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

Altamirano

DATE TYPED

2/16/04

HB

 

 

SHORT TITLE

Gross Receipts Revenue for Airport Planning

SB

348/aSCORC/aSFC

 

 

ANALYST

Valenzuela

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY04

FY05

 

($5,000.0)

($5,000.0)

Recurring

General Fund

 

$5,000.0

$5,000.0

Recurring

State Aviation Fund

SFC amendment

($66.7)

($65.5)

Recurring

General Fund

SFC amendment

$66.7

$65.5

Recurring

State Aviation Fund

(Parenthesis ( ) Indicate Revenue Decreases)

 

The SFC amendment matches HB234.

 

SOURCES OF INFORMATION

LFC Files

 

SUMMARY

 

    Synopsis of SFC amendment

 

The Senate Finance Committee (SFC) amendment to the amended Senate Bill 348 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.  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. This amendment corrects the problem.

 

The amendment 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

SB348 amendment: new distribution (4.79%)

         666,050

       653,117

New revenue to Aviation fund

          66,744

        65,448

 

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

 

     Synopsis of SCORC amendment

 

The Senate Corporations and Transportation Committee (SCORC) amendment to Senate Bill 348 makes technical revisions to reflect that distributions will occur on a monthly, rather than an annual, basis to the state aviation fund. The impact to the general fund remains to the same. The substantive amendment is the deletion of the requirement to match federal funding.

 

Synopsis of Original Bill

 

Senate Bill 348 redirects $5 million of the gross receipts taxes attributable to aviation-related activity from the general fund to the state aviation fund. The Department of Transportation, Aviation Program, would use the revenue for airport planning, construction and maintenance. The revenues would be used to match federal funding for the same purpose.

 

Significant Issues

 

NMDOT reports on a 2003 study by Wilbur Smith & Associates, which showed more than $17 million in gross receipts taxes were attributable to businesses located at airports.  The department also states that a New Mexico State University study estimates $49 million in gross receipts taxes attributable to all aviation-related activities.

 

Assuming these gross receipts would be shared with municipalities, the department estimates the general fund receives more than $28 million, annually, from aviation-related activity.

 

FISCAL IMPLICATIONS

 

Currently, NMDOT can access federal funding at a 1-to-9 match (note: municipalities provide half of the state match. As such, the $5 million in SB348 could match up to $45 million from federal funds, if available.

 

This revenue would be used for capital improvements at airports throughout the state. NMDOT estimates needs of $248 million.

 

MFV/yr:lg