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GRT bill passes first hurdle

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SB 17 addressing non-profits moves to Senate Finance Committee

By Tris DeRoma

The Senate bill that would allow the state to continue to receive gross receipts tax from the Los Alamos National Laboratory, received unanimous approval from the Senate Corporations and Transportation Committee Friday.

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Regional Coalition of LANL Communities Executive Director Andrea Romero testified before the committee on Senate Bill 17, along with one of the bill’s sponsors, Sen. Carlos Cisneros, (D-6). Rep. Stephanie Garcia Richard (D-43) is co-sponsor.

“It went very well,” Romero said. “We presented what we know about Senate Bill 17… and why we need to stabilize this tax.”

Romero described the committee as “very receptive.”

The bill’s next step is the Senate Finance Committee. A date for the hearing has not been set.
Romero also told the committee that the commission also encouraged non-profit contractors and their potential partners to organize themselves as for-profit entities, before they submitted a bid, just in case Senate Bill 17 did not make through this session.

“We’ve encouraged all the potential bidders that we know of to try and organized as a for-profit entity, so we don’t have to put ourselves in a situation where if we can’t pass this bill, and we get to Oct. 1, and they picked a non-profit to run the laboratory, we lose out on the tax revenue.”

The committee mainly wanted to know if New Mexico could compete if there was a tax, Romero said. Romero and others told the committee that Sandia National Lab has actually been paying the tax since 1979 and Los Alamos National Laboratory has been paying the tax since 2006, so damage to New Mexico’s competitiveness was not a problem, she said.

Romero made clear to the committee that what the bill was about was preserving the tax, and all that needed to be done was a change to New Mexico’s tax code to reflect that.

Currently, non-profit organizations in New Mexico are exempt from paying gross receipts tax. The National Nuclear Security Administration is in the process of selecting a new management and operations contractor for the Los Alamos National Laboratory, and that entity may be a university or other non-profit.

Texas A&M, University of Texas System and the University of California publicly announced they had submitted bids for the contract. A contractor will be decided this year.

“This isn’t a new tax. We’re trying to keep the status quo, and that’s why we received a unanimous decision,” Romero said.

Los Alamos County Councilor and Democratic state representative candidate Pete Sheehey also testified before the committee.

“For the security of our nation and the safety of our state, I want the best contractor, for-profit or non-profit, to run the lab,” he told the committee. “But under present law, $25 million in state GRT revenues plus $22 million in local GRT would be lost if a non-profit is awarded the LANL prime contract this year.”