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(Parentheses ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

Human Services Department/Medical Services Division (HSD)

SUMMARY

Synopsis of Bill

This bill amends the County Local Option Gross Receipts Taxes Act, COUNTY GROSS RECEIPTS TAX--AUTHORITY TO IMPOSE RATE--INDIGENT FUND REQUIREMENTS. (Section 7-20E-9 NMSA 1978).

The governing body of a county with a county hospital operated and maintained pursuant to a lease with a state educational institution has authority to impose up to three-eighths of one percent (0.375%), a local excise tax to be added to the gross receipts tax. The imposition of this local tax is designated into three (3) one-eighth of one percent (0.125%) increments.

The first increment imposed, applicable to class A counties, shall provide a minimum of one million dollars ($1,000,000) for the support of residents of the county who are deemed indigent and who are patients of a county hospital. Annually, a maximum of twenty thousand dollars ($20,000), derived from the investment of the county funds for indigent care, is authorized for "other assistance to indigent persons".

The second increment, applicable to all counties not classified as a class A county, may dedicate the entire amount of revenue from the second increment for health and safety purposes; provided that the county maintains a balance in the claim fund equal to one hundred ten percent (110%) of the previous year's expenditures from the fund.

The third increment, applicable to all counties not classified as a class A county, may be used for general purposes by the county.

Any county that has imposed the second or third increment, or both, on or after January 1, 1996, and said county dedicates one half of that amount for county indigent patient purposes, shall deposit those revenues collected in the county indigent hospital claims fund and shall be expended pursuant to the Indigent Hospital and County Health Act.

Expenses up to six hundred dollars ($600) may be may be paid from the general fund of the county or the county indigent hospital claims fund for burial of deceased indigent persons, adult or minor. The counties are responsible for the burial or cremation costs of indigent persons and the county's fund may be used for that purpose.

Language Regarding Transfer of Funds

Current Law provides that on June 30 of each fiscal year balances in excess of two-hundred thousand dollars in the county indigent claims fund, or that amount in the fund that exceeds thirty percent of the income to the fund, whichever is greater will transfer to the county medicaid fund. This amount transferred is in addition the county's existing obligation to the medicaid fund pursuant to Section 27-10-4 NMSA 1978. This bill strikes this language, eliminating the requirement that this transfer occur.

FISCAL IMPLICATIONS

Regarding the transfer of funds, The Human Services Department (HSD) reported that the amount that would have been transferred to the county supported medicaid fund from the indigent hospital claims fund, will have to be made up with general fund dollars. This is not true.

It is not a statutory requirement that state general fund dollars be paid to the county supported medicaid fund in the absence of funds transferring from the indigent hospital claims fund. What HSD meant to report was that funds would need to be transferred from some other source in order to offset the discontinuation of transfers from the county indigent claims fund.

ADMINISTRATIVE IMPLICATIONS

None.

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