2018 State Legislature: SB17 passes Senate

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A bill that would collect gross receipts tax from certain non profits met little resistance in the New Mexico Senate Saturday, sailing through with just a brief debate.

The New Mexico Senate voted 31 to 4 Saturday to pass the bill, known as Senate Bill 17, onto the New Mexico House of Representatives.

Sens. Brandt (R-40), (William Payne R-20, Minority Whip), Cliff Pirtle (R-32) and Sander Rue (R-23) voted against the bill.

The bill, sponsored by Cisneros, is designed to preserve the millions of dollars the county and the state receives each year from the gross receipts tax the for-profit contractor that manages Los Alamos National Laboratory pays every year.

New Mexico’s tax code currently exempts non-profit organizations from paying a gross receipts tax. While a for-profit contractor presently runs the Los Alamos National Laboratory, the management contract is in transition, with the possibility that the new contractor could be a non-profit.

Cisneros, along with cosponsors State Rep. Stephanie Garcia Richard (D-43) and Sen. Richard Martinez (D-5) want to make sure the millions of dollars the state and the county receives from the GRT tax continues.

Cisneros said the bill first came up last year when Sandia National Laboratory’s contract was up for bid.

“…Again the potential for a non-profit entity to take over the operation of the facility is there. We just want to make sure…to preserve the General Fund appropriation that comes in as a result of a for-profit entity operating the facility,” Cisneros said. “This would in fact make a non-profit exemption exempt. So if a non profit entity should prevail on the bid award, we would ensure that the state would not fall pray to the loss of up to between $25 to $30 million to our projected revenue expectation. That is at the state level. But most importantly (Los Alamos County) would stand to lose up to $22 million of their operational expenses.”

Payne cautioned the Senate to think carefully. Payne told the Senate that asking a non-profit entity for gross receipts tax could be the deciding factor for moving LANL’s  plutonium pit manufacturing operations to Savannah River, South Carolina, something the Department of Energy is considering. 

“Savannah River South Carolina is pulling out all the stops to get the pit production facility moved to Savannah River,” Payne said. “That’s already an existing facility that requires some upgrades, but right now, they’re saying it would be cheaper for the federal government to move pit production to Savannah River than it is to keep it in Los Alamos.”

Regional Coalition Executive Director Andrea Romero said she’s confident that despite the four dissenting votes, the bill is going to be equally successful in the House.

“Overall, even with the dissension, there wasn’t really any debate at all, so there really wasn’t anything coming into question,” Romero said.

SB 17 is expected to be heard next in the House Taxation and Revenue Committee sometime this week. 
Los Alamos County Council Chairman David Izraelevitz said he was pleased with the senators that expressed support for the bill and the communities it would impact.

“There were several senators, and I couldn’t tell you what party they were from, who were very supportive of the community,” Izraelevitz said. “They mentioned several times that they needed to support all the local communities. They understood how important these gross receipts taxes were to our financial health.”