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

SPONSOR Komadina

ORIGINAL DATE

LAST UPDATED

1/23/08

HB

SHORT TITLE Municipal Higher Education Facility Tax Eligibility SB 149

ANALYST Francis

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

FY10

NFI

(Parenthesis ( ) Indicate Revenue Decreases)

Relates to SB6

SOURCES OF INFORMATION

LFC Files

Responses Received From

NM Municipal League (NMML)

Higher Education Department (HED)

SUMMARY

Synopsis of Bill

Senate Bill 149 amends the municipal higher education facilities gross receipts tax [7-19D-16

NMSA 1978] to include any municipality that qualified prior to January 1, 2008. Current law

restricts the ability to levy the tax to municipalities with more than 50,000 people in Class B

counties with property value of over $2 billion.

As of the last census (2000), only four municipalities in New Mexico has populations over

50,000: Albuquerque, Santa Fe, Las Cruces and Rio Rancho. (Roswell and Farmington could

reach 50,000 by the 2010 census.) Of these four, only Rio Rancho is located in a Class B county

and Sandoval County’s property value for 2006 was just above $2 billion.

FISCAL IMPLICATIONS

The amendment does not include or exclude any additional municipalities: Rio Rancho remains

the only municipality to qualify.

Senate Bill 149 – Page

2

SIGNIFICANT ISSUES

If SB6 is enacted, Sandoval County will be reclassified as a Class A county due to population

growth and so would mean that Rio Rancho will no longer be eligible to impose this tax.

NMML highlights an important issue: “The current legislation would allow any municipality that

met the criteria to impose the Municipal Higher Education Gross Receipts Tax in future years.

The Amendment would end eligibility to impose the tax after January 1, 2008. As New Mexico

municipalities grow in the future they may wish to attract 4 year post secondary education insti-

tutions if they do not already have one in the municipality. Passage of this legislation would pre-

clude the municipality from using the Municipal Higher Education Gross Receipts Tax for the

purposes contained in the legislation."

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

SB 6 would reclassify Sandoval County as a Class A county.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Rio Rancho would no longer be allowed to levy the higher education facility local option tax.

NF/mt