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(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates Senate Bill 516

SOURCES OF INFORMATION

New Mexico Finance Authority (NMFA)

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of Bill

This bill adds a section to the County Local Option Gross Receipts Taxes Act that allows certain counties to impose a County Education Gross Receipts Tax for public school use.

A county gross receipts tax can be enacted as an excise tax, at a rate 0.5 (one-half) percent. The revenues may only be dedicated for the payment of County Education Gross Receipts Tax bonds, and may only be imposed for the period necessary to pay the principal and interest on the bonds, not to exceed ten years from the imposition of the tax.

The boards of each school district located within the set county must agree to provide at least one-fourth of the bond proceeds to an off-campus program should one be present in at least one of the school districts. The remaining proceeds shall be distributed proportionately to each school district based on the ratio that the population of each school district bears to the population of all the school districts in the county based on the 2000 federal decennial census.

Imposition of the tax requires voter approval at a regular or special election. Should the question of imposing the tax fail, a minimum of one year must pass before the boards within the county propose the implementation of the tax.

The County Education Gross Receipts Tax may be imposed only by class B counties with populations of less than twenty-five thousand (based on the 1990 federal decennial census) and a net taxable value for property tax purposes of more than $500 million: Taos County.

FISCAL IMPLICATIONS

This bill provides school districts within class B counties further financing options to improve or build schools located within those counties. Unless approved by the voters of Taos county, this bill has no fiscal impact.

If approved by the voters, this bill would provide Taos County with $1 million and $2.6 million in FY02 and FY03 respectively for bond service. Taxation and Revenue Department (TRD) and New Mexico Finance Authority (NMFA) administrative fees are estimated to be $32.3 in FY02 and $80.9 in FY03.

TRD estimate this funding level to Taos county could support the issuance of $20.5 million in bonds, assuming 10 year bonds at 5 percent and a coverage ratio of 1-1.

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