Two New Mexico state Senate panels have unanimously approved a bill that would ensure even nonprofit managers of Department of Energy national laboratories in the state would pay a gross receipts tax.
The state Senate’s Finance Committee on Thursday approved the bill unanimously Thursday, less than a week after the measure unanimously passed the chamber’s Corporations and Transportation Committee. If ultimately passed by the state Legislature and then signed by Gov. Susana Martinez (R), the bill would go into effect on July 1.
A gross receipts tax is essentially a tax on revenue. New Mexico’s statewide gross receipts tax is 5 percent, though counties including Los Alamos County levy a higher rate on certain goods and services sold. Senate Bill 17, Gross Receipts For Certain Nonprofits, would apply to both the Sandia National Laboratories in Albuquerque and Los Alamos National Laboratory (LANL).
If a nonprofit ran the lab under current state law, the state would miss out on $25 million to $30 million, bill proponents estimate.
The Department of Energy’s National Nuclear Security Administration expects to award a new contract to manage LANL in April or May. The lab management portion of the deal will cost more than $20 billion over 10 years, including options. The winner could earn as much as $50 million per year in lab-management fees.
Bidding on the new contract closed Dec. 11 but, unlike the last competition to manage Los Alamos, the field this time was open to nonprofit entities. Local interest groups in New Mexico, who have supported the bill, have worried the Los Alamos County economy would suffer if a nonprofit took over lab management. Nonprofits are currently exempt from the state’s gross receipts tax.
Incumbent lab manager Los Alamos National Security is off the job on Sept. 30. The industry-academia consortium is a for-profit limited liability corporation led by the University of California and Bechtel National, with industry teammates AECOM and BWX Technologies.
The University of California, the University of Texas, and Texas A&M University have all confirmed they are bidding on the new contract. The universities are not expected to be part of the same bidding team, and no bidder has discussed its teaming arrangements.
National Technology and Engineering Solutions manages Sandia in Albuquerque. That for-profit entity is a Honeywell subsidiary.
