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F I S C A L I M P A C T R E P O R T

SPONSOR Altamirano

DATE TYPED 2/14/2005 HB

SHORT TITLE Medicare Chiropractor Gross Receipts

SB 73

ANALYST Taylor

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

($10.0)

($11.0) Recurring

General Fund

($6.0)

($7.0) Recurring Local Governments

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Taxation and Revenue Department (TRD)

Department of Health (DOH)

Human Services Department (HSD)

SUMMARY

Synopsis of Bill

Senate Bill 73 provides a gross receipts tax deduction for the receipts of chiropractic physicians

providing services to medicare beneficiaries. It also reconciles amendments to the same section

of law in laws 2003.

The bill has an effective date of July 1, 2005.

FISCAL IMPLICATIONS

TRD estimates that the gross receipts deduction provided to chiropractors for services to Medi-

care beneficiaries would reduce general fund revenues by $10 thousand and local government

revenues by $6 thousand in FY06. Assuming a FY06 statewide gross receipts tax rate of 6.5

percent, this implies that the tax base—chiropractic services provided to medicare beneficiar-

Senate Bill 73 -- Page 2

ies—is approximately $246 thousand.

TRD’s bill analysis notes that they estimated the size of the tax base directly from their report

“analysis of gross receipts by North American Industry Classification System.

ADMINISTRATIVE IMPLICATIONS

TRD reports that the administrative implications associated with this bill would be minimal.

OTHER SUBSTANTIVE ISSUES

TRD’s bill analysis included a discussion of the provisions of the bill reconciling multiple

amendments. They noted that these provisions don’t have a fiscal impact because the depart-

ment has been honoring the deductions as passed in Laws 2003. The department’s analysis fol-

lows:

Laws 2003, Chapter 350, Section 1 amended the deduction under Section 7-9-77.1

NMSA 1978 to include Medicare receipts of home health agencies and clinical laborato-

ries. However, because Laws 2003, Chapter 351, Section 1, which also amended Section

7-9-77.1, was signed last by Governor, it was codified, while Laws 2003, Chapter 350,

Section 1 (deduction for clinical labs and home agencies) appears in the annotations to

that section. The Tax Department interprets the annotations of the statute to be binding

as law until and unless these are omitted in a subsequent amendment of the statute. The

Department’s position is based on the argument that rules of statutory construction are

only aids when interpreting true legislative intent (Quintana v. New Mexico Dep’t of

Cors., 100 N.M. 224, P2d 1101 [1983]).

BT/yr