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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 2/9/2005 HB

SHORT TITLE Late Wage Report and Tax Filing Penalties

SB 348

ANALYST Dunbar

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

$ 345.0

$ 345.0 Recurring

Penalty and

Interest Fund

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates HB 426

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Labor (DOL)

Attorney General Office (AGO)

SUMMARY

Synopsis of Bill

Senate Bill 348 increases the penalty for late filing of a quarterly unemployment compensation

report from $50 to $75. Additionally, the bill increases the rate of interest on late payment of

Senate Bill 348 -- Page 2

unemployment compensation contributions to 1.5 percent, up from 1 percent. Money in the fund

may be spent only for administration of the unemployment insurance program.

This bill is the result of the Governor’s performance review recommendations.

Significant Issues

According to DOL the implementation of this bill may cause employers to submit their contribu-

tion reports and unemployment tax timely, reducing administrative burden on the Department via

collection efforts.

FISCAL IMPLICATIONS

It is estimated that the changes will generate an additional $345,000 annually in the Depart-

ment’s penalty and interest fund.

ADMINISTRATIVE IMPLICATIONS

The increase of penalties and interest will ease the workload of the administrators due to the fact

that New Mexico employers may submit their contribution report and tax timely.

TECHNICAL ISSUES

AG observes that

New Mexico law and administrative code do not provide a definition for the

term “Unemployment Insurance Program.” Should it be defined.

Additionally,

the

bill restricts

the use of the “employment security department fund” to costs for the “unemployment insurance

program.” Why not change the name of the Fund to the “unemployment insurance program de-

partment fund” for clarity.

BD/yr/njw