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committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports
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F I S C A L I M P A C T R E P O R T
SPONSOR Gutierrez
DATE TYPED 03/03/05 HB 968
SHORT TITLE
HEALTH PROVIDER OR INSURER GROSS
RECEIPTS
SB
ANALYST Padilla-Jackson
REVENUE
Estimated Revenue
Subsequent
Years Impact
Recurring
or Non-Rec
Fund
Affected
FY06
FY07
($71.0)
($74.0)
Similar Recurring
General Fund
($44.0)
($46.0)
Similar Recurring General Fund (Lo-
cal Gov. hold harm-
less distribution)
($115.0)
($120.0)
Similar Recurring
Net Change to
General Fund
--
--
Similar Recurring Net Change to Lo-
cal Governments
(Parenthesis ( ) Indicate Revenue Decreases)
Relates to Senate Bill 59, Senate Bill 197, Senate Bill 540, Senate Bill 570, Senate Bill 643,
House Bill 634, and House Bill 715
SOURCES OF INFORMATION
LFC Files
Responses Received From
Taxation and Revenue Department (TRD)
Human Services Department (HSD)
SUMMARY
Synopsis of Bill
House Bill 968 expands the list of eligible health care practitioners eligible to receive tax deduc-
tions on gross receipts to include a licensed dietician. Current law allows eligible healthcare
practitioners to deduct payments by a managed health care provider or health care insurer for
commercial contract services or Medicare part C services from gross receipts.
pg_0002
House Bill 968 -- Page 2
“Commercial contract services” are defined as health care services performed by a health care
practitioner pursuant to a contract with a managed health care provider or health care insurer
other than those health care services provided for Medicare patients.
“Health care insurer” is a person that: (a) has a valid certificate of authority in good standing
pursuant to the New Mexico Insurance Code to act as an insurer, health maintenance organiza-
tion or nonprofit health care plan or prepaid dental plan; and (b) contracts to reimburse licensed
health care practitioners for providing basic health services to enrollees at negotiated fee rates.
According to TRD, the proposed deductions would be eligible for the local government “hold
harmless” provisions that were adopted as part of the 2004 legislation.
The effective date of the provisions in this bill is January 1, 2006.
FISCAL IMPLICATIONS
The total fiscal impact, per TRD’s analysis, is -$115 thousand, of which -$74 thousand would
directly impact the General Fund and -$44 thousand would presumably impact local govern-
ments in FY06. Due to the hold harmless provision, however, the General Fund would absorb
the losses to local governments, and therefore absorb the entire -$115 thousand impact. TRD
notes that gross receipts for dieticians were estimated based on the department’s “Analysis of
Gross Receipts by North American Industry Classification System (NAICS)” and that gross re-
ceipts data was also gathered in the remaining industries in Health Care and Food Services based
on occupational and industry staffing patterns. They note that, based on aggregate industry
trends, approximately half of these providers’ receipts (half of approximately $3.5 million or
$1.8 million) are assumed to come from managed care insurers, and thus eligible for the new de-
duction. Assuming a gross receipts rate of 6.5 percent, this would generate approximately $115
thousand in credits.
ADMINISTRATIVE IMPLICATIONS
TRD notes that systems’ coding and troubleshooting must be performed; forms and instructions
must be revised; taxpayer education and seminar materials must be prepared; and department
personnel must be trained on the new provisions. They note that these changes can be imple-
mented with existing resources.
OPJ/yr