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.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Suite 101 of the State Capitol Building North.

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

New Mexico Finance Authority (NMFA)

LFC files

SUMMARY

Synopsis of Senate Floor Amendment #1

Senate Floor Amendment #1 refines the definition of assessable premises to exclude apartments, guest houses, mobile homes and other permanent-like residences.

The amendment also provides for a schedule that is a "weaning off" of the fee imposition after fiscal year 2025 as revenues compare to the operating and maintenance costs of the convention center.

Synopsis of Senate Floor Amendment #2

Senate Floor Amendment #2 provides clarity with respect to adjusting the imposition of the fee in that no adjustment in the fee shall be made while revenue bonds issued for the convention center remain outstanding. This amendment also caps the amount of fee revenue that may be used for collecting or otherwise administering the fee to 10 percent.

Synopsis of Bill

This bill creates the Convention Center Financing Act which allows Las Cruces (by ordinance) to assess a daily fee up to $2.50 on all lodging within the city.

This bill authorizes Las Cruces to issue bonds for a convention center project using any the following revenue streams to repay the bonds:

• •the convention center fee



• •that portion of the proceeds of the Occupancy Tax available for payment of revenue bonds (pursuant to 3-38-23(1)(B))



• •any other legal revenues available to the city

Las Cruces must dedicate the revenue derived from the convention center fee to the acquisition of land for and the design, construction, equipping, furnishing, operation and maintenance of a convention center, or to payments of principal, interest or early redemption premiums due in connection with the bonds issued or refunded.

The convention center fee must be reviewed by the Las Cruces city council about every five years after the convention center fee imposition. If no bonds remain outstanding, the convention center fee must be adjusted so the revenue is equal to no more than 120 percent of the operating and maintenance costs of the convention center in the preceding fiscal year.

Las Cruces may to deduct up to 10 percent of the revenue for administration costs.

FISCAL IMPLICATIONS

The New Mexico Finance Authority (NMFA) has conducted a preliminary analysis on the proposed convention center fee. The Las Cruces Lodgers Association reported to the NMFA that in 1999/2000, there were 384 thousand room-nights per year. This level of occupancy would produce a revenue stream of $960 thousand per year. Because Las Cruces may deduct up to 10 percent of this for administration costs, the net revenue stream available to pay bonds would be $864 thousand per year. Assuming debt service coverage of 1 ˝ -1, the annual debt service would be $576 thousand. per year.

ADMINISTRATIVE IMPLICATIONS

Minimal.

JBE/sb