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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

2/23/07

HB 1017

SHORT TITLE County Health Care Gross Receipts Time Period

SB

ANALYST Schardin

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

FY09

See Narrative for

FY10 impact

Recurring Bernalillo

County

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates SB 1099, Conflicts with HB 1297.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

SUMMARY

Synopsis of Bill

House Bill 1017 amends Section 7-20E-18 NMSA 1978 so that counties with populations above

500 thousand (Bernalillo) will retain the option of imposing a second 1/16 percent increment of

the county health care gross receipts tax indefinitely. Currently, that county may only impose the

second 1/16 percent increment until June 30, 2009.

FISCAL IMPLICATIONS

Bernalillo County is the only county in New Mexico authorized to impose a second 1/16 percent

increment of the county health care gross receipts tax. LFC analysis of data provided by TRD

indicates that Bernalillo county’s taxable gross receipts base will be about $19.2 billion in FY10,

the first year that the increment would sunset under current law. An additional 1/16 percent

increment will increase Bernalillo county gross receipts tax collections by about $12,011.9

thousand in FY10.

House Bill 1017 – Page

2

SIGNIFICANT ISSUES

The 2006 legislature amended the county health care gross receipts tax statute to allow counties

with populations over 500 thousand to impose an additional 1/16 percent gross receipts tax

increment. The Senate Finance Committee amendment to the 2006 bill (HB 274) inserted a

sunset clause so that the additional 1/16 percent increment could only be imposed until June 30,

2009.

Revenues collected from the first 1/16 percent increment of the county health care gross receipts

tax are restricted for deposit in the county-supported Medicaid fund, a non-reverting fund that is

appropriated to the human services department to support the Medicaid program. If a county

chooses not to impose a 1/16 percent county health care gross receipts tax, that county must

dedicate an amount equal to 1/16 percent of gross receipts to the county-supported Medicaid

fund.

Revenues collected due to Bernalillo County’s second 1/16 percent increment of the county

health care gross receipts tax must be used to support the health care costs of indigent patients.

The second increment is intended to support the Bernalillo County hospital, which is located at

UNM.

Under current law, New Mexico’s local governments are authorized to impose up to 4.6875

percent of local option gross receipts taxes (that figure excludes several additional local option

taxes that have been authorized for selected local governments). On average, a local option gross

receipts tax of about 1.6 percent is actually imposed by local governments statewide. Combined

with the state gross receipts tax of 5 percent, the statewide tax rate is therefore 6.6 percent.

ADMINISTRATIVE IMPLICATIONS

The bill will create minimal administrative impacts on TRD.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

House Bill 1017 duplicates Senate Bill 1099.

House Bill 1017 conflicts with House Bill 1297, which amends the same section of statute to

allow Los Alamos County to impose a 1/8 percent county health care gross receipts tax.

SS/mt