NOTE:  As provided in LFC policy, this report is intended only 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 for other purposes.

 

The most recent FIR version (in HTML & Adobe PDF formats) is available on the Legislative Website.  The Adobe PDF version includes all attachments, whereas the HTML version does not.  Previously issued FIRs and attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

 

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

 

 

SPONSOR:

Stell

 

DATE TYPED:

2/18/03

 

HB

481

 

SHORT TITLE:

Water Conservation Gross Receipts Exemption

 

SB

 

 

 

ANALYST:

Smith

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

(100.0)

(110.0)

Recurring

General Fund

 

(65.0)

(70.0)

Recurring

Local Governments

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

Responses Received From

 

TRD

 

SUMMARY

 

     Synopsis of Bill

 

House Bill 481 enacts a new section of the Gross Receipts and Compensating Tax Act to provide a gross receipts tax exemption for receipts from the sale and installation of water conservation equipment.  The state engineer and interstate stream commission shall cooperate with New Mexico State University and New Mexico Institute of Mining and Technology to develop standards for water conservation technologies eligible for the exemption. 

 

FISCAL IMPLICATIONS

 

TRD relied on data from the Farm and Ranch Irrigation Survey conducted by the United States Department of Agriculture reports that New Mexico farms spent $12 million for the purchase of irrigation equipment and machinery in 1998.  Approximately 12% ($1.5 million) of total irrigation equipment expenditures were for conservation purposes.   The revenue estimate assumes agricultural expenditures for irrigation equipment total about $14 million per year.  The estimate


further assumes non-agricultural irrigation equipment expenditures total approximately $3 million.  Of the $17 million total irrigation expenditures, 12% ($2 million) is assumed to be on qualified technologies. 

 

TECHNICAL ISSUES

 

·        TRD notes that if this proposal is meant to be an agriculturally based exemption, then language should be added to clarify the point. 

 

SS/njw