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
SPONSOR |
|
DATE TYPED |
|
HB |
361/aHFl#1 |
||
SHORT
TITLE |
Military Base Retention |
SB |
|
||||
|
ANALYST |
Collard |
|||||
APPROPRIATION
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
||
FY04 |
FY05 |
FY04 |
FY05 |
||
|
|
|
See
Narrative |
|
|
(Parenthesis
( ) Indicate Expenditure Decreases)
REVENUE
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
FY04 |
FY05 |
|||
|
|
See
Narrative |
|
|
(Parenthesis ( ) Indicate Revenue Decreases)
Relates to SB 333, SB 217 and SB 278
LFC Files
Responses
Received From
Economic
Development Department
Taxation
and Revenue Department
SUMMARY
Synopsis
of HFl Amendment #1
The House Floor Amendment #1 to House Bill 361
strikes the appropriation of $400 thousand.
Synopsis of Original
Bill
House Bill 361 appropriates $400 thousand from
the general fund to the Economic Development Department for the purpose of
administering and operating the Office of Military Base Planning and
Support. Additionally, the bill moves
the policy and administration arm of the office from the Economic Development
Department to the governor’s Office of Homeland Security. The bill also exempts the office from the
open meetings act when relocation of military units is discussed or information
is obtained pertaining to office strategies.
The bill also proposes a new section of the gross receipts and
compensating tax act is enacted to create a deduction for test articles. Finally, the bill contains an emergency
clause.
Significant Issues
The Economic
Development Department indicates the proposed legislation contains the provision
for deducting the value of “test articles” which are used for research and
testing in the performance of contracts with the Department of Defense in
computing the compensating tax due. The
proposed legislation defines “test articles.” The legislation does not include
research and testing by the national laboratories, but is designed to apply to
the Department of Defense (DOD) Research and Development facilities located on
New Mexico’s military installations: Holloman
AFB, the 46th Test Group; Kirtland AFB, the Air Force Operational
Test and Evaluation Center, the Air Force Research Laboratory (two
directorates—Directed Energy and Space Vehicles), and Space and Missile Systems
Center Det 12; and White Sands Missile Range, including
numerous “tenant” organizations with similar research and development missions.
·
The purpose of including this compensating tax
revision is to increase “business” at
·
Currently,
·
Senior military engineers and project managers have
stated that
FISCAL IMPLICATIONS
The appropriation of $400 thousand contained in
this bill is a non-recurring expense to the general fund. Any unexpended or unencumbered
balance remaining at the end of FY05 shall revert to the general fund.
TRD indicates that it is uncertain that this bill will have fiscal
impact on general fund revenues. Their report indicated a possible non-recurring
impact of $160 thousand, but they also noted that both the magnitude and timing
related to the potential revenue loss are uncertain. The estimated loss is based on the
observation that the state occasionally receives compensating tax on privately
owned test articles. They also note that there is a potentially positive impact
that could result should the bill result in new investment and additional
employment. Given that the potential,
immediate fiscal impact is small, uncertain, non-recurring and is
counterbalanced by possible economic development benefits, no fiscal impact is
shown for this bill.
It should be noted there is a special
appropriation of $250 thousand in Section 5 the General Appropriation Act. Additionally, there is $150 thousand in
Section 4 in the Technology and Space Commercialization Program of the Economic
Development Department (EDD).
EDD notes the bill
provides continuing funding for the Office and for the
Commission, which includes travel and a modest level of administrative support,
it includes money for an evaluation of New Mexico’s military installations as
compared to the published Department of Defense Base Realignment and Closure
Criteria which were published (draft) in December 2002 and will be finalized
during February. It will also include
money for support of the various communities.
RELATIONSHIP
House Bill 361 is similar, but broader, than
Senate Bill 217 and House Bill 278, and Senate Bill 333.
OTHER SUBSTANTIVE ISSUES
EDD notes the Secretary of Defense has announced a Base
Closure and Realignment round in 2005, and the New Mexico
TRD notes this deduction is intended to help attract defense system
testing contracts—including major portions of the Future Combat System and
Advanced Tactical Laser Weapons System programs—WSMR. According to industry representatives, WSMR
is one of several test facilities nationwide with the capacity to handle the
testing.
Additionally, according to the Federal Procurement
Data Center, New Mexico ranked third in per capita federal procurement by place
of performance in fiscal year 2002.
KBC/lg