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committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

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

SPONSOR Ryan

ORIGINAL DATE

LAST UPDATED

2/4/06

HB

SHORT TITLE

PERSONAL INCOME TAX REBATE & FUND

TRANSFER

SB 288

ANALYST Francis

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

(189,430.0)

Non Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB 41, HB 47

Relates to Appropriation in the General Appropriation Act : $40 million has been appropriated

for transfer to the Severance Tax Permanent Fund.(Section 12)

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

FY08

189,430.0

Non Recurring Severance Tax

Permanent Fund

(189,430.0)

Non Recurring General Fund

1,800.0 Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of Bill

Senate Bill 288 rebates $189,430 thousand to NM taxpayers in a proportional share and transfers

$189,430 from the general fund to the severance tax permanent fund.

Senate Bill 288 – Page

2

FISCAL IMPLICATIONS

The total fiscal impact of SB 288 occurs in FY06. The two parts of this bill will reduce the gen-

eral fund reserves by $378.9 million or about 42 percent of current estimated general fund re-

serves.

The rebate of $189.4 million would go to approximately 725 thousand tax filers and average

$260 per return.

The appropriation of $189,430 thousand contained in this bill is a NONRECURRING expense to

the GENERAL FUND. This is considered FY06 revenue for the Severance Tax Permanent

Fund. In FY07, it is estimated that the additional principal in the STPF would generate revenue

to the general fund of approximately $1.8 million in FY08. Interest from deposits in calendar

year 2006 does not show up in the general fund distributions until FY08.

NF/nt