Master FIR (1988)

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

SPONSOR:	Smith		DATE TYPED:	02/23/01		HB
SHORT TITLE:		Increase Local Hospital Gross Receipts Tax				SB	567
					ANALYST:		Eaton

REVENUE

Estimated Revenue		Subsequent Years Impact	Recurring or Non-Rec	Fund Affected
FY01	FY02	Subsequent Years Impact	Recurring or Non-Rec	Fund Affected
	$ 1,245.0	$ 1,358.0	Recurring	Sierra County Local Hospital
	$ 38.0	$ 42.0	Recurring	TRIMS/NMFA Admin. Fees

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

Taxation and Revenue Department (TRD)

New Mexico Finance Authority (NMFA)

SUMMARY

Synopsis of Bill

This bill revises two different county hospital gross receipts tax programs which Sierra county is eligible to impose. The tax rate allowed to be imposed by Sierra County or Torrance county under the Local Hospital Gross Receipts Tax would be revised from 0.5 percent to 1 percent

This bill amends the uses for the 0.25 percent Sierra county Hospital Emergency Gross Receipts Tax to include "remodeling or improvements necessary for the conversion of a county hospital facility to another local government use."

FISCAL IMPLICATIONS

The Taxation and Revenue Department (TRD) report that the full imposition of the tax would have an estimated full year impact on Sierra county revenues of approximately $1.4 million. This level of revenue should be able to support approximately $17 million in bonds (assuming 20 year bonds at 5 percent and a coverage ratio of 1-1).

ADMINISTRATIVE IMPLICATIONS

Minimal.

TECHNICAL ISSUES

The Taxation and Revenue Department (TRD) report that the change to the Local Hospital Gross Receipts Tax rate in Section 2, Subsection A, Paragraph 4 (page 14, lines 5 through 11) would leave Cibola County with no compiled statute allowing their current tax imposition. TRD recommends the bill be amended to allow a tax rate of one-half of one percent, unless imposed on or after July 1, 2001 in which case the rate could not exceed one percent.

Paragraph (4) of Subsection A of Section 7-20C-2 NMSA 1978 describes Cibola County, Sierra County and Torrance County. Of those three, only Cibola County has imposed the tax (effective July 1, 1997).

OTHER SUBSTANTIVE ISSUES

The New Mexico Finance Authority (NMFA) report that the change allowing Sierra County to change the use of a facility that it acquired and improved with bond proceeds from the New Mexico Finance Authority(NMFA) may require the NMFA to notify and get consent from any or all of the following: NMFA's bond insurance provider, bond rating agencies and/or bondholders, and would also require that NMFA amend its loan agreement with Sierra County to allow for such a change.

The imposition of an additional 0.5 percent local tax would make the tax rate in T. or C. the highest in the state at 7.0625. Currently, Questa, Red River and Taos Ski Valley have the highest rates at 6.875 percent.

JBE/njw