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F I S C A L I M P A C T R E P O R T
SPONSOR Varela
ORIGINAL DATE
LAST UPDATED
1/30/06
HB 595
SHORT TITLE Transit Fund and Motor Vehicle Excise Tax
SB
ANALYST Francis/Moser
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY06
FY07
4,585
Recurring
Transit Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY06
FY07
FY08
($4,585)
($4,840)
Recurring General Fund
$4,585
$4,840
Recurring Transit Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Taxation and Revenue Department (TRD)
NM Department of Transportation (NMDOT)
Responses Received From
NM Department of Transportation (NMDOT)
SUMMARY
Synopsis of Bill
HB-595, “Relating to Taxation; Creating the Transit Fund; Providing for Distribution of a Per-
centage of the Motor Vehicle Excise Tax to the Transit Fund; Making an Appropriation:
Appropriates 3.5% of the total net receipts attributable to the motor vehicle excise tax and
associated penalties and interest ($4,585,000 in FY 2007) to a new transit fund in the
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House Bill 595 – Page
2
state treasury, with revenue in the fund appropriated to the Department of Transportation,
to:
o
Pay for the costs for the safe, economical commuting alternative program and for
the park and ride program
o
Distribute money to regional transit districts for costs incurred by those districts
o
Provide an equal match for transit programs that receive federal funding pursuant
to the federal Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users; provided that local matches required for those programs pursu-
ant to that federal act are met.
Reduces the amount of the total net receipts attributable to the motor vehicle excise tax
and associated penalties and interest that is appropriated to the General Fund to 96.5 per-
cent from the current 100 percent.
Effective Date is July 1, 2006
House Bill 595 establishes a new fund called the “Transit Fund”. Money in the transit fund will
pay for (1) the safe, economical commuting alternative program and the park and ride program,
(2) cost reimbursement to regional transit districts, and (3) matching funds for the federal Safe,
Accountable, Flexible, Efficient Transportation Act, provide the local match is met. The fund
shall not revert and shall be appropriated to the Department of Transportation.
The effective date is July 1, 2006.
FISCAL IMPLICATIONS
The appropriation of $4.5 million contained in this bill is a recurring expense to the general fund.
Any unexpended or unencumbered balance remaining at the end of each fiscal year shall not re-
vert to the general fund.
This fund is financed by diverting 3.5 percent of the motor vehicle excise tax, all of which cur-
rently go to the general fund. In FY07, that diversion is $4.5 million increasing to $4.8 million
in FY08.
FY07
FY08
Current Law
General Fund
$ 129.50 $ 136.50
HB595
General Fund
$ 124.97 $ 131.72
Motor Vehicle Suspense Fund $ 4.53 $ 4.78
Source: Consensus Group Forecast, January 2006
This bill creates a new fund and provides for continuing appropriations. The LFC has concerns
with including continuing appropriation language in the statutory provisions for newly created
funds, as earmarking reduces the ability of the legislature to establish spending priorities.
The NMDOT indicates that the proposed legislation would re-direct 3.5% of the revenues result-
ing from the Motor Vehicle Excise Tax and currently distributed to the General Fund to a new
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House Bill 595 – Page
3
Transit Fund. This change would result in reductions to the General Fund amounting to
$4,585,000 in FY 2007, $4,840,000 in FY 2008 and $5,075,000 in FY 2009. The new Transit
Fund would receive revenues of $4,585,000 in FY 2007, $4,840,000 in FY 2008 and $5,075,000
in FY 2009.
HB-595 indicates that the revenue in the newly created transit fund shall be appropriated by the
New Mexico Department of Transportation to four separate programs. The Bill does not stipu-
late the amounts to be provided to each of these programs. The NMDOT provides the following
table illustrating the estimated Fiscal Year 2007 program costs for these programs to the extent
that they are known at this time. FY 2007 program costs for the Safe, Economical Commuting
Alternative vanpool program (SECA) and the two existing Regional Transit Districts (RTDs) are
not known at this time. Estimated costs for FY 2008 and beyond are not available for any of the
four programs.
PROGRAM TO BE FUNDED ESTIMATED FY 2007
TOTAL PROGRAM COST
SECA vanpool program
unknown
Park and Ride Program
$2.4 million
Regional Transit Districts
unknown
Transit Grant local matching funds $5, 482,947
TOTAL
$7,882,947 + unknown amounts
NMDOT makes the following assumptions regarding the table above:
Estimated State FY 2007 Park and Ride program net cost is based on the current
NMDOT contract for Park and Ride service with All Aboard America.
Estimated State FY 2007 Transit Grant local matching funds were computed from U.S.
Department of Transportation Federal Transit Administration (FTA), Apportionments
and Allocations, based on the 2006 USDOT Appropriations Act, with reductions to the
appropriations resulting from the “U.S. Department of Defense, Emergency Supplemen-
tal Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza
Act of 2006”. Local matching fund requirements were computed based on provisions of
the federal Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy
for Users (SAFETEA-LU).
For grant programs with optional local matching opportunities, the recent experience of
New Mexico FTA sub grantees was used in setting the expected rate of required local
matching funds.
SIGNIFICANT ISSUES
Under SAFETEA-LU reauthorization NM received $116.2 million, a 103 percent in-
crease in funding, for public transportation. This will take approximately $25 million of
matching monies through FY09. The “transit fund” creates a sufficient pool for matching
monies to be available for local governments to use each year for federal matching re-
quirements.
The NMDOT indicates that the revenues proposed to be transferred to the Transit Fund
are insufficient to completely fund the programs stipulated in the bill. These revenues,
however, could assist local governments without appropriate funds for federal match.
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House Bill 595 – Page
4
Public transit service is currently provided by the NMDOT’s Park and Ride Program and
individual public and private non-profit transit operators who receive FTA transit grant
funding through the NMDOT. Vanpool service is currently provided by SECA. The two
existing RTDs do not currently provide transit service, but may be eligible recipients of
certain FTA federal transit grant funds. To the extent that specific funding is provided
for the RTDs in the RTD program area, the NMDOT feels that it may be duplicative of
local matching funds provided to the RTDs as recipients of Transit Grant funds.
According to the NM Passenger Transportation Association (NMPTA), NM remains one
of seven states without a permanent source of funding for public transportation. This fund
will allow the state to apply for the total $116.2 million in federal funds by having a
revenue stream the assures the appropriate matching funds in each year of SAFETEA-
LU.
NF:EM/yr