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

 

 

 

SPONSOR

Rodella

DATE TYPED

01/29/04

HB

234

 

SHORT TITLE

State Aviation Fund Distributions

SB

 

 

 

ANALYST

Valenzuela

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY04

FY05

FY04

FY05

 

See Fiscal Implications

 

 

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

Relates to Appropriation in the General Appropriation Act for the Aviation program of the New Mexico Department of Transportation

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY04*

FY05

($27.8)

($66.7)

($65.5)

Recurring

General Fund

$27.8

$66.7

$65.5

Recurring

State Aviation Fund

(Parenthesis ( ) Indicate Revenue Decreases)

* reflects five months of collection activity in FY04.

 

SOURCES OF INFORMATION

 

LFC Files

 

Responses Received From

New Mexico Department of Transportation

Taxation and Revenue Department did not respond to a request for an analysis of this bill.

 

SUMMARY

 

Synopsis of Bill

 

House Bill 234 adjusts the distribution, from gross receipts tax paid on jet-fuel, to the State Aviation fund by an 11.1 percent increase from 4.31 percent to 4.79 percent. The bill carries an emergency clause.

 

Significant Issues

 

During the 2003 legislative session, the Legislature passed, and the Governor signed, HB62 increasing the gross receipts tax deduction on aviation jet fuel from 40 percent to be 55 percent.  The original version of HB62 had proposed a 50 percent deduction, with a hold-harmless provision increasing the distribution to the State Aviation Fund.  However, an amendment to the original bill inadvertently nullified the hold-harmless provision. HB234 corrects the problem.

 

FISCAL IMPLICATIONS

 

House Bill 234 would increase revenues into the state aviation fund by 11.1 percent. Gross receipts tax paid on jet-fuel represents 25 percent of the revenue source for the Aviation program budget. The table below provides detail on the calculation:

 

 

FY05

FY06

Aviation Jet Fuel Total Sales

    $30,900,000

  $30,300,000

   Less 55% deduction

    16,995,000

  16,665,000

Adjusted total sales

    13,905,000

  13,635,000

 

 

 

Current law: Multiply gross receipts by 4.31%

         599,306

       587,669

HB234: new distribution (4.79%)

         666,050

       653,117

New revenue to Aviation fund

          66,744

        65,448

 

 

Because of the emergency clause, the adjusted distribution would also have an impact for approximately five months in FY04. This amount would be roughly $27.8 thousand.

 

Revenues into the general fund would decrease in a proportionate amount.

 

According to the department, the aviation fund is used to match Federal Aviation Administration (FAA) funds for airport construction projects. These dollars can leverage 90 percent federal funds and 5 percent local government funds.

 

MFV/dm