JE/njwNOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature. The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.
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| SPONSOR: | Lundstrom | DATE TYPED: | 02/04/01 | HB | 224 | ||
| SHORT TITLE: | Use of County Correctional Gross Receipts Tax | SB | |||||
| ANALYST: | Eaton | ||||||
| Subsequent
Years Impact |
Recurring
or Non-Rec |
Fund
Affected | ||
| FY01 | First Fiscal Year | |||
| $ 2,291.7 | $ 2,500.0 | Recurring | McKinley County Corrections and Corrections Bond Issue. | |
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates Senate Bill 188
SOURCES OF INFORMATION
LFC Files
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of Bill
This bill adds McKinley county to those counties eligible to impose a County Corrections Facility Gross Receipts Tax. Rather than requiring a general obligation bond issue for a corrections facility as a prerequisite for the tax (the current law requirement), McKinley county could obtain a New Mexico Finance Authority loan financed through revenue bonds to which the County Corrections Facility Gross Receipts Tax is pledged.
The bill adds language to the definition of judicial correctional facility to include courthouses and any "other" county facility used as a county administrative office.
Significant Issues
Currently, Dona Ana, Chaves and Valencia county are eligible to impose the County Corrections Facility Gross Receipts Tax at a rate of 0.125%. Chaves county imposed the tax effective January, 1994 at a rate of 1/8%. Valencia county imposed the tax effective January 1999 at a rate of 1/8%. Dona Ana county has not imposed the tax. McKinley county would be able to impose the tax at twice the rate of the other counties: 0.25%
In all of the current eligible counties, an election by the public is required for a county board to impose the tax. It is noteworthy that this bill includes language that permits imposing the tax without an election by the voters.
FISCAL IMPLICATIONS
The estimated full year impact of this bill is $2.5 million. The growth rate in McKinley county's tax base was assumed to by 5 percent per year over fiscal year 2000 levels.
The revenue should be able to support approximately $19.5 million in bonds for McKinley county (assuming 10 year bonds at 5 percent and a 1-1 coverage ratio).
JE/njw