NOTE: 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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F I S C A L I M P A C T R E P O R T





SPONSOR: Watchman DATE TYPED: 02/09/01 HB 448
SHORT TITLE: Equitable Tax Credit to Indian Distributors SB
ANALYST: Williams


REVENUE



Estimated Revenue
Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY01 FY02
$ 35,007.9 Recurring State Road Fund
$ 4,764.4 Recurring County & Municipal Road Funds
$ 2,643.8 Recurring County Govt. Road Fund
$ 2,643.8 Recurring Municipal Road Fund
$ 661.0 Recurring Municipal Arterial Fund
$ 119.3 Recurring Aviation Board
$ 59.7 Recurring Motor Boat Fuel Tax Fund
$ (1,350.0) Recurring Local Government Road Fund
$(1,350) to $(2,700) Recurring Corrective Action Fund



(Parenthesis ( ) Indicate Revenue Decreases)





SOURCES OF INFORMATION

LFC Files

Taxation and Revenue Department





Synopsis of Bill



The bill respecifies the qualifications for the current 30 million gallon per year annual limit for registered Indian tribal distributors for which state gasoline tax is not paid. Currently there are two of these distributors. The new qualification would apply to any distributor who sold at least 1 million gallons of fuel before September 1998 from a nonmobile storage container located on tribal lands. Future sales of untaxed fuel outside reservation boundaries would be made from a "permanent fuel storage bulk plant facility" approved and certified by TRD. The registered Indian tribal distributor is restricted to an enterprise which is wholly owned, operated and managed by tribal members.



FISCAL IMPLICATIONS



The fiscal impact on various funds is shown above. It assumes the addition of nine currently registered Indian tribal distributers selling untaxed gasline outside reservation boundaries. It is not clear how long it would take them to install suitable tanks.



TRD notes two additional distributors could qualify in the futures if they become registered Indian tribal distributors which would result in additional gasoline tax revenue loss of a total of $10,200.0 annually and additional petroleum products loading fee revenue loss of $1,500.0 annually.



ADMINISTRATIVE IMPLICATIONS



TRD notes significant record keeping administrative impact.



TECHNICAL ISSUES

page 4, line 16: for consistency, add: "operated and managed"



OTHER SUBSTANTIVE ISSUES



TRD notes of the approximate 930 million gallons of gasoline sold in New Mexico, about 100 million gallons are currently state tax exempt. This bill is expected to add 270 million gallons of untaxed gasoline to the current level with a resulting total of 370 million gallons escaping state taxation, approximately 40% of all gasoline sold in the state.



AW/njw