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

SPONSOR Taylor

ORIGINAL DATE

LAST UPDATED

2/10/07

3/07/07 HB

SHORT TITLE University Athletic Facility Bonds

SB 717/aSFC

ANALYST Schardin

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

FY09

*See Narrative

Recurring UNM and

NMSU

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Taxation and Revenue Department (TRD)

Youth Conservation Commission

No Response Received From

Higher Education Department (HED)

SUMMARY

Synopsis of SFC Amendment

The Senate Finance Committee amendment to Senate Bill 717 places an upper limit of 25

percent on the athletic facility surcharge that may be imposed by UNM or NMSU on all vendors

that provide products and services sold at or related to a university athletic facility. The original

bill only stated that the surcharge must not be less than 5 percent if imposed.

Synopsis of Original Bill

Senate Bill 717 creates the university athletic facility funding act. This act will allow the

University of New Mexico (UNM) and New Mexico State University (NMSU) to impose an

athletic facility surcharge of not less than 5 percent on the revenues of all vendors that provide

products and services sold at or related to a university athletic facility. The surcharge will be

collected by vendors and due to the university by the 10

th

day of the month following the taxable

event.

Senate Bill 717/aSFC – Page

2

The act will also allow those universities to issue tax exempt athletic facility revenue bonds upon

approval by the board of regents, the State Board of Finance, and the Department of Higher

Education. These revenue bonds may be used to pay for designing, purchasing, constructing,

equipping or furnishing a university athletic facility that seats at least 12 thousand.

The bill also provides that vendor payments of the surcharge will be audited and that vendors

who do not pay the surcharge will pay interest at an annual rate of 12 percent of past due

amounts, as well as attorney fees.

The bill also creates exemptions from the gross receipts and governmental gross receipts taxes

for receipts of a university from an athletic facility surcharge imposed pursuant to the university

athletic facility funding act.

Because the bill has an emergency clause, its provisions will take effect immediately upon

signature by the governor.

FISCAL IMPLICATIONS

Since receipts from the surcharge are not included in the state’s baseline gross receipts and

governmental gross receipts tax revenue estimates, the bill will have no fiscal impact on the

general fund or the recipients of governmental gross receipts tax revenues (New Mexico Finance

Authority, Cultural Affairs Department, State Parks Division, Youth Conservation Corps).

The proposed surcharge would generate revenues for UNM. The amount of revenue generated

will depend on the rate at which the surcharge is imposed, as well as the amount of receipts from

goods and services that it applies to.

ADMINISTRATIVE IMPLICATIONS

TRD reports the provisions of this bill would be easier to administer if it became effective on

July 1 or January 1 because that is when packets of information are provided to taxpayers.

SS/mt:csd