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

SPONSOR Lujan

ORIGINAL DATE

LAST UPDATED

1-30-06

HB 478

SHORT TITLE

WORKERS' COMP TAX REFUND INTERCEPT

PROGRAM

SB

ANALYST Lucero

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06 FY07

FY08

$0.1

$0.1

See Narrative

Recurring

Uninsured Employers’ Fund and Work-

ers’ Compensation Administration Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SB226,

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

Workers’ Compensation Administration (WCA)

SUMMARY

Synopsis of Bill

Amends the Tax Administration Act to allow for interception of tax refunds for certain debts

owed by employers to the Uninsured Employers’ Fund and to the Workers’ Compensation Ad-

ministration Fund. Amends the Tax Refund Intercept Program Act to include Corporate and

Franchisee Tax Act interceptions.

FISCAL IMPLICATIONS

This bill will improve efforts to collect past due amounts owed to the uninsured employers’ fund

and non payment of fees due under the workers’ compensation administration act. It is unknown

at this time how much will be collected.

The tax refund intercept act is being amended to include corporate income and franchise tax acts.

This would benefit all the claimant agencies by increasing the number of refunds subject to re-

fund interception.

House Bill 478 – Page

2

SIGNIFICANT ISSUES

The Tax Refund Intercept Program Act aid in the collection of outstanding debts. The tax refund

intercept program act is being amended to include nonpayment of reimbursements owed to the

uninsured employers’ fund and non payment of fees due under the workers’ compensation ad-

ministration act. This will allow amounts owed to be set off against the state income tax refunds

due to Workers’ Compensation Administration.

The bill also amends (page 5 line 21 and page 10 line 18) the definition of “refund”. The bill

adds Corporate Income and Franchise Tax Act. This addition opens more refunds to intercep-

tion. Previously only refunds under the Income Tax Act for individuals will be available for in-

terception.

The Workers’ Compensation Administration will be ranked 11

th

in the order of priority agencies

receive intercepted refunds.

PERFORMANCE IMPLICATIONS

This bill should help the Workers’ Compensation Administration collect more receivables.

ADMINISTRATIVE IMPLICATIONS

This isn’t a provision for the costs associated with implementing this program. Workers’ Com-

pensation Administration is funded by the fees collected. The tax intercept program at New

Mexico Taxation and Revenue Department charges a fee for interception.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Duplicates Senate Bill 226

OTHER SUBSTANTIVE ISSUES

Corporate and Franchise Tax refunds would now be available for interception.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Amounts owed to the agency will continue to go uncollected.

DL/nt