Pub 18 2021 Issue 1

8 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S n EXECUTIVE VICE PRESIDENT’S MESSAGE continued from page 7 • Provide a 1% distribution of the state’s multibillion-dollar Land Grant Permanent Fund for early childhood education. The legislature approved the constitutional amendment. • Create a clean fuel standard to reduce emissions that would include production, shipping and use. The legislation was not enacted. Overview Overall, the NMBA had a successful 2021 legislative session. Most importantly, we were able to assist in defeating a proposal to create a state bank. We opposed a number of mortgage-related proposals that were defeated, as well as real and personal property proposals that included a homestead exemption increase and a real estate transfer tax. There were a few legislative disappointments. For the second year in a row, the Legislature did not approve legislation to repeal the state income taxation on Social Security. Also, a mandate to provide a course for financial literacy in public schools was unsuccessful. We still have concerns with HB 255, the liquor license reform bill. We believe the bill did not provide adequate protection to existing licensees, and it may well impair the collateral banks hold for certain liquor license loans. Bills Monitored by the NMBA (Enacted and Signed) • Taxation relief for small business (SB 1) • Small Business Recovery Act (SB 3) • Housing Trust Fund funding (HB 2) • Broadband (SB 93, HB 2, HB 10) • Sustainable Economy Task Force (SB 112) • Adjustable-rate mortgages (SB 365) • LEDA project funding (HB 11) • Liquor license reform (HB 255) • Gross receipts tax deduction for manufacturing services (HB 278) • Expansion of low-income comprehensive tax rebate and working families tax credit (HB 291) • Workforce training residence requirements (HB 155) • Early childhood education resolution (HJR 1) • Air quality and hazardous waste regulations (SB 8) Bills Monitored by the NMBA That Were Not Enacted • Real estate transfer taxation (HB 19) • Homestead exemption increase (HB 36) • Private right of action allowed for certain environmental statutes (HB 50) • Interest rate caps on small loans (HB 99, HB 149, SB 66) • Minimum wage increase (HB 110) • Public bank (HB 236, SB 313) • Public education financial literacy course requirement (HB 302, SB 170, HB 163) • Clean Fuel Standard Act (SB 11) • Fracturing moratorium (SB 149) • Financial Exploitation Act (SB 189) • Mortgage Relief Act (SB 349) • Repeal state taxation of Social Security (HB 49, SB 78, SB 162, SB 208) The Special Session Legislators ended the two-day 2021 Special Session on March 31. The Legislature considered and approved three substantive bills: • SB 1 to expand the Local Economic Development Act (LEDA) • HB 2 to legalize adult use of cannabis and • SB 3 to expunge arrest and conviction records for certain cannabis offenses The governor signed the three bills. The principal purpose given by the governor for calling a Special Session was to consider cannabis legalization proposals. The bill legislators ultimately approved, HB 2, decriminalizes the possession, use, production, transportation, and sale of commercial cannabis for nonmedical adult use and creates a regulatory and taxation structure. The bill enacts the Cannabis Regulation Act (CRA), a comprehensive plan for regulating and licensing commercial cannabis production and distribution, including the sale and consumption of cannabis by persons age 21 or older. A new Cannabis Control Division (CCD) created in the Regulation and Licensing Department is charged with regulating, administering, and collecting fees connected with commercial cannabis activity and licensing, the medical cannabis program, and providing cannabis education and training programs. The Department of Health’s authority under existing law related to commercial cannabis activity and the medical cannabis program is transferred to CCD. The new law will allow adults 21 and older to personally possess up to 2 ounces of cannabis, 16 grams of cannabis extract or 800 milligrams of edibles. Adults 21 and older can also grow up to six mature plants. Licensed sales will begin no later than April 2022, and the state will begin issuing business licenses by January 2022. The bill imposes an excise tax of 12% in addition to gross receipts tax. In 2025, the excise tax will increase from 12% to 18% over five years. The 2021 Annual Convention With summer just around the corner, the NMBA is in full swing preparing for our annual convention, scheduled August 25-27, 2021, in Orlando, Florida. n There were a few legislative disappointments. For the second year in a row, the Legislature did not approve legislation to repeal the state income taxation on Social Security.