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F I S C A L I M P A C T R E P O R T
SPONSOR Moore
ORIGINAL DATE
LAST UPDATED
1/31/07
HB 329
SHORT TITLE Local Hospital Gross Receipt Eligibility
SB
ANALYST Schardin
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
FY09
*See Narrative
*See Narrative Recurring Union County
*See Narrative
*See Narrative Recurring Quay County
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates SB 205
Conflicts with SB 144 and HB 265
SOURCES OF INFORMATION
LFC Files
Responses Received From
Department of Finance and Administration (DFA)
Department of Health (DOH)
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of Bill
House Bill 329 amends statute to include Union and Quay counties in the list of counties that
may impose a local hospital gross receipts tax. Revenues collected by Union and Quay Counties
through imposition of a local hospital gross receipts tax will be restricted for use in operations,
maintenance, or acquisition of land or buildings for the design, construction, renovation,
equipping or furnishing of a hospital or health clinic owned by a county or with which a county
has entered into a health care facilities contract, lease or management contract.
Imposition of a local hospital gross receipts tax in any county requires approval by a majority of
county voters.
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House Bill 329 – Page
2
FISCAL IMPLICATIONS
The revenue impact to Quay and Union counties will depend on how high the local option
hospital tax is set and at what date is approved by voters. TRD estimates that Quay County’s
taxable gross receipts will total $107 million in FY08. If the entire 0.5 percent tax authorized in
the bill were imposed the tax would generate $535 thousand in that year. TRD estimates that
Union County’s taxable gross receipts will total $83 million in FY08. If the entire 0.5 percent tax
authorized in the bill were imposed the tax would generate $415 thousand in that year.
Because the counties’ voters will need to approve imposition of the tax in an election, the county
would not be able to impose the tax for the full duration of FY08.
SIGNIFICANT ISSUES
According to DOH, Quay and Union Counties each operate hospitals and health clinics under
lease or management agreements. House Bill 329 would allow these county governments to
impose a local option gross receipts tax to benefit these health facilities.
The local hospital gross receipts tax may be imposed in eligible counties if that county’s board of
commissioners approves it. The tax may be imposed in 0.125 percent increments up to 0.5
percent. This local option tax may only be imposed once for the period necessary to pay
principal and interest on revenue bonds issued to pay for the costs of acquisition, renovation and
equipping a county hospital facility or a county twenty-four hour urgent care or emergency
facility.
ADMINISTRATIVE IMPLICATIONS
The bill will cause no significant administrative impacts on TRD.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
House Bill 329 duplicates Senate Bill 205.
House Bill 329 conflicts with Senate Bill 144 and House Bill 265, which also amend Section 7-
20C-2 NMSA 1978. Senate Bill 144 and House Bill 265 create local option compensating taxes.
TECHNICAL ISSUES
TRD notes that under current law Union County is authorized to impose a local hospital gross
receipts tax at a rate of 0.125 percent. The county must meet several requirements prior to
imposing that tax that are listed in Section 7-20C-3(C), (D), and (E). It is unclear whether these
existing requirements would apply to the new 0.5 percent created in this bill.
SS/nt