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

 

 

 

SPONSOR:

Altamirano

 

DATE TYPED:

2/18/03

 

HB

 

 

SHORT TITLE:

Tricare Services Gross Receipts

 

SB

654

 

 

ANALYST:

Smith

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

(295.0)

(320.0)

Recurring

General Fund

 

(195.0)

(215.0)

Recurring

Local Funds

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

Duplicates HB759

 

SOURCES OF INFORMATION

 

Responses Received From

 

TRD

 

SUMMARY

 

     Synopsis of Bill

 

Senate Bill 654 amends Section 7-9-77.1 NMSA 1978 to provide doctors and osteopathic physicians a gross receipts tax deduction for receipts from third-party administrators of the Federal Military TRICARE program.  TRICARE is a managed care health insurance program similar to various managed care private insurance programs.

 

The section is further amended to clarify that medical doctors licensed pursuant to Section 66-6-13 (Licensure by Endorsement) and osteopaths licensed pursuant to Section 66-10-12 (Licensure without Examination) qualify for the current Medicare deduction. 

 

The bill also makes a minor change in terminology from “osteopaths” to “osteopathic physicians”.  

 

FISCAL IMPLICATIONS

 

TRD notes that roughly 3.9% of the state’s population is covered by TRICARE.  TRICARE program administrators report paying $7.5 million in claims in fiscal year 2000 for all professional services.  A 6% average rate of growth was used to approximate the base on which the fiscal impact is estimated. 

 

OTHER SUBSTANTIVE ISSUES

 

TRD notes that in addition to adding an element of stability to the gross receipts tax, receipts of the health care industry grow more quickly than general revenue.  Exempting this sector reduces the state’s ability to generate adequate revenue from the gross receipts tax over time. 

 

SS/njw:prr