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

SPONSOR Smith

DATE TYPED 2/25/05

HB

SHORT TITLE Hidalgo Medical Center Loan Payment

SB 892

ANALYST Hadwiger

APPROPRIATION

(in $000s)

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$1,484.5

Non-Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

Department of Health (DOH)

SUMMARY

Synopsis of Bill

Senate Bill 892 appropriates $1,484,450 from the general fund to the Department of Finance and

Administration in FY06 to pay off the balance of a loan relating to the Hidalgo Medical Center.

Significant Issues

SB 892 would appropriate state funds to retire a facility loan from the Primary Care Capital

Fund. This loan is paid by local governments in Hidalgo County from committed gross receipts

tax revenues. The proposed appropriation would permit local governments in Hidalgo County to

redirect committed tax revenues to other uses.

According to DFA, In 2001, the city of Lordsburg and county of Hidalgo entered into a loan for

$2,194,304 with New Mexico Finance Authority (NMFA) to construct a building for the Hidalgo

Medical Center. The city and county pledged gross receipts tax revenue to secure the loan for

the hospital, which did not qualify under NMFA cash flow criteria. The payoff of the loan to

NMFA as of July 1, 2005 will be $1,484,450.

Senate Bill 892 -- Page 2

According to DFA, Hidalgo County officials indicated they would like to keep the existing loan

for the hospital, but they are unable to secure a new loan to build a new jail facility because of

the pledged gross receipts tax to the hospital loan. Overcrowding at the current jail is causing the

courts to not issue warrants for people to be arrested in some instances. Additionally, a federal

agency has deemed the jail to be unfit for women prisoners. The County is concerned that it is

only a matter of time before the county is sued by someone because of the conditions at the jail.

FISCAL IMPLICATIONS

The appropriation of $1,484,450 contained in this bill is a non-recurring expense to the general

fund. Any unexpended or unencumbered balance remaining at the end of FY06 would revert to

the general fund.

ADMINISTRATIVE IMPLICATIONS

The administration of the appropriation would fall under DFA in FY06, which would coordinate

the loan payoff with Hidalgo County through a joint powers agreement.

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