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





SPONSOR: Martinez DATE TYPED: 02/19/01 HB 668
SHORT TITLE: Correctional Facility Gross Receipts Tax SB
ANALYST: Eaton


REVENUE



Estimated Revenue
Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY01 FY02
$ 2,221.0 $ 2,425.0 Recurring Cibola County Corrections
$ 69.0 $ 75.0 Recurring TRIMS/NMFA Admin. Fees



(Parenthesis ( ) Indicate Revenue Decreases)



Relates to HB 224, SB 188



SOURCES OF INFORMATION



Taxation and Revenue Department (TRD)



SUMMARY



Synopsis of Bill



This bill adds Cibola county to those counties eligible to impose a County Correctional Facility Gross Receipts Tax. Rather than requiring a general obligation bond issue for a corrections facility as a prerequisite for the tax (the current law requirement), Cibola county could obtain a New Mexico Finance Authority loan financed through revenue bonds to which the County Corrections Facility Gross Receipts Tax is pledged.



Significant Issues



Currently, Dona Ana, Chaves and Valencia county are eligible to impose the County Corrections Facility Gross Receipts Tax at a rate of 0.125%. Chaves county imposed the tax effective January, 1994 at a rate of 1/8%. Valencia county imposed the tax effective January 1999 at a rate of 1/8%. Dona Ana county has not imposed the tax.



In all of the current eligible counties, an election by the public is required for a county board to impose the tax. It is noteworthy that this bill includes language that permits imposing the tax without an election by the voters.



FISCAL IMPLICATIONS



The estimated full year impact of this bill is $2.4 million.



The revenue should be able to support approximately $19 million in bonds for Cibola county (assuming 10 year bonds at 5 percent and a 1-1 coverage ratio).



ADMINISTRATIVE IMPLICATIONS



Minimal.



JBE/ar