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

SPONSOR Silva

ORIGINAL DATE

LAST UPDATED

2/20/07

3/17/07

HB 1015/aSFl#1

SHORT TITLE INCREASE HOSPITAL FUNDING MILL LEVIES SB

ANALYST Propst/Lucero

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

SUMMARY

Synopsis of Senate Floor Amendment #1

Senate Floor Amendment #1 provides for county oversight and approval authority. The

amendment adds a provision for the county commission of a class A county with a population of

five hundred thousand or more to:

1.

Review and approve all requests or plans of a hospital of a state educational institution

seeking a change in the mill levy prior to the hospital seeking the change in statute or

ordinance.

2.

Annually review the proposed budget and the actual expenditures from the current and

prior fiscal year before adopting the budget of the hospital for the subsequent year.

3.

Conduct audits of the hospital as the commission deems necessary to assure that the use

of funding is in accordance with the proposed uses identified to the public when the mill

levy was presented to the voters. The audit could be paid for with funds from the mill

levy.

The Senate Floor amendment also reduces the time period, for a Class A county with a

population of five hundred thousand, for a mill levy from a maximum of sixteen years to twelve

years and amends the corresponding section of the Act to conform to the new maximum.

House Bill 1015/SFl#1 – Page

2

Synopsis of Original Bill

House Bill 1015 permits county commissioners, with the approval of the voters, to extend the

terms for mill levies for class A counties with populations of 500,000 or more -- that is Bernalillo

County -- to not less than four years nor more than 16 years. Terms for Class A counties with

less than 500,000 stay the same. The tax may only be used for a county hospital and for the

county’s contribution to the County-Supported Medicaid fund. The fund would be used for

operations.

SIGNIFICANT ISSUES

The Senate Floor amendment provides for improved oversight and approval authority by a

county commission over a hospital at a state educational institution.

DFA notes that HB 1015 is associated with a larger-than-usual capital need. In order to keep the

annual debt service requirements below the statutory $6.50 per $1,000 valuation, the bill extends

the repayment period to 16 years.

The difference between an eight year term for bonds and a 16-year term at the full 6.50 mills is

about $398,000.0. An eight year bond at 6.50 mills would generate about $523,000.0, while a 16-

year bond would generate about $921,000.0 (see table).

HB 1015 will only affect Bernalillo County’s support for UNM Hospital. Although UNMH is a

trauma center for the entire State, this extended tax proposed in this bill would be borne by

Bernalillo taxpayers only.

Bern Co 2006 net taxable value

$11,715,540,463

Maximum mill rate

$6.50 per $1,000 taxable value

Annual yield

$76,151,013 at full rate

Eight-year term

Estimated GO bond rate

3.50%

Amount borrowed

$523,458,677

Annual self-amortizing payment

($76,151,013)

16-year term

Estimated GO bond rate

3.50%

Amount borrowed

$920,979,246

Annual self-amortizing payment

($76,151,013)

WEP/DL/mt