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:

Carraro

 

DATE TYPED:

2/24/03

 

HB

 

 

SHORT TITLE:

Temporary Tobacco Settlement Fund Transfer

 

SB

730

 

 

ANALYST:

Smith

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

42,900.0

37,200.0

 

Recurring

General  Fund

6550.0

 

 

 

Recurring

General  Fund

57,000.0

 

 

Non-Rec

General  Fund

(42,900.0)

(37,200.0)

 

Recurring

Tobacco Settlement Permanent Fund

(57,000.0)

 

 

Non-Rec

Tobacco Settlement Permanent Fund

 

59,260.4

 

Recurring

Other State funds

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

Responses Received From

DFA

 

SUMMARY

 

     Synopsis of Bill

 

Senate Bill 730 increases the cigarette tax and diverts revenue from the tobacco master settlement agreements.

 

The bill imposes a new tax, the "cigarette surtax", on cigarette sales in the state.  The tax is equal to $0.05 per cigarette ($1.00 per pack); this is in addition to the existing tax, which is equal to $0.0105 per cigarette ($0.21 per pack). 

 

The bill makes the following distribution changes from the Cigarette Surtax:

 

  • UNM cancer research and treatment center will receive 8-percent of the cigarette surtax provided that 25-percent of the funds are expended on genomic research;

 

  • NMFA will receive 6-percent of the cigarette surtax given that the funds are used to expand UNM hospital;

 

  • The tobacco settlement permanent fund will receive a distribution equal to 43-percent of the cigarette surtax until the current permanent fund balance is replenished at current levels--- assuming that the tobacco settlement fund balance and the permanent fund balance are transferred to the general fund;

 

  • The remaining balance of the cigarette surtax (43 percent) is transferred to the supplemental Medicaid fund. The supplemental Medicaid fund is created by this bill and will be administered by the Human Services Department.  The purpose of the fund is to provide legislative appropriations for expenses incurred by the Medicaid program.

 

The bill then transfers the unencumbered balance of the two tobacco settlement permanent and program funds to the general fund.  The bill includes an emergency clause.

 

FISCAL IMPLICATIONS

 

Distributions from the surtax are as follows:

             

  • UNM Cancer research & treatment, $4.7 million;
  • NMFA, $3.6 million;
  • Tobacco Settlement Permanent Fund, $25.5 million; and
  • Supplement Medicaid Fund, $25.5 million.

 

SS/yr