Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are available on the NM Legislative Website (legis.state.nm.us). Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and attachments may also 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	Marquardt		DATE TYPED	1-31-04		HB	278
SHORT TITLE		Weapon Testing Tax Deduction				SB
					ANALYST		Taylor

REVENUE

Estimated Revenue		Subsequent Years Impact	Recurring or Non-Rec	Fund Affected
FY04	FY05
Indeterminate	Indeterminate	Indeterminate	Recurring	General Fund
Indeterminate	Indeterminate	Indeterminate	Recurring

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Taxation and Revenue Department

SUMMARY

House Bill 278 exempts from the compensating tax the value of equipment, replacement parts or other components of airborne advanced tactical laser weapons system or the value of entire advanced tactical laser weapons systems, brought into the state for testing for the U.S. Defense Department at a major range and test facility.

The bill carries an emergency clause, making it effective when signed by the Governor.

FISCAL IMPLICATIONS

TRD reports that the fiscal impact of the bill is uncertain. They note that proponents have reported that advanced laser technology system testing is not happening in New Mexico because of the compensating tax. They also report that it is not possible for them to know if the incentive provided by allowing the compensating tax deduction would either induce advanced laser technology testing to take place in the state, or if advanced laser technology testing would happen even without the deduction. They also note that their analysis does not account for potential investment and employment benefits that would accrue to the state if the proposed deduction resulted in advanced laser technology testing.

ADMINISTRATIVE IMPLICATIONS

TRD reports minor administrative implications that can be absorbed with existing resources.

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