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.

 

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

 

 

SPONSOR:

Varela

 

DATE TYPED:

02/25/03

 

HB

876

 

SHORT TITLE:

Civic and Convention Center Funding Act

 

SB

 

 

 

ANALYST:

Padilla

 

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

$1,000.0

 

Recurring

Local Government

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

Relates to SB 1, SB 792

 

SOURCES OF INFORMATION

 

LFC Files

 

Responses Received From

Department of Finance and Administration

Economic Development Department

Tourism Department

City of Santa Fe

 

SUMMARY

 

     Synopsis of Bill

 

House Bill 876 authorizes certain local government entities to impose a fee on the users of lodging facilities for the purpose of financing the design, construction and furnishing of a new civic and convention center and an adjoining parking garage.  The local government entities are:  1) an incorporated municipality in a Class A county with a 2000 census population of between 50,000 and 70,000 if the city council has authorized the construction of a civic and convention center; 2) the county where the incorporated municipality listed above is located, provided that the county and the municipality have entered into a Joint Powers Agreement for the collection and expenditure of the revenue.

 

The lodgers’ fee cannot exceed more than one percent of the gross room revenue per day.  The fee can be imposed only for the period necessary to cover payment on revenue bonds issued to finance the convention center and cannot exceed thirty years.  Several exemptions from the lodgers’ fee are provided, including very small facilities. 

 

The bill authorizes qualified municipalities who have imposed a convention center fee to issue revenue bonds to defray the costs associated with the construction and equipping of the center. 

 

The bill provides penalties that local governments can impose on persons failing to pay the fee or otherwise violating the convention center fee ordinance.

 

     Significant Issues

 

The municipality that meets the definition given in the bill of “qualified municipality” is Santa Fe.  According to the City of Santa Fe, a community task force has reached agreement to build a new civic and convention center where Sweeney Center currently stands.  A parking structure will be built also, with the participation of Santa Fe County.  The first phase of the project—the convention center—is expected to cost $30 million, while the underground parking structure is expected to cost $14 million.

 

The new center will be financed through the means authorized by this bill:  a one-time, special use fee of 1 percent of the value of lodging, to be paid by the users of lodging facilities. 

 

FISCAL IMPLICATIONS

 

According to the City of Santa Fe, the 1 percent fee will bring in $1,000.0 per year in new revenue.  The City of Santa Fe already imposes a lodger’s tax of 1 percent; that revenue is already dedicated to the financing of the “bricks and mortar” elements of the new center.

 

RELATIONSHIP

 

SB 1 and SB 792 also allow certain municipalities to impose fees for the financing of new convention center facilities or the improvement of existing facilities.  SB 1 applies to a new convention center in Las Cruces.  SB 792 applies to the improvement of the Albuquerque Convention Center.

 

POSSIBLE QUESTIONS

 

1. Have other financing options been explored via the New Mexico Finance Authority?

 

LP/sb