NOTE: As provided in LFC policy, this report is
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SPONSOR: |
Lujan |
DATE TYPED: |
|
HB |
845/aHTRC/aHFL#1/aSFC |
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SHORT TITLE: |
NMFA Loan Agreements with OCA |
SB |
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ANALYST: |
Kehoe |
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REVENUE
|
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
|
FY03 |
FY04 |
|
|
|
|
|
($200.0) |
|
Recurring |
GGRT
% to ENMRD (State Park Improvements) |
|
|
$200.0 |
|
Recurring |
OCA ( |
(Parenthesis ( ) Indicate Revenue Decreases)
Relates to House Appropriations
and Finance Committee Substitute for House Bill 594
Taxation
& Revenue Department (TRD)
Energy,
Minerals & Natural Resources Department (EMNRD)
Office
of Cultural Affairs (OCA)
LFC
Files
SUMMARY
Synopsis of SFC Amendment
Senate Finance
Committee amendment to House Bill 845 changes the percent gross receipts tax
distributions to the Energy,
Minerals & Natural Resources Department (EMNRD) and to the Office of
Cultural Affairs (OCA). The initial bill would have transferred $550.0 to the
OCA, but this amendment reduces that amount to $200.0. The new language is
highlighted below:
"
B. A
distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the energy,
minerals and natural resources department in an amount equal to [twenty-five]
twenty-two and one-half twenty-four percent of the
net receipts attributable to the governmental gross receipts tax. [Forty]
Forty-four and one-half Forty-one and two-third
percent of the distribution is appropriated to the energy, minerals and natural
resources department to implement the provisions of the New Mexico Youth
Conservation Corps Act and [sixty] fifty-five and one-half
fifty-eight and one-third percent of the distribution is
appropriated to the energy, minerals and natural resources department for state
park and recreation area capital improvements, including the costs of planning,
engineering, design, construction, renovation, repair, equipment and
furnishings.
C. A
distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the office
of cultural affairs in an amount equal to two and one-half one
percent of the net receipts attributable to the governmental gross receipts
tax for capital improvements at state museums administered by the office of
cultural affairs.
Synopsis of HFL#1 Amendment
House Floor Amendment #1 provides that the proceeds of governmental gross receipts tax revenue distributed to OCA after the payment of debt service may also be used for capital improvements to state monuments.
Synopsis of HTRC Amendment
House Taxation and Revenue amendments to House
Bill 845 require that any governmental gross receipts tax revenue distributed
to OCA remaining after the payment of debt service may be used by OCA for
museum capital improvement projects. The
amendment further provides that by
Synopsis
of Original Bill
House Bill 845
provides for a distribution of governmental gross receipts tax revenue to OCA;
allows OCA to enter into loan agreements with NMFA; and authorizes NMFA to make
loans from the Public Project Revolving Fund to OCA.
Significant Issues
House Bill 845
provides a revenue stream from the governmental gross receipts tax for capital
improvements at state museums administered by OCA. The bill also authorizes NMFA to make loans
from the Public Project Revolving Fund (PPRF) to OCA to design, remodel,
renovate, rehabilitate or improve state museums administered by OCA on terms
and conditions established by NMFA.
House Bill 845
proposes to reduce the EMNRD annual GGRT collections from 25 percent to 22.5
percent, and distribute 2.5 percent of GGRT collections to OCA to pledge as
revenue for the repayment of loans made from PPRF for the museum capital
improvements.
The primary source of
capital for infrastructure projects administered by NMFA is from an annual
distribution of 75 percent of the state’s Governmental Gross Receipts Tax
(GGRT) of which 25 percent is distributed to the Energy, Minerals & Natural
Resources Department (EMNRD). Within the
distribution State Parks Division receives 60% and the Youth Conservation Corps
(YCC) receives 40%. The current
distribution of the EMNRD 25% portion would change to 55.5% for State Parks and
44.5% for YCC. The effect of HB 845
reduces State Parks distribution from the GGRT from an overall 15% to 12.5125%
from the GGRT fund. The YCC distribution
remains at the current 10% from the overall GGRT fund.
FISCAL IMPLICATIONS
According to EMNRD,
the fiscal impact to State Parks would be a reduction of $78.5. This revenue figure is based on the requested
funding level for fiscal year 2004.
According to NMFA, the
Parks and Recreation Division of EMNRD has issued approximately $28.7 million
in debt. EMNRD’s current bonding
capacity is zero.
RELATIONSHIP
House Bill 496/aHTRC
renames the State Office Building Acquisition Bonding Act to “State Building
Bonding Act”; renames the State Office Building Bonding Fund to “State Building
Bonding Fund”; defines “building bonds” to include state museum tax revenue
bonds; and authorizes NMFA to issue and sell “State Museum Tax Revenue Bonds”
for renovations and maintenance of existing facilities and the development of
permanent exhibits at state museums.
House Bill 594/a/HTRC
authorizes NMFA to issue and sell State Museum Tax Revenue Bonds, payable
solely from the State Building Bonding Fund, in an amount not to exceed $5,760;
and appropriates the proceeds from the sale of the bonds to OCA for renovations
and maintenance and the development of permanent exhibits.
A list of projects
proposed by OCA for use of the proceeds of the sale of bonds is attached.
TECHNICAL ISSUES
According to TRD and EMNRD, HB 845 may violate
the intent of the Non-Impairment clause by reducing and altering the
distribution of GGRT. However,
bondholders have the option to consent to a change in distribution of
GGRT. Therefore, as bondholders, NMFA
can approve the change of distribution without impacting the investor’s
confidence and without damaging the rating of bonds.
During testimony on HB
496/a and HB594/a, there was a question on whether or
not “monuments” could also be maintained with the proceeds of the bonds if not
specifically mention. House Bill
845/aHTRC/aHFL#1 clarifies the issue.
LMK/yr/njw/ls