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

SPONSOR Gutierrez

ORIGINAL DATE

LAST UPDATED

1/25/06

2/2/06 HB 192

SHORT TITLE

NONATHLETIC EVENT ADMISSION GROSS

RECEIPTS

SB

ANALYST Schardin

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

FY08

(56.3) Recurring Public Project

Revolving Fund

(7.5) Recurring Youth Conser-

vation Corps

(10.5) Recurring State Parks

(0.8) Recurring Cultural Affairs

Department

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SB116.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Higher Education (DHE)

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of Bill

House Bill 192 creates a new deduction from the gross receipts tax for receipts from admissions

to non-athletic special events held at post-secondary institution venues within fifty miles of the

New Mexico border that can accommodate at least 2,500 people.

The effective date of this bill is July 1, 2006.

FISCAL IMPLICATIONS

Using data provided by NMSA, TRD estimates that the new deduction will be eligible for $75

House Bill 192 – Page 2

thousand in receipts that are currently taxed under the governmental gross receipts tax. These

receipts are currently taxed under governmental gross receipts tax because the events are spon-

sored by post-secondary educational institutions. Because of the way governmental gross re-

ceipts tax revenue is distributed, 75 percent of this loss will be to the public project revolving

fund, 10 percent will be to the youth conservation corps program, 14 percent will be to the state

park and recreation area capital improvements, and 1 percent will be to the cultural affairs de-

partment for capital improvements to state monuments.

This fiscal impact is not expected to occur until FY08 because NMSU’s Pan American center,

the main venue impacted by this bill, is being renovated.

SIGNIFICANT ISSUES

The receipts of any university that rents its venue to an event promoter will still be subject to the

governmental gross receipts tax, found in Section 7-9-3.2 NMSA 1978.

ADMINISTRATIVE IMPLICATIONS

TRD reports that House Bill 192 will have a minimal administrative impact. CRS forms, instruc-

tions and publications will be revised and qualifying post-secondary institution venues will have

to be identified.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

House Bill 192 duplicates Senate Bill 116.

TECHNICAL ISSUES

TRD suggests that the bill would be clearer if the term “non-athletic special event” were defined.

POSSIBLE QUESTIONS

Post-secondary institutions include two-year colleges. Could any of these two-year institutions

that are within 50 miles of the state border have venues that hold over 2,500 people.

SS/nt