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F I S C A L I M P A C T R E P O R T
SPONSOR Campos
DATE TYPED 1/31/05
HB 164
SHORT TITLE Survivor Benefits Income Tax Deduction
SB
ANALYST Taylor
REVENUE
Estimated Revenue
Subsequent
Years Impact
Recurring
or Non-Rec
Fund
Affected
FY05
FY06
N.A.
$1.0
$5.0 Recurring
General Fund
(Parenthesis ( ) Indicate Revenue Decreases)
SOURCES OF INFORMATION
LFC Files
Taxation and Revenue Department (TRD)
SUMMARY
House Bill 164 would allow an income tax deduction for survivor benefits for a peace officer,
fire fighter or a member of the U.S. armed services killed in the line of duty.
The deduction would be an amount equal to survivor benefits that are not retirement benefits and
includable in base income.
The provisions of the bill would apply to tax years beginning on or after January 1, 2006.
FISCAL IMPLICATIONS
TRD estimates that this bill would have a small impact on state general fund revenues. The cost
in FY05 is $1 thousand and in FY06 is $5 thousand.
The department’s calculations assume that the number of New Mexico peace officers, fire fight-
ers and members of the armed services killed in the line of duty is proportional to the U.S. total.
That is, since New Mexico represents 0.64 percent of the total U.S. population, the number of
persons lost to duty would be approximately 0.64 percent. They assume total lives lost in the
line of duty from these professions is around 1,800 (107 firefighters, 164 peace officers and
1,500 armed service personnel). Based on these numbers, they assume that the number of sur-
viving dependents would be less than 15. The value of survivor benefits is not explicitly ac-
counted for, but assuming a 3.2 percent tax rate and 15 survivor benefits and a $5 thousand fiscal
impact, implies that the value of these benefits average about $10 thousand per survivor, and the