AN ACT
RELATING TO FISCAL ESTIMATES; CREATING
A DYNAMIC FORECASTING PILOT PROJECT TO USE ASSUMPTIONS ON BEHAVIORAL RESPONSES
IN ESTIMATING THE FISCAL IMPACT OF CERTAIN LEGISLATION.
BE IT ENACTED BY THE LEGISLATURE OF
THE STATE OF NEW MEXICO:
Section 1. Section 2-5-4.1 NMSA 1978 (being Laws 1979,
Chapter 229, Section 1) is amended to read:
"2-5-4.1. LEGISLATIVE SYSTEMS--COORDINATION WITH OTHER
AGENCIES--FISCAL IMPACT INFORMATION--DYNAMIC FORECASTING PILOT PROJECT.--
A. The legislative finance committee shall
cooperate with the office of the governor, the department of finance and
administration and the taxation and revenue department in designing a timely
and accurate system of providing fiscal impact and other pertinent information
to the legislature concerning pending legislation.
B. Beginning January 1, 2004, a two-year dynamic
forecasting pilot project shall be conducted by the legislative finance
committee, the department of finance and administration, the taxation and
revenue department and the state highway and transportation department in which
fiscal impact information provided to the legislature concerning legislation
that proposes one or more changes to laws on taxation shall be prepared on the
basis of assumptions that estimate the probable behavioral response of taxpayers,
businesses and other persons to the proposed changes. This requirement applies only to legislation:
(1) introduced during the second session of the
forty-sixth legislature and the first session of the forty-seventh legislature;
and
(2) determined by the legislative finance
committee, pursuant to a static fiscal estimate, to have a fiscal impact when
fully implemented in excess of ten million dollars ($10,000,000) in a fiscal
year.
C. The legislative finance committee shall
cooperate with the department of finance and administration and other necessary
executive agencies to develop the methodology to implement the dynamic
forecasting pilot project pursuant to the requirements of Subsection B of this
section.
D. Following the first session of the forty-seventh
legislature, the legislative finance committee shall evaluate the success of
the dynamic forecasting pilot project required by Subsection B of this section
and determine if dynamic forecasting should become a permanent feature of
fiscal impact analyses. In making this
determination, the legislative finance committee shall consider if this
process:
(1) provides a reliable and reasonably accurate
analytic tool to aid legislators in determining the effect of proposed
legislation;
(2) can be accomplished with a reasonable amount
of resources; and
(3) can be incorporated into fiscal impact
estimates in a form that is easily understood and usable."
HB 28
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