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

SPONSOR HTRC

ORIGINAL DATE

LAST UPDATED

2/8/06

2/16/06 HB 435 & 477/HTRCs

SHORT TITLE

LIQUOR TAX DISTRIBUTION TO LOCAL DWI

FUND

SB

ANALYST Schardin

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

FY08

9,994.0

10,193.9 Recurring Local DWI

Grant Fund

(9,994.0)

(10,193.9) Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Conflicts with SB525.

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

The House Taxation and Revenue Committee substitute for House Bills 435 and 477 would in-

crease the percentage of liquor excise tax revenue that is distributed into the local DWI grant

fund from 34.57 percent to 60 percent. Doing so would cause the percentage of liquor excise tax

revenue that is distributed into the general fund to decrease from the current level of 65.43 per-

cent to 40 percent.

The bill would designate how additional local DWI grant fund revenue will be distributed

amongst New Mexico’s counties and the state’s five alcohol detoxification and treatment centers.

Part of the new revenue to the local DWI grant fund would be used to increase the amount of

funding available for grants to New Mexico counties.

The bill would eliminate an existing annual appropriation of $300 thousand from the local DWI

grant fund to the local government division of DFA to cover the costs of installing ignition inter-

lock devices for indigent people who are required by law to install ignition interlock devices on

their vehicles.

House Bill 435 & 477/HTRCs – Page 2

The effective date of this bill is July 1, 2006.

FISCAL IMPLICATIONS

According to the January 2006 consensus revenue estimate, total liquor excise tax revenue is ex-

pected to be $39.3 million in FY07. Under current law, the local DWI grant fund would receive

34.57 percent ($13.6 million) and the general fund would receive 65.43 percent ($25.7 million).

The House Taxation and Revenue Committee substitute for House Bills 435 and 477 would in-

crease the local DWI grant fund distribution to 60 percent ($23.6 million) and decrease the gen-

eral fund distribution to 40 percent ($15.7 million). The total impact will be $10.0 million.

The bill would increase the annual distributions to the state’s alcohol detoxification and treat-

ment centers by $1.56 million from $2.8 to $4.36 million. About $1 million of this funding in-

crease would be earmarked for a new alcohol detoxification and treatment facility in De Baca

County.

The bill would also increase the amount of funding for grants to New Mexico’s 33 counties from

about $8.0 million to about $16.7 million.

SIGNIFICANT ISSUES

According to a report from UNM’s Division of Government Research, 40 percent of all fatal

crashes in New Mexico involved alcohol in 2004.

ADMINISTRATIVE IMPLICATIONS

The bill will increase the administrative responsibilities of DFA’s Local Government Division,

which administers the local DWI grant fund.

DOH will need to oversee the new treatment center in De Baca County funded by this bill. This

will require about ¼ FTE and three site visits per year to ensure quality of services provided.

The bill will require TRD to make minor administrative changes.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

This bill conflicts with Senate Bill 525, which increases the local DWI grant fund share of the

liquor excise tax and creates different ways for the additional DWI grant money to be distributed.

POSSIBLE QUESTIONS

Page 4-5: What will be the impacts of removing the $300 thousand per year appropriation to

DFA to fund ignition interlock device installation for indigent people.

SS/mt:yr