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 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	Silva		DATE TYPED	2-14-04		HB	447
SHORT TITLE		Increase Leased Vehicle Gross Receipts				SB
					ANALYST		Neel

REVENUE

Estimated Revenue		Subsequent Years Impact	Recurring or Non-Rec	Fund Affected
FY04	FY05
	1,950.0	2,025.0	Recurring	Highway Infrastructure Fund
	650.0	675.0	Recurring	Local Government Board Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Taxation and Revenue Department (TRD)

NM Department of Transportation (DOT)

SUMMARY

Synopsis of Bill

House Bill 447 increases the Leased Vehicle Gross Receipts tax rate from 5 percent to 7 percent of gross receipts attributable to the short-term rental of vehicles.

Significant Issues

NMDOT provided the following information:

Annual revenue to the Local Governments Road Fund is allocated by statutory formula to certain uses: the Cooperative Agreements Program (42%), the School Bus Route Program (16%), the County Arterial Program (26%), the Municipal Arterial Program (16%), and to Equipment ($500 thousand). These amounts are further allocated among the six DOT districts in the state. Priority projects are then selected within each district from the individual applications received from local governments. The project applications from local governments exceed the available money, so the bill would enable additional local road projects to be undertaken.

The Highway Infrastructure Fund (HIF) was created in 1999 to be used for highway projects authorized by Laws 1998, Chapter 84 and certain projects authorized by Laws 1998, Chapter 85 ‑‑ the Citizens Highway Advisory Taskforce (CHAT) projects. The current revenue flow into the fund is pledged toward highway debentures issued in May 2002.

FISCAL IMPLICATIONS

TRD notes the following assumptions:

The fiscal impact is based on the current New Mexico Department of Transportation (NMDOT) forecast of LVGRT collections. In the absence of this legislation LVGRT revenue is expected to total $6.5 million fiscal year 2005. Increasing the rate to 7% will boost total collections to about $9.1 million.

Seventy-five percent (75%) of the net receipts attributable the LVGRT is distributed to the highway infrastructure fund. The remaining twenty-five percent (25%) is distributed to the local government road fund.

SN/dm