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

SPONSOR Altamirano

ORIGINAL DATE

LAST UPDATED

2/13/07

3/05/07 HB

SHORT TITLE Distributions to Aviation Fund

SB 432

ANALYST Schardin

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$895.3

Recurring

State Aviation Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

FY09

($895.3)

($949.0) Recurring General Fund

$895.3

$949.0 Recurring State Aviation

Fund

(Parenthesis ( ) Indicate Revenue Decreases)

Conflicts with HB 205 and SB 222

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Transportation (DOT)

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of Bill

Senate Bill 432 extends the sunset on a distribution of 0.046 percent of general fund gross

receipts tax revenues from June 30, 2007 to June 30, 2010. The effective date of this provision

will be July 1, 2007.

Senate Bill 432 – Page

2

FISCAL IMPLICATIONS

According to the December 2006 consensus revenue estimate, general fund gross receipts tax

revenues are expected to total $1,945.3 million in FY08, $2,062.0 million in FY09, and $2,179.5

million in FY10. Therefore, the fiscal impact of the bill would be to reduce general fund revenue

by $895.3 thousand in FY08, $949.0 thousand in FY09, and $1003.0 thousand in FY10. The bill

has no fiscal impact in FY11 and beyond.

SIGNIFICANT ISSUES

According to DOT, the state aviation distribution funding extended by this bill is used to

maintain the air service assistance program (ASAP). ASAP funds are used to offset startup costs

incurred by airlines to begin air service to small communities in New Mexico. Loss of ASAP

funds will result in loss of air service to small communities.

The ASAP program provides a one-time grant of up to $200 thousand that must be matched by

an additional $200 thousand by local communities. So far, Taos, Roswell, Los Alamos, Ruidoso,

Las Cruces, Carlsbad, Gallup, Artesia, Hobbs and Clovis have participated in the program.

DOT reports that the following projects will fail if Senate Bill 432 is not enacted:

•

Roswell is requesting a $200 thousand grant to help start service to Dallas/Forth Worth or

Houston. The city believes that an airline is interested in the providing service.

•

Ruidoso is recruiting service to Houston.

•

Air service from Gallup to Phoenix will resume in spring 2007 if grant funding is

available.

•

Taos and Los Alamos are working on a grant to help secure air service to Denver.

ADMINISTRATIVE IMPLICATIONS

The bill will have minimal administrative impacts on TRD.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Senate Bill 432 conflicts with Senate Bill 222 and House Bill 205. These bills amend the same

section of statute, Section 7-1-6.7 NMSA 1978, to provide a stable funding source for the state

aviation fund to be used for a Federal Aviation Administration matching program. The bills were

also amended to include extending the 0.046 percent distribution of gross receipts tax revenue to

the state aviation fund through FY12.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Scheduled air service improvements to small communities in New Mexico will not take place.

SS/csd