GOVERNOR RICHARDSON’S BUDGET BALANCING TASK FORCE

December 22, 2009

On November 13, 2009 Governor Richardson created a Budget Balancing Task Force to review, analyze and present pros and cons concerning numerous revenue-generating options to help balance the state’s budget in light of significant revenue losses. The Task Force was required to conclude its work and submit a report to Governor Richardson on its activities by December 21, 2009. To address the spending side of the budget Governor Richardson created the Committee on Government Efficiency, which is being chaired by former Governor Garrey Carruthers and will make recommendations for consideration by lawmakers. We are pleased to provide to you a list of the members and a table of options with revenue estimates for each option contained in the Final Report of the Budget Balancing Task Force. For your convenience the full report is available at www.NMRevenueOptions.com. The report details activities of the Task Force: schedule of meetings and attendance by members table of options with revenue estimates presentations of overviews and options additional material offered by Task Force members meeting minutes public input press coverage. The Budget Balancing Task Force has reviewed the following options: Gross Receipts and Compensating Tax Option 1. Increase Gross Receipts Tax Rate 1a. Increase rates .25% 1b. Increase rates .5% 1c. Increase rates 1.0% Option 2. Increase Gross Receipts Tax Rate with Credit for Local Option Rates Option 3. Make compensating tax apply to sales in New Mexico Option 4. Make New Mexico purchaser’s location the place of business for out-ofstate sellers with no New Mexico place of business or without nexus in New Mexico and apply local option rates for compensating tax Option 5. Change Tax Treatment of the Food Deduction and Food “Hold Harmless” Distributions 5a. Repeal deduction and all hold harmless distributions

5b. Repeal deduction, 5% credit, retain 1.225% hold harmless distribution 5c. Repeal deduction, 5% credit, repeal all hold harmless distributions 5d. Exclude candy and soft drinks from the definitions of food for purposes of the deduction Option 6. Expand LICTR and low- and middle-income exemption to mitigate effect of changes in tax treatment of food or other changes to the gross receipts tax or excises Option 7. Apply the Gross Receipts and Compensating Taxes to motor fuels 7a. GRT on gasoline 7b. 5% special fuel (diesel) 7c. Combine 7a and 7b Option 8. Amend Insurer Preemption Motor Vehicle Excise Tax Option 9. Increase Motor Vehicle Excise Tax 9a. Increase rate 1% 9b. Increase rate 2% 9c. Increase rate 3% 9d. Increase rate to average GRT rate Insurance Premiums Option 10. Increase Tax Rate on Health Insurance Premiums 10a. Increase rate 1% 10b. Increase rate 2% 10c. Increase rate 3% 10d. Increase rate to average GRT rate Cigarette Tax Option 11. Increase the Cigarette Tax 11a. Increase rate $.50/pack 11b. Increase rate $1.00/pack Tobacco Tax Option 12. Increase the Tobacco Products Tax 12a. Increase rate to 40% 12b. Rate equal to tobacco excise rate (with $.50 increase) + MSA rate on basis of tobacco content 12c. Rate equal to tobacco excise rate (with $1.00 increase) + MSA rate on basis of tobacco content Option 13. Repeal Native American Tax-Exempt Cigarette Stamps 13a. Repeal tax-exempt under current tax rate 13b. Repeal tax-exempt with $0.50 rate increase 13c. Repeal tax-exempt with $1.00 rate increase 13d. Keep $0.91 differential with $0.50 rate increase 13e. Keep $0.91 differential with $1.00 rate increase Liquor Excise Tax Option 14. Uniform Rate on Beer, Wine, and Spirits Based on Alcohol Content 14a. Single rate on alcohol content of each product 14b. Rates on spirits, wine and beer that are equal based on average alcohol content 14c. Rates equivalent to $0.10 per drink Personal Income Tax Option 15. Increase Personal Income Tax Rates

15a. 1% surtax beginning at $100K (J and HoH), $50K (MFS), $67K (S) effective 11-10 15b. 1% surtax beginning at $150K (J and HoH), $75K (MFS), $100K (S) effective 1-1-10 15c. 1% surtax beginning at $250K (J and HoH), $125K (MFS), $167K (S) effective 1-1-10 15d. 1% surtax beginning at $500K (J and HoH), $250K (MFS), $333K (S) effective 1-1-10 15e. 1% surtax beginning at $100K (J and HoH), $50K (MFS), $67K (S) effective 11-11 15f. 1% surtax beginning at $150K (J and HoH), $75K (MFS), $100K (S) effective 1-1-11 15g. 1% surtax beginning at $250K (J and HoH), $125K (MFS), $167K (S) effective 1-1-11 15h. 1% surtax beginning at $500K (J and HoH), $250K (MFS), $333K (S) effective 1-1-11 Option 16. Reduce the Capital Gains Deduction 16a. Reduce deduction to 25% effective 1-1-10 16b. Reduce deduction to 25% pro rata over $250K to $450K (J and HoH), $125K to $225K (MFS), $167K to $300K (S) effective 1-1-10 16c. Reduce deduction to 25% effective 1-1-11 16d. Reduce deduction to 25% pro rata over $250K to $450K (J and HoH), $125K to $225K (MFS), $167K to $300K (S) effective 1-1-11 Option 17. Repeal the Itemized Deduction for State and Local Taxes 17a. Effective 1-1-10 17b. Effective 1-1-11 Option 18. Simplify the Personal Income Tax Corporate Income and Franchise Tax Overview Option 19. Mandate Combined Reporting Option 19A. Decouple from Certain Federal Income Tax Provisions Option 20. Enact new, low-rate franchise tax based on property, payroll and sales in New Mexico above high thresholds 20a. Raise $100 million/year and phase out CIT effective 1-1-10 20b. Raise $50 million/year, no change in CIT effective 1-1-10 20c. Raise $100 million/year and phase out CIT effective 1-1-11 20d. Raise $50 million/year, no change in CIT effective 1-1-11 Income Tax Withholding Overview Option 21. Tighten rules for pass-through entity (PTE) and oil and gas proceeds withholding on nonresidents, and require PTE quarterly payments Estate Tax Overview Option 22. Decouple Estate Tax from Federal Credit 22a. Effective 1-1-10 22b. Effective 1-1-11 Oil and Natural Gas Taxes Option 23. Increase Emergency School Tax rate on oil from 3.15% to 4% 23a. Effective 1-1-10 23b. Effective 7-1-10 Option 23A. Reduce oil and gas severance tax rate .25% and increase oil and gas emergency school tax rate .25% 23Aa. Effective 1-1-10 23Ab. Effective 7-1-10 Option 24. Add graduated rates based on benchmark oil and natural gas prices 24a. Effective 1-1-10 24b. Effective 7-1-10

Uranium and Coal Taxes Option 25. Increase Tax Rates on Uranium to Match Rates on other Energy Resources 25a. Raise rate to effective rate on oil 25b. Raise rate to effective rate on natural gas 25c. Raise rate to effective rate on coal Option 26. Repeal the Coal Surtax Exemption 26a. Effective 1-1-10 26b. Effective 7-1-10 Business Incentive Tax Credits Option 27. Adopt uniform language that addresses the goal of the credit, the base for the credit, performance standards, recapture, etc. Option 28. Require additional reporting by credit recipients, making information on recipient’s public, periodic reports on effectiveness in meeting goals Tax Compliance and Administration Rules Option 29. Provide TRD broad authority to reallocate receipts, income, deductions, exemptions, and other items among entities to properly reflect tax liabilities and credits Option 30. Increase penalties for failure to file or pay liabilities and for willful evasion Option 31. Expand requirements for information reporting and special payment rules Option 32. Require in-state contractors to post bonds Option 33. Require State and local governments to collect and remit tax on contracts Option 34. Increase administrative fee to cover all distributions to local governments To develop these options, the Task Force referred to the 2003 Blue Ribbon Tax Reform Commission, recent legislative proposals, listened to issues raised by the Task Force members, public input and monitored proposals currently being suggested by various parties. The Task Force held a total of five meetings at various locations around the State (see meeting schedule below). All of the meetings were open to the public and all meetings provided scheduled time for public input. Date Time City Location November 16, 2009 1:00 p.m. – 5:00 p.m. Santa Fe Santa Fe Community College Jemez Room 6401 S Richards Avenue November 19, 2009 1:00 p.m. – 5:00 p.m.

Albuquerque Expo New Mexico Youth Hall 300 San Pedro Drive NE December 1, 2009 1:00 p.m. – 5:00 p.m. Las Cruces Farm and Ranch Museum Tortugas Room 4100 Dripping Springs Road December 10, 2009 1:00 p.m. – 5:00 p.m. Farmington Civic Center Theater 800 Municipal Drive December 17, 2009 1:00 p.m. – 5:00 p.m. Santa Fe Santa Fe Community College Jemez Room 6401 S Richards Avenue Sincerely yours, Rick Homans Chairman Budget Balancing Task Force Budget Balancing Task Force Membership Chair Rick Homans, Cabinet Secretary, New Mexico Taxation and Revenue Department Task Force Members Carolyn Abeita, Regent, University of New Mexico Steve Anaya, Executive Vice President, Realtors Association of New Mexico Richard Anklam, President and Executive Director, New Mexico Tax Research Institute Odes Armijo-Caster, President, Renewable Energy Industries Association Bob Barberousse, Cigar Association of America Kathi Bearden, Former Publisher, Hobbs News-Sun Jim Berry, President and Chief Executive Officer, Las Cruces Chamber of Commerce Charles Bowyer, Executive Director, National Education Association Carter Bundy, Legislative Director, American Federation of State and Municipal Employees Gayla Brumfield, Mayor, City of Clovis

Don Chalmers, Principal Dealer, Don Chalmers Ford Rick Clemente, Production Central Albuquerque Terri L. Cole, President and Chief Executive Officer, Greater Albuquerque Chamber of Commerce Caren Cowan, Executive Director, New Mexico Cattle Growers Association Pat D’Arco, Chairman, Rio Rancho Planning & Zoning Board Diane Denish, Lieutenant Governor, State of New Mexico Bill Fulginiti, Executive Director, New Mexico Municipal League Leo Garza, Legislative Committee Chair, AARP New Mexico Jackson Gibson, Member, District 6, Transportation Commission Leland Gould, Director of Government Affairs, Western Refining Jami Grindatto, Corporate Affairs Director, Intel Paul Gutierrez, Executive Director, New Mexico Association of Counties Jim Hinton, President, Presbyterian Health Services Ruth Hoffman, Director, Lutheran Advocacy Ministry - New Mexico John Horton, Director, Public Policy and Government Relations, Associated General Contractors Bill Jordan, Policy Director, Voices for Children Leanne Leith, Political and Programs Director, Conservation Voters New Mexico Sharon Lombardi, Executive Director, Dairy Producers of New Mexico Raymond Mondragon, Chair, New Mexico Economic Development Partnership Bob Murphy, Executive Director, Economic Forum of Albuquerque Fred Nathan, Executive Director, Think New Mexico Fred O’Cheskey, Southwest Public Affairs, LLC Earl Potter, Hotel Santa Fe and Five & Dime General Stores Alex Romero, President and Chief Executive Officer, Albuquerque Hispano Chamber of Commerce Joshua Rosen, Chief of Staff, State of New Mexico, Office of Lt. Governor Diane Denish Allen Sanchez, President and Chief Executive Officer, St. Joseph Community Health David S. Smoak, President, RSF Land and Cattle Co. Mark Thompson, Lieutenant Governor, Acoma Pueblo Tony Trujillo, Government Relations Director, Freeport McMoRan Copper and Gold Thom Turbett, President and Chief Executive Officer, Independent Insurance Agents of New Mexico Jerry Walker, President and Chief Executive Officer, Independent Community Bankers Association of New Mexico Michelle Welby, Director, Medical Operations, Molina Healthcare of New Mexico Chuck Wellborn, Wellborn Strategies, LLC Carol Wight, Chief Executive Officer, New Mexico Restaurant Association Governor Richardson’s Budget Balancing Task Force Options with Revenue Estimates Option Estimated Revenue Impact (000) Fund(s) Affected Effective FY10 FY11 FY12

FY13 FY14 FY10-14 Gross Receipts and Compensating Taxes 1. Increase rates 1a. Increase rates .25% 1b. Increase rates .5% 1c. Increase rates 1% 7-1-10 7-1-10 7-1-10 0 0 0 120,360 240,721 481,442 126,980 253,961 507,921 133,583 267,166 534,333 139,461 278,922 557,844 520,385 1,040,770 2,081,540 General Fund General Fund General Fund 2. Increase rates 1% with credit for local rates (no tax increase inside municipalities) 7-1-10 0 117,000

113,000 119,000 124,000 463,000 General Fund 0 1,500 1,600 1,700 1,800 6,600 Counties 3. Make compensating tax apply to sales in New Mexico 7-1-10 0 11,600 12,200 12,900 13,500 50,200 General Fund 0 2,500 2,700 2,800 3,000 11,000 Municipalities 0 1,600 1,700

1,800 1,800 6,900 Counties 0 15,700 16,600 17,500 18,300 68,100 Total 4. Make New Mexico purchaser’s location the place of business for out-ofstate sellers with no NM place of business or without nexus in NM and apply local option rates for compensating tax 7-1-10 0 (16,000) (17,000) (18,000) (19,000) (70,000) General Fund 0 68,000 71,000 75,000 77,000 292,000 Municipalities 0 23,000 24,000

25,000 27,000 99,000 Counties 0 75,000 78,000 82,00 85,00 321,000 Total 5. Change tax treatment of food and associated “hold harmless” distributions:

5a.

Repeal deduction and all hold harmless distributions

7-1-10 0 228,000 239,000 250,000 262,000 979,000 General Fund 0 0 0 0 0 0 Municipalities 0

0 0 0 0 0 Counties 5b. Repeal deduction, 5% credit, retain 1.225 hold harmless distribution 7-1-10 0 68,000 71,000 76,000 79,000 294,0000 General Fund 0 0 0 0 0 0 Municipalities 0 0 0 0 0 0 Counties 5c. Repeal deduction, 5% credit, repeal all hold harmless distributions 7-1-10

0 104,000 109,000 115,000 120,000 448,000 General Fund (36,000) (38,000) (40,000) (42,000) (155,000) Municipalities 0 0 0 0 0 0 Counties 5d. Exclude candy and soft drinks from the definition of “food” for purposes of the deduction 7-1-10

0

18,000 19,000 20,000 21,000 78,000 General Fund

6. Expand LICTR and low- and middle-income exemption to mitigate effect of changes in tax treatment of food or other changes to the gross receipts tax or excises 1-1-10 0 (21,378) (21,749) (22,126) (22,509) (87,762) General Fund 7. Include motor fuels in gross receipts tax base: 7a. GRT on gasoline

7-1-10 0 98,700 98,700 98,700

98,700 394,800 General Fund 0 49,450 49,450 49,450 49,450 197,800 Municipalities 0 16,350 16,350 16,350 16,350 65,400 Counties 0 11,200 11,200 11,200 11,200 44,800 Pueblos/Tribes 0 175,700 175,700 175,700 175,700 702,800 Total

7b.

5% special fuel (diesel)

7-1-10 0 68,750 68,750 68,750 68,750 275,000 General Fund 7c. Combine 7a and 7b 7-1-10 0 167,450 167,450 167,450 167,450 669,800 General Fund 8. Repeal gross receipts tax exemption for receipts of insurance companies not subject to insurance premium tax 7-1-10 0 6,135 6,748 7,423 8,165 28,471 General Fund 0 4,420 4,862

5,348 5,883 20,513 Municipalities 0 939 1,033 1,137 1,250 4,359 Counties 0 11,494 12,643 13,908 15,298 53,343 Total Motor Vehicle Excise 9. Increase rate 9a. Increase rate 1% 9b. Increase rate 2% 9c. Increase rate 3% 9d. Increase rate to average GRT rate 7-1-10 7-1-10 7-1-10 7-1-10 0 0 0 0 34,300 68,700 103,000 140,800

37,700 75,300 113,000 154,400 39,000 78,000 117,000 159,900 40,700 81,300 122,000 166,700 151,700 303,300 455,000 621,800 General Fund General Fund General Fund General Fund Insurance Premium Tax 10. Increase rate on health insurance premiums 10a. Increase rate 1% 10b. Increase rate 2% 10c. Increase rate 3% 10d. Increase rate to average GRT rate

1-1-11 1-1-11 1-1-11 1-1-11 0 0 0 0 19,200 38,400 57,600 59,500 42,300 84,600

126,900 131,100 46,500 93,000 139,500 144,100 51,200 102,400 153,600 158,700 159,200 318,400 477,600 493,400 General Fund General Fund General Fund General Fund Tobacco Taxes 11. Increase rate and adjust distributions and stamp discounts 11a. Increase rate $.50/pack 11b. Increase rate $1.00/pack

7-1-10 7-1-10

0 0

20,474 33,145

20,474 33,145

20,474 33,145

20,474 33,145

81,896 132,580

General Fund General Fund 12. Increase Tobacco Products Tax 12a. Increase rate to 40% 12b. Rate equal to tobacco excise rate (with $.50 increase) + MSA rate on basis of tobacco content 12c. Rate equal to tobacco excise rate (with $1.00 increase) + MSA rate on basis of tobacco content

7-1-10 7-1-10

7-1-10

0 0

0

3,050 6,550

7,700

3,150 6,750

7,900

3,300 7,000

8,300

3,400 7,200

8,500

12,900 27,500

32,400

General Fund General Fund

General Fund 13. Repeal tax-exempt stamp provisions and make distributions to new Tribal Fund for allocation to Nations, tribes and pueblos 13a. Repeal tax-exempt under current tax rate

7-1-10 0

4,900 4,950 5,000 5,050 19,900 Tribal Fund 0 23,300 23,250 23,200 23,150 92,900 General Fund 13b. Repeal tax-exempt with $0.50 rate increase 7-1-10 0 7,600 7,670 7,740 7,800 30,810 Tribal Fund 0 39,900 39,830 39,760 39,700 159,100 General Fund 13c. Repeal tax-exempt with $1.00 rate increase

7-1-10 0 10,300 10,400 10,500 10,600 41,800 Tribal Fund 0 59,300 59,200 59,100 59,000 263,600 General Fund 13d. Keep $0.91 differential with $0.50 rate increase 7-1-10 0 2,700 2,725 2,750 2,775 10,950 Tribal Fund 0 18,200 18,175 18,150 18,125 72,650 General Fund

13e.

Keep $0.91 differential with $1.00 rate increase

7-1-10 0 5,400 5,450 5,500 5,550 21,900 Tribal Fund 0 39,050 39,000 38,950 38,900 155,900 General Fund Liquor Excise Tax 14. Apply uniform rate to spirits, wine and beer based on alcohol content 14a. Single rate on alcohol content of each product 14b. Rates on spirits, wine and beer that are equal based on average alcohol content 14c Rates equivalent to $0.10 per drink

7-1-10 7-1-10

7-1-10

0 0

0

18,000 17,880

42,600

18,100 18,000

43,100

18,200 18,100

43,500

18,300 18,200

44,100

72,600 72,180

130,700

General Fund General Fund

General Fund Personal Income Tax (PIT) 15. Increase PIT rates: 15a. 15b. 15c. 15d. 15e. 15f. 15g. 15h. 1% 1% 1% 1% 1% 1% 1% 1% surtax surtax surtax surtax surtax surtax surtax surtax beginning beginning beginning beginning beginning beginning beginning beginning at at at at at at at at $100K $150K $250K $500K $100K $150K $250K $500K (J (J (J (J (J (J (J (J and and and and and and and and HoH), HoH), HoH), HoH), HoH), HoH), HoH), HoH), $50K (MFS), $67K (S) $75K (MFS), $100K (S) $125K (MFS), $167K (S) $250K (MFS), $333K (S) $50K (MFS), $67K (S) $75K (MFS), $100K (S) $125K (MFS), $167K (S) $250K (MFS), $333K (S)

1-1-10 1-1-10 1-1-10 1-1-10 1-1-11 1-1-11 1-1-11 1-1-11 7,836 5,123 3,161 1,704 0

0 0 0 74,960 56,291 41,457 28,235 34,227 25,839 19,093 12,951 85,127 64,622 48,067 32,929 70,754 53,556 39,676 26,996 77,588

59,008 43,918 30,038 77,588 59,008 43,918 30,038 82,460 62,977 47,065 32,340 82,460 62,977 47,065 32,340 327,971 248,021 183,668 125,246 265,029

201,380 149,753 102,325 General Fund General Fund General Fund General Fund General Fund General Fund General Fund General Fund 16. Reduce 16a. Reduce 16b. Reduce $225K (MFS), 16c. Reduce 16d. Reduce $225K (MFS),

capital gains deduction deduction to 25% deduction to 25% pro rata over $250K to $450K (J and HoH), $125K to $167K to $300K (S) deduction to 25% deduction to 25% pro rata over $250K to $450K (J and HoH), $125K to $167K to $300K (S)

1-1-10 1-1-10

1-1-11 1-1-11

12,077 8,020

0 0

28,453 19,109

16,400 11,105

37,378 25,506

36,609 24,996

45,304 31,177

45,304 31,177

52,178 36,548

52,178 36,548

175,120 120,360

150,221 103,826

General Fund General Fund

General Fund General Fund 17. Repeal itemized deduction for state and local taxes (adjusted pro rata for the limitation on itemized deductions) 17a. Effective 1-1-10 17b. Effective 1-1-11

1-1-10 1-1-11

3,600 0

65,400 23,200

47,300 47,300

50,900 50,900

53,500 53,500

395,592 395,592

General Fund General Fund 18. Simplify PIT 1-1-10 0 1,551 1,698 1,516 1,689 6,454 General Fund Corporate Income Tax (CIT) 19. Mandate combined reporting 1-1-11 0

5,700 32,200 18,900 7,600 64,500 General Fund 19A. Decouple from federal bonus depreciation, domestic production activities deduction and CODI effective 1-1-10 1-1-10 2,500 8,300 11,300 11,800 12,000 45,900 General Fund 20. Enact new, low-rate franchise tax based on property, payroll and sales in New Mexico above high thresholds 20a. Raise $100 million/year and phase out CIT 20b. Raise $50 million/year, no change in CIT 20c. Raise $100 million/year and phase out CIT 20d. Raise $50 million/year, no change in CIT

1-1-10 1-1-10 1-1-11 1-1-11

40,000 20,000 0 0

100,000 50,000 40,000 20,000

100,000 50,000 100,000 50,000

100,000 50,000 100,000 50,000

100,000 50,000 100,000 50,000

440,000 220,000 340,000 170,000

General Fund General Fund General Fund General Fund Income Tax Withholding 21. Tighten rules for pass-through entity (PTE) and oil and gas proceeds withholding on nonresidents, and require PTE quarterly payments 1-1-11 0 15,600

9,800 10,100 10,500 46,000 General Fund Estate Tax 22. Decouple estate tax from federal credit (using IRC section 2011 rate structure) 22a. Effective 1-1-10 22b. Effective 1-1-11

1-1-10 1-1-11

0 0

31,600 0

44,000 33,000

45,800 45,800

47,800 47,800

297,813 297,813

General Fund General Fund Oil and Gas Taxes 23. Increase Emergency School Tax rate on oil from 3.15% to 4% 23a. Effective 1-1-10 23b. Effective 7-1-10

1-1-10 7-1-10 16,767 0 35,091 35,091 36,326 36,326 37,467 37,467 38,609 38,609 164,260 147,493 General Fund General Fund 23A. Reduce oil and gas severance tax rate .25% and increase oil and gas emergency school tax rate .25% 23Aa. Effective 1-1-10 23Ab. Effective 7-1-10

1-1-10 7-1-10 10,550 (10,550) 0 0 23,300 (23,300) 23,300 (23,300)

23,884 (23,884) 23,884 (23,884) 24,460 (24,460) 24,460 (24,460) 24,893 (24,893) 24,893 (24,893) 107,085 (107,085) 96,536 (96,356) General Fund STBF General Fund STBF 24. Add graduated rates based on benchmark oil and natural gas prices 24a. Effective 1-1-10 24b. Effective 7-1-10

1-1-10 7-1-10

49,691 0

119,478 119,478

122,854 122,854

126,081 126,081

128,734 128,734

546,838 497,147

General Fund General Fund Uranium and Coal Taxes 25. Increase rates on uranium to resources 25a. Raise rate to effective rate 25b. Raise rate to effective rate 25c. Raise rate to effective rate

levels comparable to rates on other energy on oil on natural gas on coal

7-1-10 7-1-10 7-1-10

1,886 1,896 1,406

These are hypothetical amounts based on 1 million pounds of U3O8 production at the current price of $49.50 per pound.

General Fund General Fund General Fund 26. Repeal coal surtax exemption 26a. Effective 1-1-10 26b. Effective 7-1-10

1-1-10 7-1-10

6,280 0

23,219 23,219

22,058 22,058

20,955 20,955

19,908 19,908

92,420 86,140

STBF STBF Business Incentive Credits 27. Adopt uniform language that addresses the goal of the credit, the base for the credit, performance standards, recapture, etc. 1-1-11 No direct revenue effect. 28. Require additional reporting by credit recipients, making information on recipients public, periodic reports on effectiveness in meeting goals 1-1-11 No direct revenue effect. Tax Compliance 29. Provide TRD broad authority to reallocate receipts, income, deductions, exemptions, and other items among entities to properly reflect tax liabilities and credits 7-1-10 0 250 500 750 800 2,300 General Fund 0 50 100 150 160 460 Municipalities 0 15 30 45 45

135 Counties 0 315 630 945 1,045 2,895 Total 30. Increase penalties for failure to file or pay liabilities and for willful evasion 7-1-10 0 500 500 500 500 2,000 General Fund 31. Expand requirements for information reporting and special payment rules 7-1-10 0 450 360 360 120 1,290 General Fund 0 225 180

180 60 645 Municipalities 0 75 60 60 20 215 Counties 0 1,880 2,360 2,990 2,750 9,940 Total 32. Require in-state contractors to post bonds 7-1-10 0 10,763 11,355 11,946 12,471 46,535 General Fund 0 4,443 4,688 4,932

5,149 19,212 Municipalities 0 1,545 1,630 1,714 1,790 6,679 Counties 0 16,751 17,673 18,592 19,410 72,426 Total 33. Require State and local governments to collect and remit tax on contracts 7-1-10 0 3,051 2,384 2,508 2,618 10,562 General Fund 0 1,573 1,229 1,293 1,350

5,446 Municipalities 0 547 427 450 469 1,893 Counties 0 5,172 4,041 4,251 4,438 17,901 Total 34. Increase administrative fee to cover all distributions to local governments 7-1-10 0 (5,204) (5,479) (5,757) (6,017) (22,457) Municipalities 0 5,142 5,422 5,702 5,955 22,221

Counties 0 (11) (16) (22) (31) (80) TIDDs 0 73 77 81 85 316 Pueblos 0 0 4 4 (8) 0 Total (General Fund)

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