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

SPONSOR Altamirano

ORIGINAL DATE

LAST UPDATED

2/15/07

HB

SHORT TITLE

County Health Facility Revenue Bonds

SB 657

ANALYST Francis

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

* See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

FY09

NFI

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

Department of Health (DOH)

NM Finance Authority

SUMMARY

Synopsis of Bill

Senate Bill 657 allows the New Mexico Finance Authority to issue bonds secured by the credit

enhancement account for county health facilities and to allow the funds NMFA receives from the

cigarette tax for Department of Health facilities to also be used for county health facilities.

Proceeds from revenue bonds guaranteed by cigarette tax revenues for county health facilities are

Senate Bill 657 – Page

2

appropriated to the Local Government Division of the Department of Finance and

Administration for distribution to the county. Finally, an appropriation to Fort Bayard Medical

Center included in Laws 2005, Chapter 320, Section 8, is reassigned to go to a county health

facility in Grant County.

FISCAL IMPLICATIONS

NMFA reports that the reassignment of the appropriation to Fort Bayard to a Grant County,

county health center should be considered a nonrecurring impact on the amount of bond capacity

for the Department of Health.

There are no changes proposed to the distribution of cigarette tax revenues and so none of the

other beneficiaries are impacted. The Department of Health may feel some competition for these

resources from counties desiring health clinics.

DFA:

Counties have the responsibility to provide suitable quarters for local public health

offices in accordance with Section 24-4-2, NMSA 1978 as amended. Current funding for

county facilities infrastructure comes from county revenue sources. The available

revenue is usually not enough to adequately address all of the county needs and

responsibilities and usually fall short of providing adequate funds for infrastructure

needs.

Currently, NMFA receives 6 and 5/100 percent of net cigarette tax receipts for land

acquisition and the planning, designing, construction and equipping of Department of

Health facilities improvements to such facilities. This bill would not increase the

distribution for this purpose, but add county health facilities in the allowable projects that

can be funded with this revenue stream.

According to NMFA, the revenue stream from the cigarette tax has declined more rapidly

in recent years, declining at about 3 percent annually versus the previous decline of one

percent. That is to say that this revenue stream can only support so much in the way of

bond proceeds. NMFA determines the capacity of this revenue stream and Department of

Finance and Administration determines the order or authorized projects that are funded

based on project readiness. NMFA does not believe this bill will impact the bonds

outstanding because they will not issue more bonds then they have capacity to support.

Also, as the new capital project added to the list merely replaced an existing project for

the same amount, they do not see any impact on their liabilities at this time.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Department of Health reports that the executive capital outlay request includes

$3.0 million to

replace or repair local public health offices in five counties: Bernalillo, McKinley, Mora,

Roosevelt and Socorro counties. These have been identified by DOH as the top five public health

office priorities. The legislative capital outlay request includes $5.0 million to support these

same projects.

NF/mt