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:

Ingle

 

DATE TYPED:

03/11/03

 

HB

 

 

SHORT TITLE:

Amend Development Incentive Act

 

SB

744/aSFC/aHTRC

 

 

ANALYST:

Gilbert

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

 

 

NFI

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

Duplicates HB 659

 

SOURCES OF INFORMATION

 

Responses Received From

Taxation and Revenue Department (TRD)

Attorney General’s Office

 

SUMMARY

 

     Synopsis of HTRC Amendment

 

House Taxation and Revenue Committee amendment to Senate Bill 744 makes non-substantive technical corrections to page 3 and page 11.

 

     Synopsis of SFC Amendment

 

Senate Finance Committee amendment to Senate Bill 744 makes the following technical corrections:

 

The definition of a "new business facility" in Section 2(A)(3) was amended as outlined below:

 

(b) the facility is acquired by or leased to the taxpayer on or after July 1, 1991 2003 provided, the facility shall be deemed to have been acquired by or leased to the taxpayer on or after the specified date if the transfer of title to the taxpayer, the transfer of possession pursuant to a binding contract to transfer title to the taxpayer or the commencement of the term of the lease to the taxpayer occurs ….

 

Section 3(B) of SB 744 was amended as follows:

 

B. The exemption authorized by Section 3(A), exempting commercial personal property of a new business facility located in the county or municipality from the imposition of any property tax, shall may be for up to one hundred percent of the value for property taxation purposes of the property exempted.

 

     Synopsis of Original Bill

 

Senate Bill 744 amends NMSA 1978, § 3-64-1 through NMSA 1978, § 3-64-5 (Development Incentive Act) relating to counties and municipalities being allowed to exempt certain businesses with commercial personal property from property tax provisions.  This bill allows: (a) any County or Municipality to participate, (b) raises the exemption from 50% to 100% of the value, (c) raises the exemption to 20 years (as opposed to 5), and (d) adds the generation of electricity as an eligible business.

 

     Significant Issues

 

Proposed amendments to the Development Incentive Act would 1) change its name to the “Community Development Incentive Act”, 2) change the definition of “new business facility” to include facilities purchased after December 21, 2001, 3) allow Class A counties and their municipalities to offer incentives provided by the act, 4) include electrical generation facilities in the list of businesses that qualify for the exemption, 5) extend the exemption to 100 percent of personal property, and 6) extend the exemption to a maximum time period of 20 years.

 

FISCAL IMPLICATIONS

 

According to the Taxation and Revenue Department ( TRD), SB 744 would not impose significant impacts on state or local revenue sources. Personal property currently accounts for a very small fraction of New Mexico’s total assessed property value and the number of businesses qualifying for the exemption would be a small.

 

RLG/njw