , t, which overpayment was made;

e u g e b l e e h (5) a brief statement of the facts and the law n d d i = = o h on which the claim is based, which may be referred to as the l ] b ,d i a º e "basis for the refund", which [shall ] may include documentation r i = r t e w d that substantiates the written claim and supports the mtaxpayer's abasis nfor othe drefund; m :

band e(6) dif sapplicable, º o t n = .214260.7 s k m e - 8 - e a ncopy eof dan ramended ereturn lfor ueach [tax Aperiod dfor SJC/SCORC/SBwhich 129the taxpayer'srefund basisis forclaimed. the refund;

and (6) if applicable , a copy of an amended return for each tax period for which the refund is claimed.

A claim for refund that meets the requirements of Subsection A of this section [shall be ] and that is filed within the time limitations provided by Subsections F and G of this section is deemed to be properly before the department for consideration, regardless of whether the department requests additional documentation after receipt of the claim for refund.

[provided that the claim for refund is filed within the time limitations provided in Subsections F and G of this section.] C.

If the department requests additional relevant SJC/SCORC/SB 129 Page 7 documentation from a taxpayer who has submitted a claim for refund, the claim for refund [will ] shall not be considered [completeincomplete untilprovided the taxpayer providessubmits sufficient information for the requesteddepartment documentation.to make a determination.

TheD. provisions of Paragraph (2) of Subsection D of this section and of Section 7-1-68 NMSA 1978 do not apply h until a refund claim is complete] incomplete HTRCºas long as g o the»HTRC HTRCºprovided»HTRC taxpayer HTRCºprovides»HTRC t hr g e i k HTRCºsubmits»HTRC sufficient information for the department to h r i s make a determination.

hThe ,secretary t,or D.the secretary's delegate may allow the claim in whole or in part or may deny the claim.

TheIf secretarythe: or the secretary's delegate may e u g e b l e e h allow the claim in whole or in part or may deny the claim.

If(1) nclaim dis ddenied iin =whole =or oin hpart the:in writing, the person shall not refile the denied claim, but the person, within ninety days after either the mailing or delivery of the denial of all or any part of the claim, may elect to pursue only one of the remedies provided in Subsection E of this section;

land ](2) bdepartment ,dhas ineither agranted ºnor edenied (1)any claimportion isof denieda incomplete wholeclaim orfor inrefund partwithin inone rhundred ieighty =days rafter tthe eclaim wwas dmailed writing,or [nootherwise ]delivered to the department, the person shallmay notelect refileto treat the claim as denied claim,and melect ato npursue oonly done mof :the remedies provided in Subsection E of this section.

b e d s º o t n = .214260.7 s k m e - 9 - e a n e d r e l u [ A d SJC/SCORC/SB 129 [may be refiled with respect to that which was denied ] but the person, within ninety days after either the mailing or delivery of the denial of all or any part of the claim, may elect to pursue only one [but not more than one] of the remedies provided in Subsection E of this section;

and (2) department has neither granted nor denied any portion of a complete claim for refund within one hundred eighty days [of the date ] after the claim was mailed or otherwise delivered to the department, the person may elect to treat the claim as denied and elect to pursue only one [but not more than one] of the remedies provided in Subsection [D] E of this section.

A person may elect to pursue [no more than ] only one of the remedies provided in [Paragraphs (1) and (2) of] this subsection.

A person who timely pursues more than one remedy [shall be ] is deemed to have elected the firstfirst. [remedy h invoked].

g o (1) direct to the secretary, pursuant to the t hr g e i k provisions of Section 7-1-24 NMSA 1978, a written protest thatSJC/SCORC/SB h129 rPage i8 sthat [shall set ] sets forth:

h , t, (a) the circumstances of:

1) an alleged e u g e b l e e h overpayment;

or 4) a n d d i = = o h denial of a prior right to property levied upon by the l ] b ,d i a º e department;

r(b) ian =allegation rthat, tbecause eof wthat doverpayment (b)or andenial, allegationthe that,state becauseis ofindebted thatto mthe taxpayer for a nspecified oamount, dincluding many :allowed interest, or for the property;

b(c) e d s º o t n = .214260.7 s k m e - 10 - e a ndemand efor d r e l u [ A d SJC/SCORC/SB 129 overpayment or denial, the staterefund is indebted to the taxpayer forof athat specifiedamount amount, including any allowed interest, or forthat the property;

(c)and [demanding(d) ] a demandrecitation forof the refundfacts toof the taxpayerclaim offor thatrefund; amount or that property;

and (d) [reciting ] a recitation of the facts of the claim for refund;

The plaintiff or the secretary may appeal from any final decision or order of the district court h to the court of appeals.

g o F.

Except as otherwise provided in Subsection G of tSJC/SCORC/SB hr129 gPage e9 i k this section, [no ] a credit or refund of any amount may be h r i s allowed or made to [any ] a personperson: [unless as the result of a h , t, claim made by that person as provided in this section]:

e u g e b l (1) only within three years [of] after the end e e h n d d i = = o h of the calendar year in which:

l ] b ,d i a º e (a) the payment was originally due or r i = r t e w d the overpayment resulted from an assessment by the department mas aprovided nin oSection d7-1-17 mNMSA :1978, whichever is later;

b e d s º o t n = .214260.7 s k m e - 11 - e a n e d r e l u [ A d SJC/SCORC/SB 129 [pursuant to ] as provided in Section 7-1-17 NMSA 1978, whichever is later;

(c) property was levied upon [pursuant to the provisions of] as provided in the Tax Administration Act;

1) an internal revenue service audit adjustment or a federal refund paid due to an adjustment of an audit by h the internal revenue service or an amended federal return;

or g o 2) [making a change ] the amendment to a federal return for t hr g e i k which federal approval is required by the Internal Revenue h r i s Code;

h , t, (2) [when an amount ] in the case of a denial e u g e b l e e h of a claim for creditSJC/SCORC/SB under129 [thePage provisions10 of]credit under the Investment n d d i = = o h Credit Act, Laboratory Partnership with Small Business Tax l ] b ,d i a º e Credit Act or Technology Jobs and Research and Development Tax r i = r t e w d Credit Act or for the rural job tax credit [pursuantprovided toby ]Section m7-2E-1.1 aNMSA n1978 oor dsimilar mcredit, :only within one year after the date of the denial;

b(3) ein dthe scase ºof oa ttaxpayer nunder =audit .214260.7by sthe kdepartment mwho ehas -signed 12a -waiver eof athe nlimitation eon dassessments ron eor lafter uJuly [1, A1993 dpursuant SJC/SCORC/SBto 129Subsection providedF byof Section 7-2E-1.17-1-18 NMSA 19781978, oronly similarfor credit,a [hasrefund beenof denied, the taxpayersame maytax claimpaid afor refundthe ofsame period for which the creditwaiver nowas latergiven, than]and only withinuntil a date one year after the later of the date of the denial;mailing of an assessment issued pursuant to the audit, the date of the mailing of final audit findings to the taxpayer or the date a proceeding is begun in court by the department with respect to the same tax and the same period;

(3)(4) [when ] in the case of a taxpayerpayment under audit by the department who has signed a waiver of thean limitationamount on assessments on or after July 1, 1993 pursuant to Subsection F of Sectiontax 7-1-18not NMSAmade 1978,within [thethree taxpayeryears may file a claim] only for a refund of the sameend taxof paid for the samecalendar periodyear forin which the waiveroriginal wasdue given, and only until a date oneof year after the latertax ofor the date of the mailingassessment of anthe assessmentdepartment issuedoccurred, pursuantonly tofor thea audit,claim thefor daterefund of thethat mailingamount of finaltax auditand findingsonly towithin theone taxpayeryear orof the date aon proceedingwhich is begun in court by the department with respect to the same tax andwas thepaid; same period;

(4)or [if(5) ] in the case of a paymenttaxpayer ofwho anhas amountbeen ofassessed a tax [wason ]or notafter madeJuly within1, three1993 yearsunder ofSubsection theB, endC or D of theSection calendar7-1-18 yearNMSA in1978 whichand thean originalassessment duethat dateSJC/SCORC/SB of129 thePage tax11 orapplies dateto ha ofperiod ending at least three years prior to the assessmentbeginning of the departmentyear occurred,in onlywhich forthe aassessment claimwas gmade, oonly for a refund offor thatthe amountsame of tax [canfor bethe madeperiod ]of andthe onlyassessment withinor tfor hrany gperiod efollowing ithat kperiod within one year of the date onof which the taxassessment wasunless paid;a longer period for claiming a refund is provided in this section.

or h r i s (5) [when ] in the case of a taxpayer who has h , t, been assessed a tax on or after July 1, 1993 under Subsection e u g e b l B, C or D of Section 7-1-18 NMSA 1978 and [when the ] an e e h n d d i = = o h assessment that applies to a period ending at least three years l ] b ,d i a º e prior to the beginning of the year in which the assessment was r i = r t e w d made, [the taxpayer may claim ] only for a refund for the same m a n o d m :

b e d s º o t n = .214260.7 s k m e - 13 - e a n e d r e l u [ A d SJC/SCORC/SB 129 tax for the period of the assessment or for any period following that period within one year of the date of the assessment unless a longer period for claiming a refund is provided in this section.

No credit or refund shall be allowed or made to [any ] a person claiming a refund of gasoline tax under Section 7-13-11 NMSA 1978 unless notice of the destruction of the gasoline was given to the department within thirty days of the actual destruction and the claim for refund is made within six months of the date of destruction.

No credit or refund shall be allowed or made to [any ] a person claiming a refund of gasoline tax under Section 7-13-17 NMSA 1978 unless the refund is claimed within six months of the date of purchase of the gasoline and the gasoline has been used at the time the claim for refund is made.

If, as a result of an audit by the department or h a managed audit covering multiple periods, an overpayment of g o tax is found in any period under the audit and if the taxpayer t hr g e i k files a claim for refund for the overpayments identified in the h r i s audit, that overpayment may be credited against an underpayment h , t, of the same tax found in another period under audit pursuant to e u g e b l e e h Section 7-1-29 NMSA 1978.

[provided that the taxpayer files a n d d i = = o h claim for refund for the overpayments identified in the audit.] l ] b ,d i a º e I.

[Any] A refund of tax paid under any tax or tax ract iSJC/SCORC/SB =129 rPage t12 e w d act administered under Subsection B of Section 7-1-2 NMSA 1978 mmay abe nmade, oat dthe mdiscretion :of the department, in the form of credit against future tax payments if future tax liabilities in an amount at least equal to the credit amount reasonably may be expected to become due.

b e d s º o t n = .214260.7 s k m e - 14 - e a n e d r e l u [ A d SJC/SCORC/SB 129 may be made, at the discretion of the department, in the form of credit against future tax payments if future tax liabilities in an amount at least equal to the credit amount reasonably may be expected to become due.

The filing of a fully completed original income tax return, corporate income tax return, corporate income and franchise tax return, estate tax return or special fuel excise tax return that shows a balance due the taxpayer or a fully completed amended income tax return, an amended corporate h income tax return, an amended corporate income and franchise u » r tax return, an amended estate tax return, an amended special t h g e fuel excise tax return or an amended oil and gas tax return l i h r i s that shows a lesser tax liability than the original return h , e h constitutes the filing of a claim for refund for the difference t u g e b l in tax due shown on the original and amended returns." eSJC/SCORC/SB e129 ,Page gh13 n d d i = = o h SECTION 5.

Section 7-1-29.1 NMSA 1978 (being Laws 2003, l ] b ,d i a º r Chapter 398, Section 12, as amended) is amended to read:

e r = t e w d "7-1-29.1.

AWARDING OF COSTS AND FEES.-- mA. a n o d m :

bIn ran eadministrative tproceeding ºor ocourt tproceeding nbrought =by .214260.7or sagainst ka mtaxpayer eand -conducted 15in -connection ewith the determination, collection or refund of a ntax eor dthe rinterest eor lpenalty ufor [a Atax dgoverned SJC/SCORC/SBby 129the A.Tax Administration Act, the taxpayer shall be awarded a judgment or a settlement for reasonable administrative costs and reasonable litigation costs and attorney fees incurred in connection with the proceeding if the taxpayer is the prevailing party.

In [any] an administrative proceeding or court proceeding [that is ] brought by or against [the] a taxpayer [on or after July 1, 2003] and conducted in connection with the determination, collection or refund of [any ] a tax or the interest or penalty for a tax governed by [the provisions of] the Tax Administration Act, the taxpayer shall be awarded a judgment or a settlement for reasonable administrative costs and reasonable litigation costs and attorney fees incurred in connection with [an administrative ] the proceeding [with the department or the administrative hearings office or reasonable litigation costs incurred in connection with a court proceeding] if the taxpayer is the prevailing party.

h (2) "court proceeding" means any civil action g o brought in state district court;

t hr g e i k (3) "reasonable administrative costs" means:

h r i s (a) any administrative fees or similar h , t, charges imposed by the department or the administrative e u g e b l e e h hearings office;

and n d d i = = o h (b) actual charges for:

1) filing fees, l ] b ,d i a º e court reporter fees, service of process fees and similar r i = r t e w d expenses;

3) any SJC/SCORC/SB 129 Page 14 study, manalysis, areport, ntest oor dproject mreasonably :necessary for the preparation of the party's case;

band e4) dfees sand ºcosts opaid tor nincurred =for .214260.7the sservices kin mconnection ewith -the 16proceeding -of eattorneys, acertified npublic eaccountants, demployees rof ea lNew uMexico [licensed Acertified dpublic SJC/SCORC/SBaccounting 129firm analysis,or report,enrolled testagents orwho projectare reasonablyauthorized necessaryto forpractice in the preparationcontext of thean party'sadministrative case;proceeding;

and 4) fees and costs paid or incurred for the services in connection with the proceeding of attorneys Sflº or of certified public accountants»Sfl Sflº, certified public accountants, employees of a New Mexico licensed certified public accounting firm or enrolled agents»Sfl who are authorized to practice in the context of an administrative proceeding;

and 4) fees and costs paid or incurred for the services of attorneys in connection with the h proceeding.

g o C.

t hr g e i k (1) the taxpayer is the prevailing party if h r i s the taxpayer has:

h , t, (a) substantially prevailed with respect e u g e b l e e h to the amount in controversy;

or n d d i = = o h (b) substantially prevailed with respect l ] b ,d i a º e to most of the issues involved in the case or the most r i = r t e w d significant issue or set of issues involved in the case;

mSJC/SCORC/SB 129 Page 15 (2) the taxpayer is not the prevailing party if the administrative hearings office finds that the position of the department in the proceeding was based upon a nreasonable oapplication dof mthe :law to the facts of the case.

b e d s º o t n = .214260.7 s k m e - 17 - e a n e d r e l u [ A d SJC/SCORC/SB 129 (2) the taxpayer [shall ] is not [be treated as] the prevailing party if [prior to July 1, 2015, the department establishes or, on or after July 1, 2015] the [hearing officer ] administrative hearings office finds that the position of the department in the proceeding was based upon a reasonable application of the law to the facts of the case.

h (a) department or administrative g o hearings office regulations, information releases, t hr g e i k instructions, notices, technical advice memoranda and h r i s announcements;

and h , t, (b) private letter rulings and letters e u g e b l e e h issued by the department to the taxpayer;

and n d d i = = o h (4) the determination of whether the taxpayer l ] b ,d i a º e is the prevailing party and the amount of reasonable litigation r i = r t e w d costs or reasonable administrative costs shall be madeSJC/SCORC/SB by129 mPage a16 nmade oby dagreement mof :the parties or:

b(a) ein dthe scase ºof oan tadministrative nproceeding, =by .214260.7 s k m e - 18 - e a n e d r e l u [ A d SJC/SCORC/SB 129 agreement of the partieshearing or:officer;

(a)or (b) in the case [where the final determination with respect to the tax, interest or penalty is made in] of ana administrativecourt proceeding, by the hearingcourt. officer;

or (b) in the case [where the final determination is made by the] of a court proceeding, by the court.

(1) reasonable litigation costs and attorney fees pursuant to Subsection A of this section in a court proceeding may be incorporated as a part of the court's decision or judgment [in the court proceeding] and [shall be] are subject to appeal in the same manner as the decision or judgmentjudgment; [A decision or order granting or denying in whole or in part an award for];

and h (2) reasonable administrative costs pursuant g o to Subsection A of this section [by a hearing officer shall be ] t hr g e i k in an administrative proceeding are reviewable in the same h r i s manner as a decision of [a hearing officer ] the administrative h , t, hearings office.

e u g e b l E.

[No] An agreement for or award of reasonable e e h n d d i = = o h administrative costs or reasonable litigation costs in any l ] b ,d i a º e administrative proceeding or court proceeding pursuant to r i = r t e w d Subsection A of this section shall not exceed the lesser of mtwenty apercent nof othe damount mof :the settlement or judgment or seventy-five thousand dollars ($75,000).

b e d s º o t n = .214260.7 s k m e - 19 - e a n e d r e l u [ A d SJC/SCORC/SB 129 twenty percent of the amount of the settlement or judgment or [fifty thousand dollars ($50,000).

A taxpayer awarded administrative litigation costs pursuant to this section may not receive an award of attorney fees pursuant to Subsection D of Section 7-1-25 NMSA 1978] seventy-five thousand dollars ($75,000).

The department shall annually report to the legislative finance committee and the revenue stabilization and tax policy committee on the costs it incurs pursuant to SJC/SCORC/SB 129 Page 17 this section." SECTION 6.

SHORT TITLE.--[SectionsTITLE.--Chapter 1 through 9 of this act] Chapter 7, Article 1B NMSA 1978 may be cited as the "Administrative Hearings Office Act"." SECTION 7.

Section 7-1B-6 NMSA 1978 (being Laws 2015, h Chapter 73, Section 6) is amended to read:

g o "7-1B-6.

HEARING OFFICER CODE OF tCONDUCT-- hrINDEPENDENCE.-- g e i k CONDUCT--INDEPENDENCE.-- h r i s A.

h , t, (1) adopt and promulgate a hearing officer e u g e b l e e h code of conduct;

and n d d i = = o h (2) [periodically ] annually, evaluate each l ] b ,d i a º e hearing officer's performance for competency, efficiency and rprofessional idemeanor =in raccord twith erelevant wlegal dstandards mand athe nhearing oofficer professionalcode demeanorof inconduct, accordincluding withthrough relevantthe legaluse standardsof da msurvey :of practitioners who appear before the hearing officer.

b e d s º o t n = .214260.7 s k m e - 20 - e a n e d r e l u [ A d SJC/SCORC/SB 129 and the hearing officer code of conduct, including through the use of a survey of practitioners who appear before the hearing officer.

SJC/SCORC/SB 129 Page 18 C.

h (4) conduct all adjudicatory hearings pursuant g o to the Motor Vehicle Code;

t hr g e i k (5) conduct all driver's license revocation h r i s hearings pursuant to the provisions of the Implied Consent Act;

h , t, (6) make and preserve a complete record of all e u g e b l proceedings;

and e e h n d d i = = o h (7) maintain confidentiality regarding l ] b ,d i a º e taxpayer information as required by [the provisions of ] Section r i = r t e w d 7-1-8 NMSA 1978.

mD. a n o d m :

bIn ehearings dconducted sin ºaccordance owith tthe nTax =Administration .214260.7Act, sSection k13-1-22 mNMSA e1978 -and 21the -Motor eVehicle aCode: n e d r e l u [ A d SJC/SCORC/SB 129 D.

In hearings conducted [pursuant to ] in accordance with the Tax Administration Act, Section 13-1-22 NMSA 1978 and the Motor Vehicle Code:

A taxpayer or the taxation and revenue department may request a written ruling on a contested question of SJC/SCORC/SB 129 Page 19 evidence in a matter in which the taxpayer has filed a written protest and for which that protest is pending.

The administrative hearings office shall issue a copy of its written ruling to the [taxation and revenue ] department at the time the ruling is issued to the taxpayer;

The hearing officer shall h conduct a hearing to allow the ample and fair presentation of g o complaints and defenses.

The hearing officer shall hear t hr g e i k arguments, permit discovery, entertain and dispose of motions, h r i s require written expositions of the case as the circumstances h , t, justify and render a decision in accordance with the law and e u g e b l e e h the evidence presented and admitted.

A taxpayer or the n d d i = = o h taxation and revenue department may request a written ruling on l ] b ,d i a º e a contested question of procedure in a matter in which the r i = r t e w d taxpayer has filed a written protest and for which that protest mis apending. n o d m :

bThe eadministrative dhearings soffice ºshall oissue ta ncopy =of .214260.7its swritten kruling mto ethe -department 22at -the etime athe nruling eis dissued rto ethe ltaxpayer; u [ A d SJC/SCORC/SB 129 is pending.

Theand administrative(3) hearingsthe officehearing shallofficer may administer oaths and issue asubpoenas copyfor ofthe itsattendance writtenof rulingwitnesses toand the [taxationproduction of relevant books and revenuepapers, ]and departmentfor athearings theconducted timefor thea rulinglicense issuspension issuedpursuant to Section 66-5-30 NMSA 1978, the taxpayer;hearing officer may require a SJC/SCORC/SB 129 Page 20 reexamination of the licensee." SECTION 8.

and (3) the hearing officer may administer oaths and issue subpoenas for the attendance of witnesses and the production of relevant books and papers, and for hearings conducted for a license suspension pursuant to Section 66-5-30 NMSA 1978, the hearing officer may require a reexamination of the licensee." SECTION 8.

Upon timely receipt of a tax protest filed [pursuant to ] in accordance with the provisions of Section 7-1-24 NMSA 1978, the taxation and revenue department shall promptly acknowledge the protest by letter to the protesting h taxpayer or the taxpayer's representative.

If the department g o determines that the protest [is] has not been filed in t hr g e i k accordance with [the provisions of ] that sectionsection, [7-1-24 NMSA h r i s 1978], the department shall, within twenty-one days of receipt h , t, of the protest, inform the taxpayer of the deficiency and [the] e u g e b l provide the taxpayer, within twenty-one days of the taxpayer e e h n d d i = = o h being informed, one opportunity to correct it.

[WithinIf forty-the ltaxpayer ]corrects bthe ,ddeficiency, ithe aprotest ºshall ebe fiveconsidered daystimely afterif receiptthe ofinitial a protest was filed pursuantwithin toninety thedays rin iaccordance =with rSubsection tD e w d provisions of Section 7-1-24 NMSA 19781978. that has not been m a n o d m :

b e d s º o t n = .214260.7 s k m e - 23 - e a n e d r e l u [ A d SJC/SCORC/SB 129 resolved, the taxation and revenue department shall request from the administrative hearings office a hearing and shall send to the office a copy of the protest.

The chief hearing officer shall promptly designate a hearing officer and shall set a date for a hearing to take place within ninety days after receipt of a protest filed pursuant to Section 7-1-24 NMSA 1978.] If the taxpayer corrects the deficiency, the protest shall be considered timely if the initial protest was filed within ninety days in accordance with Subsection D of Section 7-1-24 NMSA 1978.

HTRCºB.B.

Within sixty days of the date of the protest, the taxation and revenue department or the taxpayer may request an informal conference.

If the department requests an informal conference, the conference shall occur only if h agreed to by the taxpayer.

If requested or agreed to by the u » r taxpayer, the informal conference shall occur within one t h g e l i hundred twenty days of the taxpayer's filing of the protest.

h r i s Within thirty days of the completion of the informal h , e h conference, the department shall send a letter response to the t u g e b l e e , gh taxpayer identifying any issues that have been resolved and any n d d i = = o h issues still in dispute in the protest.

In the event an l ] b ,d i a º r informal conference has been requested and has not resolved the e r = t e w d m a n o protest, the department shall, no later than one hundred eighty d m :

b r e t º o t n = .214260.7 s k m e - 24 - e a n e d r e l u [ A d SJC/SCORC/SB 129 days of the date of the protest, file a request for a hearing with the administrative hearings office.

C.

If no party requests an informal conference within sixty days of the date of the protest or if the taxpayer does not agree to such a conference, the taxpayer may file a request for a hearing with the administrative hearings office.

If within ninety days of the date of the protest no informal conference has been requested or agreed to and the taxpayer has not requested a hearing with the administrative hearings office, the taxation and revenue department shall file a request for a hearing with the administrative hearings office.»HTRC HTRCºB.

A taxpayer may request in h writing an informal conference with the department within sixtySJC/SCORC/SB u129 »Page r21 tsixty h days after the date of the protest, and the department shall g e l i conduct the requested informal conference within thirty days of h r i s the receipt of the request.

Whether or not a taxpayer requests h , e h t u g an informal conference with the department, a taxpayer may e b l e e , gh request a hearing with the administrative hearings office no n d d i = = o h earlier than sixty days from the date of the protest.

l ] b ,d i a º r e r = C.

The taxation and revenue department shall t e w d m a n o include with its request for a hearing an answer to the protest ddescribing mthe :legal and factual bases supporting the department's position beyond an assertion of the presumption of correctness and articulating the remaining protested issues.

b r e t º o t n = .214260.7 s k m e - 25 - e a n e d r e l u [ A d SJC/SCORC/SB 129 describing the legal and factual bases supporting the department's position beyond an assertion of the presumption of correctness and articulating the remaining protested issues.»HTRC HTRCº D.

The taxation and revenue department shall include with its request for a hearing a detailed statement of position describing the legal and factual bases supporting the department's position beyond an assertion of the presumption of correctness, including any issues that were resolved at an informal conference and articulating the remaining disputed issues at protest.»HTRC HTRCºD.»HTRC In the event the taxpayer first requests a hearing with the administrative hearings office, the HTRCºtaxationtaxation and revenue»HTRCrevenue department shall, within thirty days HTRCºafter of service of»HTRCof the taxpayer's request for a hearing, file its HTRCºdetailedanswer statement of position»HTRC h HTRCºanswer to the protest»HTRCprotest describing the legal and u » r t h factual bases supporting the department's position beyond an g e l i assertion of the presumption of correctnesscorrectness. HTRCº.

, including h r i s any issues that were resolved at an informal conference and h , e h t u g articulating the remaining disputed issues at protest.»HTRC e b l e e , gh The department may amend its HTRCºdetailedanswer statement of n d d i = = o h position»HTRC HTRCºanswer to the protest»HTRCprotest up until ten l ] b ,d i a º r e r = days before the scheduled hearing or other deadline specified t e w d m a n o in a controlling scheduling order;

provided HTRCº,that dif mthe :administrative hearings office determines that the department's amended answer unfairly prejudices the taxpayer, the administrative SJC/SCORC/SB 129 Page 22 hearings office may disallow the amended answer.

bThe rhearing eshall tbe ºlimited oto t n = .214260.7 s k m e - 26 - e a n e d r e l u [ A d SJC/SCORC/SB 129 however,»HTRC that if the administrativegrounds hearingsprovided officein determines that the HTRCºtaxpayer's departmentprotest createdletter anand unfairin surprise or other fundamental unfairness, the administrativedepartment's hearingsanswer officeto may rule that the presumptionprotest. of correctness rests with the taxpayer.

department's amended answer unfairly prejudices the taxpayer, the administrative hearings office may disallow the amended answer.»HTRC The hearing shall be limited to the grounds provided in the taxpayer's protest letter and in the department's HTRCºdetailed statement of position»HTRC HTRCºanswer to the protest»HTRC.

If HTRCºthethe hearing officer finds that»HTRCthat the taxation and revenue department HTRCºfails»HTRCfailed HTRCºfailed»HTRC to comply with the deadlines set forth in Subsections A HTRCºthroughand D»HTRCB HTRCºand B»HTRC of this section, HTRCºthe presumption of correctness shall rest with the taxpayer.»HTRC HTRCºthe hearing officer may order that no h further interest may accrue on the protested liability.»HTRCliability. u » r F.

IfF. the taxpayer files the request for a hearing, t h g e l i the chief hearing officer shall set a hearing to take place h r i s within ninety days of the taxation and revenue department's h , e h HTRCºresponsive detailed statement of position»HTRC t u g e b l e e , gh HTRCºanswer to the protest»HTRC, but in no case later than one n d d i = = o h hundred twenty days after the taxpayer's request for a hearing.

lIf ]the btaxpayer ,dfiles ithe arequest ºfor ra Ifhearing, the departmentchief fileshearing theofficer requestshall forset a hearing withto take place within ninety days of the etaxation rand =revenue tdepartment's eanswer wto dthe mprotest, abut nin ono HTRCºdetailedcase statementlater ofthan position»HTRCone HTRCºanswerhundred totwenty days after the dtaxpayer's mrequest :for a hearing.

bIf rthe edepartment tfiles ºthe orequest tfor nhearing =with .214260.7the sanswer kto mthe eprotest, - 27 - e a n e d r e l u [ A d SJC/SCORC/SB 129 protest»HTRC, the chief hearing officer shall set a hearing to take place within ninety days of that request.

SJC/SCORC/SB 129 Page 23 Either party may, within ten days of notice of hearing assigning a hearing officer or notice of reassignment of a hearing officer, exercise one time the peremptory right to excuse the hearing officer designated to conduct the hearing;

provided that the party has not moved for a discretionary ruling from the assigned hearing officer, nor previously h exercised its right of peremptory excusal.

Once a hearing u » r officer has been peremptorily excused, that hearing officer t h g e shall not be assigned to the case again.

l i h r i s G.

The administrative hearings office shall rule on h , e h a dispositive motion, including a motion for summary judgment, t u g e b l a motion for partial summary judgment or a motion to dismiss, e e , gh n d d i = = o h filed by the taxation and revenue department or the taxpayer at l ] b ,d i a º r least thirty days before the hearing unless the parties consent e r = t e w d to a different deadline in a scheduling order.

mH. a n o d m :

bA rtaxpayer emay tappear ºat othe thearing non =the .214260.7taxpayer's sown kbehalf, mmay eappear -through 28a -bona efide employee or may be represented by an attorney, a ncertified epublic daccountant, ran eemployee lof ua [New AMexico dlicensed SJC/SCORC/SBcertified 129public [B.]accounting H.firm whose authorization by the firm and by the taxpayer to appear is evidenced in writing or an enrolled agent.

AAn taxpayer may appear at the hearing on the taxpayer's own behalf, [or may be represented by ] may appear through a bona fide employee or may be represented by an attorney, a certified public accountant, an employee of a New Mexico licensed certified public accounting firm whoseor authorizationan byenrolled theagent firmshall andabide by theSJC/SCORC/SB taxpayer129 toPage appear24 istheir evidencedrespective incontrolling writingprofessional or [withethical respectstandards onlyof toconduct taxat imposedall pursuantstages toof the Incomeadministrative Taxproceeding Act,before athe personadministrative whohearings is]office. an enrolled agent [for federal income tax purposes ].

An attorney, a certified public accountant, an employee of a New Mexico licensed certified public accounting firm or an enrolled agent shall abide by their respective controlling professional or ethical standards of conduct at all stages of the administrative proceeding before the administrative hearings office.

HTRCº The party that does not have the h presumption of correctness shall present its case first at the g o hearing.»HTRC At the beginning of the hearing, the hearing t hr g e i k officer shall inform the taxpayer of the taxpayer's right to h r i s representation.

A hearing shall [not ] be [open] closed to the h , t, public except upon request of the taxpayer.

A hearing officer e u g e b l e e h may postpone or continue a hearing at the hearing officer's n d d i = = o h discretion.

As used in this subsection, "enrolled agent" means l ] b ,d i a º e a federally licensed tax practitioner with unlimited rights to r i = r t e w d represent taxpayers before the internal revenue service.

mI. a n o d m :

bWithin ethirty ddays safter ºthe ohearing, tthe nhearing =officer .214260.7shall sinform kthe mtaxation eand -revenue 29department -and ethe ataxpayer nin ewriting dof rthe edecision land, uin [accordance Awith dSection SJC/SCORC/SB7-1-25 129NMSA [C.]1978, I.of the aggrieved party's right to, and the requirements for perfection of, an appeal from the decision to the court of appeals and of the consequences of a failure to appeal.

Within thirty days after the hearing, the hearing officer shall inform the taxation and revenue department and the taxpayer in writing of the decision and, [pursuant to the provisions of ] in accordance with Section 7-1-25 NMSA 1978, of the aggrieved party's right to, and the requirements for perfection of, an appeal from the decision to the court of appeals and of the consequences of a failure to appeal.

and (2) findings of fact and law and a thorough SJC/SCORC/SB 129 Page 25 discussion of the reasoning used to support the order with citations to the record and applicable law.

[D.] J.

A taxpayer with two or more protests containing related issues may request that the protests be h combined and heard jointly.

The hearing officer shall grant g o the request to combine protests unless it would create an t hr g e i k unreasonable burden on the administrative hearings office or h r i s the taxation and revenue department.

h , t, [E.] K.

Nothing in this section shall be construed e u g e b l e e h to authorize a criminal proceeding or to authorize an n d d i = = o h administrative protest of the issuance of a subpoena or l ] b ,d i a º e summons." rSJC/SCORC/SB i129 =Page r26 t25 e w d HTRCº SECTION 9.

A new section of the Administrative m a n o d m :

b e d s º o t n = .214260.7 s k m e - 30 - e a n e d r e l u [ A d SJC/SCORC/SB 129 Hearings Office Act is enacted to read:

"[NEW MATERIAL] HEARING OFFICERS--COMPENSATION.--Hearing officers shall receive an annual salary that is ninety percent of the annual salary of a district court judge pursuant to Paragraph (2) of Subsection D of Section 34-1-9 NMSA 1978."»HTRC » g o » r h t i k l i g t h s , e h t l i w l b l e e , g 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 = .214260.7 s k em e - 31 - e a n e d r e l u [ A d