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SPONSOR: | Lujan | DATE TYPED: | 03/02/99 | HB | 262 | ||
SHORT TITLE: | Extend Investment Credit Act | SB | |||||
ANALYST: | Taylor |
Subsequent
Years Impact |
Recurring
or Non-Rec |
Fund
Affected | ||
FY99 | FY2000 | |||
N.A. | $ 0.0 | $ 0.0 | Recurring | General Fund |
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates/Conflicts with/Companion to/Relates to
SOURCES OF INFORMATION
Taxation and Revenue Department
SUMMARY
Synopsis of Bill
House Bill 262 would extend the investment credit act to January 1, 2004. Current law would see the credit end January 1, 2000.
Significant Issues
The investment credit was enacted as an economic development incentive. It allows manufacturing companies to claim a credit equal to 5% of the value of qualified manufacturing equipment provided that certain employment conditions are met. The maximum credit is restricted to 85 percent of any gross receipts, compensating or withholding taxes paid during the applicable period.
FISCAL IMPLICATIONS
The fiscal impact of extending the investment credit is revised to show no fiscal impact. The revision to the estimated impact acknowledges the previously overlooked information provided by the Secretary of the Department of Finance and Administration in a December letter to Representative Max Coll and Senator Ben Altamirano. The letter, which is attached, reported that the general fund and Severance Tax Bonding fund revenue estimates treated the sunset provisions as if they remain in effect. Thus, since the revenue estimate has already accounted for the loss in revenue from extending the credit, the revenue loss should not be counted again.
ADMINISTRATIVE IMPLICATIONS
TRD reports minimal administrative impact.
BT/prr:gm
Attachment