BE SEEN. BE HEARD: High-Priority Public-Private Partnerships Bill Gets First Hearing
Our state's infrastructure deteriorates with time and wear, but with bleak revenue forecasts for the state budget, how can imperative maintenance and replacement of the infrastructure proceed? ACI believes the answer is public-private partnerships (P3s), and ACI has made P3s a priority of this session. The flagship P3 bill of the session is House Bill 275
, co-sponsored by Rep. Larry Larrañaga
and Sen. Carlos Cisneros
, and it's getting its first of three assigned House committee hearings on Thursday. At approximately mid-session, we need to send a message loud and clear that P3s mean jobs. WE NEED YOU TO BE THERE!
Fill the Room for HB 275 (Public-Private Partnerships Act)!
Thursday, Feb. 16, 2017, 8:30 a.m.
House Transportation, Public Works and Capital Improvements Committee, Room 317, New Mexico State Capitol
See a Summary about House Bill 275
See HB 275
See the House Committee Schedule
Sometimes the best solutions to our challenges come from the private sector. The use of private resources to provide solutions to public problems should not be restricted when the benefits to the public can be demonstrated at a reasonable cost. The establishment of guiding principles governing the creation of public-private partnerships will allow public entities to benefit from these solutions. ACI supports public-private partnerships allowing the state and certain local governments to enter into long-term partnerships with private-sector partners to facilitate public projects to address New Mexico’s aging infrastructure and critical public
Mandatory Unitary Combined Reporting Bill Moves with Changes
Once a committee substitute was in place for discussion purposes in Senate Corporations and Transportation, Sen. Peter Wirth
said that his mandatory unitary combined reporting bill embodies many of the same concepts as other bills he has presented since he first arrived at the Legislature in 2005. The 2017 version, Senate Bill 1
(Unitary Group Combined Tax Reporting) incorporates the “water’s edge” reporting, rather than worldwide, which excludes the income and apportionment factors of affiliates of the unitary group that are incorporated in a foreign country or that conduct most of their business outside the United States.
Audience members representing a variety of industries, including ACI’s Jason Espinoza, spoke in opposition to the bill. Recurring concerns about the bill were the need to include single sales factor and the need to exclude foreign dividends.
Providing expert testimony for SB 1 was Richard Anklam, the president and executive director of the New Mexico Tax Research Institute and a longtime member of ACI’s Taxation Committee. Anklam provided context about foreign dividends and the reason it was a topic of concern for many in the audience.
Anklam: Currently, if you’re a separate filer in New Mexico right now, the state cannot tax foreign dividends. The state can tax foreign dividends if you’re a combined or consolidated filer. You get 100 percent dividends exclusion if you’re a separate filer in New Mexico currently, and you get zero exclusion as a consolidated or combined filer. So, if you have a lot of foreign dividends, and you’re a separate filer in New Mexico, the last thing you want to do is change your status, because you lose that immunity. The reason the court did that is foreign dividends are not subject to apportionment. That is why most states give some because you’re trying to exclude the foreign activities.
Sen. James White
asked the bill sponsor if he would consider exempting more of a filer’s foreign dividends than the 50 percent proposed in the bill.
Chairman Clemente Sanchez
proposed changing the bill to mirror surrounding states by excluding 100 percent of foreign dividends. Sen. Wirth conceded to the amendment.
The bill, as amended in the committee, received bipartisan support with a 5-3 vote, with Sen. Michael Padilla
moving for a “do pass,” and Sen. White seconding. The bill moves on to Senate Finance. Chairman Sanchez suggested speaking with industry representatives to address any further concerns as the bill moves forward. Single sales factor remains a priority for many.
Income and Capital Gains Taxes Bill Loses Steam
ACI is actively opposing bills proposing new taxes on businesses. Seen throughout the session is ACI President and CEO Jason Espinoza testifying shoulder-to-shoulder with Minda McGonagle, the registered lobbyist of the National Federation of Independent Business, in opposition to tax bills.
One such bill this week was House Bill 310
(Income and Capital Gains Taxes), sponsored by Rep. Bill McCamley
. House Taxation and Revenue heard a committee substitute for the bill on Monday. Although McCamley said the substitute was "more palatable," the committee unanimously voted to temporarily table the bill.
HB 310 proposed to add a top-bracket marginal tax rate to each filing status for personal income tax, to reduce the net capital gains deduction, and to increase the motor vehicle excise tax.
In his comments opposing the bill, Jason said, "We do have issues with all three portions of the bill, but I’m going to speak specifically to the personal income tax increases. That’s a tax increase on small businesses across the state. Those are pass-through entities. Many LLCs and other small businesses file personal income taxes, so it’s not just a tax on high-income individuals, this is a tax on small businesses across the state. We’re looking at the long term in terms of supporting a business environment, to create more businesses, to create more jobs, which will then in turn create more revenue."
Also opposing the bill during the hearing was the New Mexico Automotive Dealers Association, an ACI member, represented by President Charles Henson and registered lobbyist Randy Traynor, whose firm is also a member.
During the committee discussion, Rep. Jason Harper
said that he has been working closely with the Fourth Floor, and he has been told Gov. Susana Martinez will not sign anything that is "revenue-positive."